Spare5 Raises $10M to Gather More Human Insights for the Internet
Seattle startup Spare5 is pairing human and machine intelligence to give businesses insight into things like what photo will best sell a vacation rental property. The company’s model for tapping people’s spare brain power to complete valuable micro-tasks is finding a host of uses among data-driven commerce and content companies.
Founded less than a year ago after being developed in the new in-house idea factory of Seattle venture capital firm Madrona Venture Group, Spare5 has just raised $10 million to plough into expansion. Spare5’s backers for both its $3.25 million seed round last November and this Series A investment are Foundry Group, Madrona, and New Enterprise Associates.
While there’s a lot of interesting technology underpinning Spare5’s business, CEO Matt Bencke said it all begins with the community of users, called Fives. (Seattle loves its number-identified groups, particularly as football season starts up and the 12s come out for the Seahawks.)
Individuals download the Spare5 iOS app, share some information about themselves by granting access to parts of their Facebook profile and taking an optional survey, and then begin to complete small tasks presented by Spare5 on behalf of its business customers.
These tasks, divided into several categories and targeted to individual Fives based on their interests, skills, and demographic profiles, include reacting to media. “If you’re a data nerd, the way I describe it is subjective interpretations of unstructured data,” Bencke said. Fives might be asked to rate, describe, compare, classify, or tag photos, videos, and audio clips. There are basic editing tasks, too, such as cropping photos or removing backgrounds.
Spare5’s business customers pay for the resulting ratings, which can be sourced from multiple Fives for higher fidelity. “It’s really hard for a business with thousands and millions of products to know which image is the best one to show based on a search term, and so we can help companies do that,” Bencke said.
These insights can help with search engine optimization, content classification, and e-commerce optimization.
Spare5 is not the first business to parcel out individual tasks on demand. Amazon Mechanical Turk—“a marketplace for work”—has been at it for close to a decade. Microworkers, from Dallas-based Weblabcenter, boasts on its website of a crowd of workers 600,000 strong.
Bencke rejects the crowdsourcing label. “We try to think of ourselves as having a much smaller, active community of folks who are checking in with us, who we get to know and respect, hopefully on an individual basis,” he said.
Other tasks, assigned to qualified Fives, include taking surveys, transcribing media, and even calling merchants to confirm details like their operating hours. Companies like Groupon, which has some 8 million merchants in its directory, need help ensuring that data on each one is current, Bencke said.
“It’s kind of what I call the last mile of the Internet because there’s a lot that humans know that isn’t on the Internet, and people are interested in that kind of data,” he said. “It matters. If you’re going to a spa at 2 p.m., and Groupon says they’re open and they’re not, that’s a problem.”
Spare5 is also using its Fives to tune machine learning algorithms.
“There’s so much machine learning going on in the world, and I think it’s still early days, but any machine learning algorithm is only as good as the humans who train and retrain it,” Bencke said. “So what Spare5 brings is this incredible power to provide massive amounts of human insights with a quality that nobody else does. We’re almost like the AWS of human insight.”
Spare5 advisors include Dan Weld, a University of Washington artificial intelligence expert, and Oren Etzioni, head of the Allen Institute for Artificial Intelligence (and a speaker on the topic at Xconomy’s upcoming Seattle 2035 conference).
The Fives—numbering in the thousands and growing quickly—are paid a small amount for each task.
So is this the gig economy taken to its extreme? Sort of, Bencke said.
“The majority of our Fives are doing this in their spare moments and so they’re making the kind of money you might expect,” Bencke said, adding that Spare5 is not designed to be a job. “We think of it literally as, got a few free minutes? Let’s do something productive, hopefully it’s fun, it’s certainly easy.”
There are some very active users for whom Spare5 must file with the IRS because they’re earning $600 or more on the app. I can imagine an Uber driver rapidly rating vacation rental photos and calling spas to confirm their hours in between fares.
For most Fives, though, the earnings—paid through PayPal, though other modes of compensation are in the works—are akin to pocket change you might have spent at the video arcade in an earlier era. “People got trained by the freemium gaming economy to spend a dollar or a nickel or a quarter here and there, and I think Spare5 is sort of the natural evolution of that,” Bencke said. “Hey, if you can spend money here and there in your free time, why not make a little bit of money?”
Spare5 charges businesses on a monthly basis. Its standard package includes 20,000 light tasks or 4,000 medium tasks or 2,000 complex tasks a month for $1,995.
Spare5’s co-founders are Bencke, former TeachStreet chief technology officer Daryn Nakhuda, Urbanspoon co-founder Patrick O’Donnell, and Feedburner co-founder Matt Shobe.
The idea for the company was cooked up by Madrona’s Greg Gottesman and serial entrepreneur Joe Heitzeberg, and validated by the Madrona Venture Labs team. Madrona then recruited Bencke, formerly a senior vice president at Getty Images (now a Spare5 customer), to take the startup to its next phase as CEO.
(The Labs effort continues, with new ideas forthcoming, a Madrona spokeswoman said via e-mail. Meanwhile, Madrona’s Scott Jacobson is the lead managing director working with the Labs team, taking over for Gottesman, who has shifted to the role of venture partner.)
Bencke said the funding will be used to expand Spare5’s team in Seattle, which currently numbers 13, and to expand Spare5 to platforms beyond iOS.