HomeAdvisor pivoted like a startup, but profits like an established company

March 18, 2014


Chris Terrill is the product of somewhat dueling identities. He is the son of a contractor, a confessed home improvement junkie, mixed with equal parts tech and startup geek: the perfect blend for a CEO of a company like HomeAdvisor. “I was very close to getting a master’s in architecture … I’ve read Architectural Digest since I was a little kid. I love this stuff,” Terrill said.

HomeAdvisor connects homeowners with certified and trusted home improvement professionals. Luckily, home improvement contractors can be notoriously nefarious, so HomeAdvisor has experienced tremendous growth since its founding right here in Denver. Nearly 14 years, 1,200 employees and 25 million connected customers later, HomeAdvisor still maintains the startup mentality that led to its incredible growth.

Terrill said this can be attributed in part to the company’s structure. The core Internet company itself is only a couple hundred people, with the remaining 1,000 or so working the operational side. “It feels like we’re a big company, but really have a fairly small, nimble core,” Terrill said.

This is dichotomy has become part of HomeAdvisor’s identity, especially given how HomeAdvisor deals with two distinctly different types of clientele: the home owners and the contractors, who pay HomeAdvisor for leads and over 200 million dollars worth of annual earnings.

“I think what makes us unique is we act and feel like a grown-up startup," Terrill said. "We have our blue jeans, our beer Fridays, our ping-pong table and pinball machines and all that good stuff. We’ve got all the upsides of a startup, what I consider a fun culture, but we have the stability and profitability of a more mature company. I think we have the best of both worlds.”

This type of startup environment isn’t just a “fun façade” to lure in top talent; it’s a method to empower employees to innovate for the company. The idea is that, yes, it’s a fun environment to work in but one that more importantly fosters an atmosphere of creativity and collaboration. Terrill said that the impact of such an atmosphere is evident in their employee’s attitudes.

“We push everybody to bring their best idea to the table," Terrill said. "Once people see that a good idea can come from anywhere and have an impact on the business, it makes them more connected. As many good ideas come from the bottom up as from the top down. It makes people feel very empowered, and we have the revenue base to explore these ideas.”

Success can often breed complacency, but HomeAdvisor has retained all of the hunger from its lean startup roots. When Terrill took the helm of HomeAdvisor (then ServiceMagic) in 2011 he didn’t feel the company was as dominant as it should be in the marketplace. So he did something rarely seen from a company of such establishment and size: he pivoted. The name change to HomeAdvisor in 2012 coincided with a stricter focus on the home improvement space, a space in which Terrill aimed to be not just a prominent player but the dominant one.

While this pivot was thoroughly calculated, no transition of this magnitude comes easily. The name HomeAdvisor was tuned through tireless research to resonate within its market, and performed empirically better than “ServiceMagic” in these tests. Still, changing the domain for such an established site is a rare move, mostly because search traffic is so crucial to HomeAdvisor’s business model.

“Being a former CMO, I don’t like to change names… Frankly we’re probably the biggest consumer facing company to evolve through that type of change,” Terrill said.

While this change came with its share of growing pains, it ultimately paid dividends: “We’re getting great brand equity in HomeAdvisor.” Terrill said.

Now the branded traffic has increased, which is important for their transition from B2B to B2C brand. This also led to a strategic increase in direct marketing. “We’re much more about direct marketing now. We get people to come to HomeAdvisor and have a strong brand experience,” Terrill said. The site has begun focusing on higher end improvements, catering to the customers looking to remodel their bathroom as opposed to somebody trying to find a plumber to fix a leak.

HomeAdvisor, as Terrill puts it, is about building relationships. This had led to an emphasis on creating a community aspect to the site. Contractors are beginning to use HomeAdvisor as a sort of “LinkedIn” for their work, sharing photos of previous projects through their profile on the site. HomeAdvisor has essentially become their online resume, marketing and lead generation source. Terrill likens it to Match.com: it’s about getting the right person at the right time at the right place for the right price.

The focus on the homeowner-contractor relationship shows in DesignMine, their new app that helps align expectations between the two parties by enabling customers to articulate their vision of a project more accurately to a contractor. Another product that has brought huge value to HomeAdvisor was CostGuide, the largest and most concise compilation of financial data on home improvement costs, accurate down to the user’s zip code.

As HomeAdvisor continues innovating new ways to enable the customer-contractor relationship to flourish, it pursues these projects with the prudence of a company that has been around the block. Looking towards 2014 and beyond, HomeAdvisor will continue to grow, and with it so will Colorado’s burgeoning startup scene. As HomeAdvisor is such a prominent Colorado success story, Terrill is a staunch advocate for the continued growth of the Colorado tech sector. “I think Denver is the new, cooler Austin but nobody in Austin wants to hear that.” Chris Terrill, a UT grad, said. “I do love Austin. I feel like you can make fun of your own."

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