Matchmaking businesses aren’t exactly a new idea — though the breathless enthusiasm of the tech press might lead one to mistakenly believe that the concept sprang into existence in 2009 with Uber. But in fact commerce intermediaries that bring groups of shareholders together to interact and transact are as old as commerce itself.
As Karen Webster pointed out, the first commerce intermediary to operate at scale was Istanbul’s Grand Bazaar, which opened for business 558 years ago.
But in the era of near ubiquitous smartphone ownership — and in the shadows of such mega-matchmaking platforms like Uber, Airbnb, Amazon, Lyft, The App/Play Store, eBay, Square, and more — one can reasonably argue we are living in the platinum age of the platform. It is even easier than ever to slap down $400 for a pre-made “Uber of X” template and be up and running with one’s own matchmaking platform in less than 48 hours.
Unfortunately, though it might be easier than ever to found a matchmaking platform, actually getting it to ignite in any meaningful way is still has hard as it has ever been, which is to say extremely. For a platform to succeed, David Evans and Dick Schmalensee wrote in their book “Matchmakers have find two groups of shareholders they can attract to each other, find a way to operate at scale, find a way to make money from making the match and constantly keep reiterating their platform to keep up with the evolving demands of the two groups of shareholders it is connect.”
It’s not easy work — and that is why there are far more “Uber of X’s” consigned to the scrap help of innovation history than there are successful Ubers in the market.
There is no one magical, silver-bullet secret that ensures a matchmaker’s success or failure. But over the course of 2018 — and literally dozens of conversations with the ambitious entrepreneurs who have successfully launched matchmaking platforms — we did hear an awful lot of good ideas on how to make the right match, how to get to scale — and how to make money while doing it.
And since the matchmakers were in at PYMNTS all year, we thought we might offer up some of our favorite ideas, interactions and unexpected words of wisdom they shared with us.
Roadie And Resetting Small Goods Transport
Who They Matchmake For: People or small to medium-side businesses (SMBs) with small goods they need delivered with drivers/gig workers who are going to the location the goods need to get to.
Founding Pain Point: Roadie CEO Marc Gorlin was trying to retile his bathroom when his tile got stuck 90 miles from his home and he speculated that there was at least one person near his tiles who was coming his way anyway who would have been willing to drive his tiles down to him for a fee.
“When I tell the tile story,” Gorlin said, “people always tell it right back to me. Their tile might be a dog, the order they made from the local hardware store, or the ladder they bought from Home Depot and needed to get home, but they only had a Prius. Everybody has a tile story.”
Roadie formed as a “delivery-on-the-way” marketplace to solve for all of those tile stories.
How It Works: Drivers download the iOS and Android app and are sent potential gigs based on their driving habits as understood by an algorithm. Drivers can reject tasks and users can view drivers. Cost of shipping is determined by size and duration of the trip, and drivers keep 80 percent of the delivery fee (Roadie collects 20 percent for matchmaking). All deliveries are insured by the platform — which means in case something arrives broken, the buyer will be compensated.
Most Unexpected Effect: Romance.
“We had a guy that brought a dog from a lady in California on his way to New York,” Gorlin shared. “He dropped it off in Chicago, met her … they wound up having dinner, he dropped by on his way back through, and they got engaged to be married last Valentine’s Day.”
How Heal Is Bringing Housecalls Back To Medicine
Who They Matchmake For: Patients and doctors who perform house calls.
Founding Pain Point: CEO and Co-Founder Nick Desai found himself in the hospital with his wife and their infant during a holiday weekend. After a seven-hour wait and being matched with an inept medical resident, they decided to disrupt medicine by allowing consumers to dial up a doctor on demand.
“We looked at each other and observed how broken the system is and decided to put our heads together and solve this trillion-dollar problem,” Desai told Webster.
How It Works: Heal doctors are not contract employees like Uber drivers; they are fully vetted and background-checked employees of the service — only about one in 14 doctors who apply to the service are hired. Heal doctors see about 14 patients a day (as opposed to the 30 that are the average in private practice) and accept most major forms of insurance. Patients without insurance, or with an insurance program that isn’t accepted by the platform, can pay a flat $99 fee per visit. Once a consumer dials up a doctor through the app, the doctor is guaranteed to be there within two hours. Doctors who work for Heal are only required to provide medical care — all back office functions from booking to billing are picked up by the platform’s automated software.
Most Unexpected Effect: How little time it takes to persuade people they prefer house calls.
“It takes two hours to get a doctor, they come to your home so you don’t have to be exposed to other germs in an ER, and it costs the same — or in many cases less — than going to an emergency room or urgent care center. That can be a pretty life-changing experience, and we find that very few people walk away from it and say, nah, you know I really want to go back to a doctor’s office when I feel sick again, as opposed to the doctor coming to my couch.”
Papa And Providing Grandkids On Demand
Who They Matchmake For: Senior citizens and college students
Founding Pain Point: Papa Founder and CEO Andrew Parker was at first trying to solve a very personal problem. His grandfather — whom he called Papa — had been diagnosed with early-onset dementia. Before his Papa needed extensive medical care and intervention, Parker discovered he needed a companion, both for his own good and for the good of his full-time caregiver, Parker’s grandmother.
“I was thinking about this one day at work,” Parker said, “and realized that there are so many seniors out there, and so many college students who could use the income. So I started to wonder if maybe there was something I could do to connect them and maybe let something magical happen.”
How It Works: Papa is a logistics platform that makes is easy for seniors to connect with college students and essentially hire them for an hour or two, for a variety of tasks — usually of the sort people ask their grandchildren to do, such as a ride to the doctor or a lesson on how to set up Netflix. All of the students who sign onto the platform are thoroughly vetted since seniors can be a vulnerable population. The service is also set up so that the senior users can interface with the service via either app or phone. Users can order services a la carte, or subscribe for $15 to $30 a month. According to Papa, most users start out ordering a single service before converting to the subscription.
Most Unexpected Effect: The range of activities that the services seniors and college-aged “Papa Pals” come up with.
“We had a member who was on the campaign trail with Ronald Reagan 30 years ago, and her family hired a Papa Pal to help her transcribe her very interesting life story into a digital format for her family.”
Divvy And Providing A New Path To Homeownership
Who They Matchmake For: Potential homebuyers and home sellers.
Founding Pain Point: According to Divvy Co-Founders, CEO Brian Ma and COO Adena Hefets, a large subset of potentially good, responsible homeowners are being shut out of buying because they aren’t able to save enough cash to make a down payment.
“We are a fractional ownership platform that gives customers the option of [working] with us to put down less, and then work within a specialized rental product that allows them to embark on the path to homeownership via a mortgage,” Ma explained.
How It Works: To join the Divvy platform, consumers fill out a digital application and are screened. Once selected, consumers are then matched with a member of Divvy’s broker network to find a property. Once found, the agent brings the deal back to Divvy, which evaluates and suggests an offer. If the seller accepts, Divvy buys the home and the customer immediately enters into a three-year lease with Divvy at a fixed monthly amount. Part of that payment goes to Divvy as rent and the other part is saved on the consumer’s behalf as “equity” in the home. At the end of three years, Divvy’s tenant has saved, on average, a 10 percent down payment and can work with a traditional lender to get a mortgage to buy the home.
Most Unexpected Outcome: How much more there is still to take on in the real estate business.
“Our focus now, and very much going forward, is making sure people are on track to buy houses,” Ma said. “There are these much bigger pockets that I think we can take on in the future, particularly as we build out and scale the platform.”
Goodworld And Building A Bridge To Charity
Who They Matchmake For: Nonprofits and potential donors.
Founding Pain Point: After two decades in the military and government service and a long stint in the Department of Defense’s counter-terrorism unit, Goodworld COO and Co-Founder John Gossert wanted to help the world by fighting friction in charitable donations — instead of by actively fighting terrorists.
How It Works: As of today, Goodworld is the only social fundraising platform with hashtag-to-donate technology on both Facebook and Twitter. Consumers who sign up with Goodworld can use the donate hashtag to give to charities. First-time donors receive a reply with a one-time link to sign up, then they can instantly give to thousands of causes anytime, anywhere. And once an online donor goes through the one time sign-up, that hashtag payment capability is “portable,” and can follow them across social media. For nonprofits that work with Goodworld, the firm takes a 4.8 percent processing fee for card transactions as its cut, with processor Stripe getting 2.2 percent, plus $.30 per transaction
Most Unexpected Outcome: The changing face, and methodology, of giving.
“Older men writing big checks is still the main form of giving but those donors are not being replaced by other older men writing big checks. Social media is a powerful tool to inspire donations — even micro donations. People you know are much more of an authentic ambassador for a brand or cause than strangers.”
So what is the lesson to take from all this matchmaking?
There are unusual and unexpected pain points all over the place, so long as one is looking close enough to spot them. From older consumers who need a tech lesson, to tiles sitting sadly in a warehouse when they could be on their way to someone who needs them, there are all kinds of places where a matchmaker is needed to … well make a match.
Making that first match, however, is almost the easy part — it’s making enough of them to build profitably to scale that remains the tricky part for most firms.
But, as our conversations over the last year indicate, it does happen — often in very unexpected ways.