A little less than year after raising $14 million in series A funding and adding HP CEO Meg Whitman to its board, Zaarly has pushed out the next iteration of its local marketplace this morning. Called Storefronts, the product provides verified sellers with curated brand pages, where buyers can browse services, engage with content about the provider, and begin to build relationships with the individuals behind the services. It’s a big step for the startup as it looks to create a viable economy that not only solves the problem of connecting buyers with sellers but fosters the stability and certainty crucial to scaling any marketplace.
Zaarly is launching Storefronts with a little over 100 sellers in the San Francisco area and plans to expand the program into New York and Los Angeles by early fall. Much of the outreach so far has been high-touch, working with sellers individually to build their pages and, in some cases, hiring photographers to capture a handful of sellers in their element. It’s what Zaarly CEO Bo Fishback calls ‘manualization” — the idea that you need to do things manually before you can fully understand and automate them.
Fishback tells Street Fight that the new product is all about adding certainty to Zaarly’s marketplace. “Meg Whitman is on our board and she always says, ‘what you guys are doing is creating a well-lit marketplace where today it’s like you’re in the back alley,’” says Fishback. “[The launch of Storefronts] is going to be the first time since we started this company that it will be obvious through the product what the vision of this company is.”
Part of that vision is to transform the peer-to-peer exchange model from essentially a digitalization of classifieds — where businesses can generate leads or the local resident can sell his bicycle — to a local economy that creates opportunities for sustainable growth. Like Etsy or Square in its early days, Zaarly is going after the micro-business segment — a growing population of individual sellers who do not have the capital, or need, for Main Street’s physical marketplace.
The key here is that commerce — the actual exchange of goods — is not what drives value. As the connected payments space is proving, commerce is quickly becoming a commodity intended to create value elsewhere. “Building Airbnb’s payment system: that’s increasingly easier every day,” says Fishback about the home rental service. “Having a trusted community of people that are willing to sleep in each others beds — that’s the competitive advantage. And that’s the zone we’re in more than anywhere else.
The “human element,” as Fishback explains, is one of the reasons why Zaarly remains almost exclusively about selling services: “It’s going to be really hard to be in the products world and not compete with Amazon. An iPhone is an iPhone is an iPhone, but a plumber is not a plumber is not a plumber.”
Down the road, the challenge for Zaarly is tying its marketplace into the existing search and discovery tools that consumers use to find local services. It’s hard to imagine the company scaling its buy-side without hooking into the existing consumer pathways like Yelp or Google. Part of the reason a company like Square has succeeded is because it asks very little of consumers. For Zaarly to grow, it will have to do the same.
Steven Jacobs is deputy editor at Street Fight.