Can Porch.com become LinkedIn for your house?
Sometimes all a small company needs to get a foothold is the help of a big company.
That’s what happened with Seattle-based home improvement startup Porch, a Yelp-like (YELP) listing service that connects homeowners to home professionals. Porch launched just 13 months ago but has rapidly grown to 250 employees with 1.5 million professionals listed, and the company has $33.9 million in venture funding. A surprising national partnership with Lowe’s (LOW) that Porch landed last April has proven instrumental.
In every Lowe’s store across the country, when customers are looking for, say, a carpenter to hire, sales associates direct them to Porch.com. The power of the Lowe’s relationship is such that it is the first thing Porch sales associates mention on their cold calls. (Similarly to Yelp, they call businesses to tell them about Porch and encourage them to sign up for “pro” accounts.)
“Not every professional knows Porch, but everybody knows Lowe’s,” says CEO Matt Ehrlichmann. “We’ve got about 70 people right now that are out there selling to home service professionals. What these folks can do is use the Lowe’s brand to get us in the door.” As Lowe’s chief development officer Richard Maltsbarger told Fortune at the time of the partnership, “The great part about our proposition and partnership with Matt and Porch is that between our knowledge of home improvement, and the Porch team’s knowledge of technology, the Internet, and big data, we have total expertise.”
According to Ehrlichmann, Porch sales associates begin a call by saying something like, “Hi, I’m Matt from Porch. We’ve partnered with the Lowe’s store down the street from you—I’m not sure if you’re looking to take on more business, but we have a way for you to discover some more insights about your business and meet homeowners who could use your services.” And gee, what small business isn’t looking for more customers?
Another partnership, with Realtor.com, has been significant to Porch’s growth as well. Using data from Porch, Realtor.com now offers buyers free Porch Home Reports for 95 percent of for-sale homes. Each report is like a Carfax for a house (or even akin to Ancestry.com), showing all of its renovation history, specific projects that were done over the years, and which contractor did them.
“We realized there’s a really complimentary relationship here in what we do,” says Realtor.com’s product management SVP Tracy Mahnken. “If we’re focused on the 2.5 million homes that are for sale, Porch is focused on the 95 million that are not. But a homeowner that has taken that kind of time to put in all that detailed information about their home, well, that home will come up for sale. It will come up for sale in a year, maybe two years. So what Porch is doing only helps us build out our database further.”
Now Porch has quietly launched a “pro dashboard,” which beefs up its services for professionals. The dashboard is free, but Porch is hoping professionals will pay for extra insights, along with being a “featured pro” on the site; the fee starts at $50 a month. When Porch first launched, we described it as “Angie’s List meets Pinterest,” and indeed, a straightforward listing service is still the site’s core appeal. But moving forward, the better comparison may be LinkedIn (LNKD). In a time when so many startups describe themselves using other startups (e.g., “it’s Tinder for dog adoptions!” or “we’re Uber for dry cleaning!”), Ehrlichmann embraces the analogy.
“Think of it as LinkedIn for the home,” he says. “All the metrics and insights that LinkedIn provides to its small business customers who are paying to access the network, that’s what we’re doing for the professionals that will pay to access our network.” The pro dashboard available to professionals offers stats like how many people viewed their page in the last month, how many times they’ve appeared in search results, and even past customers of theirs who have recently moved, and where. Homeowners are ‘connected to’ contractors that they’ve hired and were happy with, “just like being connected to someone on LinkedIn,” says Ehrlichmann.
Now that it has implemented this suite of tools, the big challenge will be convincing small businesses, like your local carpenter, roofer, or family landscaping outfit, that they need to pay for such a thing in the first place.
It’s the same hurdle Yelp faces: across the country are small businesses who believe they’re doing just fine, thanks, and have managed to thrive for decades without the Web. For them, it’s a dubious proposition to pay a new web site to bring them more business. Of the 1.5 million professionals listed on Porch, 200,000 have a “verified license.” Porch won’t disclose the portion of the 1.5 million paying for premium features. But Ehrlichmann says the appeal should be in the ability to target: “They don’t just get more leads and business from us, but they can target a specific type of homeowner that is their best fit. If they traditionally service people with a $90,000 home, why would we put them in front of someone with a $300,000 home?”
To be sure, Porch isn’t the only site that lists home professionals. Search for a landscaper in, say, Newton, Mass., and one of the featured pros is Weed Man in Woburn/Haverhill. Google that same business and, indeed, its Porch page is in the top five results—but shows up below Facebook, Angie’s List, and Yelp. And there are others.
Ehrlichmann, a serial entrepreneur who sold his first company, software maker Thriva, for $60 million, likes to say Porch doesn’t really have any direct competitors. You’d think of Zillow (Z) and Trulia, (TRLA) but those cater to people looking for a new home, not existing homeowners embarking on an improvement project. Then there is HomeAdvisor, which exists for the same purpose of finding home improvement professionals. But Ehrlichmann cites Porch’s detailed Home Report as a major competitive advantage.
Yet if the Home Report is a practical offering, valuable for the history it provides, it’s difficult to make the leap to seeing Porch as a social network like LinkedIn. Ehrlichmann responds, “We don’t need this to be a communication platform, where people are talking every day on it. We want it to be a useful tool that networks all the relevant information together.”
For a homeowner simply looking to hire someone, fast, that sounds less LinkedIn, more Yellow Pages. And in an era when many people use that physical yellow book for a doorstop or computer stand, a hyper-specialized online database like that could be quite appealing.