Business Ideas VI: Run My House

Idea: Run My House – manage all your household services from a single app

MVP: Running your own house sucks – even if you outsource tasks like yard service, gutter cleaning, pest control, and cleaning, it’s still a challenge to deal with numerous service providers by inefficient means like phone calls. What if you had an app that enabled you to simply check off the service subscriptions you desire, and to take pictures to show problems needing resolution? Even when homeowners work with their existing service providers, there are major communication inefficiencies – not to mention the difficulty in acquiring good providers in the first place!

The difficulty with an MVP in the home services market is chiefly a business problem – a substantial percentage of home service work is performed in the informal economy, and as a result it’s highly fragmented. As a result this business is best attacked in a single test market to start, as providers need to be secured across all major services in order for homeowners to realize value in the service.

Market: The combined household market for home cleaning, yard service, pest control, gutter cleaning, and related scheduled services exceeds $100 billion per year, and including non-scheduled maintenance the total market may exceed $500 Billion annually. This market is currently incredibly fragmented, in no small part because there are limited economies of scale in providing most of these services.

Unfortunately for the consumer, this leads to a terrible experience. If Run My House can capture a 10% fee for delivering volume to providers, while keeping the cost to consumers static, it should be possible to capture meaningful market share. With a total addressable market greater than $10B, there is true unicorn scale possible in this market.

Idea Score (0-10 scale): 7.5 points

Feasibility of MVP / Market Entry: 0.5

Building an MVP for RunMyHouse could be daunting, given the number of service providers that must be secured before the service becomes compelling. This sort of “full-stack” startup, providing a complete service rather than just software, has larger potential but also substantially greater risk and capital requirements. Typically it makes sense to attack individual metro areas individually, starting with a beta market and working through challenges there first.

A simpler alternate MVP might simply help homeowners organize communication with existing vendors – perhaps by providing the software for free, with vendors selling their services via the app. This Zenefits-style approach (the give-away-the-software part, not the HR disaster) could enable rapid expansion at lower cost.

Revenue Market Size: 4 (out of 4)

As noted above, the total market opportunity in the residential space is several hundred billion per year – a 10% take rate implies a true addressable market size of 20B+. Numerous public players in the home services and home sales space (ANGI, Z) point to the possibility of a unicorn valuation for a successful player.

Difficulty, Barriers to Entry, and Competition  (out of 2): 1

A large scale b2c rollout of this sort would likely require substantial funding. HomeJoy was a substantial failure in this space, showing that giving away services at negative margins can take even well funded startups down. Handy, its largest competitor, has since worked hard to get to profitability, underscoring the risks of the home services market.

Taking a software-only approach could lower the risk of rollout, but substantial marketing spending would still be required to get customers and providers onboard.

Riding Hype or a Trend? 2

Bringing fragmented, illiquid, hundred-billion dollar markets online has been one of the key success stories of the last 20 years of the internet. Home services has been among the final frontiers because of its deep fragmentation, but Uber and ride-sharing proved that change will come to even the most glacial industries.