SaaS Interviews with CEOs, Startups, Founders
EP 396: Why He Raised $3m Then Merged With #1 Competitor
24 Aug 2016
Chapter 1: What inspired Kevin Davis to create Geekatoo?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit soul mark.
And I'm your host, Nathan Latka. OK, Top Tribe, this week's winner of the 100 bucks is Jose Avila. He is a 17 year old that doesn't want to go to college and he wants to start his own business. For your chance to win 100 bucks just like Jose every Monday morning, simply subscribe to this podcast on iTunes right now and then text the word Nathan to 33444 to prove that you did it.
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Chapter 2: How did Geekatoo evolve from a bidding site to a fixed price model?
Coming up tomorrow morning, you're going to hear from John Lee. He is the CEO of Prosper Works. They have 40,000 paying customers and they had just announced a new funding round adding to $10 million they've already raised. Top it, tribe. What is happening? Our guest today is Kevin Davis.
After a bad experience with Geek Squad, he started Geekatoo to help people find quality techs in their neighborhood. Six years later, Geekatoo was acquired by their largest competitor, Hello Tech. Besides work, Kevin is a lifelong musician and plays live electronica in LA under the name Cinematronica. Kevin, are you ready to take us to the top?
Totally.
Let's do this, man. Musician, tech guy, geek. I love this.
Yeah, I feel like, you know, geek and music and it all goes together.
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Chapter 3: What challenges did Kevin face in the early years of Geekatoo?
Oh, yeah, man. You have a big advantage. It kind of, you know, you're backstage after a gig and the ladies think you got no brains and you start talking tech and they go sold, baby. I'm in. Done. All right. Tell us about Geekatoo. And we're going to build up guys to the story. They actually just sold to their competitor, Hello Tech, about a month ago. It's currently July 2016.
We're going to build that, though. So, Kevin, tell us why you started Geekatoo.
Yeah, sure. So I had a pretty bad experience with Geek Squad, as you said before, where they just kept my laptop for about a month and a half. And, you know, just the natural thought was, well, we have all these smart people that can help with computers in our local area.
Chapter 4: What strategies did Geekatoo use to acquire customers nationwide?
So why don't we just send them directly? And so that was kind of the experience. initial thought behind it where we wanted to go out and kind of be like an Uber for tech support. Although sometimes I hate those like kind of comparisons, but exactly. But yeah, so I mean, we started to do that for a couple of years.
We were more of a bidding site and then we changed up to a fixed price after we learned a lot of lessons about what we were selling, what the customer wanted and kind of what the best way was to move forward. And then once we moved to that fixed price offering, I think we really started to take off.
And one of the big things that we did early was we had a ton of people that were telling us, you know, If you do a marketplace, you have to open up in one market and then build that up and then go to the next one. And we kind of just said, F that. Let's try to do something where we can do it nationwide and build the supply as the demand comes in.
And the nice thing about that was, as we try to look for cheap ways to get customers, if you're running nationwide ads on Google instead of just targeting San Francisco or LA or somewhere, it starts to become easier to get customers. So that's kind of where we started.
And why is it easier, Kevin? Is it because the ads are cheaper?
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Chapter 5: How did the merger with HelloTech come about?
Yeah, exactly. So, I mean, if you're trying to do it in a major metro and you're competing in San Francisco for like computer repair keywords, I mean, those are going to be incredibly expensive.
And so if you can just go to Google and start, you know, raising the keyword price just a little bit at a time, you start getting maybe some of the less competitive areas, but people that are still willing to pay the same amount. And the nice thing that Geek Squad did was they proved the market out and made it kind of like a, you know, standard price across the country. So it's
Even if it was in a smaller town, it was the same amount of revenue coming in. And that's kind of how we built it out initially. And then just kind of took it nationwide, where now we have over 7,000 providers nationwide.
Okay. And you do consider this a marketplace? It's a marketplace pricing model?
So, yeah, um, I do have kind of a personal thing about the word marketplace where I, I consider us more as a platform. I would describe kind of the Airbnb where you get to select a provider, you see star ratings, um, kind of, you know, that process is more of a marketplace. We're more of a platform where somebody comes in, they just say what their problem is and we pick the provider.
We kind of take care of everything else.
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Chapter 6: What are the financial metrics that define Geekatoo's success?
Just kind of like, I guess Uber would be something like more of a platform than a marketplace. Cause they kind of, you know, take care of everything and you're not selecting the driver. So I consider it as more of a platform than a marketplace, but it's just nomenclature really.
And you founded it in 2010? Yes, exactly. And what was first year revenue? Like nothing. It's always embarrassing. What was it?
No, no, no. I mean, I don't think I'm exaggerating when I say literally nothing. I would consider that when we first got actual customers was about 2013. So our first year revenue for that was probably about $20,000. Um, but then we quickly grew from, you know, 60 to 130. And then, um, at the time of, of when we got acquired, we were doing about 275, uh, to about 300.
Chapter 7: What lessons did Kevin learn from the startup journey?
So, uh, a month actually.
25,000 bucks a month.
Yeah.
Yeah. What is the, let's go back a second. You said between 2010, 2013, you didn't really do any revenue, any revenue until you did 20 grand. Is that per month in 2013?
No, that was the total. So, I mean, the very short story is just, It took us a year and a couple of months to get the product out, which was way too long. If I could tell my 20 year old self, you know, just don't try to build a perfect system, try to get something out early, quick, use lean methodology, get customers to see it and then try to iterate outwards.
But, you know, we took, you know, like I said, a year and a couple of months just to get a product out. And then we were this kind of bidding model where, you know, we had a decent amount of people come in and try to sign up, but almost none of them would actually convert to selecting a gig. They just kind of move on to the next result on Google.
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Chapter 8: What advice does Kevin have for aspiring entrepreneurs?
So I mean, literally.
How old were you in 2010?
Uh, 2010, uh, I was 20, uh, 28, 27.
So how did, my question was going to be, how did you support yourself for those three years where no revenue was coming in? Had you saved a bunch of money or something or what?
Yeah. So, I mean, um, I had, my, my dad actually had passed away before a couple of years before where I didn't have a lot of money, but I have, I had enough that if I moved back home, um, you know, uh, It wasn't easy trying to date, for example, just doing that with no job. And I had relatives saying, get a real job.
But yeah, I mean, I had something where at least for about six months that I could do something that just focused on coding a site. I got my co-founder in. But yeah, I mean, we didn't have a lot of money. My co-founder had a little bit more. So at least he could help in terms of just bare bones bootstrapping in that way. But the thing about 2010 was that the amount of...
work that it took to get something off. And, and I feel like now that with not just AWS, but you know, there's so many different platforms that can kind of make your life a lot easier when you're trying to bootstrap a launch.
And top tribe AWS is an Amazon web services. It's a hosting provider just for playing.
Oh, got it. Got it. Yeah. And yes, we were AWS as well. And so, yeah, I mean, it's just, but even just beyond that, it's like, there's so many now that makes life so much easier that if we had done it again, you know, the same exact site, it probably would have taken us two to three months to launch.
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