Interesting fact: HomeAdvisor and GreenSky both have names with two capital letters without a space. (And how does a free service pay for the television commercials?) Identidad fiscal #81-1415662. GSKY has a 7x P/E multiple vs. ANGI at ~30x. As for GSKY they are just getting started and it will be interesting to see how they scale without crippling their economics. All Rights Reserved. ANGI spends > $150mm per year on its sales force to acquire and retain providers. What if you took the “imaginary” business model I noted above, that HomeAdvisor *MIGHT* have, for yourself? And paying for leads does not guarantee any revenue, just the opportunity to be introduced to the prospective customer. HomeAdvisor incorporates home improvement project planning resources like True Cost Guide, where customers can view average project costs. Based on my research and evaluation of the market we see that providers are willing to spend ~10% on marketing. These leads are sent through the contractor’s preferred channel, either e-mail, text or phone call. HomeAdvisor has essentially become their online resume, marketing and lead generation source. But CEO Terrill takes the long view in considering the return on investment. Speaking of “rinse”, let’s metaphorically “shower” and wash the HomeAdvisor off ourselves. “We push everybody to bring their best idea to the table," Terrill said. Lending Tree has a direct to consumer model and spend 63% on advertising for its loans. They fill roles on the human resources, IT and software development teams, building transferable skills they can take to the marketplace. If a typical contractor receives 12 leads per month, they could conceptually pay $360 for these leads plus $25 of the prorated annual fee. Because the younger generation are “technology natives,” they are more adaptable and able to learn in modern environments quickly. They also have an built-in advantage AGAINST contractors that you may not know of…. This post will evaluate the two different business models and some speculation on where their growth will come from in the future. It is unlikely they would disrupt the existing model so closely after their IPO, but could be a change in the next few years. Modern youth apprenticeship, said Tanya Jones, HomeAdvisor’s recruiting director, accomplishes goals for the new generation of students and for private industry. But this is all part of Home Advisor’s business model. One of the simplest explanations for its longevity is its effectiveness. But if it’s a free service, why are the contractors so relentless in trying to make contact with the prospective customers? If we assumed the average project was $10k-$20k that would represent 370k to 740k completed projects. I love this stuff,” Terrill said. “I was very close to getting a master’s in architecture … I’ve read Architectural Digest since I was a little kid. The spend a lot of money calling contractors and convincing them that it's a service that will help them expand their business and in fact, stress that they will need more staff to handle all of the calls that they are about to receive. Clearly the momentum favors ANGI. We’ll start sending you leads.”, We might say, “OK, give us a week and we’ll start sending them.”. He needed evidence that a youth apprentice program would work. Like me, they must see the benefit to believe it.”, Industry: Digital marketplace for home services, CareerWise Colorado es una organización registrada 501(c)(3). This had led to an emphasis on creating a community aspect to the site. He also sees greater value for the entire industry in building and expanding the modern youth-apprentice model, regardless of where the apprentices end up in the long term. GreenSky had its IPO this summer and HomeAdvisor spun-off from IAC and merged with Angie’s List in September of 2017, forming ANGI Homeservices. HAVERFORD, Pennsylvania -- You may have seen the HomeAdvisor commercials. First, let’s start out by imagining what it might be like to HomeAdvisor, a beacon of bad faith, and a target of many a class action lawsuit. Pragmatic, Smart and Proven. Today that cost is only 1% of revenue and thus well below a market competitive level due to their unique partnership model. These contractors believe Angie’s buyers are more serious than buyers on other sites, as evidenced by their willingness to pay to join the community. This is an attractive opportunity for GSKY to grow. This … These two models could be compatible with each other as ANGI handles the generation of requests and GSKY is a tool for providers after they get a request. (Perhaps this “willingness to pay” also means Angie’s buyers are less price sensitive?) Since the service is free to the prospective customer, there is no commitment for the customer to purchase the service at all, from any of the contractors that have been introduced. “I think CEOs need their peers to ‘show, not tell’ them what they should look at. The Online service matches customers with local professionals in 1,100 different types of service categories, in all 50 states. In 2017, GreenSky processed 3.7bn in payments from its then 11,000 providers. Below is a view of some the metrics from GSKY’s S1 filing earlier this year. This also led to a strategic increase in direct marketing. Now. It seems clear that ANGI has a path to offer financing, so if it is so clear, why haven’t they done it? Today, HomeAdvisor employs several modern youth apprentices and is helping CareerWise Colorado write the playbook for this unique model. “They are sponges and want to learn. HomeAdvisor connects homeowners with certified and trusted home improvement professionals. Its aim is to connect homeowners with prescreened, local service professionals to carry out home improvement, maintenance and remodeling projects . Pragmatic, Smart and Proven Chris Terrill, HomeAdvisor’s CEO, subscribes to the notion that college may not be the right path for all students, and that some will benefit from college only after experiencing the workforce. Click here for instructions on how to enable JavaScript in your browser. Log onto HomeAdvisor.com and fill out a few questions plus basic customer information and submit. You would get the same leads, but the lead would be INTERESTED in YOU. (I mean, minus the selling the leads to anyone with a pulse).

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