Building a Two-Sided Marketplace: LawnStarter CRO Ryan Farley (Part 6)

Sramana Mitra: What is the next inflection point or strategic move that you made that gave you the next level of growth?

Ryan Farley: We didn’t expand markets because we wanted to focus on the core customer experience. The following spring, we went to a total of eight cities. All winter was spent in recruiting the supply for those cities and building the technology to automate a lot of the stuff that we were still doing with humans behind the scene. That was when it started to feel like a real company. It was the first time of having a Board as well. That was the next phase of the company.

Sramana Mitra: What does eight successful cities mean in your business? How many providers? How many customers would constitute a successful city for you?

Ryan Farley: It’s all about matching supply and demand. We’re in some giant cities. We’re also in tiny cities. We experimented. Right now, what success means is that supply and demand are being matched effectively and more specifically, we want every lawn care company to have 15 or more recurring customers from us. Anything less than that, we feel that we’re not really adding much value to their business. That’s when we feel like we are a partner. The retention is incredibly high. That’s how we define a successful city.

Sramana Mitra: How many providers do you try to optimize that at?

Ryan Farley: For a midsize city, we’ll get 20 to 30. To open a market, the zip code of the service area needs to have four or more providers. We never force lawn care providers to take a job. We need to know that if one guy can’t do it, another lawn care provider can pick it up. The minimum criteria is to have three providers for a day in a zip code.

Sramana Mitra: Where are you at the end of 2016 and what’s the next milestone?

Ryan Farley: Things are looking good. We didn’t add that many more markets. We wanted to focus on going deeper into market. We did some more PR and brand awareness. We focused heavily on referrals. We were generating revenue. Unit economics were looking promising.

We could go to a hundred cities right now but we really wanted to nail going deep in the market. You get a lot of benefits from a brand awareness standpoint. You can bring more jobs to more lawn care companies and increase the number of jobs each lawn care company has.

Sramana Mitra: You pitched this story as a $5 million revenue company. Is this $5 million top line?

Ryan Farley: That’s top line. This year, it’ll be well over $5 million.

Sramana Mitra: What else do you want to share?

Ryan Farley: Lookiing back, it always amazes me at how naive I was then and how much I’ve learned.

Sramana Mitra: First time entrepreneur’s journey is incredibly steep.

Ryan Farley: Yes. You can’t learn quicker than you do when you are in the heat of it.

Sramana Mitra: Great. It was nice talking with you.

This segment is part 6 in the series : Building a Two-Sided Marketplace: LawnStarter CRO Ryan Farley
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