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Summary:

German startup Gigalocal has good backers and a name that seems inspired. But can its focus on a local market be enough to help open up a gap in the increasingly busy — but still relatively unproven — field of service marketplaces?

gigalocal

Hamburg-based Gigalocal, which has just launched its website and apps for iOS and Android, calls itself a “virtual wish list” — a place where users can get help, “no matter what you need, when you need it, where you need it.”

The reality is that it’s entering the increasingly hot business of service marketplaces — a busy space full of companies offering platforms that match buyers and sellers of low-value jobs and errands.

Gigalocal allows users to post up the tasks that they need to be completed (the “gigs” that its name riffs off) and lets others bid for them. Want somebody to pick you up from the store later on? Need someone to pick up your dry cleaning or drop off a parcel? What about getting a dog walker to fill in when you can’t?

Even if you don’t understand German, you can get an idea of their pitch from this promo video, in which the user has forgotten his anniversary and uses the service to pull together things at the last minute.

After a fitful start, the company’s been greeted with some interest at home — not least because of its team. The founders include Sebastian Diemer and Alexander Graubner-Müller, who worked together in the past on Gaopeng.com, a Chinese Groupon variant which was bought by Groupon itself. Investors, meanwhile, include Heiko Hubertz of gaming portal Bigpoint and Edgar Berger, the head of Sony Music International.

In addition, the company is building on work it has done already with another website, Gigalo, which is based around a very similar concept. Gigalo allows people to offer jobs at a fixed rate (rather than auctioning), and is available in German and Spanish, with local versions across six countries in central and South America. It’s gained little traction so far, but the suggestion appears to be that its struggles will inform the team behind Gigalocal.

It’s not just previous experience that seems to inform Gigalocal, though. To get ahead, it’s not just learning from its own past, but also from rivals elsewhere. And this whole idea — the errand marketplace — is certainly one that’s starting to warm up right now. We’ve given some coverage to TaskRabbit, and there are a number of other companies also eying up the same area: Zaarly, Thumbtack and more. Looking around Gigalocal suggests that it is keen to find out what it can from those businesses wherever possible.

Perhaps that’s no surprise, given that the team behind Gigalocal also has connections with the famous (or perhaps infamous) Samwer brothers — a trio of German siblings who have become known for making millions by cloning foreign startups. Their roster has proven pretty successful in stealing a march on American companies before they can get to the German market, often resulting in selling their local service back to the “parent” company. That includes eBay clone Alando and Groupon clone Citydeal (bought by eBay and Groupon respectively) as well as still-independent services such as Facebook clone studiVZ, Groupon clone Citydeal and YouTube clone MyVideo.

Right now Gigalocal is definitely following the pattern by focusing first on Berlin and then, later, on other German cities. However, I think its chances of success are more intimately linked to whether the entire service marketplace model is a good long-term bet… and that’s where I have questions.

Personally I’m not sure if there’s enough in this whole business for it to succeed without some serious evolution. After all, it’s starting out with a proposition that actually aims at not one but two audiences simultaneously: buyers who need to be both time-starved and affluent enough to use the service, and sellers who need to be time-rich and financially to take up the job offers. That leaves it open to a lot of issues depending on the friction between the two groups.

And there’s also a lot of issues around the trust levels involved, which need to be high enough to overcome the fears of adoption. Is the system open to abuse? What happens if it goes wrong? TaskRabbit, for example, vets all its runners — but doing that properly is a tough business at scale. These are the crinkles that all need working out if any of the companies (let alone all of them) are to succeed in the long run. It’s not hard to imagine that every company offering an errand marketplace is only a few steps away from an AirBnB-like disaster that dramatically erodes trust.

But who knows? The crucial requirement for success is to become a platform for other people. And if, like eBay, these companies can build up their business to the point where some people can earn a significant livelihood, we may see a breakthrough.

  1. secretfrankfurt Thursday, August 18, 2011

    Go for it boys’n girls!!!

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  2. (the “gigs” that its name riffs off) what this mean?

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  3. Hey guys,

    thanks for the article – we’re appreciating international coverage big time and are really up to something very big here :) Small correction, though: The team behind Gigalocal is not connected to the Samwer brothers in any way and follows a different approach in terms of not copying but adapting super-early-stage-models in a differentiated manner (vs. cloning proven concepts) and creating a sustainable business moedl (vs. selling overheated blown-up business models):

    Gigalocal is neither a copycat of Zaarly, nor taskrabbit but has some strategic USPs that are not merely related to local adaptation but constitute a clearly different value proposition and strategic positioning.

    Best from Hamburg,

    The Gigalocal Dudes

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  4. You are missing a few points here:
    The competitors you described are not available on the german market or in the German language.

    Also it makes clear sense to start with Berlin as one of the the biggest city in Germany (as in too lazy to look up if it actually is the biggest, but should be)

    Nicole

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