Sandy Kronenberg sees great potential in using an uber-like business to make it easier for metro Detroit residents to find the right service pro and tap into the $400 billion home service industry.
So he launched Farmington, Hills-based Service.com, a concierge service that can get you to a plumber, electrician, roofer, handyman, painter, contractor, carpet cleaner – most any service pro you might need – simply by clicking on an app or going to the website. Here’s the link to the app.
You can log on, find a pro, arrange for service, pay securely through the site and a project manager will help you through the entire process.
It’s like Angie’s List, right?
Kronenberg says Angie’s List is a lead generator where Service.com is a concierge service, and it is free of charge.
“We don’t charge for leads. You don’t have to pay in advance for a lead,” he says “Service.com differs from Angie’s list in that we act as a concierge with our project managers. Service.com helps find the right pro, assists with communication and payment to the pro. Customers don’t pay until they are satisfied with the service.”
Still, Kronenberg says, there is room for everybody.
“This is at least a $400 billion business and less than 1 percent is done online,” he says. “There is room for all competitors. I believe we have found a niche.”
The website and mobile app went live about eight weeks ago and already has 400 service pros in metro Detroit and 3,500 active users. The pros have been vetted to be sure they have a license, insurance, strong recommendations and are financially sound.
Kronenberg spent quite a bit of time finding the right pros. He went to conventions and conferences to meet people and also worked with local union folks. “They are often the most seasoned professionals,” he says.
The unions were very interested because Service.com raised awareness for its members and brought in more work, he says.
Here’s how Service.com works.
It is all done on line. Download the Android or Apple app or sign in to your account now from the web. Type in your problem. For example, “I have a leaky faucet.” You can even send a picture of the issue. Your project manager will help you find a plumber, set up terms and conditions and help negotiate the price.
For smaller jobs you don’t pay until the job is completed. When it’s done to your satisfaction you go back to the site, click pay, and you’re done.
For larger jobs, say siding or building a garage, some upfront dollars may be required by the pro. Your project manager will help you through it.
Service.com has partnered with Moneris and Chase to accept debit and credit payments (no Paypal at this time). It plans to offer instant financing in January.
Service.com not only wants to make the payment easy, it also wants to uncomplicate the lives of the service pros. Kronenberg says they like the program because someone else is collecting their fees.
“They spend 20 percent of their time collecting money,” he says. “With this it is a more seamless transaction.”
Service.com receives a 2 percent-7 percent success fee once a transaction is completed. When a credit card is used the company only charges the pro a 1 percent transaction fee compared with the 3 percent others charge.
If you are interested in becoming a pro, click here.
Kronenberg is looking to expand the business and expects to take it nation-wide next year. Right now Service.com employs 20 people and he expects that to double in 2017. Most of the developers have come from Kronenberg’s alma mater, the University of Michigan.
He has hired a few developers with little experience while they are still in school. There’s good reason. The language they must learn is changing so rapidly it is sometimes better to hire them before they get their degree.
“Some of the smart ones plug their iPhone into the computer and learn to be developers in a month,” he says. “Developers can make $50,000 to $60,000 if they know the language the employer is looking for and within two or three years they could see salaries ranging from $80,000 to $100,000.”
Service.com was started with $3.4 million in seed money from Ludlow Ventures, Fontinalis Partners, Moneris and angel investors.
Kronenberg is no stranger to the entrepreneurial community and has a pretty impressive track record. Five years ago he sold another company he founded, Netarx, for $34 million to Logicalis Group, an international provider of IT and communications technologies based in Berkshire, England. After that he turned his interest to the home service industry and Service.com.
“We can help you get your home repair done in a snap,” he says.