Thats one hell of a question…..is there something Im missing?
A lot of nights, I cant sleep. My mind races and I’ll think for hours. Needless to say, I put a lot of sleepless hours into this question. In the end, I came to the conclusion (assumption) that it’s the business model. Its not easy, its a marketplaces (the hardest internet businesses to start) and there are some alternatives out there. So lets talk about the alternatives.
I can’t tell you how many times over the course of talking to people about Fix It Today, people would say “oh like Thumbtack?” (call me secluded..I had never heard of Thumbtack before) or “oh like Angieslist? (they are still around?). I had to do some more research to see what I was missing out on. After delving into this, there are other companies like Angies and Thumbtack such as Task Rabbit and a couple other. So lets dissect these business models.
What do all of these companies actually do? They do lead generation. They are kind of like phonebook (if you’re old enough to remember what a phone book was) but they get paid by bringing the company to the customer. They have a catchy website that people come to, to find a plumber and that plumber pays the lead gen company money to get the customer’s name and phone number. The customer is a “lead”.
Oh Thumbtack….Apparently these guys got valued at $3B in their last round but I believe they have fallen quite a bit since then. This was in the covid free money bubble where investors were investing and buying at crazy multiples. So how does thumbtack work. This is from my observation and reading…it might not be 100% correct. It is basically as I said above. They list the service provider, the customer comes to Thumbtack and if the service provider gets clicked on, they pay Thumbtack. Very similar to Google PPC ads in my opinion. The people who pay the most show up at the top, then the rest are below and are not bedazzled like the big spenders. While snooping around their website, you see you can schedule some providers online but you can’t for some. Interesting.
Leads and pricing – after talking to a local company, they initially loved them but now hate them. I feel like this is the thing that happens for lots of companies as they grow. We need to make sure we don’t do this. Thumbtack seems to charge $40-160 (maybe more) for leads. Again, a lead doesn’t always lead to the customer using your service, it just simply means you get to talk to them. Its up to the service provider to sell their company. Thumbtack charges based upon lead type, meaning; one service may that doesn’t generate much money (say changing a light switch out) may be $40 but replacing an entire A/C unit (thousands of dollars in revenue) could be $160. Sometimes, customers put the wrong problem and companies are charge very high lead rates and lose money on the job. An example is the customer chooses “New A/C system” so the provider is charged $160. Well, it was just the thermostat and they only charge $100 for a new thermostat. The company lost $60 on that one.
Customer service – While they started with US customer service and they were very helpful, it seems they have now outsourced to a foreign country. If you know anything about service providers here in the South, they prefer speaking to US customer service. Note to self…keep US based customer service, even if it cost you more money because you want happy providers.
So is Fix it Today like these other companies? Yes and no. Are we a lead gen company? Yes. Do we reward providers based on how much they will give us? No. Do we have “preferred” providers (IE sponsored ads) ? No. Do we have different pricing? Yes but nothing like these other companies. I think the key to our future success is we have built a 100% performance based system. We will not charge service providers unless they get scheduled appointments. When they win, we win together. Shared success will launch us ahead.
