- A service marketplace in the form of a “catalog of business cards” of masters is rubbish. Even if this marketplace has ratings and reviews.
- The first time, the customer will choose a master based on ratings and reviews, and then continue to work with them directly, bypassing the marketplace. And this will always happen! Unless the marketplace transitions to the “managed marketplace” model.
- The beauty of it is that this model can be implemented for any services. Even for such unconventional ones, like this startup:
- And which service sector do you want to “explode” by building your managed marketplace on the ruins of outdated marketplaces “with ratings and reviews”?
Project Essence
Confetti conducts corporate team-building events — but in a virtual space.
This works well for companies that have implemented remote and hybrid (office plus remote work) modes of operation. Regular joint events help maintain emotional connection between employees and the company.
However, the platform is also used by large companies operating in an office. This is because preparing and conducting offline events for a large number of people takes a long time and is expensive. And emotionally shaking up and supporting employees needs to be done regularly — for which the virtual format has proven to be very convenient.
However, events do not necessarily have to be held for the entire company. They can be held for individual teams of various sizes. The service catalog includes events for groups of 4–20 people, as well as for 500 participants. Events usually last from half an hour to an hour.
The themes of the events vary greatly — quizzes, meditations, cooking classes, yoga and drawing lessons, stories about history and culture, training on how to fold paper figures or make scented candles, and many other activities that may interest, engage, or entertain someone.
Such events can be held for holidays or regularly to integrate newcomers into work teams, as well as to incorporate them into the employee development program.
To conduct events, you need to select one from the catalog of possible events and specify the planned number of participants.
After that, the event needs to be “customized” — that is, select options for its conduct, for example, what theme to conduct the quiz on, or what exactly participants should learn to cook or draw.
Depending on the theme, number of participants, and options for its conduct, the price for the event will vary. Once everything is specified and confirmed, you need to select the date of the event and place an order for its conduct. Confetti will take care of everything else — including even sending invitations and reminders to participants.
Currently, Confetti has started implementing subscriptions for regular event hosting and bulk prepayments for future events — which reduce the cost of an individual event for the client but provide a more stable revenue stream to the startup.
Confetti’s services have been used by 8 thousand companies, which have held 33 thousand virtual events with the participation of more than 1 million participants.
While studying the startup, I came across an interview that the founder gave in November 2022 — and there she mentioned 4 thousand clients. This means that the number of new clients doubled in 2023. The startup claims that it has now reached the size of expected annual revenue of 12 million dollars but expects this figure to grow to 15–20 million by the end of the year.
I first noticed this startup back in the summer of 2021. And now Confetti has raised new investments totaling 16 million dollars, increasing the total investment in the project to 22.3 million dollars.
Something interesting
Another similar service for virtual team building — created by the startup Teamraderie, which raised $9 million in investments for this purpose. In addition, there are several others I haven’t written about 😉
The theme of virtual corporate events — judging by the number of startups and the investments they attract — is growing quite actively.
Here we see the same picture as with business meetings — “we tried it, and we liked it” 😉 After all, before the pandemic, it was believed that all important negotiations and presentations should be conducted in person. Then, during the quarantine, everyone had to switch to online formats for business meetings — and it turned out that it also works, but there’s no need to spend time traveling back and forth. The pandemic is over — but the habit of meeting online remains.
Today’s Confetti also used to organize offline team-building activities before the pandemic. During the quarantine, they had to come up with something to survive — and decided to try conducting team-building events in an online format. Companies liked this format, the quarantine ended — but the appetite for conducting corporate events in an online format continued to grow 😉 Because such events turned out to be faster, cheaper, and can be held much more often than “old-fashioned” offline events.
Before the pandemic, Confetti managed to attract $2.25 million in investments, and during and after it — 10 times more! All because they timely switched to a new online format, which “suddenly” turned out to be in demand.
This once again reminds us that rapid growth is possible only against the backdrop of key changes in the surrounding world — in the market, in technology, or in people’s behavior.
Therefore, the most important skill for startups is to be able to detect these changes as early as possible and react to them faster. Roughly speaking, it’s not worth trying to “change the world” with your idea — it’s much easier and more profitable to be able to change yourself 😉
Another important point is that at the very beginning of the transition to the online format, Confetti was a “regular” marketplace — which gathered third-party contractors on its platform capable of conducting online events and offered companies to use their services. However, what happened there afterward was not their responsibility. They were like a marketplace — their task was to connect the customer with the performer, not to be responsible for the result.
However, now they call themselves a “managed marketplace” — a marketplace that is responsible for the results of the performers presented on the marketplace and helps customers achieve these results.
For this purpose, they introduced a corporate support service, which helps customers at every stage of organizing the event and monitors the result of its implementation, as well as began to approach the selection of contractors more responsibly, sacrificing even their quantity for the sake of quality.
Where to Run
It’s funny that the other day, in the fast-founder chat, we were discussing the topic of service marketplaces in terms of the danger that service marketplaces face, namely, the risk that the customer may directly negotiate with the master who came to them — and then call them without involving the marketplace.
When a service marketplace is a “catalog of business cards” of masters, such a risk indeed exists. Why should I pay the marketplace for choosing the same business card every time 😉 Even if the first time I chose a master based on ratings or reviews.
The marketplace can only be constantly paid for the result it guarantees! When it ensures the completion of work within a specified time, budget, and quality — replacing performers if necessary, helping the customer plan the process of execution and work, and solving problems that arise during the process.
A startup like Sweeten operates on a similar model of a “managed marketplace,” for example, about which I wrote about in early 2023. It helps customers to renovate their homes or apartments using contractors presented on the marketplace while controlling all stages of work execution. This startup has raised $20.7 million in investments.
Thus, the possible direction of movement is the creation of managed marketplaces for specific types of services.
You don’t even need to come up with anything new. You just need to look at the types of services people are currently ordering on classified ad sites and “regular” marketplaces — identify a specific type of service and create a managed marketplace for it. Start recruiting performers from these same classified ad sites and marketplaces and advertise it to the audience of those same classified ad sites and marketplaces, claiming that “unlike them, we are responsible for the result.”
So, which service sector do you want to “explode” by building a managed marketplace on the ruins of already outdated classified ad sites and marketplaces “with ratings and reviews”? 😉
About the Company
Confetti
Website: withconfetti.com
Last round: $16M, 26.03.2024
Total investments: $22.3M, rounds: 6