I have been covering the home improvement HaaS (humans as a service) space for a while now, and if there’s one thing I am evangelizing is that the notion of experience and scale matters. I know that sounds basic, but that’s the reality, and one that is challenged by some. I am all for changing everything about anything, but when it comes to human nature and trust, these are difficult to build an algorithm around, host at
All of this thinking came to a head recently when I read about the unfortunate layoffs of 90 employees at Porch and reports that key executives “bolted”. The Porch situation, while horrible, is nothing compared to the overall amount of companies who have come and gone in the home improvement space. Here are just a few:
- Homejoy, $39.7M funding, according to Crunchbase, closed
- EBay Hire, funding unknown, closed
- LikeList, $5M funding, Closed according to Crunchbase
- Haven, $1M funding, out of business
- Housefix, $150K funding, closed
- Decorati, closed
- ServiceAlley, closed
- HomeElephant, closed
- , etc., etc.
OK, so you get the idea. The home improvement HaaS business is tough with a lot of churn, investment and closures. If you read the details of the closures, it is really quite telling.
The best example of the challenges of the space came from Jim Brown, founder of Haven, in a blog post on Medium. Brown’s candor and guts are respectable and he summarizes his learnings as, “I believe we underestimated the complexity of creating a consumer focused business and overestimated our ability to build such on a limited budget.” That’s makes a lot of sense and I can personally relate to consumer web ventures that ended in a lot of layoffs. I was in one at AltaVista.
Through the analysis and interviews I have done on HomeAdvisor (owned by IAC/InterActiveCorp ) and companies that have exited, cash, patience, and experience appear to be ingredients for long-term success. So how does HomeAdvisor stack up? Let’s look at the stats, provided to me by HomeAdvisor:
- $1B investment
- $360M in annual revenue
- 35M homeowners served
- 100,000 approved home service providers
- 5M unique users per month
- 1M projects with cost data
This absolutely leaps and bounds above even their nearest competitor, Angie’s List.
I reached out to Chris Terrill, CEO of HomeAdvisor (owned by IAC/InterActiveCorp ) and I think he had some wise words for the investment community about getting into the space. And a bit snarky, too, which I appreciate.
“On the surface this sector seems so simple, and akin to a quick gold rush opportunity,” In reality it requires strong operational focus, a lot of cash over a long period of time, and the right mix of expertise. Many VC’s are looking for the Unicorn in this space that can grow quickly, build a qualified network virally and do it all with a relatively small initial investment. “
I think even
Disclosure: My firm, Moor Insights & Strategy, like all research and analyst firms, provides or provided research, analysis, advising, and/or consulting to many high-tech companies in the industry, including HomeAdvisor, all cited this article. I do not hold any equity positions with any companies cited in this column.