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Apply HN- FixSmarter: Mobile App So You Don't Get Screwed by Your Contractor

6 points by theoconn 11y ago

You break your front, plate glass window. What do you do? Join Angie's list, redbeacon, pro.com, homeadvisor, thumbtack, or search local contractors? Maybe. But all you'll get is one or more recommended contractors who will come over and give you whatever estimate for a price they think they can get from you. You're really no better than looking in the yellow pages. FixSmarter puts you back in control. With FixSmarter, you take a video of window. The video is distributed to local contractors for actual bids. The price is confirmed by both parties upon inspection. The cost of the job is held in escrow by FixSmarter until completion of the job. Disputes over price and performance are resolved in house by experts in FixSmarter through video evidence. FixSmarter takes a small percentage of the money held in escrow as a fee. All contractors will be vetted, licensed, and have liability insurance. If they don't have insurance, FixSmarter will provide the means to get insurance. Unlike what's out there now, contractors don't pay for unsuccessful bids, consumers don't pay to join and both parties can feel certain in price, payment, and performance. FixSmarter's video project proposals combined with in-house dispute resolution takes a giant step forward for consumers needing home repairs. I've been frustrated by getting home repairs for years and believe in this solution. I'd love to hear from everyone on why I'm wrong or if I have a Dumb and Dumber like chance.

mgberlin 11y ago
How do you scale decision making with regard to whether or not a job was completed to spec? What about conflict resolution in the case of a disagreement?
- theoconn 11y ago
  Good point. Escrow gets released if both parties submit approvals. If there is a dispute, videos of what was done are submitted to independent mediator who has final say (reviewed in house as well). The customer objecting will have to pay a small fee to object which is refunded with escrow if they are correct. Thanks for comment.
buss 11y ago
What kind of arbitration agreement am I signing up for as a contractor? As a contractor, why would I do this instead of waiting for customers on Angie's List? What if my initial estimate was wrong and the window costs 2x what I thought it would cost?
- theoconn 11y ago
  It would be a streamline AIA arbitration agreement. Angie's List and the other websites have fees in order to get leads. When you get a lead, you are one of multiple leads and you are charged whether or not you get the job. Here the contractor has the fee extracted from the payment he is receiving. If the initial estimate is wrong, the contractor can change estimate (joint approval). As the company developed, a method would be instituted to evaluate the percentage of time/amount a contractor sticks to original bid. Thanks for commenting.
  - theoconn 11y ago
    Also, supplies would come out of escrow as agreed and needed. Thanks again.
    - davemel37 11y ago
      what about other ongoing costs, like labor?
      - theoconn 11y ago
        @davemel37 I think it starts with smaller jobs but I plan on also allowing for releasing escrow for completion of labor on bigger jobs (with video documentation on each stage)
davemel37 11y ago
I agree the current model is broken and I also think this can improve it incrementally...but I think this problem needs to be rethought from the ground up. I think multiple bidding strategies or price comparison is inherently flawed for service businesses. It forces adverse selection on both sides. Essentially, to the buyer, all contractors are vetted, licensed, and have insurance, and they have no other context, so they are forced to choose the cheapest bid. However, the sellers (contractors) don't know what type of client this is, how much they might try to change scope, or what the actual project might end up costing, so they are forced to charge as much as possible to cover the unknown. By forcing them to bid on the project, the better contractors, who are more aware of the potential costs and risks will bid higher than the less competent ones. Essentially, this will skew the process in a way that the customer will always end up with the worst vendor. Further, the contractor needs to confirm price upon inspection. If this leads to changing bids, as most industries do, either the customer will be too annoyed with your site and the contractor, or just go with the new bid...and contractors will quickly learn to bid low and quote higher on site. I would love to hear your thoughts about this and how you hope to overcome adverse selection from a bidding model. For what it's worth, I have my own ideas for the space, but they aren't technology driven solutions, they are people driven solutions.
- SocksCanClose 11y ago
  @davemel37 I like where you're going with this, and I agree that this is a very good problem to address. I wonder if you could design some sort of system similar to Uber pricing algo where you give an estimate ("[Startupname] believes that this job will cost between $70 and $120"), and then include various multiples (I imagine that getting a window repaired in Menlo Park will cost more than doing so in Topeka, KS) for locality, current demand, etc.
  - theoconn 11y ago
    @SocksCanClose Thanks for adding to the ideas. The range is a great way to do it. range for the bid with an explanation in the video by a contractor. The video bid makes it much easier for a contractor to express his knowledge and expertise to convince the consumer that he is right for the job. A price (in the bid range ideally) gets confirmed upon inspection of the job and the money gets held in escrow.
brudgers 10y ago
Considering all the administrative overhead why would a contractor use this service? How will Fixsmarter comply with state insurance laws when selling insurance to contractors? How would the dispute resolution process superior to that of organizations like the American Arbitration Association that is typically standard in the US construction industry? How does holding the money in escrow resolve with state various mechanics lien laws?
- theoconn 10y ago
  @brudgers thanks for the comments. The contractors that I've been working with on this believe it cuts down on the overhead. They have to be somewhat tech savvy but they welcome takingaway the billing and collecting aspect of the jobs. Fixsmarter wouldn't sell insurance but provide referrals and get referral fees. I think it could comply with the state insurance laws in that capacity. The AAA is great but it is basically a mini-trial and very expensive to get through. This would be agreeing to resolve dispute internally so the parties would be giving up that forum. It would be like when people submit to the jurisdiction of the People's Court rather than going to state court. Mechanic's liens secure non-payment on a job. Here, the money would be in place so that a contractor would not have to start a state court proceeding to enforce a mechanics lien. Appreciate the feedback! I still have to fully vet all the issues that you raise but my preliminary surveys and interviews point to them working out.
bestattack 10y ago
I am pretty into this! I've never been a homeowner or landlord, and a big reason why not is that I don't want to have to keep a rolodex of people to call when things break. I'd love it if you guys would fully automate this for me, and am willing to pay a lot (because my alternative is the rolodex thing, or a property manager). Idea one: I'm a renter, I want my landlord to fix something for me. Can you enable me to video it with your app and get the landlord to either signup, or at least fix it with his normal contractor? Idea two: Say I'm a landlord, my renter complains about something being broken. Instead of hiring a property manager, I want to make my renters download the app, submit a fix request and then I'll approve the proposal thru you guys. I'm not a landlord but I could imagine wanting to become one if I didn't have to deal with handling these requests. I think this is one of those ideas that's hard to distribute, because you aren't needed often enough for people to even remember your app's name when they have to get something fixed. So you'll need a really compelling distribution strategy; maybe landlords can talk to each other or you can go through landlord associations or something.
- theoconn 10y ago
  @bestattack Big thanks for your comments. That's an intriguing angle and one we have not discussed yet. It could work very well for landlords to get people out to their jobs. I also think many small landlords do not have contractors they can trust so they could also use it to farm out jobs. Greatly appreciated!

6 points by theoconn 11y ago

mgberlin 11y ago

How do you scale decision making with regard to whether or not a job was completed to spec? What about conflict resolution in the case of a disagreement?

theoconn 11y ago
Good point. Escrow gets released if both parties submit approvals. If there is a dispute, videos of what was done are submitted to independent mediator who has final say (reviewed in house as well). The customer objecting will have to pay a small fee to object which is refunded with escrow if they are correct. Thanks for comment.

buss 11y ago

What kind of arbitration agreement am I signing up for as a contractor? As a contractor, why would I do this instead of waiting for customers on Angie's List? What if my initial estimate was wrong and the window costs 2x what I thought it would cost?

theoconn 11y ago
It would be a streamline AIA arbitration agreement. Angie's List and the other websites have fees in order to get leads. When you get a lead, you are one of multiple leads and you are charged whether or not you get the job. Here the contractor has the fee extracted from the payment he is receiving. If the initial estimate is wrong, the contractor can change estimate (joint approval). As the company developed, a method would be instituted to evaluate the percentage of time/amount a contractor sticks to original bid. Thanks for commenting.
- theoconn 11y ago
  Also, supplies would come out of escrow as agreed and needed. Thanks again.
  - davemel37 11y ago
    what about other ongoing costs, like labor?
    - theoconn 11y ago
      @davemel37 I think it starts with smaller jobs but I plan on also allowing for releasing escrow for completion of labor on bigger jobs (with video documentation on each stage)

davemel37 11y ago

I agree the current model is broken and I also think this can improve it incrementally...but I think this problem needs to be rethought from the ground up. I think multiple bidding strategies or price comparison is inherently flawed for service businesses. It forces adverse selection on both sides. Essentially, to the buyer, all contractors are vetted, licensed, and have insurance, and they have no other context, so they are forced to choose the cheapest bid. However, the sellers (contractors) don't know what type of client this is, how much they might try to change scope, or what the actual project might end up costing, so they are forced to charge as much as possible to cover the unknown. By forcing them to bid on the project, the better contractors, who are more aware of the potential costs and risks will bid higher than the less competent ones. Essentially, this will skew the process in a way that the customer will always end up with the worst vendor. Further, the contractor needs to confirm price upon inspection. If this leads to changing bids, as most industries do, either the customer will be too annoyed with your site and the contractor, or just go with the new bid...and contractors will quickly learn to bid low and quote higher on site. I would love to hear your thoughts about this and how you hope to overcome adverse selection from a bidding model. For what it's worth, I have my own ideas for the space, but they aren't technology driven solutions, they are people driven solutions.

SocksCanClose 11y ago
@davemel37 I like where you're going with this, and I agree that this is a very good problem to address. I wonder if you could design some sort of system similar to Uber pricing algo where you give an estimate ("[Startupname] believes that this job will cost between $70 and $120"), and then include various multiples (I imagine that getting a window repaired in Menlo Park will cost more than doing so in Topeka, KS) for locality, current demand, etc.
- theoconn 11y ago
  @SocksCanClose Thanks for adding to the ideas. The range is a great way to do it. range for the bid with an explanation in the video by a contractor. The video bid makes it much easier for a contractor to express his knowledge and expertise to convince the consumer that he is right for the job. A price (in the bid range ideally) gets confirmed upon inspection of the job and the money gets held in escrow.

brudgers 10y ago

Considering all the administrative overhead why would a contractor use this service? How will Fixsmarter comply with state insurance laws when selling insurance to contractors? How would the dispute resolution process superior to that of organizations like the American Arbitration Association that is typically standard in the US construction industry? How does holding the money in escrow resolve with state various mechanics lien laws?

theoconn 10y ago
@brudgers thanks for the comments. The contractors that I've been working with on this believe it cuts down on the overhead. They have to be somewhat tech savvy but they welcome takingaway the billing and collecting aspect of the jobs. Fixsmarter wouldn't sell insurance but provide referrals and get referral fees. I think it could comply with the state insurance laws in that capacity. The AAA is great but it is basically a mini-trial and very expensive to get through. This would be agreeing to resolve dispute internally so the parties would be giving up that forum. It would be like when people submit to the jurisdiction of the People's Court rather than going to state court. Mechanic's liens secure non-payment on a job. Here, the money would be in place so that a contractor would not have to start a state court proceeding to enforce a mechanics lien. Appreciate the feedback! I still have to fully vet all the issues that you raise but my preliminary surveys and interviews point to them working out.

bestattack 10y ago

I am pretty into this! I've never been a homeowner or landlord, and a big reason why not is that I don't want to have to keep a rolodex of people to call when things break. I'd love it if you guys would fully automate this for me, and am willing to pay a lot (because my alternative is the rolodex thing, or a property manager). Idea one: I'm a renter, I want my landlord to fix something for me. Can you enable me to video it with your app and get the landlord to either signup, or at least fix it with his normal contractor? Idea two: Say I'm a landlord, my renter complains about something being broken. Instead of hiring a property manager, I want to make my renters download the app, submit a fix request and then I'll approve the proposal thru you guys. I'm not a landlord but I could imagine wanting to become one if I didn't have to deal with handling these requests. I think this is one of those ideas that's hard to distribute, because you aren't needed often enough for people to even remember your app's name when they have to get something fixed. So you'll need a really compelling distribution strategy; maybe landlords can talk to each other or you can go through landlord associations or something.

theoconn 10y ago
@bestattack Big thanks for your comments. That's an intriguing angle and one we have not discussed yet. It could work very well for landlords to get people out to their jobs. I also think many small landlords do not have contractors they can trust so they could also use it to farm out jobs. Greatly appreciated!