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I think a lot of this comes down to the sector they were going after. Speaking from experience, software for Plumbers, Roofers, Pest Control, Cleaners and most

I think a lot of this comes down to the sector they were going after. Speaking from experience, software for Plumbers, Roofers, Pest Control, Cleaners and most home improvement type sectors are really hard to scale. It really is an up-hill battle getting them to spend more than a couple hundred a month and the churn was so much higher than any other sector I have worked in. You have HomeAdvisor, Angie's List, etc. who are heavily tapped into this market and understand the challenges that come along with it. We developed a lead gen, crm and follow up system targeting this sector. So many of the Plumbers and Roofers we talked to would complain about HomeAdvisor and other similar providers. How bad the leads were, that they were shared (sent to 5+ others), etc. but were not willing to pay for a higher priced offering that fixed those things. Most that were willing to invest were horrible at even answering calls from prospects. They would call prospects back 2+ days later to discover they went with someone else who actually did answer their phone and would then say it was a bad lead. The experience gave me a much better understanding on why the competitors focus on shared leads. Hopefully at least 1 of the 5 roofers the lead is sent to will actually respond in a timely manner.

obilgic 9y ago
I have a feeling that there is a reason, these small businesses stay as small businesses; They are not the most economically rationale decision makers
- johnvonneumann 9y ago
  As someone who comes from parents who own a small construction company, I think you've actually gotten it the wrong way round. What you say could be construed as correct, but in the wrong way. From what I understand, many small businesses (especially those who are Mum and Dad run) are only looking for small business, they have no interest in going bigger, why would they? In the majority of cases, the work they do more than covers the bills, people may think that bigger is always better, but when the business supports a family, this is rarely the case, bigger can actually be far worse. Not to mention that much like was mentioned/alluded to in this article, founder rates of pay/benefits are pretty much never the same as would have to be paid to a "normal" employee. This is unscalable, I know Paul Graham has referred to this idea before, so I won't explain it worse. TL;DR Most small businesses owners are far better rational decision makers than you think, because most of the time, the aim of the game is not a unicorn, it's support of the family.
  - obilgic 9y ago
    Coming from a similar family background I think thats why I said: 'economically rationale decision makers'. Overall financial gain may not be the only thing they optimize for. For example their life style (being able to answer call whenever they want).
    - johnvonneumann 9y ago
      Ahh sorry if I came off to be attacking you man, wasn't my intention at all. And yeah you got it spot on! I know that for my Dad in particular, he always said to me whenever I mentioned scaling the business up and taking on more guys that whilst it would be nice, it would likely mean more of a managerial position, keeping an eye on projects and that. He said he runs his own business to avoid being at the grindstone 24/7, he was always able to come and see school sports and participate in that sort of stuff. I always found it pretty self-controlled tbh, knowing that he could have scaled it up, but knowing the game would change if he did.
  - shubhamjain 9y ago
    There's one kind of growth where you are investing dollars in marketing, sales, hiring and scaling the YoY percentage points; another, where you're investing in efficiency, automation, better gigs, and reduced work load. Why wouldn't anyone be interested in the latter? Small businesses aren't aware what technology can do for them and often, there's a reluctance to change. I am not sure if businesses have become tired of the constant bombardment of promises that don't have a solid ground but I believe some level of effort can make a positive change in their lives.
    - gedrap 9y ago
      Maybe good enough is just good enough for some business owners? If you are making good profit already, which more than covers your needs, why bother looking into improved efficiency, automation, getting better gigs, etc? It's not that you can just flip 'efficiency' switch and things are more efficient. In some cases, sticking to doing things in a familiar way and which works well enough is a rather reasonable decision in the grand scheme of things.
- hkmurakami 9y ago
  It may not be a financially maximizing strategy, but it's often rooted in personal rationale. A friend who runs a very successful real estate business once related to me that "[he has] no desire to be another DeLeon"
- dboreham 9y ago
  All the plumbers and construction contractors I know as friends are constantly busy. They wouldn't know how to handle more incoming business. They can't really charge more for their work. So their only way to scale is to change the structure of the business (go regional rather than local for example). There are significant risks and costs in doing so, and software doesn't help much.
gwbas1c 9y ago
> They would call prospects back 2+ days later to discover they went with someone else who actually did answer their phone and would then say it was a bad lead. That's the opportunity, but it might not be what you want. Start a very tech-savy, customer-friendly plumbing business and figure out how to franchise it. Have your own small in-house tech department that relies on outsourcing. Outcompete the local plumbers and then hire them when they go out of business. All of your franchises will be required to use your software system. I encountered something similar when I hired some painters via a national chain. The guy who ran the local franchise saw it as an investment opportunity, and loved running his own business. One of the painters was a guy who's painting business folded and realized it was just easier being someone else's employee.

obilgic 9y ago

I have a feeling that there is a reason, these small businesses stay as small businesses; They are not the most economically rationale decision makers

johnvonneumann 9y ago
As someone who comes from parents who own a small construction company, I think you've actually gotten it the wrong way round. What you say could be construed as correct, but in the wrong way. From what I understand, many small businesses (especially those who are Mum and Dad run) are only looking for small business, they have no interest in going bigger, why would they? In the majority of cases, the work they do more than covers the bills, people may think that bigger is always better, but when the business supports a family, this is rarely the case, bigger can actually be far worse. Not to mention that much like was mentioned/alluded to in this article, founder rates of pay/benefits are pretty much never the same as would have to be paid to a "normal" employee. This is unscalable, I know Paul Graham has referred to this idea before, so I won't explain it worse. TL;DR Most small businesses owners are far better rational decision makers than you think, because most of the time, the aim of the game is not a unicorn, it's support of the family.
- obilgic 9y ago
  Coming from a similar family background I think thats why I said: 'economically rationale decision makers'. Overall financial gain may not be the only thing they optimize for. For example their life style (being able to answer call whenever they want).
  - johnvonneumann 9y ago
    Ahh sorry if I came off to be attacking you man, wasn't my intention at all. And yeah you got it spot on! I know that for my Dad in particular, he always said to me whenever I mentioned scaling the business up and taking on more guys that whilst it would be nice, it would likely mean more of a managerial position, keeping an eye on projects and that. He said he runs his own business to avoid being at the grindstone 24/7, he was always able to come and see school sports and participate in that sort of stuff. I always found it pretty self-controlled tbh, knowing that he could have scaled it up, but knowing the game would change if he did.
- shubhamjain 9y ago
  There's one kind of growth where you are investing dollars in marketing, sales, hiring and scaling the YoY percentage points; another, where you're investing in efficiency, automation, better gigs, and reduced work load. Why wouldn't anyone be interested in the latter? Small businesses aren't aware what technology can do for them and often, there's a reluctance to change. I am not sure if businesses have become tired of the constant bombardment of promises that don't have a solid ground but I believe some level of effort can make a positive change in their lives.
  - gedrap 9y ago
    Maybe good enough is just good enough for some business owners? If you are making good profit already, which more than covers your needs, why bother looking into improved efficiency, automation, getting better gigs, etc? It's not that you can just flip 'efficiency' switch and things are more efficient. In some cases, sticking to doing things in a familiar way and which works well enough is a rather reasonable decision in the grand scheme of things.
hkmurakami 9y ago
It may not be a financially maximizing strategy, but it's often rooted in personal rationale. A friend who runs a very successful real estate business once related to me that "[he has] no desire to be another DeLeon"
dboreham 9y ago
All the plumbers and construction contractors I know as friends are constantly busy. They wouldn't know how to handle more incoming business. They can't really charge more for their work. So their only way to scale is to change the structure of the business (go regional rather than local for example). There are significant risks and costs in doing so, and software doesn't help much.

gwbas1c 9y ago

> They would call prospects back 2+ days later to discover they went with someone else who actually did answer their phone and would then say it was a bad lead. That's the opportunity, but it might not be what you want. Start a very tech-savy, customer-friendly plumbing business and figure out how to franchise it. Have your own small in-house tech department that relies on outsourcing. Outcompete the local plumbers and then hire them when they go out of business. All of your franchises will be required to use your software system. I encountered something similar when I hired some painters via a national chain. The guy who ran the local franchise saw it as an investment opportunity, and loved running his own business. One of the painters was a guy who's painting business folded and realized it was just easier being someone else's employee.