Pete & Ned's web war on cheap foreign labour
Tweaky co-founders Ned Dwyer, 28, and Pete Murray, 24, with lead investor Mark Harbottle of 99designs.
A former civil engineer and a DJ want to transform odd jobs on the web - but that's not the most unusual part of the story.
The newly minted entrepreneurs, who in the past month quit their day jobs, have made a vow of sobriety until their company becomes profitable - something that has left at least one of their investors, 99designs founder Mark Harbottle, "quite impressed".
If [web developers] feel like they're having to compete against someone who is $2 an hour then that sort of disincentivises them to get involved in a project.Tweaky co-founder Ned Dwyer
So instead of popping the champagne corks when they announced $450,000 in investment from Harbottle on Tuesday, they drank soda water and got straight to work on growing their Victoria-based start-up.
Pete Murray when he worked as a civil engineer at a WA mine.
The problem former DJ Ned Dwyer, 28, and civil engineer Pete Murray, 24, aim to fix with their tweaky.com marketplace for minor website customisations is the very low fees many web developers in Australia, Britain and the US are currently having to compete with when they use online marketplaces like freelancer.com, odesk.com and elance.com.
Such marketplaces connect freelance web developers all over the world with companies or people who have a task that they want done to their website but can't complete themselves or just want to outsource.
Ned Dwyer when he was DJing.
Although a great way of connecting developers with customers, Tweaky's co-founders argue that the existence of such marketplaces is costing jobs in developed economies, with developers often found competing with someone who will bid much less than them in places such as Africa, India or the Philippines.
Unlike the existing marketplaces, Tweaky aims to prevent bidding wars from erupting with developers in such countries by setting the price of "tweaks" to a website at $US25 and hand-picking web developers it believes are best to get a job done.
The start-up takes a 50 per cent cut from all tweaks, offers a money-back guarantee to customers, and scopes out projects into individual tweaks - something likely to appeal to customers who have little time.
Co-founder Dwyer said Tweaky did these things because it needed "to attract the best developers in the world" to its marketplace. "And if they feel like they're having to compete against someone who is $2 an hour then that sort of disincentivises them to get involved in a project," he said.
"We also want to establish a bar for our clients to let them know 'this is what you should be expecting to pay for this work and here is why'. And the reason you want a quality developer to work on your job ... is to know that they actually understand what you're asking them to do. You also want someone to sort of back you up there and handle things if something goes wrong."
Analyst thinks it's a winner
It's an idea that Australian IBRS business and technology analyst Guy Cranswick believes could take off if the start-up scales quickly enough and maintains a reputation for picking high-quality web developers.
"This company would have to get to a sufficiently large size to attract ... those high-quality individuals that do want the extra work or have the availability but don't want to be involved in a Dutch auction bidding down, down, down and competing against anyone right around the world who claims various kinds of competencies which might not actually be true," Cranswick told Fairfax Media, publisher of this article.
He added that he believed Tweaky might work because there would be several companies that realised when they paid $20 for development on other marketplaces "they actually got less than $20 worth of service".
"So there's a market for this in that it's so huge, so it scales," he said. "There's also a need for it because people recognise that there is a way of arbitrating a dispute and are willing to pay a higher value in price in hoping that the designer or whoever it may be in Africa or India ... actually does the job that they said they could."
Freelancer founder responds
Matt Barrie, the outspoken Australian freelancer.com founder and CEO, said in an email to Fairfax that he had "never heard" of Tweaky when asked what he thought of the start-up. Asked in a follow-up email to respond to what he thought of their business model and the low fees web developers faced, he said: "I can guarantee you that all their freelancers will have accounts on our site. We have a money-back guarantee on all work, that's how our milestone payment system works. Only we charge 3 per cent instead of 50 per cent."
Barrie said it was "not really worth responding" to comments that Freelancer, among other sites, were sending jobs offshore. The same comment applied to whether making small changes on a website would be better for someone to do through tweaky.com, something Tweaky's co-founders argued would be the case.
How it was born
Tweaky was born under the name of ThemePivot at a start-up competition held in Melbourne over a weekend in November 2011 and won first place, giving its founders $5000 in cash and $1000 worth of Amazon credits. Since then, 250 jobs have been posted on it, 200 of which have been completed by Tweaky developers.
Tweaky co-founder Dwyer, the businessman of the start-up, said that since the business model was first developed and pitched in Melbourne it had pivoted "a few times" to end up where it was at now. "Pete and I worked together at the start-up weekend and we built a small version of the product which was completely different to what it is now," he said, adding that by winning the competition it "opened a few doors for us".
The $5000 prize money is what the start-up duo had been using to build their company until Tuesday's investment from 99designs founder Mark Harbottle and investor Leni Mayo. The Amazon credits helped to pay for the Tweaky website, which is currently being run from an Amazon server.
"We haven't really invested any of our own money," Dwyer said. "I guess for ourselves it's just been sweat."
Founder's past careers
Immediately before working on Tweaky, Dwyer's co-founder and the web developer of tweaky.com, Pete Murray, was working on REA Group's realestate.com.au through a global IT consulting company called Thought Works. Before that he was a civil engineer building roads for mines in far northern Western Australia.
Dwyer, on the other hand, has run "for the last couple of years" product development agency Native Digital after he bought it from its founder, Nick Crocker. At Native Digital Dwyer helped develop eBay Australia and record label EMI Australia's social media strategy. Prior to that he was DJing and "running night club events and things like that and touring DJs". Before then he worked at a motorcycle company in Western Australia.