SaaS Interviews with CEOs, Startups, Founders
1566 How This Thumbtack Competitor Hopes to Win with $50k in GMV Last 12 Months
07 Nov 2019
Chapter 1: What is the business model of Chore Relief?
sure relief. He has processed 250 jobs at an average price point of about 197 bucks per job, 50,000 bucks in total volume through his platform. He keeps about 20% of that.
So 10 grand for the company currently raising 500 to 750 K to continue doubling down on growth again, launched in 2017, really helping and hoping to grow the shared economy specifically in the home services space, whether it's contractors, handymen, cleaning folks, things like that, home repair, uh, and helping consumers get matched up to better quotes faster. Hello, everybody.
My guest today is Tariq Kribesh. He is the team leader and CEO and founder and director consultant, and he's backed by director consultant Terry Friel and various mentors at 1871 Chicago's premier incubator. The company is called Chore Relief. He's a serial entrepreneur with expertise and passion that sits at the nexus of technology, innovation, lifestyle, and social innovation.
He built a line of beauty products currently in 400 outlets and e-commerce sites today.
Chapter 2: How does Chore Relief differentiate from competitors?
He's also built the core, the platform behind, again, Chore Relief, which we're going to talk about today. Tariq, are you ready to take us to the top?
Right. Thanks for having me, Nathan. Yes, my name is Tariq. My company is Chore Relief and we like to say your home is our business.
Yeah. So what does that mean? Tell us what you do and what the business model is, how to make money.
Sure.
Chapter 3: What vetting process do contractors undergo on the platform?
So despite the fact that the companies like Andrews List, Home Advisors, and TaskRabbit, 90% of people say use word of mouth to find help. And that's mainly because of the high service fee, the bidding fee, the revenue sharing fee, as well as the lack of transparency and no negotiation between the client and the contractors, and among more issues.
So True Relief, what it does is connect consumers with the service providers through an innovative strategy that allows the customers to name their own price while empowering the service provider with a business management tool. This strategy combines the economic growth of the community and economic growth due to two of the sustainable approaches.
So Tarek, do you vet the handymen and the cleaning people that you mentioned and refer to on your platform? Do you vet all these folks? Are they contractors for you or what? Of course.
So yeah, so most of our people that come to our platform, they go through a vetting process. We make sure that they have identity verification, no criminal records whatsoever before they can actually start receiving jobs. Now let me tell you something different about what's beneficial for us, for contractors to join our platform rather than the rest.
Well, hold on. I want to understand how my audience could use you first and then we can go there. So just to be clear, if someone has a broken toilet and it's in the middle of winter and they can't find anyone to fix it, they can essentially open your app, say, I'm willing to pay 10 bucks to get the faucet fixed.
And your network of handyman in that area will basically say, yes, I can do it or no, I can't.
Right, so what we do now is that we give the opportunity for immediately as you post a job, which takes anywhere from 45 to 60 seconds, instantly in front of the hand of contractors in the area. Now, these contractors have two choices. They can accept it as a face value or submit a counter offer. Because sometimes customers, they come in with a low ball offering.
We want to make sure that the actual, it's fair for both clients and the contractors.
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Chapter 4: How does Chore Relief enable consumers to set their own prices?
But with a click of a button down, the customer will get a list of all the contractors. They can compare the rates. They can read reviews about each individual contractors. And whomever they choose to hire, they simply can just award the jobs to that particular individual.
Okay. And how do you make money? Is this typical marketplace? You take a cut in between?
Right. So currently what we do is we take a commission out of that service. So once the job is completed, we process the payment. We make sure that the contractor receives its payment within two business days or 48 hours. We take a 20 percent commission. But however, that's in the long term. It's going to change.
And we want to drop down to our commission services to simply a 10 percent commission. and introduce a subscription bidding fee, which is a nominal $1 for contractors to bid on a project rather than what the competitors normally charge anywhere from $5 to $30. Who's your biggest competitor? Angie's List, Home Advisors, TaskRabbit.
And they charge a SaaS fee in addition to commission?
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Chapter 5: What funding is Chore Relief currently seeking?
Correct. Interesting. Okay, and help me understand. I want to put this on a timeline real quick. When did you launch the company? What year?
Well, 2017, mid of 2017.
Okay, so recently, did you raise capital or bootstrap?
No, this was all being bootstrapped. And now we're in the process of talking to investors to bring in some seed fund.
You're at an accelerator though. Did the accelerator put money in? No, they didn't. Okay, so you're bootstrapped today. You're looking at raising. How much do you want to raise?
We're looking at somewhere between half a million and 750K.
And why that amount? Why is that right for you?
Well, currently what we've done so far is we were able to generate some revenue.
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Chapter 6: How many jobs has Chore Relief processed since its launch?
Based on the metrics that we have is we have an average transaction per customer roughly around $196. We want to make sure that the investment that we get right now will get the investors at least a 5x return upon the exit minimum. And that's what we feel like, you know, that $500,000 to $750,000 is a sweet spot for us to focus our economic growth.
growth in the city of Chicago, and then eventually get the plan to expand to other market like Atlanta, Georgia, as well as in LA, California.
And how many jobs right now are you processing per month? Would you say successfully?
So far, what we've had as we were learning from the process is the application has a little bit of difficulty. So that's why we're currently re-engineering the app to make it user-friendly, make it easy to use, and also create what we call the network effect. So I recently came across the book. It's called The Hook by Nir Eel. I'm sure you're familiar with it.
And the idea was to create something that people can almost not get addicted to. but it also comes in like every time you come in and you feel like you incentivize to spend more time on the applications in terms of getting jobs or looking to fulfill the service.
So Tariq, are your pre-revenue today no jobs yet?
No, we have jobs. We've been doing jobs. So roughly, we've done roughly around $45,000 to $50,000 in revenue since launch. Okay.
And that's what... Instead of focusing though on revenue real quick, I want to actually focus on the activation metric, the value metric. So how many jobs have you completed since you launched?
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Chapter 7: What challenges has Chore Relief faced in its app development?
We've completed roughly about 250 jobs and there was a 300 jobs that were unfulfilled. And the reason why they were unfulfilled because customers were probably coming at a very low valuation. This is why we created the model of now contractors can actually submit a counter offer just to help the consumers figure it out.
If that, you know, they really, the sense of urgency, if they want to do that job, this is roughly the bulk price that they need to be.
So 250 jobs completed over what period of time? Over 12 months. Okay. The past 12 months, the average kind of per job prices, call it 196 bucks. We'll say $200, $200, 200 bucks, which means again, volume wise, you've been about 50,000 of which you keep 20%. So your revenue, your, your kind of gross margin is about, you've made about 10 grand so far. Correct. Okay.
And how are you, so you're in a very beautiful spot right now in terms of experiments and figuring things out. How are you convincing both sides of the marketplace to use you? For example, I would never use you as a consumer because I'm going to think, well, they're brand new. He's not gonna be able to fill my job. Why waste my time?
So here's the funny that you said that we figured out a way of growth hacking to get contractors. Right now we have about 7,000 contractors across our platform with 13,000 contractors and a pipeline that we didn't even have to actually start taking up the applications.
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Chapter 8: What is the vision behind Tariq's commitment to the shared economy?
We found it. I mean, there's no lack of contractors looking to, to, to do jobs because they've been hurt by these other competitors that charging them 30 bucks just to get a lead. And there's no guarantee you're getting the job. Here we are. We offering you an actual job, not a lead. And it's entirely at that point, it doesn't cost you anything to, to submit an offer or accept it as a face value.
So it's not a shortage amount. What we have now we're focusing on is trying to find clients like yourself, people that want to come to the app. Um, And that's why the focus now is shifted back into Chicago, even though if you look at our user map, it has a nationwide user presence.
But we want to stay focused in the city of Chicago, make sure we understand our KPIs, understand our customer personas, make sure we find, you know, we get the lowest cost possible to find these clients and hopefully build some sort of a metrics that allow them to come back for more.
So how are you doing that now? How are you getting users?
So right now what we do is we do a lot of social media paid advertising, as well as we go like in you know, conferences, media meetups, like part of the incubators that we do every Friday, they have what's it called a TGI Friday. So we part of that community. And then we just pass out flyers, coupons for people to try the service for the first time. Yeah.
You know what I would do if I was you, you probably couldn't do this, but this is what I would do. I would literally go to like my neighbor's house. I would take a bat and I would beat the hell out of their mailbox. I would destroy it. Then I would leave a note and the note would say, I accidentally hit your mailbox. I'm willing to pay to fix it.
Just download this app and I'll cover the total cost.
That's what I would do.
I would go knocked on every mailbox.
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