Doug Ludlow and his wife had just moved from Los Angeles to their own home in the Bay Area when he had a revelation.
“I very quickly realised I was the least handy person on Earth,” he jokes. “I didn’t know how to swing a hammer.”
Suddenly, Ludlow was a first-time homeowner; he was now responsible for maintaining a house, and it was his biggest purchase to date. But he had no idea who to call when he needed help. He had to go through Yelp and call up half a dozen carpet cleaners just to get someone to make small repairs to his house.
Ludlow had sold his startup, Hipster, to AOL in 2012, and then worked at AOL Ventures before launching his next startup. He knew that he wanted to start a new company, but he didn’t know exactly what he wanted to do.
He kept coming back to this problem of not knowing who to call to repair things around his house. If you rent and live in an apartment, you have a super and a landlord who take care of your issues; if you own your own house, you’re on your own.
In 2013, Ludlow got the idea for The Happy Home Company. He launched the company quietly in September 2014, then officially in December 2014. Today, the company has 19 employees and is based in San Jose.
“We wanted to make this process as simple as possible,” Ludlow told Business Insider. “We wanted to remove any layer of abstraction between you and getting your home project completed.”
The Happy Home Company focuses on home repair, home improvement, and maintenance. As a customer, you pick up your phone and text one of the Happy Home Company’s 10 “home managers” — W2 employees who have backgrounds in home repair and were contractors in a past life. Ludlow said 84% of all customer communication is done through SMS; the rest comes from Happy Home Company’s website.
You can get a free consultation to find out what’s wrong with your home, be it a leaky faucet or an air conditioner in need of a new filter.
Then, your home manager works with a list of pre-approved, carefully screened service providers in your area to get your repairs taken care of. The goal is to make it super-simple for the customer, so you’re only ever interacting with your home manager.All the scheduling and payment is done through Happy Home Company. Owning a home is already overwhelming, Ludlow says, so home repair should be as painless as possible.
Ten home managers may seem a small number — how does that scale? — but Ludlow says each is able to handle quite a few homes since the average person isn’t asking to get a job done every day. An average customer uses Happy Home Company about once a quarter.
Ludlow says the Happy Home Company’s biggest project to date has been a $36,000 renovation, but on average, the company does $200 handyman jobs. Usually, the first request they get from new customers is a small project, but as customers gain trust in the company, they come back for help with bigger and more expensive projects, like remodels. Unlike a company like Handy, which has a lower average transaction rate, Happy Home Company can scale up their average transaction cost with user trust.
Happy Home Company makes money on a sliding scale, taking a hint from companies Airbnb and eBay. Bigger jobs mean the startup takes a smaller cut, and on smaller jobs, they take a larger cut.
“Even though we take a cut, customers get a lower price than they would have on their own,” Ludlow explains. “Service providers we work with get so much business from us, they’re able to lower the rates for us because we’re giving them more jobs.”
Ludlow says Happy Home Company has raised $3.5 million in seed funding from investors including early Uber investor Chris Sacca at Lowercase Capital, David Tisch at BoxGroup, SV Angel, and Dave Morin at Slow Ventures.
“When we launched the service, it was kind of frustrating,” Ludlow says. “People said, ‘I love the idea of Happy Home — I’ll use you when I have a project.’ And they’d hear about us and like us but if they didn’t need us at the time, they’d forget about us. So growth at the time was difficult.”
But, Ludlow says, now growth is surging. He says the company realised they had to reach customers exactly when there was demand for the service. “Now, we intercept people when they have a specific job to do, instead of getting people to sign up and hoping they will just turn to us when they have a specific job to do,” he says.
From the time Ludlow launched Happy Home Company in September 2014, he says it took the company 384 days to hit its first one thousand users, and to do $1 million in job transactions. But then, it took the company just 38 more days to get its next thousand users, and to make its next $1 million in job transactions.
Now a year into its operation, Happy Home Company is unveiling its next steps. Previously, the service was only available in the Bay Area. Now, it’s expanding to more areas around the US.
In addition, the company is using data it’s collected about the kinds of jobs its users commonly need to have done around the house to create “smart jobs,” proactive, preemptive solutions. For example, if you live in a place where it rains, it would be helpful to have someone come out in August to have someone take care of your gutters before every gutter cleaner in your city is booked up and the price triples.
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