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August 15, 2024 • 35min
The vital question Taskrabbit founder Leah Solivan wished she asked investors
Masters of Scale
Leah Busque founded TaskRabbit in 2008, pioneering the gig economy model that has since become ubiquitous. In this Masters of Scale episode, she shares the origin story and scaling journey of TaskRabbit with host Jeff Berman. Leah discusses leaving her job at IBM to pursue her startup idea, the early days of building the product and marketplace, key inflection points in the company's growth, and ultimately selling to IKEA. She also reflects on her transition to venture capital investing and the lessons she now applies when working with founders.
The vital question Taskrabbit founder Leah Solivan wished she asked investors
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Key Takeaways
- Leah Busque founded TaskRabbit in 2008 after realizing she needed a way to get dog food delivered on a snowy night in Boston
- She left a secure job at IBM to pursue her startup idea, cashing out her pension to fund the initial development
- TaskRabbit started as a closed beta with 30 hand-picked "taskers" serving 900 moms in a 1 square mile area of Boston
- Leah was TaskRabbit's first tasker, running errands herself to learn about the business model and customer needs
- The company hit major growing pains around 50 employees when communication and processes broke down
- Bringing on Stacy Brown-Philpot as COO was crucial for scaling the company effectively
- IKEA acquired TaskRabbit in 2017 after a successful partnership integrating TaskRabbit services into IKEA stores
- As an investor now, Leah advises founders to ask VCs what they are saving/earmarking for follow-on investments
Introduction
Leah Busque founded TaskRabbit in 2008, pioneering the gig economy model that has since become ubiquitous. In this Masters of Scale episode, she shares the origin story and scaling journey of TaskRabbit with host Jeff Berman. Leah discusses leaving her job at IBM to pursue her startup idea, the early days of building the product and marketplace, key inflection points in the company's growth, and ultimately selling to IKEA. She also reflects on her transition to venture capital investing and the lessons she now applies when working with founders.
Topics Discussed
The Origin of TaskRabbit (8:18)
Leah recounts how the idea for TaskRabbit came to her on a snowy night in Boston in 2008:
- She and her husband were about to go out to dinner when they realized they were out of dog food
- The iPhone had just been released 4 months earlier
- Leah thought "Why can't I use this device to connect with someone right now in real time and get the dog food?"
- She saw potential in combining social, location, and mobile technologies
- That night she bought the domain RunMyErrand.com for $6.99, which became the initial name for TaskRabbit
"I used my iPhone at that moment, and I thought, okay, if such a site existed, what would it be called? And I typed in the domain name runmyerrand.com, and it was available on GoDaddy for $6.99. So I bought it." - Leah Busque
Leaving IBM to Pursue TaskRabbit (10:05)
Leah had a stable job as an engineer at IBM, but decided to leave to pursue TaskRabbit full-time:
- She had been at IBM for 8 years and was feeling frustrated with her career progression
- No one in her family had been an entrepreneur before
- She cashed out her IBM pension to fund the initial development of TaskRabbit
- Scott Griffith, then-CEO of Zipcar, became an important early mentor
"I ended up cashing out to start the company, my pension from IBM." - Leah Busque
Building the Initial Product and Marketplace (16:10)
Leah describes how she built and launched the first version of TaskRabbit:
- She spent 6-8 weeks coding the initial product herself
- She would work at a local coffee shop and get real-time feedback from customers
- She posted an ad on Craigslist to find the first "taskers" and was overwhelmed by applicants
- She hand-interviewed and selected the first 30 taskers to ensure trust and safety
- The initial closed beta launched with 900 moms in a 1 square mile area of Boston
"I hand interviewed every single person because I was very worried from the beginning around trust and safety. And again, this was long before you jump into a stranger's car. Feel okay about that? I started with 30 taskers that I handpicked." - Leah Busque
Being TaskRabbit's First Tasker (20:39)
Leah realized she needed to be a tasker herself to truly understand the business:
- She rode a Vespa scooter all over Boston running errands for customers
- This gave her crucial insights into the tasker and customer experience
- She learned what types of skills and people she needed to recruit as taskers
- She discovered that the open-ended nature of "get anything done" was too broad
"That was the best learnings that I could get about building this company. And that's another thing I'll tell founders when they're building their business, can you be a part of the process? That is how you learn about what customers want, because taskers are customers too." - Leah Busque
Early Funding and Scaling (22:12)
Leah discusses some of the early funding and growth milestones for TaskRabbit:
- She participated in the Facebook Fund incubator program, receiving $15k for 2% of the company
- This opened doors to Silicon Valley networks and investors
- She met Tim Ferriss through the program, who became an advisor and introduced her to key investors
- She raised a $1 million seed round from Floodgate and Baseline Ventures
"I know that everybody thinks this is a bad idea, but I think there's something here that I'm just going to make it into something that's worth it." - Leah Busque on accepting the Facebook Fund deal
Leadership Transitions (23:45)
Leah shares her experience with leadership transitions as TaskRabbit grew:
- After the Series A, she tried bringing in an outside CEO, which didn't work out
- She realized the company still needed the founder as visionary leader at that stage
- Later, she successfully brought on Stacy Brown-Philpot as COO
- Stacy complemented Leah's skills and helped take the company to scale
"I think my mistake there was that the company was still so young, it was still so early to remove the founder as the leader. A COO would have been fine." - Leah Busque
Scaling Challenges (25:48)
Leah describes the growing pains TaskRabbit experienced as it scaled:
- Around 50 employees, communication and processes broke down
- Cross-functional collaboration became more difficult
- The company culture started to fracture
- They needed to implement more formal organizational structures and processes
- Some early employees struggled to scale with the company's growth
"When we hit 50 people, I feel like everything broke. Communications broke, cross functionality between teams broke. The culture broke. Everything broke." - Leah Busque
Partnership and Acquisition by IKEA (29:29)
Leah recounts how the IKEA partnership and acquisition came about:
- IKEA furniture assembly was always TaskRabbit's most popular task
- They pursued IKEA as a partner for years before making contact
- They piloted an in-store partnership in London, IKEA's largest market
- The partnership drove up IKEA's average order value significantly
- IKEA initiated acquisition talks, which Leah hadn't been seeking
- There was strong cultural alignment between the companies
"From day one, the highest volume task on the site was always Ikea furniture assembly. From day one, I mean, I was like going to Ikea, getting these flat packs with my little Allen wrench, like putting Ikea furniture together." - Leah Busque
Transitioning to Venture Capital (33:39)
Leah discusses her move into venture capital investing after TaskRabbit:
- She was ready for a change after 10 years with TaskRabbit
- As an investor, she's constantly learning about new technologies and business models
- She finds it intellectually stimulating but with less pressure than being a founder
- Her founder experience gives her empathy and insight when working with entrepreneurs
"Being an investor is the best thing for me. I'm learning new technologies all the time, I'm learning about new business models all the time, I'm meeting new people all the time. So it's very invigorating, and I feel just as busy as I did when I was running a company, but without the pressure." - Leah Busque
Advice for Founders Raising Capital (34:36)
Leah shares an important insight for founders when fundraising:
- As a founder, she was overly focused on competitors in her market
- As an investor, she realized founders should understand how they fit in a VC's portfolio
- Founders should ask VCs what they are saving/earmarking for follow-on investments
- Understanding this can help with planning the timing and size of future fundraises
"I would ask them, what are you saving for me as a company? What do you got earmarked for me in this fund? Right? And I think understanding that along the way would have been helpful in planning how and when we did fundraises." - Leah Busque
Conclusion
Leah Busque's journey with TaskRabbit exemplifies the challenges and rewards of building a pioneering technology company. From the initial spark of inspiration on a snowy night in Boston to scaling a global business and ultimately selling to IKEA, Leah navigated the complex terrain of the startup world. Her experiences highlight the importance of hands-on learning, adapting to different stages of growth, finding complementary leadership, and strategically pursuing partnerships. Now as a venture capitalist, Leah brings valuable founder perspective to her work with entrepreneurs, helping them avoid pitfalls and maximize their chances of success. Her story demonstrates how the skills and insights gained from building a company can be leveraged to make an impact across the broader startup ecosystem.
