Friday Entrepreneurs: Wei Yang, CallForSitters.com
September 08th, 2006 - 3 Comments
Today, I’m featuring Wei Yang, 27, from CallforSitters.com, a site that connects babysitters and parents. It’s cool because it has the classic chicken-and-egg problem, yet it has nearly 100,000 users! If any of you have business ideas that only become useful after a lot of people join, check this one out. As you read below, note a few things:
- Wei Yang’s site removes barriers in some places, but intentionally adds them in other places (e.g., charging parents). Think about how you can use barriers strategically, as I wrote about here.
- He’s hiring for equity. If you’re interested, let me know and I’ll connect you. (If you’re not sure, ask yourself if the skills you’d learn would be applicable to things you’ll do in the future.) One email never hurt anybody.
- He funded it with credit cards!
- The advice to really do your research about your competitors is right on. Every week, I get emails from people thinking they have a secret idea. They say something like, “Ramit, what do you think about starting…an online video site??? This is when I throw a large piece of metal through a window. PLEASE DO SOME HOMEWORK AND SEE WHAT OTHERS HAVE DONE!!! This was the basis for my article, 8 stupid frat-boy business ideas.
- He talks about how he skipped a week of classes to polish an executive summary, submit it to an entrepreneurship program, and take this thing live. Think back to your last week of work or classes. Did you do something that could change your life?
I love this. But I can’t figure out how you got around the chicken-and-egg problem. (The chicken-and-egg problem is when your site needs a lot of people to be useful.)
The chicken-or-the-egg problem prompted a long debate when we first thought of the CallforSitters.com idea. For our service, we started by defining our core markets (parents that need babysitters and babysitters that need jobs) and then we looked towards traditional communication channels to see how the two groups previously interacted. We debated a number of models including: charging only the parents, charging only the sitters or making the site entirely free for everyone. While the latter option sounded great on paper for attracting new users, we decided that a safer option for our members and to keep out unwanted guests would be to setup a barrier of entry so that only the people who truly needed the service would be signing up to our website.
Traditionally, parents who don’t have friends or relatives to rely on would use newspaper classifieds and bulletin boards to find local babysitters. We wanted to improve this exchange by providing an enhanced online version with a faster turn-around time. Our babysitter profiles answer common interview questions, so parents can pre-screen sitters online and contact only those who they feel are qualified. We also provide the emails and phone numbers of our members so that parents will have more options to contact the sitters after putting their ads out.
While there are competing services out there that charge the babysitters membership fees and let the parents post jobs for free, we went with the more traditional model where we charged the parents for access and built up a reserve of babysitters by letting them sign up for free. We felt that in our niche, the people that are looking for jobs are most likely the people that are in need of money, therefore we wanted to help them by sharing this resource without making it difficult for them to participate.
How successful is the site now?
The site over all has been receiving great feedback from our users. We have just shy of 100,000 users and we have babysitters registered in every state. Numbers aside, the fact that we are helping parents who are in dire need of child care so they can take a break from the daily grind or confidently accept a full-time job without scheduling concerns is what makes this website a worthwhile venture.
Every now and then, mixed in between the customer service emails are the letters of praise and appreciation and these letters are the ones that really help reinforce what we’re doing.
Do you have any business partners?
Right now the site is co-owned by myself and a few friends and family members. Most of the co-owners compliment my skills in one way or another. However, if there’s anyone out there that would like to help us grow for equity, we would certainly be open to discussion.
How did you initially get started? (Be specific, including how you noticed the need—was there a personal reason?—came up with a solution, created the web site, and went through other logistics.)
The idea was started in my dorm room like most other college start-ups. At the time, I needed a job and the only advertised jobs near my campus were jobs selling Ginsu knifes or scissors that can cut pennies (if for some reason that is your forte). Frustrated by the lot of disappointing options, I wanted to develop an online forum where students could go online and actually find a decent, worthwhile job that paid more than minimum wage. At the time, Monster and HotJobs were all pretty hot, but most of these websites offered career options and not so much part-time gigs. So instead of trying to compete directly with the big boys, I wanted to create something that served a different audience. Flipping through the school newspaper, the child care section always had the most number of ads and many of them I had seen running for a few weeks probably due to a lack of good responses. Based on my knowledge of the web, I felt that this was probably one niche I could do a lot of improvement on; thus the idea of CallforSitters.com was born.
However, what really pushed the idea forward during my brainstorming phase was a new opportunity that had popped up at my university for entrepreneurs. My university started a new entrepreneurship program which I was really interested in. Luckily for me, the program was open to anyone interested whether they were in the business school or not. The only catch was that an idea had to be submitted and be accepted by the dean of the new program. I skipped a week of classes, polished my idea, and submitted the executive summary as my entry. When I was finally accepted into the program, I decided to use the project as my thesis, and I built out and refined the rest of the details from there.
How did you fund it at the beginning?
The project was started mostly off of credit cards, possibly some student loans and whatever the website made back in the monthly revenue. I tried to do a good amount of networking while in college so the original website was actually created by myself and a group of friends with very little overhead. I was lucky enough to have some friends and family invest in the idea about a year after the initial launch to help grow the business. However, for the most part, the project has been self sustaining and maturing on its own.
I know a lot of articles out there suggest hitting up friends, family and fools to start but I will be the first one to say that is not always a viable or easy option, especially when the project is still just an idea. I mean, does everyone have rich friends out there? I certainly didn’t. I think if you truly believe in your product, even your friends and family would want to see that you’re committing some of your own money and sweat into the project. Sometimes you come out on top and win, but sometimes you also learn the hard way why some things just don’t work out.
And then what?
Funding today is a little easier as we now have more cash flow to work with. However, in my opinion we are still on the ground floor with a lot of potential for growth. I would honestly love to have a couple of million dollars to work with and do as I please, but I’ve also learned that with a smaller budget, you learn to be a lot more careful with your testing, analytics and growth strategy. In the end, I think it’s a fair trade-off to get that experience as well as learning to adapt with the industry changes.
What are some of the growth challenges you’ve had to face?
I think one of the biggest challenges we’ve faced is getting the word out so that we can be in all the markets we want to be in. The technology on the website (search by zip code) is in place for us to serve the entire U.S. but without the large corporate marketing budgets backing the product, it’s been a challenge to get both the parents and the babysitters from a new area to find us and completely fill up an area at the same time.
I remember reading somewhere that it takes about $80 million dollars to create a household brand name in the U.S. I guess we have quite a ways to go… =)
What’s been your biggest surprise?
My biggest surprise would have to be the amount of work that is involved with building up a brand and keeping the business running smoothly. You hear phrases like “A successful business is 1% inspiration and 99% perspiration.” As much effort as my team has been putting in, sometimes I think we still underestimate that 99%…
Do you make money?
I won’t get into the specifics but I think we are doing okay for now. I can say like most start-ups, we would like to be higher in the list of “websites you can’t live without.” However, as long as the service does its job of helping people, I am happy with its accomplishments.
Ok, seriously: Why are all babysitters women?
Heh, this is a good question. Even though about 92% of the sitters registered on CallforSitters.com are female, I don’t necessarily think one gender or the other would be a bad fit in the babysitting role; I guess it all comes down to what the individuals want to do as their jobs. This is certainly one question that would make for a good discussion on BabysittingForums.com!
What’s next from here? Do you want to grow? What does that look like?
We are currently working on a newer version of the website that will provide a more enhanced experience for our users than the current edition. We are definitely looking to grow within our industry as well as possibly expanding into other fields that can benefit from the addition of people-matching services.
At this point in time, I would like to focus more of our team’s efforts into marketing. If you view website development as the sprint portion of the race, then marketing is the marathon. You need to succeed in both parts in order to get to the end.
Should entrepreneurs keep their ideas secret? Did you? Should you have?
I think depending on what stage of the game you’re at, you should find a good balance between guarding your trade secrets vs. getting your ideas out to the open public. Obviously if you have the mechanics of teleportation figured out, I would guard that secret, file a patent and create a working prototype before letting the public know what you’ve been up to.
On the other hand, if you have yet another web idea, I would probably follow Google’s lead and build a beta, throw it out there and let your users tell you what they like and don’t like about your service and respond accordingly. As far as web based technology goes, I don’t think there’s much left that can be protected. YouTube only went mainstream about 3 months ago and already all of the major community websites have their own version of video players that can stream videos without hiccups. I feel like the only barrier to entry one can put up with websites is to build up the core group of audience and hope that the next copy-cat won’t be able to build up their audience faster than you can.
In my particular case, I have a group of entrepreneurial friends with whom I brainstorm and juggle ideas who I have always included when something new sparks in my head. I find that having multiple points of view and open discussions helps me see through flaws and weaknesses that I may have otherwise overlooked. However, for the general public, I wouldn’t necessarily announce our plans unless I am sure we are near completion on those features. If you can’t get any constructive feedback from the crowd especially at the early ideas stage, then there’s really no point for them to be in the know. However, if you are at a point where you are ready for debut, I’d say go for it; write a press release and let it all out.
It seems to me that your site is a great example of something removing barriers. Can you talk about that?
The one thing I love about CallforSitters.com is that it does work and it does save both the parents and babysitters time in their search for each other. The benefits we offer our sitters over Craigslist and regular bulletin boards is that you come, you create a profile, and you can link to it anywhere on the web. Unlike online classifieds, you don’t have to come back every 2 weeks and re-post your ad, which can be time consuming. Also, we send out daily emails to sitters when new jobs are posted in their area; this feature alone can save many frustrated job seekers hours a day knowing that the system has their back.
For parents, we implemented many features to help speed up their searching process over traditional media. If a parent was to look for a babysitter in the newspapers, they would first have to come up with an ad, re-word the ad so it can fit in four short lines of the classifieds, play phone tag for a few days or weeks and finally interview a few candidates and hire one that they hope is the best out of the group.
With our system, you sign up, browse the available profiles and you can choose who you want to interview within that hour. If there are too many profiles to check out, we also allow you to post a job with your needs and let sitters that fit the description respond to your job so you can see who out of the group of respondents fit what you’re looking for. To help you save time asking all the basic questions, the sitters on the site have answers to common questions filled out as well as available references listed in their profiles. All in all, we do our best to make sure parents can make an informed decision and get the best possible results from our service.
Tell us a little bit about yourself.
I’m currently 27 and live in the city of Atlanta. I graduated from the University of Maryland (Go Terps!) and I probably spent too much time in front of a computer day-to-day. =P I started working with the web in college and have done everything from design to coding to marketing (basically whatever the website needed). I’m always looking to meet other entrepreneurs out there who share the same passion for their projects as I do mine. I find chatting with fellow entrepreneurs can be very enlightening and the networking is always fun.
What advice can you give us about starting something successful?
My one advice for anyone trying to do Internet related businesses would be to stay abreast of the industry news and don’t reinvent the wheel. Make sure you do your research so that you are not unnecessarily creating everything from scratch when the parts that make up your service are widely available. If your idea needs certain components or code to make it work, see if you can find them on the web (free or for a fee) and put them together. I’ve come across so many development teams that insist on making every piece of code from scratch which just ends up being months of wasted time. Chances are someone out there is already working on your idea so take smart short cuts where and when you can.
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