Why the Home Services Market Suddenly Exploded in Startup Land

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4689159475_25fda88579_oFew things can be as tedious, time consuming, and expensive as home improvement. Seattle’s Pro.com connects people with local home improvement professionals in a way that’s similar to ordering food or making dinner reservations.

The service is fast and seamless, an exhaustive one-stop shop that, according to Pro.com’s CEO Matt Williams  has yet to reach its full potential for convenience. Street Fight recently spoke to Williams, also a former CEO of news recommendations services Digg,  about the home services market, competing with Amazon and Google and why smaller services companies and apps can adopt a full-stack model. Williams will join us as a featured speaker at Street Fight Summit West in San Francisco June 2nd.

It’s been a pretty extraordinary past 18 months for tech companies going after the services market. What factors do you think led to this sudden explosion?
I think it’s seeing all of these other on-demand services that have become mature. It’s the effect of Uber, and a number of other companies like it — the sharing economy, first and foremost. And secondly, it’s the use of the smartphone by not just the average consumer, but the average small business owner. Whether you’re driving a car or delivering food, or you own and operate a contracting company, you have a smartphone now. Through smartphone adoption, the ability to run your business from your pocket is starting to become a real thing.

When it comes to the home services market, do you see a split between discovery and transactions, or will those two models eventually converge?
I think they are converging. Traditionally in this market, there’s been a large contingency of lead generation companies, and not as many companies handling the full transaction gamut. I think we’re starting to see a lot more of handling end-to-end, understanding pricing, getting connected to a pro and then getting the job done and paying for it through the platform. There are few companies doing that now, but it’s starting to become a much larger business of convenience for the consumer.

Both Amazon and Google have announced new programs aimed at the home services market in the past few months. What does this mean for the sector today, and for young companies like Pro.com?
People have been going after this space for a long time, for many years, in different ways. Amazon has had a handle on local now for a number of years, following the group deal phenomenon. Google is probably one of the longest-standing, in terms of providing access to small businesses from a listings perspective, enhanced information and connecting [consumers] to small business owners. I think it’s an evolution for both of them for sure, and for a number of companies going after the space it’s the right place and right time, in terms of larger market opportunity matched with consumer convenience that can create a whole new venture, whether it be a small business or a larger company.

A number of companies are trying to take on a full stack approach, similar to Uber. Do you think that will work in home services?
I do, and that’s to some extent what we’ve been doing since day one. Connecting customers with the pricing information that they need, and then to a pro in the market who’s one of the best to service their needs, and then being able to get the job scheduled and the transaction complete — it’s the ultimate convenience for the consumer. And we’re seeing more and more interest in having that level of convenience, that immediacy that’s valuable for consumers.

How do you see the home services market developing over the next 18 months? Are you keeping your eye on anything specific that could alter the dynamics of the market?
The home services market has traditionally been guided by lead generation, and that’s where pros are paying some kind of fee — advertising, listing, a fee to get connected to a potential customer. I believe the shift that is occurring is one toward more of a transaction-based model. That’s where we see it happening. It’s all about job generation. That’s where we’ve been focused; we don’t get paid unless a pro actually gets a client, completes the work for that client and then gets paid by that client.

For us, we think that it’s a model that lends itself to putting out higher-level jobs, being able to connect the right pros with the right customers and making the transaction as seamless as possible. I see that movement toward full-stack, transaction-based convenience actually being the emphasis for the next 12-to-18 months, in terms of where the industry’s going.

Annie Melton is a contributor to Street Fight.

See Pro.com’s Matt Williams speak at Street Fight Summit West in San Francisco on June 2nd. More info and buy tickets here.