“muddy waters make it easy to catch fish” – Seeing opportunity in an uncertain market

Read this post later

This week we spoke to Nicolay Alexiev, VP of Product @ Airtasker about his journey over the past 6 months as Covid hit having an immediate impact on their marketplace business. It’s not been a smooth ride for anyone but how teams think, manoeuvre and rally during these times separates the best from the rest.

How did you go about readjusting expectations and targets around the performance of the Airtasker product?

I should start by noting that Airtasker is a marketplace, and we live and die by the liquidity of that marketplace. For someone like me who had plenty of experience as a PM in the SaaS world, but none in the consumer space prior to joining Airtasker, it took a while to intuitively grasp the notion that in the context of an online marketplace, liquidity is the product. The value that the demand side of the marketplace comes for is the instant access to a significant volume and depth of supply, and vice versa. So if either side undergoes a sudden spurt of growth or takes a significant hit, it throws the entire marketplace off balance – i.e. liquidity is compromised.

So yeah, we felt the impact of the lockdown on Day 1, as our demand side took a double-digit percentage hit. Posters (consumers that come to Airtasker to post tasks) suddenly were posting far fewer tasks in a number of our traditionally strong categories, such as home cleaning, gardening and handyman. Our revenue is tied to the volume of transactions completed on the platform, so a quick glance at our marketplace activity dashboard was a sufficient wake-up call for us – our meticulous revenue forecasting, goal setting and resource planning was all of a sudden kaput, and it was very much a “back to drawing board” moment. We understood that the softer consumer demand is here to stay at least until the restrictions are eased, so we had to figure out how to rekindle it, whilst tightening our belts. 

Fortunately, Covid hit just a couple of months after we’d achieved our company goal – called “Freedom” – of reaching profitability by the end of 2019. We’d already been on this incredibly tough journey of turning Airtasker into a money making venture from being a money burning one. So the team – not just executives, but the entire organisation – was really quite calm in the storm. We were in a stable position financially, and we knew how to be frugal and achieve results without having to throw money at problems.

That said, in the first couple of weeks of lockdown we just didn’t know how steep the drop in marketplace activity is going to be, so we decided to review our existing capital allocation decisions, and put in place a hiring freeze. 

A few of the product bets we wanted to make in 2020 were contingent on new hires, so the freeze rendered those implausible, unless we wanted to drop something else. We needed to take a good hard look at our existing strategy, and figure out whether we can get away with some light alterations, or if it needed a more comprehensive overhaul.

Nicolay Alexiev, VP of Product, Airtasker

 

How did Covid impact prioritisation around your product road map? 

As I mentioned, we managed to stay calm in the storm. Our CEO Tim made it clear from the onset that he doesn’t want to make rash decisions, and that he expects the same from everyone at Airtasker. Of course in this environment emotions run high, and it was sometimes incredibly challenging to keep our cool in the face of an influx of customer feedback – mostly from our Taskers who were worried about the dwindling demand and how it would impact their earnings – and daily swings in key metrics across different categories or locations. Everyone’s brains were in solution mode, and there were easily half a dozen ideas per day for a product pivot to better respond to changing consumer behaviours. Still, we’d made the deliberate call to not undertake any major product changes driven by Covid, and to leverage our messaging capabilities – email, push and in-app banners – to manage Poster and Tasker expectations with regards to the precautions they needed to take to keep each other safe. We also introduced a couple of lightweight changes to certain user flows in order to accommodate for the increasing demand for certain pockets of services like “pick-up and delivery”, and “grocery shopping”. Overall we managed to keep knee jerk decisions to a minimum, but as I mentioned previously, our strategy certainly needed an update and we wanted to be very deliberate about it.

In the months leading to Covid we’d been discussing a change in how we devise and communicate our company strategy. We were aiming to move away from a traditionally top-down direction setting to a much more inclusive and collaborative approach. Inspired by the “W Framework” popularised by Lenny Rachitsky and Nels Gilbreth, I was keen to instigate a similar process for strategy planning. 

We’d been discussing this new process for a few weeks, and we still had a few kinks to iron out when Covid hit. Frankly, it was such a great forcing function for us to get the ball rolling and not overthink it. We knew the strategy was no longer fit for purpose, and it gave us mental freedom to try out a new approach. We also knew that we needed to move fast, so inviting more folks from Product, Growth, Design, Data and Engineering would allow us to explore a much broader problem space and come back with tighter, data informed recommendations. It was the perfect storm.

The leadership team put forward a strategy doc that laid out the different strategic pillars (bets) and the context behind those, and then we assigned a cross-functional task force to each pillar. After two weeks of research, data exploration, vigorous debate and rough estimations we had a pretty good idea of the impact and cost associated with each pillar. It became quite clear that we would be biting off more than we can chew if we had tried to pursue even half of what we originally had in mind. PMs talk about ruthless prioritisation all the time. I know I do. Covid really made us walk the walk. It made it crystal clear that we need to consolidate efforts. Suddenly, subtle misalignments and fuzzy-outcome initiatives and teams shone through. So we killed a bunch of them. It was a tough pill to swallow for the people affected, and we had to make two PMs redundant. Toughest thing I’ve had to do so far in my career. 

It was a gruelling process, but also quite rewarding in the sense that it gave us so much clarity as to what’s important. We had a coherent, deliberate and focused strategy, and it was something that the broader team was bought into because they’d been part of devising it. We’d focused on the pillars that best leverage our core strengths, and we were ready to rock and roll.

What did Covid highlight about your product that you were unaware of prior to the arrival of Covid?

As I said earlier, for a marketplace like Airtasker liquidity is the product. I recently walked past the facility that hosts the Carriageworks Farmers Market – a vibrant local marketplace in the Inner West held weekly on Saturdays. It was a Sunday, and the bustle, activity, chatter and excitement that I’ve come to associate the venue with was non-existent. It was the real-life representation of what I’d slowly been coming to realise about Airtasker – a marketplace without people to breathe life into it is but an empty shell.

So when we saw the demand drop in the first few days of lockdown, we were bracing ourselves for a standstill. 

That said, whilst Airtasker shares a lot of similarities with other marketplace products, its uniqueness comes from its horizontal nature. It is how Tim envisioned things to work, and it’s this premise of truly being the place to “get anything done” that has been intrinsic to every decision we make.

What this meant in practice was that whilst we observed certain categories of services like home cleaning take a hit, others like grocery shopping and bicycle repairs started catching fire. About three weeks into the lockdown our numbers had reached the nadir, and it wasn’t nearly as bad as we’d initially feared. In hindsight, it was clear that the horizontal nature of the marketplace was the ultimate hedge against Covid. It not only softened the blow, but actually highlighted new opportunities for future growth.

Watching these long-tail services pop up alongside our more popular categories was such a powerful reminder of who we are and what we’re about. Our mission is to empower people, all people, to realise the full value of their skills, whatever those skills may be. We saw just that happen and we took it all as a clear sign that we should go back to our roots, and to what makes us unique. It’s now at the core for our strategy, and it gave birth to a really exciting new initiative that you’ll learn about in the next couple of months 😉

Is there anything you’ve put in place to make you more reactive to unforeseen circumstances such as Covid?

Not really. I don’t believe you can plan for the unforeseen – it’s called that for a reason. That said, if there’s one thing that you can do as a leader to be in the best possible position for when something like this happens, it’s to ensure that you have smart, resourceful and resilient people on the team. It turns panic into creativity, crisis into opportunity, survival into growth.

What are you most proud of within Airtasker over the past few months?

It’s been an intense year so far, and a lot of the things that come to mind would be stuff that isn’t unique to us – e.g. how quickly we managed to transition to fully remote work, how we ruthlessly prioritised, and how we hustled to drive costs down.

That said, I think ultimately you’re measured against your ability to stay focused on your customers and create value for them even in the direst of times. One of the things we monitored closely in the first few weeks of lockdown was the impact that it had on our Taskers’ earnings. How much a Tasker earns determines their Tier – i.e. how much fee they pay us.  We knew that the softer demand will drive earnings down, and put Taskers in a tough spot. We could’ve shrugged our shoulders and explained this as “how the marketplace works”, but instead we decided on a wide scale fee rebate as a way to give back to our community and show support. That was an important statement that we’re in this together.

The other thing that made me super proud was this unsolicited “Thank you” video that one of our Taskers put together for us. It took us completely by surprise, and it was so well done. It tells the story of Tania Verbeeck who was stood down by her employer and found respite in Airtasker. Watch it if you can. It’s absolutely fantastic.

How did you and your team live out the Airtasker values during that time?

There’s a Chinese proverb I like – “muddy waters make it easy to catch fish”. It speaks to the opportunity that market uncertainty creates. I believe that a key difference between great Product Managers and average ones is the former’s ability to not just navigate uncertainty, but fully embrace it and make the most of it. 

One of our values is “When it’s on it’s on”, and I believe the PM team really lived it. The leadership team and cross-functional teams both relied on the PMs to step up and own it. We had three new PMs who started during the lockdown. Things could have gone pear shaped so easily, but they didn’t. It’s that resilience that I mentioned previously that allowed us to push ahead and reach calmer waters.

Have there been any operational or product changes as a result of Covid that you expect to maintain beyond the near future?

Like most companies, we’ve had to switch to a more asynchronous way of communicating. As a result, written documentation has become essential to how we operate and make decisions. It was a great opportunity for the PM team to evaluate some of our existing document templates and overhaul those to be more fit for purpose. 

It’s made it much harder for a shoddy idea to consume time and resources just because of a good verbal pitch or a beautiful slide deck. It’s one of the best things that’s happened to us, and it’s definitely here to stay.