As somebody that worked for a competitor and knows a lot about both of these companies, I can't say for certain what company is going to "win" local services but I can promise you both of these companies will lose (or I guess you could say Angie's List has now already lost).
Angie's List went from a membership based review service and tried to unsuccessfully turn it into a marketplace which never worked. In the process they didn't invest in their most valuable asset which was high quality reviews of service pros and a lot of consumer trust. Maybe they are still the best right now for reviews, but that is going to change very soon and this acquisition will just accelerate that.
HomeAdvisor is just a sales and marketing company (which has been around since 1999 as its old name, ServiceMagic). They aren't a technology company. They have huge teams of sales people calling pros and selling them on buying consumer leads. Consumers fill in their information for a job and their system just matches them with the pre-sold leads from their sales team. The experience is poor from the consumer side (you often get matched with terrible pros who aren't interested in your job) and is even worse from the pro side (they are paying to be matched for a job they don't want). Pros hate it, they churn at huge rates, which is why HA needs a big sales team. It's a business and they make money but it isn't the type of business that can grow very big.
I'm not even sure why this transaction is interesting. Angie's List has been trying to sell themselves for a long time and has gotten to the point where their stock dropped enough that this deal today is "good" that was bad a year ago. HomeAdvisor has been around for 18 years and will go the way of the Yellow Pages in 3-5 years. Just rearranging the deck chairs on the Titanic.
Have to agree with this assessment, just recently tried both of those services in the hunt for a plumber. Everyone I called from HomeAdvisor didn't return my calls or else called to tell me they weren't actually plumbers. Angie's List was a laughable disappointment with only one search result for my entire zip code and a testament to how the pay-walled garden approach just doesn't work.
I finally resorted to asking around in my neighborhood and found a good plumber who was not listed on Google maps or any other online source. Reasoning was obvious: one bad review and your business is shot down forever, the best thing to do is to stay off the radar.
I have found that this is one of the most redeeming qualities of Next Door. Among the people selling "gently used" crap that no one would even take for free, the NIMBY crowd, the easy racism under the guise of neighborhood watch, the MLM moms, and the "THINK OF THE CHILDEN" crowd, Next Door has been spot on for recommendations.
There are small business owners who make posts every two weeks are so about their super amazing lawn care business providing 10x the quality of TruGreen, but if you ask for recommendations, people flock in droves on both sides. Users give glowing praises for good experiences, and they will absolutely crucify a business for bad experiences. Sometimes you have to tease out details, but it's way better than a context-free review post to Google or Yelp.
It's very common for a review on a website to have a business with a 4 star rating and a couple negative reviews. The negative reviews will only say something like, "Terrible experience. I will never user ${business} again!" Thanks buddy! You've given me 0 reasons to avoid this place. Next Door allows you to engage other locals on why the experience was poor.
I just hope that Next Door doesn't try to pivot and capitalize on this. The system in place is perfect for recommendations, and I would hate for them to create some weird Yelp-esque review system within the app.
Edit: This isn't confined to Next Door. Any forum where you can engage neighbors or locals with conversation will be better than a review site. People rarely go into enough details on why an experience was positive or negative. An HVAC company can refill refrigerant for a low price, but their duct work can be extremely pricey and sub-par. Reviews probably will not capture that type of information without asking what the user had done, how much it cost, promptness, time to complete the work, etc. Added these interview-style questions on a review site probably won't help, because will likely not submit a review where all of these are required fields.
I have some of the same sentiment and concerns (my previous comment https://news.ycombinator.com/item?id=14242737), mainly around their lack of real technology, differentiated product, and questionable financials. Appreciate your insider knowledge (since you were the original CTO of Thumbtack).
Angie's List used to be awesome. When we bought our current house, we needed an array of professionals for various services, and we hired all of them via Angie's List reviews. Every single one was great. We have found that having a large number of relevant positive reviews on Angie's List to be an extremely strong indicator that the pro will do good work.
However, over the past few years, it really seems like it has stagnated, and it's clear they've changed their focus. It's harder to find people who have many recent reviews, and they're always trying to push "coupons" in your face.
These days more often than not, I get recommendations from our neighborhood Facebook group (sometime Nextdoor as well, but Facebook is much more active here). The track record isn't quite as good as Angie's List was in the glory days, but it's a lot better than Yelp or just randomly searching.
Hiring service pros is so stressful, and such a minefield. So many of them are flakes or terrible at what they do. It seems like it should be a no brainer to have a service that reliably connects you with people who will do awesome work on your home. But I guess it's too hard to monetize that...
>It seems like it should be a no brainer to have a service that reliably connects you with people who will do awesome work on your home. But I guess it's too hard to monetize that...
It is difficult to monetize when the end customers care first and foremost about cost/price and not quality. Low volume, high price, quality work doesn't need or require the lead generation [volume] that these sites offer home pros. Word of mouth is sufficient, and free.
I'm actually going to disagree on the ServiceMagic comment that the contractor doesn't care.
I worked for a local contractor for several years, and we had to care, if anything, more, about those orders. Those jobs were the ones most likely to file with the BBB if something went wrong. Plus, enough bad reviews and they actually used to hide low-ranked companies.
Not specifically apropos of the buyout, but my experience with Angie's List has been similar to that of Yelp, that is, businesses that paid to advertise on AL were better able to maintain high rankings. The top-rated companies were not the best from either a quality or price perspective. While it's a great idea to crowd-source referrals for contractors like that, it's unfortunate that that model falls prey to the same impulse to increase revenue by soliciting advertising contracts with the firms that it purports to rank impartially.
I think this is why TripAdvisor is better, in my experience, for restaurants than Yelp. If I'm not mistaken, TripAdvisor makes most of its money off of hotel booking referrals.
ANYTHING is better than Yelp. It literally does everything in the book to get you to download the app (to collect your user data, presumably) and is literally designed from the ground up to promote businesses that pay them to
be higher on the index.
Their sales tactics are borderline abusive, too. They will hunt you down forever until you sign a package with them, and they give you zero time to think about whether their ad package (which only works on their site and has a super high CPC compared to AdWords) is right for your business.
The audiences are a little different. TripAdvisor is easier to game, I find it a good guide, but there are definitely false positives. TA is very accurate for shitty restaurants.
Yelp is weird because when it's good, the reviews are great and super insightful. But you don't necessarily get a great picture of the area. (My typical use case I showing up in randomtown, USA for 24-48 hours.)
TripAdvisor recommendations get dated fast and are only for a niche audience. In my experience they tend to stick to the most popular places rather than the best places, and they miss a lot of local spots / dive-y spots / places that families wouldn't go etc.
In cities like SF, NYC, etc, I've had much better luck with recommendations from Foursquare and Yelp. Especially with new places.
> TripAdvisor makes most of its money off of hotel booking referrals
Somewhat surprisingly this is the case for a lot of travel POI type sites (hotel referral commission rates are so high). Even a site like Kayak gets a significant portion of its revenue from hotel bookings.
I'm definitely with you on having better categorization and classification and filtering options.
Kevin Rose did a short-lived app called Oink [1] a few years ago with the idea of ranking individual dishes at each restaurant. I really thought (and still think) there's a huge potential for this concept.
Every day I have some query like "show me all of the places that serve falafel within 15 minutes of me" or "what are all of the shops with sandwiches in my neighborhood?" Running those kinds of queries on the traditional POI sites like Yelp or Google Maps is pretty ineffective.
> The solution is classification instead of ranking.
> I am more interested in a Mediterranean place that cooks falafel to order and has tahini sauce than I am in a 4-star Mediterranean restaurant.
However, just because a Mediterranean place cooks falafel to order and has tahini sauce doesn't mean that they cook the falafel well, that the service is decent, etc.
I'm also personally _more_ interested in the availability of falafel and tahini sauce than the number of stars a restaurant has, but I use the ranking/reviews to determine which place would be the most enjoyable to eat at. 70% of the Mediterranean restaurants near me may offer falafel, the question is which of them will not be a subpar experience. Unfortunately rankings/reviews definitely aren't always correct, hence this conversation, but I definitely think they still have a place.
Personally I weigh a high number of positive, detailed reviews with photos over the number of stars a restaurant has.
Interesting. I haven't even thought to look for reviews on Facebook. I have found nextdoor.com useful for finding service professionals.
For local restaurants, eh, I just visit them once. What I'm looking for in a restaurant seems to vary too much from what folks who leave reviews are looking for. e.g, some folks really care about how long it takes their meal to arrive or the quality of the service. To me, the quality and consistency of the meal is most important, so I'll forgive a slow kitchen or an occasional bad server or server having a bad day. Also, as they say, there's no accounting for some people's taste. :-)
The "How I Built This" is an incredibly well done podcast. I know this is a little off topic but it's likely a podcast many at HN would find interesting as it's about how entrepreneurs built their businesses.
It's definitely interesting, but it's been rough to get through a few of them. Some of guests spout sage-like advice with complete ignorance of any survivorship bias.
Other ones, just when I think they're going to go that way, make humble admissions that there was a confluence of people and ideas that they combined with hard work to get to where they were at. So there are some good ones.
That all could be my side-line opinion though, tinted by my ego protecting itself while I'm not successful.
> Angie's List is a US-based website containing crowd-sourced reviews of local businesses. For the quarter ending on June 30, 2016, Angie's List reported total revenue of US$83,000,000 and a net income of US$4,797,000.
> Angie's List had its first profitable year since founding in 1995 in 2015.
> In 2013, investors worried that the company had been in business for more than 18 years, yet never had shown an annual profit, and that valuations of the company were unrealistic based on the actual revenue the company produces. But by 2015 growth estimates indicate a significant earnings-per-share growth, with a long-term growth rate at 19%. Combine this with stock estimates rising in 2015 by 13.3%, some Securities research firms such as Zacks Investment Research indicated ANGI is well-positioned for future earnings growth.
M&A 101 - Inflated asset valuations, Transaction driven (legal fees, professional services fees, bonuses, write-offs, etc.), Top-line stuffing, and most importantly - Done with other people's money. M&A is not where you look for rationale.
The companies to beat are Thumbtack and maybe ProReferral aka red beacon. They seem to have the right monetization schemes. Also, I would think that the big box home improvement stores like Home Depot drive huge referral traffic.
Also one of these companies should team up with HGTV.
Five years ago I signed up for Angie's List because I liked the concept of a paid membership to keep the reviews legitimate and of high quality (I figured the type of person that would pay for a membership would leave better reviews). Angie's List itself would highlight this in their advertisements at the time.
After using the site for a bit I realized that they were giving preferential sorting to "coupon baring providers" (and to have coupons your business has to pay Angie's List). They were taking from both ends and compromising the one thing they were supposed to be better than their competitors at. I specifically stated this was why I was cancelling and actually got back a seemingly personalized email saying "I have passed along your feedback regarding this issue. While I cannot promise that our policy will change, I will personally see to it that your idea is discussed with other Angie's List personnel and that it will be seriously considered."
Fast forward four years and I get a notification of a class action settlement in my email because of this very issue (and some other shady stuff they were apparently doing). I guess the Angie's List personnel didn't consider what I wrote seriously enough...
> In August 2016, Angie’s List has agreed to settle three lawsuits for a payment of $1,400,000. The class action lawsuits focused on Angie’s List’s acceptance of advertising payments from service providers, and whether those payments affect service providers’ letter-grade ratings, reviews, and place in search-result rankings. Angie’s List denies plaintiffs’ claims, but disclosed that revenue from service providers can affect the order of search-result rankings of the service provider under certain settings. Moore vs. AngiesList.
I went with top 1-3. One was amazing and professional, though quite expensive. He more than earned his paycheck by fixing installation errors left behind by two providers before. The other 2, were just average in workmanship, which surprised me based on their high ratings. You can clearly tell were making up through volume.
If you are the type of person who doesn't mind paying 20%-30% extra for higher quality job without cutting corners, it's not easy to spot them in Angie's list.
Having not heard of Angie's List before I decided to check their website out. If anyone working on that is reading HN, you might find it interesting that I didn't understand at all what the website was for until reading all the way down to the testimonials.
Until then it was all about how happy users are and how many solutions it provides.
Might be a good idea to put a one-liner explanation somewhere very visible.
It's a sales funneling technique. By the time the user has reached the bottom, he has been prepped with all the glowing testimonials and ready to sign up. For a casual visitor, as blunt as it is, you are not their target audience.
I have always been super skeptical how Angie's list stays in business and continues to grow competing against Yelp, Thumbtack, FindAPro, Porch, etc. Turns out I was wrong about Angie's list (sort of).
Angie's list earnings have been all over the place missing and beating, and for me was a big fat red flag.
I noticed it was increasingly easy to get memberships; I saw several groups promoting free AL memberships as a side benefit last year. Now it's free to join, apparently. Not sure if these numbers capture that shift, but loss of subscriber revenue was, apparently, a plus not a minus.
It was more useful when it was limited to paying members. I'm sure IAC sees easy profit in shifting to a "if you're not the customer, you're the product" model.
I joined because it was free now it's now been a year and they're trying to bill me for a new year. They never said it was free for only one year or they buried it in the tos. I have unsubscribed from the service I find Yelp much more useful.
At least one of the brands you listed was close to buying them in 2015, but then it all fell through. Sounds like IAC was also in the process of making them an offer at that same time as well.
Surprised Angie's list was able to get this much, every impression I had was they were doing poorly, especially after the layoffs a while back. Would be interesting to have been a fly on the wall during the negotiations.
Readit News
Angie's List went from a membership based review service and tried to unsuccessfully turn it into a marketplace which never worked. In the process they didn't invest in their most valuable asset which was high quality reviews of service pros and a lot of consumer trust. Maybe they are still the best right now for reviews, but that is going to change very soon and this acquisition will just accelerate that.
HomeAdvisor is just a sales and marketing company (which has been around since 1999 as its old name, ServiceMagic). They aren't a technology company. They have huge teams of sales people calling pros and selling them on buying consumer leads. Consumers fill in their information for a job and their system just matches them with the pre-sold leads from their sales team. The experience is poor from the consumer side (you often get matched with terrible pros who aren't interested in your job) and is even worse from the pro side (they are paying to be matched for a job they don't want). Pros hate it, they churn at huge rates, which is why HA needs a big sales team. It's a business and they make money but it isn't the type of business that can grow very big.
I'm not even sure why this transaction is interesting. Angie's List has been trying to sell themselves for a long time and has gotten to the point where their stock dropped enough that this deal today is "good" that was bad a year ago. HomeAdvisor has been around for 18 years and will go the way of the Yellow Pages in 3-5 years. Just rearranging the deck chairs on the Titanic.
I finally resorted to asking around in my neighborhood and found a good plumber who was not listed on Google maps or any other online source. Reasoning was obvious: one bad review and your business is shot down forever, the best thing to do is to stay off the radar.
There are small business owners who make posts every two weeks are so about their super amazing lawn care business providing 10x the quality of TruGreen, but if you ask for recommendations, people flock in droves on both sides. Users give glowing praises for good experiences, and they will absolutely crucify a business for bad experiences. Sometimes you have to tease out details, but it's way better than a context-free review post to Google or Yelp.
It's very common for a review on a website to have a business with a 4 star rating and a couple negative reviews. The negative reviews will only say something like, "Terrible experience. I will never user ${business} again!" Thanks buddy! You've given me 0 reasons to avoid this place. Next Door allows you to engage other locals on why the experience was poor.
I just hope that Next Door doesn't try to pivot and capitalize on this. The system in place is perfect for recommendations, and I would hate for them to create some weird Yelp-esque review system within the app.
Edit: This isn't confined to Next Door. Any forum where you can engage neighbors or locals with conversation will be better than a review site. People rarely go into enough details on why an experience was positive or negative. An HVAC company can refill refrigerant for a low price, but their duct work can be extremely pricey and sub-par. Reviews probably will not capture that type of information without asking what the user had done, how much it cost, promptness, time to complete the work, etc. Added these interview-style questions on a review site probably won't help, because will likely not submit a review where all of these are required fields.
However, over the past few years, it really seems like it has stagnated, and it's clear they've changed their focus. It's harder to find people who have many recent reviews, and they're always trying to push "coupons" in your face.
These days more often than not, I get recommendations from our neighborhood Facebook group (sometime Nextdoor as well, but Facebook is much more active here). The track record isn't quite as good as Angie's List was in the glory days, but it's a lot better than Yelp or just randomly searching.
Hiring service pros is so stressful, and such a minefield. So many of them are flakes or terrible at what they do. It seems like it should be a no brainer to have a service that reliably connects you with people who will do awesome work on your home. But I guess it's too hard to monetize that...
It is difficult to monetize when the end customers care first and foremost about cost/price and not quality. Low volume, high price, quality work doesn't need or require the lead generation [volume] that these sites offer home pros. Word of mouth is sufficient, and free.
I worked for a local contractor for several years, and we had to care, if anything, more, about those orders. Those jobs were the ones most likely to file with the BBB if something went wrong. Plus, enough bad reviews and they actually used to hide low-ranked companies.
Their sales tactics are borderline abusive, too. They will hunt you down forever until you sign a package with them, and they give you zero time to think about whether their ad package (which only works on their site and has a super high CPC compared to AdWords) is right for your business.
They need to go away
Yelp is weird because when it's good, the reviews are great and super insightful. But you don't necessarily get a great picture of the area. (My typical use case I showing up in randomtown, USA for 24-48 hours.)
In cities like SF, NYC, etc, I've had much better luck with recommendations from Foursquare and Yelp. Especially with new places.
Somewhat surprisingly this is the case for a lot of travel POI type sites (hotel referral commission rates are so high). Even a site like Kayak gets a significant portion of its revenue from hotel bookings.
The solution is classification instead of ranking.
I am more interested in a Mediterranean place that cooks falafel to order and has tahini sauce than I am in a 4-star Mediterranean restaurant.
Conveniently those are all verifiable facts, so there's no need to wrestle with subjectivity.
Kevin Rose did a short-lived app called Oink [1] a few years ago with the idea of ranking individual dishes at each restaurant. I really thought (and still think) there's a huge potential for this concept.
Every day I have some query like "show me all of the places that serve falafel within 15 minutes of me" or "what are all of the shops with sandwiches in my neighborhood?" Running those kinds of queries on the traditional POI sites like Yelp or Google Maps is pretty ineffective.
[1]: http://mashable.com/2012/03/14/kevin-roses-oink-folds/
You preferences aren't the mean or the median, I suspect.
> I am more interested in a Mediterranean place that cooks falafel to order and has tahini sauce than I am in a 4-star Mediterranean restaurant.
However, just because a Mediterranean place cooks falafel to order and has tahini sauce doesn't mean that they cook the falafel well, that the service is decent, etc.
I'm also personally _more_ interested in the availability of falafel and tahini sauce than the number of stars a restaurant has, but I use the ranking/reviews to determine which place would be the most enjoyable to eat at. 70% of the Mediterranean restaurants near me may offer falafel, the question is which of them will not be a subpar experience. Unfortunately rankings/reviews definitely aren't always correct, hence this conversation, but I definitely think they still have a place.
Personally I weigh a high number of positive, detailed reviews with photos over the number of stars a restaurant has.
For local restaurants, eh, I just visit them once. What I'm looking for in a restaurant seems to vary too much from what folks who leave reviews are looking for. e.g, some folks really care about how long it takes their meal to arrive or the quality of the service. To me, the quality and consistency of the meal is most important, so I'll forgive a slow kitchen or an occasional bad server or server having a bad day. Also, as they say, there's no accounting for some people's taste. :-)
https://www.angieslist.com/articles/angie-hicks-npr-s-how-i-...
I highly recommend!
Other ones, just when I think they're going to go that way, make humble admissions that there was a confluence of people and ideas that they combined with hard work to get to where they were at. So there are some good ones.
That all could be my side-line opinion though, tinted by my ego protecting itself while I'm not successful.
I think it can be a great brain food to start the day. Any other resources you would recommend like this?
From https://en.wikipedia.org/wiki/Angie%27s_List:
> Angie's List is a US-based website containing crowd-sourced reviews of local businesses. For the quarter ending on June 30, 2016, Angie's List reported total revenue of US$83,000,000 and a net income of US$4,797,000.
> Angie's List had its first profitable year since founding in 1995 in 2015.
> In 2013, investors worried that the company had been in business for more than 18 years, yet never had shown an annual profit, and that valuations of the company were unrealistic based on the actual revenue the company produces. But by 2015 growth estimates indicate a significant earnings-per-share growth, with a long-term growth rate at 19%. Combine this with stock estimates rising in 2015 by 13.3%, some Securities research firms such as Zacks Investment Research indicated ANGI is well-positioned for future earnings growth.
Also one of these companies should team up with HGTV.
https://mobile.twitter.com/tnorthcutt/status/567747019726409...
After using the site for a bit I realized that they were giving preferential sorting to "coupon baring providers" (and to have coupons your business has to pay Angie's List). They were taking from both ends and compromising the one thing they were supposed to be better than their competitors at. I specifically stated this was why I was cancelling and actually got back a seemingly personalized email saying "I have passed along your feedback regarding this issue. While I cannot promise that our policy will change, I will personally see to it that your idea is discussed with other Angie's List personnel and that it will be seriously considered."
Fast forward four years and I get a notification of a class action settlement in my email because of this very issue (and some other shady stuff they were apparently doing). I guess the Angie's List personnel didn't consider what I wrote seriously enough...
> In August 2016, Angie’s List has agreed to settle three lawsuits for a payment of $1,400,000. The class action lawsuits focused on Angie’s List’s acceptance of advertising payments from service providers, and whether those payments affect service providers’ letter-grade ratings, reviews, and place in search-result rankings. Angie’s List denies plaintiffs’ claims, but disclosed that revenue from service providers can affect the order of search-result rankings of the service provider under certain settings. Moore vs. AngiesList.
https://en.wikipedia.org/wiki/Angie%27s_List
I went with top 1-3. One was amazing and professional, though quite expensive. He more than earned his paycheck by fixing installation errors left behind by two providers before. The other 2, were just average in workmanship, which surprised me based on their high ratings. You can clearly tell were making up through volume.
If you are the type of person who doesn't mind paying 20%-30% extra for higher quality job without cutting corners, it's not easy to spot them in Angie's list.
Until then it was all about how happy users are and how many solutions it provides.
Might be a good idea to put a one-liner explanation somewhere very visible.
Apparently the customer was happy to pay 0.5B without that advice. AL sold a company, not a product, and they closed the deal.
Angie's list earnings have been all over the place missing and beating, and for me was a big fat red flag.
It was more useful when it was limited to paying members. I'm sure IAC sees easy profit in shifting to a "if you're not the customer, you're the product" model.
https://finance.yahoo.com/chart/ANGI#eyJtdWx0aUNvbG9yTGluZSI...
End of day market cap $352M with a 41% surge after hours.