Inspired by the Social Capital Index located here on xigi.net (see below left), two analysts are posting their take on the enterprises listed in Deals in Play monthly. These DEAL REVIEWS highlight some of the market opportunities and challenges, and are based on reviews of publicly available information. Our hope is that these reviews - and importantly the dialogue and feedback on the deals that follows - will add further clarity to the growing social venture finance space. The following is Andrea McGrath’s analysis of Laborfair.

LABORFAIR

By Andrea McGrath

How do you find someone to clean your house? Or clear out the gutters, mow the lawn, plow the driveway, move that old living room set to the local dump? How about finding reliable childcare or elder care?  Typical solutions - such as personal referrals, yellow pages, classified ads, online ads, or online searches can be time-consuming, expensive, and inefficient. Most importantly, many of these solutions often lack the critical aspect of ‘trust’ - trust of the referral source, the person contracted, and in the transparency of the pricing. Enter Laborfair - an “eBay for labor” whose mission is to provide an easy and trusted solution for connecting those who need a service with those who can fulfill it - while at the same time enabling fair prices and fair wages - and additional work opportunities - to a workforce of service provides that includes many of today’s working poor.

So how does it work? Uses have free access to search for, connect to or post a job request and can use Laborfair continually. Those providing services build profiles (with viral social media), and credibility is checked through at least one professional reference (required - and Laborfair verifies) and user reviews (as submitted). Those looking for services can go to the online platform of providers which shows profiles, reviews, ratings, availability (days), and provides the ability to search by locations (currently the Bay area), categories of service, ratings, or name. Users contact providers directly with a request, or they can simply post details of their request and how many responses they would like to receive by email or phone - and providers are notified of these details. Providers assess service requests and contact those interested directly. Market pricing is transparent, and all wages go to providers. Laborfair is free for consumers and provider registration -although providers pay a $3-to-$10 fee to respond to exclusive job requests. After hiring a provider listed on Laborfair - users are encouraged to provide a review of the service - which helps to build the desired trust and credibility of listings through user reviews. In addition to building their ‘core’ online home services marketplace, Laborfair is also actively building their value proposition to potential partners (consumer products and service organizations) - building on the needs of branded products to connect consumers and service providers; placement agencies to match clients to employers; and industry groups/nonprofits to match their base to employment opportunities. Laborfair seems like a really strong bet! After winning the Duke MBA start up challenge and raising seed capital of $450K in 2006, in 2007 they developed the proof of concept and beta model and rolled out to the L.A. market by December. They also have a solid management team of three (3) including a Reuters Digital Vision fellow and a great board of advisors with diverse experiences ranging from AOL., Microsoft, microfinance, labor, and several entrepreneurial ventures. Operationally - since launching - Laborfair has healthy initial revenue numbers from revenues per lead, retention of providers, and lead revenue from returning customers - and healthy growth in site traffic, service provider listings, lead generations, and revenues.  

It seems that there are many ‘wins’ in this model - I’ve read the materials twice and I just keep thinking “I like this model..” Listed above are some of the organizational and investment strengths - there are more that could be highlighted on the consumer end and the provider end - and importantly on the social impacts of its business model. For example, some of the initial data gathered to date demonstrates that Laborfair’s provider market includes many ‘working poor’ who have been able to gain additional work and clients, build a solid reputation, ensure a fair wage, and increase their monthly and annual incomes. These are real results, and measuring these numbers - and others related - should be central to Laborfair’s mission as it moves forward. Net-net - at its core - Laborfair (as they state) is a model that empowers the working poor while addressing a real consumer need. Win-win!