Happy New Years All,
Figured it was time for an update on the business. I’m probably a bit tardy with a blog post, so this one may end up a bit longer. Hopefully, it’s an entertaining thread though. The last couple of months, upon releasing the site, consisted of a series of early successes and failures. We have had a few sellers sign up for accounts. We’ve had a few DIYers (mainly friends) find the site organically and engage the experts for consultations. We’ve also got some early lessons on email marketing that’ll prove invaluable down the line.
Some of the early consultations worked. Some didn’t. We had small bugs in each of the three main site features (i.e. payment, scheduling, and video-meetings). This is to be expected with any new release, but nonetheless can be frustrating. I try to always maintain a long-term view of this journey and not be overly moved by any small success or obstacle, but do allow myself the cathartic freedom to drop a f-bomb when we discover something broken (and hopefully when the kids aren’t home).
These contained feature failures are always beneficial to the site/business. We’ve fixed each of the bugs, so the product should be incrementally better than it was upon release. Each requires some time to diagnose, design a solution, and for me to choose an economic/swift path to resolve (i.e. choose which freelancer/firm to fix it).
In parallel, I’ve planned for the next few months of other business facets to focus on. There’s always some administrative/legal work that needs to be done, and I’ve found an economical (start-up expert) lawyer who has really helped in that vein. I’ve also been interviewing other dev firms to start to reduce dependencies on a single-firm approach. However, the bulk of my planning time has been in the fundraising/hiring and marketing arenas. I figured I’d talk about those areas in more detail.
Fundraising & Hiring
These two, otherwise independent, business facets will be inextricably linked going forward. The big buckets of capital expenditure are usually in three main areas:
- “Administrative” – things like business operations costs, rent, and salary
- ”Development” – this is the product & engineering (technology) bucket
- ”Marketing” this is for customer acquisition and branding investments
Personnel expenses can be put into any of these categories, depending on the role. My plan with all of my early expenses is to remain very lean. The company is inherently a remote service, so I plan on doing my best to build a remote (i.e. no office expense) company. Marketing, as we’ll touch on next, can be expensive if one is not careful – so we will conduct very measured tests here.
To afford any of them, I’ll have to fundraise. The success of my fundraising will dictate how much I’ll have to allocate to these three larger buckets, but my immediate need will be to get some part-time or full-time help. Since my skill-set is more of the General Manager/Strategist, I’ll definitely have to find some technical/development skill-sets to complement my own. And, it always helps to have customer-acquisition (digital marketing) ninjas help in the early stage. These will be the primary areas of hiring focus. If I raise enough to pay for full-time salaries, then the range of available talent becomes broader. If I raise a smaller amount, I will continue to have to manage freelance project-based and part-time employees.
I may have another entry later to talk about fundraising, as it’s a pretty substantial topic and area of time devotion for any founder/CEO. At a high-level, my strategy will be to pursue a “friends and family” round in the next few months. This is where a founder solicits funding from close acquaintances and maybe some closely-vetted 2nd degree connections. The next round, again depends on the size of the first, but would be to pursue institutional/VC investment in a “seed” or “pre-seed” round. There’s a lot that can happen between now and then, so it doesn’t merit spending too much time talking about it. However, any 2-sided marketplace, such as mine can generate significant returns if successful, but ultimately requires some sizable investment for the necessary marketing expenditures. This level of capital is typically limited to the VC sector, and hence why it’s part of the strategy early on.
Marketing
This is a fun topic, at least for Diana and I who like to talk (and argue) about these tactics. As I said before, there are plenty of horror stories of misguided founders who overspent on inefficient marketing expenditures early on. For those of you who know me, or have at least seen the way I dress, splashy expenses are not my MO. This will be no different.
As we are establishing a new category and service-concept, we’ll have to invest in awareness-building. This is why I was sincerely excited to see FrontDoor, an early competitor in this space, spend an inordinate amount of money in advertising over the past few months. They have a buyer-subscription model which I believe will never prove to be the dominant model in this category, but used their deep parent pockets (as a long-established, home-warranty company) to fund their early campaigns. In turn, they’ve done some of the legwork for me, in educating customers that companies like us exist.
With respect to our approach, it’ll be far more targeted and driven by cost-efficiency standards. For targeting the tradespeople, I hope that email will prove to be an effective channel. Many of these tradespeople have public listings, so I was able to already procure a very large national database of these business listings for a fractionally small expense. This single tactic could prove to be a bit of a silver-bullet, but I won’t get ahead of myself on that either. Interestingly enough, I’ve also seen that there are a number of tradespeople on LinkedIn, which could also prove to be another cost-efficient and uniquely effective channel as well. I’ll have more to update on these tactics in the coming months.
To find the buyers/DIYers, will be the harder marketing challenge to solve early on. Thankfully, we are all really DIYers. Approximately 40% of households take on some DIY project every year. So, targeting the project-ready (homeowners) will be our real challenge. To do so, we are employing a number of tactics:
- SEO – To optimize for search engines, there are a wide-array of technical, strategic, and content related choices a new site has to make. I won’t bore you with the technical work for now, but optimizing page load-speed will be an early focus for us. The workhorse for the SEO channel will be our blog. The site launched with existing articles, and we will continue to publish new articles weekly to build some credibility and keyword depth. I’m experimenting with a mix of freelance writers and a Content-AI engine. As such, if you read the blog, you may think it’s a bit ordinary. And you’d be right. We don’t have the budgets to be fancy yet, but the content quality will improve in time. The unfancy blog is here: https://learn.diywithhelp.com/
- SEM – The paid search and display channels aren’t historically viewed as being cost-effective. I don’t foresee us spending any notable money here early on. However, we will do some early “broad-match” tests that can help us identify the niches/targets with whom our messaging resonates. In that vein, this becomes an extremely cheap research tactic that will help us in every other marketing tactic we pursue. Additionally, I do think Facebook may prove to be a useful channel for us given the DIY groups that reside there.
- Social – Since I just mentioned Facebook, this is a bit of an arbitrary bullet. However, the video-centric nature of YouTube, TikTok, and Instagram already have a lot of DIY content. There are some studies that show TikTok before-and-after DIY content has increased their audience’s propensity to take on DIY projects. We will start to post, redundantly, and equally unfancy posts on Facebook, Instagram, and TikTok to start. You can find those handles here if you’d like to mindlessly follow/like/share our content so we can begin to grow our footprint on these social platforms.
Alright, that did prove to be a longer post. But, this really sets out my tactical pursuits for the next few months. I’ll report back progress against these efforts in the future posts. Until then, Happy New Year! And let us know when you have some household projects you want to work on!
Take care,
eric