This 1001 startup idea from YoStartups is to make a platform to help homeowners, and small-scale developers find licensed contractors for their remodeling projects.
What is the idea?
This 1001 startup idea from YoStartups is to make a platform to help homeowners, and small-scale developers find licensed contractors for their remodeling projects. The platform will allow the users to identify the best contractor for their job depending on their legal and work profile, and based on customer reviews and feedback.
Market Size and Definition
According to a report on Global Market Insights, the remodeling market size is expected to grow at a CAGR of over 10% from 2016 to 2023 and can be valued over $410 billion by 2023. It includes building work that changes the home layout or modifies exteriors such as lawn, patio or garage. Increasing employment along with escalating per capita disposable income is anticipated to drive the industry growth over the forecast period.
There are a few players in the market, but the challenge is to aggregate quality data of as many contractors on the platform. BuildZoom, founded in 2012 in Safo is working on a similar model and currently focusing on US market. It provides complete status on the license profile for the contractors and augments it with the information from the Better Business Bureau (BBB). They started with the no fee model and looked forward to capitalizing on the advertisement revenue down the line.
HomeAdvisor is another company in the field, got acquired by IAC in 2004; founded in Colorado, it is a nationwide online marketplace here homeowners can find and connect with the local pre-screened home professionals.
Pain Point & Target Audience
The target audience for the startup is individual homeowners and small-scale developers who are working on their remodeling projects. Currently with the limited information accessible about the contractors, and the homeowners find it difficult to identify and select a best-suited contractor for their project. Even if they find a quality contractor, in most the cases they still end up paying more than the value created.
The platform will help homeowners and small-scale developers in selecting through a list of licensed contractors based on their project requirements. The platform will provide the complete information on the licenses held by the contractors and if they have any ongoing legal issues. It will further help you to make the decision on a contractor by providing customer feedback and reviews.
The platform will also have a project bidding functionality. Once you submit your project specifics, contractors will submit their respective quotes. This will ensure that a user always gets the best price. Each contractor will also feature their past projects and their company profile so that the customer can choose the one with most relevant expertise.
The startup will primarily work on marketplace model where it will connect homeowners with the contractors. The startup should provide specific sections on the platform to every contractor so that they can put their profile with the freedom to customize it to their requirement. The contractor profile information can be further augmented by the license information and customer feedbacks.
The startup should integrate the project management and payment services to the platform so it can keep track of the activities. It should charge a certain percentage of every deal from the respective contractor as a fee. Once there is a decent traffic on the platform, the startup can also open a revenue stream from advertisement and a special feature on the platform.
Way to market
The startup should start with the platform development and contractor aggregation as they can be done in parallel. Until the platform is fully developed, the startup can integrate typeform or another similar tool to collate the contractor information.
Then the startup should work on integrating with the relevant government database to get details on the licensed contractors. As the business is location-based, the startup should select a megacity and launch its services over there and then expand thereon.
For promotions and marketing, the startup should target the residential complexes which are just coming into possession and try reaching out to property agents and small scale developers.
The startup should target to complete the platform in first three months along with all the integrations. Parallely it should also target to onboard 50 plus contractors from the city of launch while the platform is being developed.
The startup then further work on getting high traffic onto their platform and should target to reach 25K monthly view over next six months. The startups should further plan to launch the platform in two more mega cities over next 12 months.
Investment Needed For Prototype
The startup should look to raise around $150k for the platform development and initial marketing and business development. The startup can also look for accelerators like Ycombinator or Inhab Real Estate Tech Accelerator, Hong Kong which is run by YoStartups for seed money and their deep industry expertise and network.
The team must have a full stack developer to lead the platform development. The startup also needs to have another co-founder from Real Estate Construction, Asset Management or Brokerage background to lead the product development. The Real Estate experience will also help in approaching some of the initial construction company for software testing.
Investors / Expert Take
Y-2016 witnessed over $2.6 billion in funding to Real Estate software and platform startups across 277 deals. And according to a report on cbinsights.com, Y-2017 is set to register 10% increased in funding to the category making the total funding over $2.9 billion.So there is a huge opportunity in the category, but what will create a difference is the domain expertise rather than just a high-tech software. The startup needs to work ground-up with the detailed understanding of the problem they are solving, and then demonstrate the perceivable benefits to the early adopters of their tool. In case you are looking at scaling or launching this venture, you can apply for our virtual acceleration program Excelrate on the Yostartups.com website; it will help you in streamlining and structuring your startup idea. We have limited scholarships and discount packs for deserving startups, depending on the strength of your application, you may qualify for a discount.