Coffee & Power, From Linden Labs Founder, Puts A Jolt of Creativity Into Crowdsourcing

1/4/12Follow @wroush

After building a vast virtual world with a complex internal economy sustained by the labor of more than a million active users, what do you do for an encore?

For Philip Rosedale, the founder and former CEO of Linden Lab, the company behind Second Life, the answer was to try to recreate some of the same dynamics in the real world.

Coffee & Power, the San Francisco crowdsourcing startup that Rosedale founded in 2010 with former Linden Lab colleague Ryan Downe and former Accenture consultant Fred Heiberger, is all about making it easier for people to do small chunks of creative work for one another, and get paid for it. Transactions are initiated online, at a website where people can post small jobs they need done or are willing to do. But most of the actual work happens offline—and there are even two physical Coffee & Power “workclubs,” in San Francisco and Santa Monica, where members can meet to collaborate or deliver services.

Coffee & Power co-founder Philip Rosedale

“At Linden Lab I was the sci-fi, physics-and-atoms guy, a total geek for assembling things out of digital pieces,” says Rosedale. “But the magical thing about Second Life—what changed me more as a person and was more inspiring to me as a leader—was not the digital Legos. It was the way people’s welfare and livelihoods were changed by their interactions with each other. Ryan and I said, ‘We have got to do this for the real world.’”

Coffee & Power, which opened to the public on November 1, is far from the first online marketplace for small jobs. Investors have been paying a lot of attention lately to bigger crowdsourcing players like oDesk and Elance, as well as upstarts such as TaskRabbit, MobileWorks, and Zaarly. But one of the things that makes Coffee & Power interesting is the way it copies three of the elements that, in Rosedale’s view, made Second Life so successful. (In its heyday in the late 2000s, the virtual world had more than 20 million registered users and as many as 88,000 people online at any given time).

The first element is rich communications, in the form of profiles, reviews, status updates, and a live public chat space (sorry, no 3-D avatars this time). The second is radical transparency, meaning the details of every transaction are available for everyone to see. The third is a virtual currency, called C$ in an echo of Second Life’s Linden Dollars or L$.

Those are the “key enabling features” that help sellers and buyers find one another, decide who’s trustworthy, and pay for work completed, Rosedale says. “All you have to do is put the right pieces together so people can very rapidly decide to work with each other or for each other.”

There’s something else that makes Coffee & Power unusual: the fact that the site itself was crowdsourced. It turns out that Coffee & Power is the second thing Rosedale and his co-founders set out to build after the Linden Lab experience. The first was Worklist, a new collaboration system for software developers. It’s a place where entrepreneurs who need help building a program or a website built can farm out the job in small pieces—a half-day’s work is the usual increment.

Downe, Heiberger, and Rosedale assembled the entire Coffee & Power website by posting tasks such as “fix Facebook/LinkedIn login redirects” and “change ‘about us’ copy” on Worklist. As of yesterday, they’d spent a cumulative $289,628 on the project (the figure is visible to everyone, thanks to the aforementioned transparency principle).

It’s no coincidence that Coffee & Power matches up buyers and sellers of small jobs, with all payments handled digitally; the site is simply a broader implementation of the ideas built into Worklist itself. After launching Worklist, “the three of us sat down and said, ‘How can we apply what we have learned and how we do things with Worklist to more generalized forms of work that might be more highly scalable?’” says Rosedale. “That was the birth of Coffee & Power. We said, ‘We have got to be able to use this to let people do anything they want.’”

Now that Coffee & Power is up and running, Rosedale says Worklist is developing into a business of its own, with more third parties posting their own projects. A stealth-mode startup called MediaTrove, for example, is using Worklist to build a kind of Web-based Muzak service called Kanoodl. But Rosedale’s passion of the moment is still Coffee & Power, which has so far attracted more than 5,500 users. They’ve posted 4,417 jobs or “missions,” about a third of which have been completed, for an average payment of C$12; roughly C$25,000 has been exchanged since the site’s launch.

Coffee & Power earns money by keeping a 15 percent cut when users convert their C$ into real dollars using PayPal. Obviously, 15 percent of $25,000 isn’t much, so the startup is fueled for the moment by investments from True Ventures, Greylock Partners, and tech celebrities Mitch Kapor, Jeff Bezos, and Kevin Rose. The jobs sought and offered on Coffee & Power range from the mundane—”I want you to reformat my resume,” “I will teach you how to use Final Cut Pro”—to the unusual and outright bizarre (“I want you to turn my old suit into a zombie costume,” “I will crochet an octopus for you.”) There’s a comment system that lets you ask a buyer or seller for more details about an offer or a mission before signing up. As in Second Life, most members go by a pseudonym, but they can prove their bona fides by linking to their Facebook and LinkedIn profiles. And when you’re checking out a seller, you can gauge their trustworthiness by seeing how many missions they’ve completed and how previous buyers have reviewed their work.

Ryan Downe, Rosedale's co-founder at Coffee & Power

At $12 per job, nobody at Coffee & Power is getting rich, but Rosedale says that’s not really the point—the main goal was to make it easy for sellers to exploit their hidden skills while earning a little cash in the process. “Coffee & Power is a tool that asks the question, ‘If you had an extra three hours today, how many things could you do?’” he says. “In SecondLife, you had to do everything, from making friends to building a house. You didn’t have a choice, so people discovered all these new capabilities they had. But we all have a lot of skills that we don’t use in our day jobs.” He sees Coffee & Power as one data point in the recent trend toward purpose-built marketplaces that bring people together for all kinds of brief transactions, from photo assignments (Gigwalk) to limo rides (Uber).

The Coffee & Power workclub at 1825 Market Street—which San Franciscans will remember as the former home of the much-loved Get Lost Travel Books—doubles as the company’s headquarters and as a casual co-working space for members. (Both the coffee and the power are free, for the moment.) Rosedale calls the workclub a safe, Starbucks-style “third place” for missions that need to be completed in person, but where buyers and sellers might prefer not to meet at their homes—think SAT tutoring for a teenage child. “It probably applies to 10 percent or less of the jobs, but for those 10 percent, it is really powerful and cool,” says Rosedale. A second location, hosted by Santa Monica, CA-based software startup Sparqlight, opened last month, and there’s talk of a third location in Miami.

The economies at Worklist and Coffee & Power are still tiny compared to Second Life, and even compared to competitors such as TaskRabbit, where users can post errands like grocery runs to be completed by background-checked runners, or oDesk which helps companies recruit, track, and pay mostly offshore software engineering help. But Rosedale sees the projects as very different from their cousins. He says Worklist is good for managing rapid software development projects in small, $200 chunks; that’s about a twentieth of the average contract size on oDesk, and it “forces you to break things down into a series of small, actionable steps, which we should all have to do as managers,” he says. TaskRabbit, meanwhile, boils down to a “job dispatch system” where “the tasks can be done by anyone,” Rosedale argues. Coffee & Power, by contrast, is “a matchmaking system primarily driven by sellers saying what they will do. It’s driven by novelty and fun and talking and learning with each other.”

Whether it will ever be driven by money as well remains to be seen. “How this will transform the nature of work, I’m not sure,” Rosedale says. As societies cope with chronic unemployment and underemployment, much of the work that used to show up on our W2 forms could eventually be replaced by smaller freelance tasks, he speculates. “The Internet has driven the price of everything down. But if you look at what people have done on Worklist, I think people will be able to charge reasonable prices. Who’s to say you can’t make more money doing a number of small, microwork projects? These are good questions—and I enjoy working on things that raise strange questions.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

By posting a comment, you agree to our terms and conditions.

  • echoota

    Did you just say 15% of $25000 isn’t much? There’s a lot a person could do with nearly $4k. I’ll be the judge of what is too much, and your downplay on the matter isn’t necessary. Ebay doesn’t take that much from successful auctions, and even they set ceilings. Plus doesn’t Paypal take their own percentage on payouts? We’re approaching 20% now, is that still a pithy amount?

    Honestly C&P is a great idea, service, and platform, but I don’t think it’s worth 15% of my earnings. Maybe I’m being too severe, it just doesn’t seem to make good business sense to me to surrender that much for my hard work. 9-10% seems more reasonable with perhaps a ceiling or a reverse-graduated percentage scale. Whether the job is $12 or $25k the C&P service is still the same. As the payee moves towards hundreds or thousands lost, the prospect gets incredibly difficult to accept because the C&P value doesn’t scale with the numbers.