Montreal’s International Startup Festival was a week of sun, fun, and compelling conversation. Here’s one of the great startup chats we had à Le Jardin des Écluses.
Montreal-based curated design and development marketplace Crew got its summer started right with a $10 million Series A round, led by Accomplice, with participation from Real Ventures, iNovia, BDC Capital, and others. The FounderFuel alumnus was on hand at #Startupfest as the round was closing, so we sat down with Crew co-founder Luke Chesser about scaling curation, and understanding what successful entrepreneurs mean when they talk about traction.
So you’re from Vancouver, but you’re now here permanently in Montreal. How did that happen?
I originally came up to Montreal when I was 17 to go to McGill University for engineering. And I was doing engineering – civil engineering – and it wasn’t what I thought it was going to be. It was missing the creative aspect of engineering that I was really interested in.
In my last year at McGill I hooked up with the three other co-founders of Crew – Mikael, Stephanie, and Angus – they were working on this company called Ooomf, which had just gone through FounderFuel. I joined them right after they raised the first half a million dollars, and basically from there we did the usual startup thing and pivoted maybe three or four months after I started.
And the ‘usual startup thing’ in this case is basically figuring out what to do?
Yeah, we were basically looking for product-market fit. We were working on a mobile landing page for apps, and while we were working on it we weren’t getting a lot of traction. It’s hard to know at the time what traction looks like because you’ve never done this before, but when we pivoted to the idea of building a marketplace for mobile and web talent, what we realized is that we hadn’t seen traction before like what we’ve seen now.
In our first month we did about $100,000 in projects and just from there it took off. In our first year, we saw our average project size continually creep up to the point where it was $5,000, and in our first six months I think we did $1,000,000 in projects. Since then, in the last year and a half, we’ve done over $15,000,000 USD in projects, and the average project size is around $10,000.
So let’s talk a bit about the platform, because there has been an explosion in the last couple of years of marketplaces that connect talent to clients. But you guys are taking a more curated approach.
I think most people are aware that there are marketplaces online, and have been for a little while, that will connect you designers, developers, maids, whatever it is. And they all go on the lowest price point model, based upon the way that they’ve set up the marketplace and the interactions between the people posting the projects and the talent that’s on there.
“It’s hard to know at the time what traction looks like because you’ve never done this before.”
And what you see is that quality doesn’t always win, it’s basically a competition on price. The work suffers, and the people that work on the projects aren’t happy because they’re always competing on price.
So what we’ve done is flipped it, and said from the beginning we’d curate both sides. What that means is to be part of the platform, a designer or a developer is vetted by our team. What we look at is past projects they’ve worked on, past experiences, how they interact with clients and how they communicate. And while they’re working on a project we’re constantly looking at how they interact with clients on Crew, to make sure we’re constantly vetting.
On the flip side, we work with project owners to help them make the best decisions possible for their budget – like maybe choosing a landing page over a full site. Basically what we’re trying to do is provide some kind of value even if we can’t match them with someone in their price range.
So you’re basically Match.com’ing a whole industry vertical.
Basically, yeah.
We were talking about traction before, but how do you scale that? I’m assuming it was a lot of work and trust building on both sides.
There’s kind of a couple of ways that we’re scaling it. The first is that our support team and project management staff is incredible, and as we’ve scaled we’ve worked on tools to quickly figure out whether or not a project is going to be a good fit for Crew. So that’s been a lot of work on the back end for our developers.
On the other side, what we’re trying to do is educate people before they come onto the platform. So that means we’ve put up tools like how much to make an app, which blew up actually on the Internet.
Ok, now a $10 million round, bringing you to I think 13-14 million total raised to date. What’s the next step?
The first thing is definitely continuing to build the team. To give you an idea, at this time last year we were probably five or six people working on Crew, and now we’re about 24 people. So our biggest challenge over the last year has been growing the team and making sure the people on it are excited and talented. We’re going to try and double that team size, but do it without losing the quality of the team.
At the same time, we’re going to be doubling down on our marketing efforts. We do a lot of stuff to built trust and provide information outside of the platform, to help bring people onto the platform. Because it’s a high barrier for you to get onto the platform and post a project – that’s a pretty big commitment and trust. And what we found was building tools outside of the platform that people could use for free, they saw the level of work we did, and the level of commitment to quality, and that builds trust when they are ready to build something.