Cover photo for Philip I. Thomas
✨ Highlights of last month • Launched Postcard. Had >15k visitors on the first day and hundreds of signups, which was more than I expected. Overall, a great start! • Did a smaller launch for The Contraption Company, the product studio I started where I'm building tools like Postcard. • Spent a week in London and took a spontaneous side trip to Copenhagen. I enjoyed lots of fantastic coffee - highlights included Prolog, April, Prufrock, Origin, and Omotesando.  And, the new King waved at (or toward) me 👋 • I joined as a guest caller on one of my favorite podcasts, Cal Newport's Deep Questions. • Moonlight, the company I co-founded in 2017 and sold in 2020, was just purchased by its top customer. I'm happy to see it continue to exist, and I've been helping the new team.   🤔 Things to share • Appreciated City of Gold, a documentary about the late food critic Johnathan Gold  • This post by Fred Wilson about Paris resonated with how I feel about London.  • It's fun to see so many new tools leveraging AI, such as Lex and InteriorAI. The maturation of AI technologies has changed the "adjacent possible," resulting in an explosion of applications of these technologies. • I've been reading many books about Nordic societies, which have impressed me as being well-positioned to succeed in technology-based economies.   • The Physics of Filter Coffee has been a fun read. It's by an astrophysicist who explores the science of coffee brewing. Since reading the book, I've started making my water for coffee.   • "In My Newsletter I Trust", "The Age of Social Media Is Ending" 📫 What I'm up to this month • Continuing to iterate on Postcard in response to user feedback and building some quirky experiments.  📍 Where I'll be (Let me know if we overlap!) • Dec 15-20: 🏝 Hilton Head • Dec 20-26:  🏔 Denver
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What I'm up to - October 2022

✨ Highlights of last month • I spent a week in the Catskills and saw a wild bear for the first time 🐻 • Shipped an archive page, social sharing improvements, and a showcase of customer websites for Postcard • Update the Contraption Co. website with a focus on "dependable tech tools"  • Published "When are low-code prototypes useful?" for a presentation that gave 🤔 Things worth sharing • I started replacing work-related video calls with "walk and talk" phone calls. It's also been a fun way to talk to friends. If you want to chat, let's walk and talk.  • Books: Small Giants is a good reminder of small businesses' impacts on local communities. Status and Culture made me realize that many online communities function as scoreboards for niche status groups. For example, Strava measures how quickly bicyclists ride common routes, and Nomad List measures how many places travelers have visited.  • Startups: Nexus combines checking + investment accounts into a single, auto-managed tool that keeps cash consistently invested but instantly accessible. Kindred lets you swap homes - we've used it while traveling a few times already, and it's an almost-free alternative to Airbnb. • Gadgets: Adhesive pen loops are a helpful add-on for any notebook.  📫 What I'm up to this month • Updating the onboarding for Postcard ahead of a broader launch • Spending a much-needed week in NYC 📍 Where I'll be (via Nomadlist) • Now to Oct 8: NYC 🗽
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When are low-code prototypes useful? Evaluating startup market and implementation risks

Ask for advice on how to make a startup, and most people recommend starting with a low-code prototype.  There are categories of businesses where low-code prototypes can help you de-risk a new idea: • Blogging software (like Ghost did) • Marketplaces (like we did with Moonlight) • Delivery (like Savioke did) But, there are other categories where a prototype won't provide a meaningful signal: • AI / deep tech (like DALL·E) • Search engines (like Google) • Space travel (like Blue Origin) To decide which ideas benefit from low-code prototyping, you can apply the frameworks of execution risk and market risk. Execution risk: Can you develop the technology to make this work? For example, making a website in 2022 has low execution risk because many people possess the skills, and there are tools such as Squarespace or Webflow that simplify the process. Building a self-driving truck has high execution risk because nobody has achieved level 5 autonomy with any self-driving car. Market risk: Do people want this, and is there a big enough market? For example, there is a low market risk for an apartment finder in Manhattan because people are already actively seeking that product and are willing to pay for it. Conversely, building a new social network has high market risk - because its success means competing with Tiktok and Instagram for a person's finite attention. Comparing market risk with execution risk, we can categorize businesses as Applications, Moonshots, Copycats, or Hard Tech. [Evaluating startup market and implementation risks] Applications leverage known technologies to solve a problem in a new way. Many well-known consumer tech startups, such as marketplaces and ecommerce, fall into this category. Airbnb is a great example - the software for booking hotels existed, but nobody thought to apply that software to booking peer-to-peer. The success of Airbnb was limited by whether people wanted to sleep in somebody else's apartment, not whether they could build it. Moonshots invent new technologies to solve new problems. Bitcoin was a great example - Satoshi sought to develop a digital currency that nobody controlled. To do it, Satoshi had to invent blockchain technology. Bitcoin had both technology and market risks - not only had nobody created a decentralized currency before, but Satoshi did not know whether anybody would adopt Bitcoin. Copycats use existing technologies to address a known problem. These can still be lucrative businesses - most often when an existing business adds a new feature that its customers already want. For example, the success of Slack removed market risk from workplace chat products. So, when Microsoft built Microsoft Teams as a chat product and offered it to their existing customers, Microsoft Teams became more successful than Slack. Hard tech companies invent new technologies to solve complicated unsolved problems. For instance, Boom is building an airplane that flies twice as fast. Airlines already buy aircrafts and know customers would pay more money to arrive in half the time. Boom's success isn't limited by whether airlines want a faster airplane - it's determined by whether they can build a cost-effective aircraft that meets existing safety and reliability standards. So, when are low-code prototypes useful? Low-code prototypes work best for Applications - where there is low execution risk and high market risk. When your business doesn't require the invention of a brand-new technology to succeed, then execution risk is low. But, when you don't know whether people want it, the business carries significant market risk. Building a prototype and showing it to users can help you de-risk whether people want it.
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What I'm up to - September 2022 👋

This is a monthly email about what I'm up to! ✨ Highlights of last month • Had a relaxing, Walden-esque week in Mexico City, spent mostly in Parque México. I spent a lot of time reading - including Digital Minimalism, Deep Work, and Shop Class as Soulcraft.   • Went full-time on The Contraption Company, where I'm incubating new projects and collaborating with startups. • Got Postcard closer to a launch with faster page speeds, design improvements, and more customers. 🤔 What I'm pondering • Portable Billboards: Inspired by Digital Minimalism, I've been reflecting on how iPhones started as an integrated phone + iPod. But, they've evolved to be a ubiquitous billboard in your pocket, designed to constantly draw attention so that they can show more ads. • Knowledge work commodification: It's becoming harder to get an entry-level software job, especially out of coding schools. I think this signals a shift in tech toward more performance-based hiring instead of personality-based hiring. This all seems to be a second-order consequence of remote work - where coworkers spend less time socializing. A problem is that there is not (yet) a reliable, quantitative way to measure the productivity of knowledge workers, especially in software development. But, that isn't stopping people from trying! 📫 What I'm up to this month • Spending lots of time in New York • Working on getting Postcard launched, and exploring some new projects around gamification and recommendations 📍 Where I'll be (via Nomadlist) • Sept 5-12: 🌳 Catskills, NY • Sept 29 - Oct 8: 🗽 NYC (If we cross paths - let's meet up!)
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👋 What I'm up to - July 2022

This is a monthly email about what I'm up to! ✨ Highlights of last month • Launched Made in Webflow, a project I've lead to redesign and rebuild a popular social site for Webflow creators • Seeing some cool Postcard sites published - such as ericoneil.me and heyitsaaron.com. Continued to improve the project - including making posts easier to share.  • Been getting deeper into Web3. Bought my first NFT and set up Ledgers. The processes felt clunky, but I can see how smooth the experience could become with further refinement. • Took my first post-COVID trip outside of North America, which was fantastic. I had too much great food, coffee, and wine. Copenhagen impressed me as a city optimized for the Information Age. • Reactivated my twitter after two years of inactivity, and wrote some scripts to auto-delete old tweets and to auto-tweet my travel in real-time. • Favorite read from last month: What I Know About Running Coffee Shops, by an Irish barista and cafe owner who recounts his experience and lessons scaling a group of specialty cafes in Dublin. 📫 What I'm up to this month • Attending 3 weddings - will be traveling for almost the entire month!  • Adding some new features to Postcard. 📍 Where I'll be (via Nomadlist) • July 2-4: 🌽 Marion, IN • July 8-15: 🏔 Denver • July 15-17: 🚡 Breckenridge • July 17-28: ☀️ Los Angeles • July 29-31: 🚣‍♂️ Duluth, MN (If we cross paths - let's meet up!)
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Sharing a project I built - Postcard

Over the last two years I've quit Instagram, Facebook, and Twitter.  I replaced social media with newsletters and blogs as the ways I stay in touch. Not many people have blogs - so I built a bot to let me follow Twitter users over email. Getting tweets over email is a fantastic, calm experience. That got me thinking - What would social media look like without a central service? Social media platforms promote dangerous viral dynamics. Plus, as social media platforms rise and fall - you can't move your followers between sites.  I tried hosting a blog as an alternative to social media. But, blog posts felt so permanent and formal that I rarely posted. Email newsletters feel more ephemeral - but existing tools tend to be complicated and business-focused. Nothing out there served as the harmonious integration of a personal website with a personal mailing list that I sought.  To recap, here's what makes a great, decentralized social media service: 1. Self-hosted profiles: Instead of twitter.com/philipithomas, use a domain I own - like philipithomas.com 2. Updates over email: Meet people on the tools they already use and keep updates less formal than a blog post  3. Data ownership and portability: You should be able to change tools and keep your followers. That's what I've built - a project called Postcard. And, you're looking at it right now - this newsletter is sent through my Postcard, which I host at philipithomas.com. If you want to set up a personal website, or if you want to move off of social media - take a look and let me know what you think:  www.postcard.page. 
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Advice for marketplace startups

Marketplace businesses connect buyers and sellers, and they typically make money by taking a cut of transactions. Some of today's largest companies are marketplaces, such as Amazon, Airbnb, and Uber. I spent three years building a marketplace for software engineering gigs called Moonlight. It took us about two years of experimentation to make something that people wanted, then another year of growth to get acquired. Those two years of product development became a crash course for me in how to build a marketplace as we constantly experimented with our business until something worked. For startup founders interested in starting a marketplace business, here is my distilled advice that I hope will save you two years of work. Focus on demand. Many founders approach marketplaces from the supply side - a group of people looking for work. But, be careful - the actual group that defines the marketplace is the buyer. Ask yourself: who wants to buy this product, and what problem do they want to be solved? Does the buyer even have the budget to purchase what I'm selling? What you sell is your product. That is where the market risk lies for your business. How you fulfill that product has operational risk but isn't typically where the "secret sauce" for a company lives. Uber didn't start their business by saying, "Wow, lots of drivers are sitting around with no work." Instead, they began with the ideal customer experience - on-demand rides. Over time, Uber grew the number of people working as professional drivers because they offered fair pay and stable work. Why a marketplace business model? For a marketplace to work, you need to deliver ongoing value to both buyers and suppliers, and you need to have the supply work on multiple projects. Often, many different business models could apply to the same problem. If your supply prefers full-time jobs over gigs, then maybe you should monetize in contingency agreements where you earn a recruiting placement fee. If companies wish to work directly with suppliers, then perhaps you should be selling a lead generation service like Craigslist. If companies want to outsource projects, then maybe you should build a full-service agency. Most marketplaces start as an agency where humans manage the entire process from end to end. Beginning as an agency proves that buyers want to buy your product and is an excellent way to get started. But, the difficult part is transitioning from a service business into a technology business. Some companies navigated this transition well, such as Airbnb, and others navigated it poorly, such as Gigster. Think about commoditization. Are you selling the individual skills of each worker on your marketplace, or can any person do any job on the marketplace? There are some significant implications here for how matching works. If hiring is such a "considered purchase" for the buyer - how can you automate it enough to get buyers to make a decision instead of taking weeks to interview tons of people? Airbnb successfully pushes customers to pick between drastically different listings at different prices. But, that same model doesn't work in every business. As a rule of thumb, every decision you ask buyers to make in a marketplace is an opportunity for them to drop off without making a purchase. Sidecar was an early ridesharing startup that competed with Lyft and Uber. But, Sidecar let drivers set their price - and it turned out that customers were not equipped with the information or patience to choose the exact driver they wanted every time. Uber's innovation of constant pricing meant that every driver cost the same. So, they could route the closest driver to you, and if there was a problem - they could reassign the driver without your approval. For your marketplace: does letting your customer pick the supplier and price improve or detract from the experience? Beware disintermediation. Agencies have recruiters that make sure that the demand and supply follow the rules. Once you become too big to manually handle every deal (and truly become a marketplace), then you need people to follow the rules still. If people don't follow the rules, then you spend a lot of money acquiring customers and suppliers who cut you out of the deal. The more a company thinks they've hired a particular person, instead of hiring your company - the more likely you will get disintermediated. Yes, you can write any rules into contracts about fees and needing to go through you. But, suing customers isn't a viable growth strategy. You can only get compounding growth if you can consistently grow the number of working suppliers. And, if you need humans to enforce the rules - then your business is an agency, not a marketplace. The home cleaning startup Homejoy failed because their customers had a stronger loyalty to a cleaner than the Homejoy brand. So, Homejoy would pay for ads to get customers, but after a first cleaning - the customer would typically rebook directly with the cleaner instead of the app. Managed by Q innovated on this cleaning model and managed to make it viable. They sold cleaning services to companies who were less likely to form loyalty to individual cleaners, and they made their cleaners full-time employees with benefits so that they could rely on the company for all of their income. The frequency of purchase will determine whether your marketplace can experience exponential growth in the number of active customers. So, ask yourself - why would a customer use this marketplace the second, third, or hundredth time? Also, can your suppliers rely on your marketplace for stable income? Your pricing is too low. At a 5% take rate, you need about 20 full-time working placements to pay one internal employee. That's crazy. I always recommend that marketplaces aim for closer to a 50% fee. With a 50% fee, you only need one full-time working placement to support one internal employee. High prices might seem like a problem - but it's a competitive advantage. If you differentiate on nothing but the price, then your business is a commodity and can get replaced. The amount of money you make dictates how much money you can spend to acquire new customers - which drives faster growth. Low fees can hurt your ability to pursue enterprise customers, too. Big companies will want you to invoice them with 90-day payment terms, but suppliers don't want to wait three months for payment - which means you're factoring invoices and taking on the risk of non-payment. High margins help make both of these risks more palatable. Consider TAM. To raise VC, you need a path to $100m net revenue per year. (Probably higher because your revenue isn't recurring). How many suppliers could work on your site, and how much money could you earn? Is that even possible? And, why would that labor continue working through you instead of leaving the platform to go work for somebody else? Small decisions in marketplace businesses have significant impacts on the viability of the business. So, be strategic about every detail, and focus on creating the ideal customer experience above all else.
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Moonlight's pitch deck

In 2017, I co-founded Moonlight as a professional community for software developers with Emma Lawler. We were both leaving San Francisco, and wanted to make it easier for all developers to find specialized, remote work options. We envisioned a Silicon Valley diaspora that would permanently transform knowledge work into a distributed, work-from-home career. Starting with a no-code prototype, we slowly built a web application and iterated on different parts of the business model. In 2019 we raised a pre-seed round of funding. Fathom Capital and Goldcrest Capital co-led the round, and other participants included Haystack, Jeremy Yap, Quinn Slack, Luke Kanies, Hampus Jakobsson, and Aghi Marietti. In 2020, PullRequest acquired Moonlight. Their developer marketplace, funded primarily by Google, continues to operate and grow the product today. Here, I'm publishing the pitch deck that we used to raise investment money for Moonlight in 2019. I want to share the vision we had pitched for the future of knowledge work, and I want to demystify the process of fundraising for other founders. Below each slide, I've included prose typical of how I would present the slide. As a reminder, this presentation is being shared for informational purposes only. Moonlight is not raising money, and no offer of investment is being made or solicited. Moonlight's pitch [Slide 1] Today I'd like to talk to you about Moonlight, which is a professional community of software developers. [Slide 2] Our mission is to help the world work together to build the future. [Slide 3] Emma and I co-founded Moonlight, and bring extensive experience in building both digital products and startups. Emma worked as a product designer at Fitstar, which was acquired by Fitbit shortly before its IPO. She went to school at CU Boulder. I was the founder of the workforce management startup Staffjoy, a Fellow at Y Combinator for that company, and an engineer at OpenDNS, during which it was acquired by Cisco. I am a graduate of Washington University in St. Louis' School of Engineering. Emma and I both have technical backgrounds in product design and engineering. Emma designs the product and I build it. [Slide 4] We started Moonlight to solve our own problem. Two years ago, we both left San Francisco to travel full-time, but we wanted to keep working with great companies that valued our specialized skills. We were fortunate to have great networks from living in San Francisco, which gives us access to high-quality contract work. But, most people in the world do not have direct access to growing tech companies. So, we built Moonlight to address this problem. We left the Bay Area, and built Moonlight from Airbnbs on five different continents over two years. Around the world, we met software engineers and companies to understand how the technology industry is changing, and became deeply involved with a variety of international communities ranging from Startup School by Y Combinator to flying to India with the US State Department. [Slide 5] As we traveled, we realized that remote workers have an unmet hierarchy of needs. The first thing you need to become a remote worker is a remote job. But, we have found that workers' needs extend far beyond that. Most remote workers enter as contract workers, but desire stability in terms of salary, insurance, and vacation - meaning, they want employment. Once these workers have stability, they seek to address loneliness through a sense of community. Next, workers often report that it's hard to go from junior to senior in their careers outside of an office. We think this is because remote teams have fewer spontaneous and unstructured interactions, which makes it harder to learn on-the-job from teammates. We think there's an opportunity to help here with things like training and certifications. Ultimately, people want to work on something that they really care about, which the top of the pyramid. [Slide 6] We built Moonlight to solve the needs of remote knowledge workers. We started with jobs - by helping people find project-based work. We thought that project-based work might be the future, but found that most freelancers return to a full-time role within two years. In fact, about one in seven contract jobs on Moonlight ends up converting to full-time employment. In the future, we plan on moving up the pyramid with community, advancement, and recognition. Ultimately, we want to help people find the right job for their interests. [Slide 7] The problem we're addressing is that companies have trouble hiring software engineers. Stripe's Developer Coefficient report last year found that "access to developers is a bigger constraint than access to capital." These potential customers have money that they're trying to spend, without success. As software "eats the world" and work becomes distributed, we foresee 10x to 100x as many applicants for every open role, making the hiring process even harder [Slide 8] Our view is that software work is becoming globalized. Remote collaboration is becoming easier with tools such as Slack and Zoom. The demand for developers is rising as every company from Boeing to JP Morgan to John Deere becomes a software company. And, programs such as Lambda School and General Assembly are creating a new wave of developers entering the market. [Slide 9] We believe that distributed work is the future, and that it solves the problem of companies being unable to hire developers. Stripe addressed their own perceived lack of developers by officially opening a remote office. And, there's a trend of more and more companies going distributed, ranging from GitHub to Product Hunt to Stripe to WordPress. [Slide 10] Our view is that today's traditional, localized hiring networks don't scale to a new global labor market. Hired had an early start, and launches city-by-city in limited markets. They are actively trying to move away from contingency-based pricing to subscription pricing, and they have high overhead due to their sales model. LinkedIn uses an antiquated approach to matching people to jobs. It focuses on a network model based on who you know, so that you can find jobs through your second and third-degree connections. But, in a global hiring market, hiring managers may have no connections with the best possible worker for their team. TripleByte rejects most candidates and has a low acceptance rate of offers. Their success is predicated on a supply-constrained market. We believe that the rise of coding schools and remote work threatens this supply-first model. [Slide 11] Our name, Moonlight, comes a latent behavior in the software community. Developers already work on side projects and side gigs in their free time, and they're often doing it from home - not an office. We focus on three different personas of developers who moonlight. One is the "Explorer." These tend to be people that are specialized and senior, and are looking to adopt technologies early. They moonlight for passion. Think of developers working on Bitcoin - before it became an employable skill, it was a passion project. Second, there are the "Independents." These are people that are experienced and looking for advancement. They moonlight to trial new teams. They rarely enter the open job market because they're highly employable and have a network. They use trial projects to evaluate potential teams for long-term work. Think of them as people who will help their friends with startups on nights and weekends, and then transition to full-time once the company matures. Third, there are the "Beginners." These tend to be more generalist people who are just finishing a coding school. They seek stability, and moonlight prove their ability. We observe many coding schools advocating for contract-to-hire so that candidates can get into companies and stand out from the crowd. [Slide 12] Remote work is changing the market. This broader talent pool means that people need to be matched by specialities and experience, instead of just location. Every developer is going to be a candidate for every job in the world. Without in-person "whiteboard interviews", we strongly believe that trial-based hiring will become the norm, which we call "moonlighting." Candidates will contract with a company for anywhere from a few days to a few months, and companies will evaluate them based on their actual performance. With no office, the provider of career advancement resources and mentorship opportunities will transition from the company to a third-party. This is where Moonlight plans to expand in the future. [Slide 13] Today, Moonlight is a SaaS business. We provide job matching, managed contract-to-hire (including payments), candidate alerts for companies, and a weekly newsletter. In the future, we plan to work more on education for distributed team best practices, career support for remote workers, and community such as online and local groups for developers. [Slide 14] Under the hood, Moonlight is a data-driven software company. We track over 500 different engineering skills ranging from Kubernetes to Python. We've tracked over four million data points of how people are using the product, and we've identified over 50,000 potential users on job boards. On top of that data, we've built machine learning models such as associations of different skills. So, we can tell that a developer who lists React as a skill also knows Javascript. Based on these skills and data points, we are pursuing a long-tail SEO strategy with over 10,000 auto-generated landing pages. So, if you search for React developers or developers in Cleveland, we have pages for that. Finally, given a company's website, these tools all work together to be able to identify the right candidates for a particular hiring manager. The result is that we have about one-in-four cold email response rate, relevant job matches and, ultimately, we're closing hires. [Slide 15] Today 1,700 developers who want flexible work have joined and been approved for Moonlight's network. They apply to Moonlight by setting up a free profile, configure payments through Stripe, and we manually screen each applicant. Most remote work websites focus on outsourcing. We don't. About two-thirds of Moonlight's developers are located in North America. Developers on Moonlight have an average of nine years of professional experience, and on average earn over $100 an hour. Almost everybody is seeking contract work at any given time, while a third of candidates are open to full-time work opportunities. Our strategy is to engage passive candidates with contract work. Then, when they begin looking for a full-time role, we can immediately identify that intent and match them with the ideal roles. [Slide 16] Developers find Moonlight in three different ways. First, we have identified over 40,000 people looking for work, and when we email them 15% sign up. We plan to expand partnerships in the future. Moonlight is currently a Stripe Verified Partner. We are actively in pilots with some coding schools. And, we are building out a certifications module so that we can co-market expert communities with companies who need "sales engineering"-style support. About a fifth of our new customers come from referrals. We hold events in most major markets and we really do a great job of attracting passive candidates. [Slide 17] Our revenue is growing 16% week-over-week. This graph shows our path to $7k MRR, and the live revenue just passed $10k MRR this morning. [Slide 18] The $300 monthly cost per seat is designed for bottoms-up distribution, and our goal is to grow land-and-expand revenue. Customers range from unicorns like CloudFlare to hours-old startups.[Slide 19] The total attainable market is huge. With half a million software engineering managers in the United States each spending $300 per seat, we estimate a $2 billion per year market opportunity. [Slide 20] Finally, long-term we are building a remote-first community. Our strategy is to first scale the SaaS business to fund growth. Second, we will grow community and network to retain developers throughout their career. And third, we will develop tooling to facilitate remote work. We already have built active chat channels integrated with Slack that have thousands of participants, and we have organized meetups around the world. We can see the future of Moonlight as a verticalized professional community - something like a mix of LinkedIn, GitHub, and Quora. [Slide 21] Today we're raising our first round of funding to double-down on growth. Our goal is to hire a front-end engineer and operations coordinator, aggressively go to market with per-seat membership, drive network effects to fuel growth, and create new features to increase engagement. [Slide 22] Our mission is to help the world work together. We see Moonlight as having co-working benefits without the office, helping companies find and retain remote workers throughout their careers, offer career advancement opportunities for workers, and ultimately to build tools that empower distributed teams. [Slide 23] That is Moonlight - the product is live at MoonlightWork.com. Appendix We structured our appendix with a Q&A card and metrics graphs. For later rounds of funding, it is typical to have an entire metrics deck. But, for earlier rounds of funding, you basically want to be prepared to answer common questions that investors may have.  [Slide 24] [Slide 25] [Slide 26] [Slide 27] [Slide 28] [Slide 29] [Slide 30] Send me your deck! If you have any questions, please feel free to email me at philip@contraption.co. If you're working on a pitch deck, I'd love to provide feedback! Please send it to me. If you enjoyed this article, you may also enjoy my 2017 article Staffjoy's Pitch Decks That Raised $1.7m.
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Buyers define marketplaces

A marketplace business connects buyers and sellers in exchange for a cut of the revenue. Some of today's biggest companies, such as Amazon, Uber, and Airbnb, are marketplaces. Yes, these companies changed how millions of people work and earn money. However, the core innovation of these businesses is how they use technology to solve customer problems. In 2017, I struggled to hire full-time software developers but found many that were willing to work nights and weekends for extra money. So, I started Moonlight as a marketplace to connect developers with weekend work. Thousands of software engineers quickly signed up, but hiring managers showed less eagerness to join. It turned out that you cannot kickstart a marketplace with sellers alone. I learned a valuable lesson: buyers define the market. [Marketplace business model] Startups seek to build something that people want. Finding this product/market fit once is hard - but in a marketplace, you must do it twice. Buyers and sellers on a marketplace have separate wants and needs, each with a distinct set of quirks. The critical insight is that these challenges are not equal - because you are dealing with money. The demand from buyers will inevitably attract a supply of sellers. There are more professional drivers today than there were ten years ago because Uber and Lyft expanded the market. When there are new ways to earn money, labor will follow. Fair pay gets sellers on a marketplace. Aggregating sellers does not make a marketplace. Marketplaces earn their cut of revenue by being able to find buyers better than the suppliers alone. Personal shoppers existed long before Instacart, but it was hard for them to find customers. If sellers can find enough customers on their own, they don't need the platform - leading to disintermediation. Disintermediation killed marketplaces such as Homejoy and Handy. Marketplaces justify their existence by solving a buyer's problems in a novel way. They identify some business transaction where the buyer is under-served by an existing seller, and where technology can transform the relationship. People couldn't reliably get transported by taxis and were happy to spend more money on Uber. Hotels were expensive and conventional, so travelers spent money on Airbnb instead. Searching for a particular product at stores was hard, so Amazon built a product search engine. Technological innovations such as the internet and smartphones meant that these businesses could not have existed sooner. Marketplaces must create demand, then that demand attracts sellers. After the initial influx of developers to Moonlight, we spent most of the next few years changing the product and pricing to attract hiring managers as buyers. The business grew and was ultimately acquired earlier this year. We thought that Moonlight found a new way for developers to work, but its real innovation was changing how software teams hired.
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