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.
Which is good: maybe there was a time when they were legitimate, but in the current day it appears they are not. In fact I would consider a 'we bought a AAA rating from Better Business Bureau, look!' as a huge red flag.
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.
This might be true technically but it's common knowledge that not paying will negatively affect perfectly good reviews. To the point that reviews that were ok while we paid aren't the instant we stop.
You can argue whatever you want about your former employers but convincing SBOs that Yelp aren't extortionist scumbags based on this detail is not going to fly.
Source: I work directly with maid services and trust in Yelp is at an all time low. Literally the first comment when they are mentioned in our private group is something along the lines of "Die in a grease fire" or "F*ck Yelp". And this is from some of the nicest ladies (mostly) that you'll meet.
"it's common knowledge that not paying will negatively affect perfectly good reviews"
No, it's a common rumor. Repeating rumors does not make them true, and this "knowledge" is completely false.
I have no financial or business interest in Yelp. I just don't enjoy seeing my own work, and the work of my colleagues, disparaged by completely unsubstantiated rumor mongering.
Would I be in the wrong to call this a "canary"? As in you cannot pay to rank higher in search. But you can pay to have more exposure, better reviews, hidden bad reviews, etc.
Except for the fact that you can be at the top of all search results by purchasing an ad. (SOURCE: Opened yelp in browser on mobile amd searched for coffee in SF)
Yelp is also terrible for owners who purchase a business and are strong armed into doing business with yelp on order to remove all the previous bad ratings, description, contact info, etc. (Source: bought 1 bar in LA and 2 in LV)
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.)
Foursquare was my favorite app ever, until they split it up into 4sq and swarm. then it became totally useless to me, and all of my friends slowly stopped using it. :/
4sq's venue ratings is hit or miss. I've definitely found some good places to eat at (that I would've otherwise not found), but I've also eaten at a ton of places that are highly rated but nothing special. For the latter, perhaps they are good relative to the immediate area, but not really that good.
Big fan of their SMS bot Marsbot as well if you haven't tried it yet. For some reason it's very low key and they don't promote it at all, but it's a pretty sweet product.
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.
It does not! At least it did not 8 years ago when I worked there. Obviously a lot can change, but they realized the one competitive advantage they had that kept others out of the market was the huge catalog of user reviews.
While other things may be fudged for profitability, there was a clear line between content and advertising we didn't cross.
There are quite a few TA people on HN. Maybe one will chime in?
I don't work at TA, but I do own a tiny hotel in France so I deal with Booking.com and TA rather frequently -- TA does have a paid product for hotels, however other than not having my website URL and the ability for people to book directly with me on my TA profile, there has been absolutely zero difference in our visibility on TA. So far, TA has been really nice to work with despite me not paying them anything (yet.)
TA is definitely my go-to app when I go places; it is pretty good both as a consumer and as a listee.
I found TA invaluable for researching trips to Italy, Israel, and Costa Rica. You definitely have to use it carefully, and I verified with other sources, but there's a lot of good information there.
Ranking on TripAdvisor is based only on review data, with more recent reviews carrying more weight as you'd expect. I work on this personally. Money has no influence whatsoever.
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.
If you're ever in Raleigh, NC, you'll find the best Mediterranean (specifically Lebanese) at Neomonde/Sitti/Sassool (they are all owned by the same family[1]). In my mind, Neomonde is a local treasure.
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.
I think your criticism is very fair. I listen to a lot of podcasts that interview founders and I find there are some who are humble and don't try to give out advice and others who feel entitled to give everyone advice.
Ultimately what worked for one founder may never work for others. I try not to take any of them as gospel and just enjoy the stories that I find interesting.
Agreed. While I thought the Southwest airlines story was very interesting (fighting court battles for years before operating their first flight!), I could barely make it through the show on 5-hour Energy.
> 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.
They do a huge amount of radio advertising -- so most visitors are likely coming from radio ads that explain what they do. People that visit AL already know why they're there.
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.
The good thing about Yelp is that if you actually read through 1- and 2- star reviews for otherwise highly rated restaurants or services, you realize pretty quickly that it is the reviewer with some sort of problem, and not the service.
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.
Is there value in Angie's List? Every time I wind up there from the open Internet, I wind up not knowing what I'm doing and eventually leaving. Is it like a yelp that you have to sign up to get access to?
For a split second, I misread the headline as IAC buying AngelList and my brain went "whoa!", wondering why that crew sold to IAC of all organizations, what this meant for angel investing, what chaos would ensue, etc. Then I blinked and re-read the headline with relief.
Can't say I have had a bad experience with them... yet. I have only used Angie's list for 1 year, and used 3 companies listed there. All 3 did amazing work. I live in a big city where I get a lot of options, so filtering the bad ones out is not always easy. I never used one of their coupons... just read a lot of the reviews. I like how they break down the review into sub categories. For example, I can be looking for an electrician to install ceiling fans, I can find reviews about exactly that... instead of just finding electricians in general.
I have used Angie's List for a few recent jobs, if for nothing else, a yellow pages of businesses with at least some feedback attached. I'm aware of potential, if not clear, risk of bias, but I struggle finding other alternatives that have both quantitative and unbiased feedback.
And unfortunately, I've not had much luck historically going off word of mouth.
Nothing consistent. Part of the problem is that a lot of local contractors and businesses still somewhere around 1995 in term of technology. And it's probably even worse when you get even a short distance away from urban centers. I actually find the Yellow pages can still work better than the alternatives. If someone only has 2 reviews they might as well not have any.
I never used Angie's List, but it used to blow my mind that they used buy expensive TV ads and sell cheap web ads. I never could figure out how they would make that work. This was about 4-5 years ago.
I've heard it from a friend working at one that it's 0.5-2% of a deal (the bigger the deal the smaller the cut), and here's a Quora discussion that corroborates that figure [0].
For public deals, banks will give a fairness opinion and they have to publicly disclose their fees in the relevant securities filings. This data is aggregated by various services (likely behind a paywall), which would let you slice and dice it by deal size.
Match Group - which is what they group their dating sites in for financial reporting - is one of 5 distinct groups they have investments in.
HomeAdvisor, which this purchase would presumably fall under, is another major group that includes HomeAdvisor as well as a bunch of other brands. They've made two other purchases for this group so far this year: HomeStars (Canada) and MyBuilder (UK). As well MyHammer (Germany) in October last year.
>unusual purchase by iac. they've always focused on dating apps.
Not unusual at all. It's all about the business model: online subscription based revenue. When I worked for $major_dating_site, we were directly compared to Angie's List by investors.
funderr.com is already taken, but funder.io is available. I call dibs - that should be a thing btw, e.g. your honor, yes he actually built the app and ran the product BUT I called dibs, on Twitter and on HN, look at the timestamp.
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.