What is your source of inspiration? ‘Cause for us it’s gaining new experience, communication with proactive entrepreneurs and sharing their success stories with you, our readers.
Today, we’re really glad to tell you about David Heimbuch, a founder of Hidrent - an app for hiring trustworthy off-duty firefighters for work around the house.
David, can you provide us with a bit of your background information? How did you come into the IT and digital world, what was your first experience with the industry?
I’ve spent the majority of my career working for startups in the ad tech space. My first job was with an email marketing company, Yesmail, in Chicago. That company was acquired by CMGI in 1999 prior to the dot com bubble burst. After that, I held prominent roles for other successful startups including Photobucket, YuMe, Tapad, and Shazam. Each of these companies either completed an IPO or had an exit via acquisition.
Could you share the brightest moments of your career path?
Other than starting my own company, Hidrent, I would say the most fun I had elsewhere was with Shazam. I joined the company early in 2011 as their first employee in Chicago. There was a ton of buzz thereafter Apple featured Shazam in one of their early iPhone commercials, and that was contagious throughout the company. The brightest moment at Shazam was when we made the halftime of the Super Bowl “Shazamable” in 2012. I also sold a sponsorship to Bud Light for a commercial that ran during the Super Bowl with LMFAO leading up to the halftime show.
Regarding Hidrent, how did you come up with the idea of such a business? Could you tell us the reasons that made you launch the company? What is your proudest accomplishment within it?
I married into a family of firefighters. I remember vividly a conversation I had with my brother-in-law, a firefighter in Cincinnati, about a time when I was using Thumbtack. I told him how I was able to hire a handyman to help me fix the railings on my stairs. He told me that he does stuff like that too and that all firefighters he knows do similar tasks during their off days to make extra money. When I asked him what they used to market their services he said they really don’t do any marketing because it’s not really something they know. I knew with my marketing background and this knowledge about firefighters that a business had to be built.
My proudest accomplishment has been that I have not given up. You get a lot of different opinions when you speak with experts and previous entrepreneurs... Most everybody loves the idea of helping firefighters supplement their incomes, but some question whether or not it is an investable business. I’ve heard more no’s than I can count, but I know this will be big and someday those rejections will be remembered as the fuel that kept me going.
In modern realia, during quarantine and Covid-19 pandemic your startup idea should come into the limelight. What sources and techniques do you use to target and attract the right audience?
That’s true. We have seen our revenues double from Q1 2020 to Q2 2020 with the onset of COVID-19. More and more people are being careful with who they let into their homes, but they still need help with certain tasks. Plus, I think quarantine has made more people eager to fix up their house which has contributed to the increase in our business as well.
We haven’t been spending much on paid media during this time. We have the demand now, but it took us a while to get there. In the past, we primarily used digital media to build the demand side of our marketplace. Platforms like Facebook and Nextdoor have worked the best for us. Our audience is comprised of senior citizens/baby boomers, single women, and stay-at-home moms. We cast a wide net to start and let the market dictate who was going to use the service. Once we found who those people were, then the advertising became more targeted and precise, and our acquisition costs have gone down significantly.
Did you have any initial capital, or were there any sponsors who helped you to run the start-up?
I did have some initial capital of my own to put towards the MVP and advertising costs. Those funds were depleted quickly though and I’ve had to become extremely resourceful with the money I have left. I’ve taken out several loans and opened more credit cards than I’d like to admit. Once we started getting some traction though I applied to the Capital Factory and was selected to join their accelerator program. That opened up a lot of doors and led to some outside funding through an equity crowdfunding campaign with MicroVentures. We raised $50k in 2019 and another $75k in 2020. Recently, we launched another crowdfunding campaign that is currently live with Republic.
What problems did you face when developing the initial version of the product? Bearing your previous experience in mind, what criteria do you have if selecting a software development company/vendor?
I chose a local agency in Dallas, TX to build the initial version of the product. If I could go back in time though, I would do it differently. I thought I needed someone local that I could meet with in person, and follow along with during the process. I thought everything had to be perfect. Truth is I could have spent half as much money and used a developer offshore in India or the Ukraine, or nearshore, and got a product just as good. I’ve since left the Dallas agency and started working with a nearshore company that I am very happy with. So to answer the question, the biggest problem was that I thought it had to be perfect when in reality we just needed something that worked and could be tested to see if we had product/market fit. I spent all of the money I had upfront and didn’t have much left to adjust to what the market was telling us about the product.
What unseen opportunities did you see that may result in making your startup a huge success?
We started as a B2C company that helps firefighters supplement their incomes during their off-duty days by connecting them with homeowners looking for a safe, trustworthy, and reliable handyman. After launching though we started getting calls from businesses asking if they could use our firefighters to help with their labor needs as well. Most recently a company used us to hire firefighters to supervise their COVID-19 testing sites in San Antonio, TX. I see the B2B side of our business having exponential growth in the coming years.
Is your startup lucrative enough for investors? If yes, why?
Yes, we are absolutely in that position right now. As evidenced by the $125,000 we have raised so far, and the current equity crowdfunding campaign with Republic. There are 1.2M firefighters in the US and all qualify to join Hidrent to make a little extra money during their 20 off-duty days each month. If we only get 20% of the firefighters in the US to sign up, then that would be 240,000 workers on the street. That’s huge! In 4 of the 7 markets we’re living in now, Dallas, Denver, Austin, and Phoenix, we already have over 10% of their firefighters signed up. Imagine what we could do with a significant investment.
What are your views on customer experience? What will be the customer experience of your business?
Customer experience ranks at the very top in terms of the order of importance for the success of our business. We are constantly interviewing customers now to find out more about what they like, and what they don’t like with Hidrent. One example is they don't like that we ask for a credit card so early in the registration, so we are in the process of changing that. Another is that they don’t want to name their own price, so we are switching to an hourly model. Without talking to your customers you might as well be trying to fit a round peg in a square hole. There’s nothing more important than customer experience and staying on top of their wants and needs.
How do you see your industry in 3-5 years? Is there something special we should expect?
The on-demand home services industry is currently valued at $600B with a compound annual growth rate of 49%. The market is fragmented due to the presence of a large number of small vendors, and it is intensely competitive. To survive and succeed in this competitive environment, we must differentiate our offering for the customers through a clear and unique value proposition. We have done this as the only home service marketplace that exclusively uses off-duty firefighters to fill labor demand. As mentioned earlier, the highest focus of any top on-demand service company must be customer experience and satisfaction. Technology will continue to drive this and offer ways to create a competitive separation.Expert opinion