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Bootstrap First to Exit, Bootstrap Again, Then Raise VC Money ALL from St. Louis: Stephanie Leffler, CEO of OneSpace (Part 5)

Posted on Friday, Jul 29th 2016

Sramana Mitra: How long have you sold the service?

Stephanie Leffler: We started in January 2011 – about five years.

Sramana Mitra: Tell me a little bit more about how this services business ramped up. Amazon was sending you people. You were managing their larger Mechanical Turk project using your platform. Did all leads come from Amazon or did you start marketing yourself?

Stephanie Leffler: In the beginning, all leads came from Amazon. We did start marketing ourselves. It’s funny. Thinking through the entrepreneurial journey, we found ourselves in a position where we never understood how good we had it in our first business with people searching online, finding exactly what we had to sell, and calling us and buying it. Now we’re in this space where there’s not even a clear term for what we do. People don’t search it. It’s hard. We hired a couple of enterprise sales people to go out and proactively reach out and try to sell our product into big enterprises.

We found a lot of synergy in the retail space. Amazon built Mechanical Turk to help them power their retail business. Retailers definitely understood it and we started to get some traction with retail customers on our own – not because they were searching for it but because we were introducing it and getting them to buy.

Every company in the world, in my opinion, has a growing need for content. We found a niche with retailers and what we classify as publishers. These are companies who need to publish digital content. Those are areas where our software was very good. We had a great workforce that we built up. The truth is it’s still not easy. It’s still not even remotely close to easy because people still don’t necessarily search for us. People don’t know it exists. Today most of our marketing is still reaching out and proactively introducing products to customers.

Sramana Mitra: Are your Mechanical Turk workforce producing content and editing content? Where is the sweet spot of the service that you’re providing?

Stephanie Leffler: That’s a good question. It has evolved over time. When we first started, we did run content projects through Mechanical Turk and found that there were not very many people on Mechanical Turk who were capable of writing and had editorial skills. There were some. We executed 6,000 tests and found 200 who could pass our basic writing test.

What we did in the early days was actually recruit ourselves and help people join Amazon Mechanical Turk. When we first started, all our software did was sit on top of Mechanical Turk. We leveraged them for lots of stuff so we didn’t have to build it ourselves. As we recruited more and more people into the ecosystem, we realized that there were a lot of freelancers that weren’t good. We acquired a competitor of ours who had their own database of freelancers and integrated that with our platform. Then we were able to recruit our own work force as well as leverage Mechanical Turk when we needed to. That’s our strategy today.

We partner with multiple marketplaces. We can pull people from those marketplaces into our platform. We also have more than a hundred thousand people who are considered our direct workforce. As far as the service that we provide, we do a ton of content. To clarify, the resources who create content for us on the platform generally are not the group who come from Mechanical Turk. They have been recruited because they have a great blog or they have shown that they can write in one way or another.

Sramana Mitra: You’re hiring, independently, people who can write and bringing them on to Mechanical Turk and working that way?

Stephanie Leffler: We did for a long time. When we launched our own platform where we could onboard people directly and pay them, we stopped helping people join Mechanical Turk because that was pretty clunky. Now they just join One Space directly. When you launch a project on OneSpace, you can choose which workforces can see that project. You could open it up to people on Mechanical Turk. You can open it up to just your own team.

At this point, anybody that we recruit is getting recruited into OneSpace directly. It costs less for us to pay them. If you’re coming from Mechanical Turk, we have to pay a 10% or 20% fee. If we recruit you directly, we’re paying just whatever the PayPal fee is.

Sramana Mitra: Now you have your own digital workforce and you supplement that with Mechanical Turk. You have enterprise customers who are using this freelance workforce to manage their projects.

Stephanie Leffler: That’s correct.

Sramana Mitra: The projects are all in the area of content development and processing?

Stephanie Leffler: A lot of content development and processing, but it’s a pretty diverse set of projects. Content is a big one. It could be anything from content development, editing, optimization, and even idea generation. We have a bucket of data. Within data, there’s a ton of research that goes on. Not academic research but research as in, “I have a database of 100,000 customers. I want to know these six pieces of data about them.”

In a B2B company, we might go out and find out who is the purchasing manager for a particular company. We do lots of categorization, data cleansing, and classifying Big Data sets in all sorts of ways. The next bucket is moderation and looking at things that are submitted. It might be vendors who submit products to a retailer to post on their site. Those have to be approved. It might be people making social media posts. Those need to be family-friendly.

Then there’s a huge emerging bucket of all kinds of things that are so small that they aren’t worth mentioning. They’re anything from graphic design, health and records administration. The platform is now built in such a way that it can facilitate almost any type of work.

This segment is part 5 in the series : Bootstrap First to Exit, Bootstrap Again, Then Raise VC Money ALL from St. Louis: Stephanie Leffler, CEO of OneSpace
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