Task Rabbit-SWOT Analysis
Task Rabbit is a new venture by C.E.O and founder Leah Busque who initiated the company in Boston through the help of local micro-investors as Run-My-Errand, before changing its name to Task Rabbit. The company’s initial 1$ million dollar support comes from Baseline Ventures based in san Francisco and Maple Investments from Menlo Park. The company offers online service networking on a local basis, where people with errands to be run can sign up, buy credits, post their errands and errand runners to run their errands at designated fee.
The runners get the fee designated for the service and Task Rabbit deducts some service facilitation fee from the clients’ credit record. The company is up beat and currently it has opened in San Francisco and its making way for further expansion to more cities (Figueroa, 2010). This paper analyzes the company’s potential success in the future as well as any challenges that it may encounter in its legal and financial operations. The analysis shall adopt the SWOT analysis model-Strengths, weaknesses, opportunities and threats sub-units for analysis.
Strengths:
Firstly, the company seems to have established a name and image after its success in Boston, and additionally; it success may prompt it financial supporters like Baseline ventures and Maple investments to put in more funds thus helping grow faster (Roush, 2009b). The fast rate of its expansion in Boston and now into San Francisco is a sign of the company’s fast gaining of ground which implies a faster rate of its growth, because currently through its face book initiative other cities are calling for it service extensions to their locales.
The model of approach that company has used which is totally “crowd-sourcing” of services with minimal to almost nil permanent employment cuts costs and makes its operations effective and over-heads free. The personal launch strategy used by Leah in San Francisco also ensures effective management of new start ups, and this can ensure successful start ups by ensuring she maintains the same approach and model-however; this may be a source of a potential pit fall as we shall review in the weaknesses section of the analysis (Roush, 2009a).
The dedication of Baseline ventures and maple investments to the project coupled by the fact that they have successful networking ventures such as Digg and Twitter as well as Web 2.0 within their business port folio means a plus for Task Rabbit which could take further advantage on this to develop their potential. In fact Busque revealed in her interview that she is proud to work with the two because of the resources the two bring to the table and experience.
Weaknesses:
The company currently relies on Leah Busque, the only permanent employee, and as far as she still insist to pioneer new branch outs in various cities she may have to seek more permanent employees to stay behind and ensure all is well. However, this may not be guaranteed because efficiency and effectiveness of individuals differ and this may change the image or quality of service delivery in the long run and that may not augur well for the company.
The company also lacks a clear example to follow because these are totally new ventures with similar variations that may not have worked in the past such as Kozmo. Therefore, the lack practical bench marks and they have to rely on intuition and proper analysis of the status quo.Additionally, the company has no sure source of capital yet-through its success may attract new investors. Currently, the company runs on a measly 1$ dollar from the two willing micro-financiers whose steady support relies on the firm’s current success. Thus there is no certainty about the next round of funding (Roush, 2009b).
Opportunities:
The implosion of earlier similar ventures means that the market is currently un-serviced and thus providing an opportune moment that Task Rabbit can positively capitalize on. In fact, this is one of the advantages as a pioneer in the online service networking industry (Roush, 2010).The success that has currently been attributed to Task Rabbit has given it a positive image that the company can capitalize on to expand further in to more cities. Start ups in Boston in less that a year since inception shows that the company has actual expansion opportunity that needs to be realized.
Threats:
There are similar ventures that have come up in the recent past with similar service provision among them: fixR, Labortopia and Assured labor. These companies provide similar, but subtly different services, and these pose a competitive challenge to task rabbit in the near future considering that they were late start ups (Roush, 2010).Other threats and potential legal pit falls may include they inability to guarantee clients high quality services. The company has however, set a high standard of measure where a single mistake or error can eliminate a runner from the list of service providers.
However, this does not guarantee the quality of service delivery for the incoming runners either. This may actually lead to legal tussles where clients may sue for receiving sub-standard services and request for refund as well as taint the company’s image.An almost similar scenario may occur for the errand runners, who may be assigned tasks that are more than prescribed or described during their offer. This may result poor pay for more or heavier work thus leading to complains from errand runners which may take a legal twist.
Additionally, any damages and security issues that may be breached may take legal twist that may end up at Task Rabbits door steps because they are supposed to guarantee high quality service and genuine errand runners that may pose no security threat to the users of their services. Therefore, cases of theft or crime may haunt the company. Therefore, hiring reliable employees and maintaining employee reliability may become a challenge as the company expands further.
Conclusion:
Despite the anticipated challenges Task Rabbit may still make it big, because it has had a good start and will from its supporters. Unlike kozmo, the model it has used may be more reliable and hence guarantee its growth. The proper preparation to tackle these anticipated challenges may determine how well the company will succeed in establishing and developing a firm base. The fact that it has a fast, first start and there is a willing market implies greater chances of success.
References
Figueroa, A. (2010),. Task Rabbit: New part-time work for people without jobs, retrieved on 2nd March, 2011 from http://www.csmonitor.com/Business/2010/0805/TaskRabbit-new-part-time-work-for-people-without-jobs
Roush, W. (2009a),. As unemployment rises, “service networking” startups find niche matching workers with odd jobs, retrieved on 2nd March, 2011 from http://www.xconomy.com/boston/2009/02/10/as-unemployment-rises-service-networking-startups-find-niche-matching-workers-with-odd-jobs/
Roush, W. (2009b),. IT, Social Networking, Funding: Run-my-errand is fbFund finalist, retrieved on 2nd March, 2011 from http://www.xconomy.com/boston/2009/05/19/runmyerrand-is-fbfund-finalist/
Roush, W. (2009c),.Run-my-errand picks up $1 million dollars from West Coast venture firms, retrieved on 2nd March, 2011 from http://www.xconomy.com/boston/2009/10/30/runmyerrand-picks-up-1-million-from-west-coast-venture-firms/
March, 2011 from http://www.xconomy.com/san-francisco/2010/06/22/taskrabbit-kicks-off-errand-running-service-in-san-francisco-boston-burbs/
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