Note: This article is a longstanding attempt to document & research Angi, HomeAdvisor, Thumbtack and other Competitors & Alternatives.
This is a work in progress and a rough draft. We are updating and upgrading it in real time as we conduct more research & understanding into Angie’s List, Angi, Thumbtack, and Homeadvisor, along with similar companies and competitors.
Angie’s List Competitors & Alternatives
The Ultimate Guide to Angie’s List Competitors and Alternatives.
What is Angie’s List?
Angie’s List originally started as a subscription that homeowners paid to access reviews and find the best contractors in their local area. This was a wonderful service that homeowners paid for, and led to contractors getting completely free leads.
However, Angie’s List is no longer what it used to be, as they merged with HomeAdvisor, forming “Angi”, and transitioned towards a “pay per lead” model that was free for homeowners, but made the contractors pay for each lead. Now, Angi and HomeAdvisor have been sued by the FTC for deceptive and fraudulent business practices and ordered to pay back up to $7.3 Million Dollars to Home Service Providers. Why is the FTC suing them? Because they’ve been engaged in deceptive business practices, and effectively have taken advantage of unknowing contractors by over-promising them leads and jobs that they were then reselling to 4-5 other companies at the same time.
They’ve also been accused of not having good enough safeguards to prevent fake leads from being generated and sold to their home service providers, meaning that contractors were paying money for leads that weren’t even real, and then being denied refunds for those leads.
How could this happen? How could the well respected Angie’s List turn into a hated behemoth? The story starts in 1995 with Angie Hickam and Bill Oesterle, in the suburbs of Ohio.
The History of Angie’s List, HomeAdvisor, and Angi.
Angie’s List started in 1995 with a couple of Harvard Business School MBA graduates — Angie Hickam and her boss Bill Oesterle. Bill struggled to find good home service providers in Indianapolis, and had used a company back in Ohio named “Unified Neighbors”, which was a magazine periodical started in the 1970s that published local reviews for the best home service contractors.
Another Harvard Business Graduate, Bill Corbin, described what he accomplished when founding Unified Neighbors in 1975. He writes:
“Using a new PC, an electronic typewriter and an old printing press, [I] created Unified Neighbors, the first systematic compilation of live consumer experiences, enabling objective recommendation of quality home service providers.”
Bill Corbin and Bill Oesterle?! Two Bills in this story? Yes. Bill Corbin (we’ll call him Bill #1) started the original idea of publishing high quality reviews and recommendations of home service providers — and Bill Oesterle (Bill #2) loved that idea a little too much.
You see, Bill #2 had turned to Bill #1’s magazine, Unified Neighbors, when an HVAC contractor took advantage of him for a remodeling job back in Ohio. Back in 1995, if a contractor ended up running off with your deposit, you didn’t really have an online forum like Google, Yelp, or Facebook to complain to.
You basically just had to write about it in your diary or tell your friends & family. 🙁
So, after Bill Oesterle’s HVAC contractor ran off with his deposit, Bill #2 used Unified Neighbors to find a better contractor and get the job completed. Keep in mind, back in 1975, the internet didn’t exist! Finding a good service contractor was more complicated — you had to rely entirely on word of mouth or print advertisements/media.
After Bill #2 moved to Columbus Indiana, no such service existed. So, In 1995, Bill #2 talked his former employee Angie Hicks into creating their own service, later naming it: “Angie’s List.”
Angie was only 22 years old when she co-founded Angie’s List, but boy she was ambitious! Somehow Angie Hickam talked Bill #2 into using her name for his business idea, which turned out to be a genius move.
She immediately began knocking doors to pitch the new idea to her neighbors. Her first customer was a lady named Patty Bowman, and Patty helped start Angie’s List by giving them a list of every contractor she’d ever used, and her reviews of them. (This is also a good argument for you entrepreneurs to first focus on Doing Things That Don’t Scale, because of what you can learn by doing it)
Angie was like: “Patty, you want to help me build my billion dollar company that’s going to make me insanely rich? Sure, I’ll take it!” Talk about a big win for Angie! That’s what some hustle gets you early on in your business.
Side tangent: This reminds me of the AirBnB story where in the early days, Brian Chesky and his other co-founders flew out to New York in order to interview their early users, and end up getting coffee with one of them. In the process, the guy essentially says: “Hey, I’ve tried every single platform trying to rent out my house and make more money doing so, and I have this notebook of 20 years of my thoughts & notes on this market and idea. Do you want it?” Um, yes. Thank you very much! This was probably Brian’s eyes when that moment happened: 🤑
End side tangent.
Angie Hicks added over 1,000 new members entirely by going door to door. Pretty impressive! Talk about doing things that don’t scale.
Originally, homeowners paid a small price of about $40-$50/year to be a member of Angie’s List and her new magazine periodical. Homeowners paid for a subscription to the newsletter, which was sent out monthly. In the newsletter was reviews from other homeowners and members of Angie’s List of local contractors. Now, if your HVAC contractor ran off with your deposit, instead of writing in your diary about it, you could send a letter to Angie and she would publish it publically!
Homeowners were paying for information about service providers provided by their neighbors. This was before the internet was a thing, so neighbors would have previously relied on Word of Mouth to find the best service provider.
In 1996, things were going so well that Angie Hicks and Bill #2 bought out their original inspiration for the idea: Bill #1’s Unified Neighbors. Quickly, they combined both businesses, and took to the hard work of scaling up this their business model. But Angie Hickam is an ambitious woman! And by 1999, at the heights of the internet craze, they launched the website, www.AngiesList.com. Boy, was that a gangster move.
From there, www.AngiesList.com took off like a rocket.
Back in the early days, the primary value that Angie’s List provided to homeowners was authentic reviews and experiences from neighbors and other homeowners. In these times, Homeowners were the customer! They were ones primarily receiving the value. When comparing it to home service contractors paying ads and over-promise through advertising — this was a far superior way of finding a contractor.
“Companies cannot pay to be on the list, nor can they put themselves on the list. Only Angie’s List members can submit reviews and ratings after they’ve hired a company or contractor.”
Source: https://www.deseret.com/2006/7/19/19964291/angie-s-list-providing-ratings-in-the-salt-lake-area
This authentic way of finding contractors led Angie’s List to grow rapidly. So rapidly, in fact, that by 2007, about 8 years after www.AngiesList.com launched, Angie’s List decided to go public.
And we can learn a lot about today’s Angie’s List by looking at the financials from Angie’s first 10K report. In their 2007 10K report, Angie’s List had 234,879 homeowners signed up for membership, earning them $10.8M in sales from homeowners. This would mean on average, homeowners were paying an average of $45.98 each year, or $3.83 per month to have access to unbiased reviews and rankings.
Or at least, that’s what homeowners thought they were paying for. By 2007, we see the beginning of the business model changing.
It turns out, that homeowners paying for memberships wasn’t the only way Angie’s List was making money. In fact, by 2007, it wasn’t even the primary way.
On Angie’s List 2007 financials, there’s an additional line item of $12.3M of revenue earned from “Service Providers”.
Wait, what?
How are “Service Providers” (Contractors!) making up more than half of the revenue that Angie’s list is generating? This is in direct contradiction to what Angie Hicks claimed when she said: “Companies cannot pay to be on the list, nor can they put themselves on the list.” Then why are companies paying Angie’s List?!
Well, turns out she should have added an asterisk in the Deseret News article, because there’s a BIG caveat here. Once the company was added on the list by an Angie’s List member, then Angie’s List was calling and selling an advertising service to contractors to boost their rankings by paying money.
Boo!!! What a raw deal for the homeowner. We pay to receive a magazine, but you’re going to promote the contractors that pay us the most money? Maybe I’m being harsh. But that isn’t what the original vision for Angie’s List was. At least, that’s not what was being promised to the public.
What started out as a service to help homeowners find trusted contractors, is now a pay to play model! Contractors are able to pay Angie’s List to put their finger on the scale, and boost their business. As the internet (and Angie’s List) grows in popularity, this trend becomes even more troubling. You see, Angie’s List had a big problem.
And this big problem starts with a G and ends with an oogle.
GOOGLE!
Google changed everything. Because what was previously privileged information, Google wanted to make public information. Google began to make it easier to find businesses, and they launched their own review platform where members of the public could shout their anger to the world by leaving a mean review.
They could also rave about how amazing a company is to the world. And this was all free to write and consume these reviews, unlike Angie’s List.
Angie’s total revenue percentage from club membership revenue starts to drop. For example in 2009 they earned $20.4M in club membership sales, in 2010 they earned $25.2M, and in 2011 they did $33.8M.
But luckily, Angie’s List learned there’s a bigger way to earn even more money: Pay Per Lead Services.
“In 2011, 2010 and 2009, membership revenue accounted for approximately 38%, 43% and 45% of our total revenue.”
“In 2011, 2010 and 2009, service provider revenue accounted for approximately 62%, 57% and 55% of our total revenue.”
As of 2016:
“Membership revenue decreased $9.9 million for 2016, the result of our introduction of a free membership tier in all markets in June 2016 in connection with the removal of our ratings and reviews paywall” ← They abandoned the paid membership business model!
“Ratings and reviews, which are now available to members free-of-charge, assist members in identifying and hiring a provider for their local service needs.”
Source: Angi 2016 Public 10K Report
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They had 1.5 Million Paid “Members”. (I’m guessing homeowner) => $60M – $75M in revenue each year.
After HomeAdvisor bought Angie’s List and rebranded both companies under the “Angi” brand, this massive behemoth of a company is now a Pay Per Lead Business Model — meaning, contractors pay for every single lead that gets sent to them.
How Does Angie’s List Work for Contractors?
As discussed above, Angie’s List originally started as a subscription that homeowners paid to access reviews and find the best contractors in their local area. This was a wonderful service that homeowners paid for, and led to contractors getting completely free leads.
However, as the internet became popular, and services like Google Reviews and Yelp grew more popular, Angie’s List felt pressure to reduce the costs of their subscription services. Before, Angie’s List charged money for homeowners to access the most highly recommended contractors. Over time, Angie’s List decided to make their service free for homeowners, and instead charge contractors who wanted to advertise using Angie’s List. This is called “pay per lead” business model, because residential contractors pay Angie’s List for each “lead” they send the contractor.
They transitioned towards a “pay per lead” model that was free for homeowners, but costs homeowners more money.
This was popularized by a young upstart company named HomeAdvisor, and who had an aggressive approach of taking on Angie’s List. HomeAdvisor aggressively hit the markets (and the phones) with this business model. Their strategy was to dial in aggressively to residential contractors, and promise them the moon for their credit card number. Once they got the credit card number, they’d rack up a ton of card charges over a short period of time, and send them every website visitor that landed on their site telling the contractor it was a lead. (Ok, this might be an exaggeration. They also sent it to 4 other contractors at the same time. And BOY was that a money maker). Over time, HomeAdvisor was an aggressive competitor to Angie’s List, and put a lot of pressure on it.
Other Angie’s List competitors at the time were Google, Yelp, Facebook, HomeAdvisor.
Later, other Pay Per Lead competitors entered the scene, such as Thumbtack & Houzz, along with other organic review platforms that competed with Angie’s List: Facebook Recommendations, Facebook Local Groups, Neighborly, Next Door, Handy, Task Rabbit, Task Easy, etc.
So, HomeAdvisor decided they wanted to buy Angie’s List and create a mega Pay Per Lead Platform. Since HomeAdvisor had already cold called anyone who’d ever owned or thought about starting a contracting business, and since they’d started being sued in court for deceptive business practices, they decided to stick with Angie’s List much better brand, and bought Angie’s List and rebranded under the “Angi” brand, birthing this massive behemoth of a company in this contractor Pay Per Lead Business Model — meaning, contractors pay for every single lead that gets sent to them.
What is the Pay Per Lead Business Model for Contractors, and Does it Work?
Problems with a Pay Per Lead Model:
- They aggressively attempt to capture every single lead possible, in order to sell to contractors. This leads to low quality leads, as homeowners are not always aware that they’re filling out a form to be contacted.
- They sell the lead to multiple contractors. They do this for a few reasons:
- Ultimately, it comes down to money. If you can sell a lead to 4 different contractors, you just quadrupled the amount of money you made off that customer filling out their contact information. However, that’s obviously not a good answer to explain for contractors, so they need a better excuse, and they say:
- It’s in the homeowner’s best interests to have multiple options.
- Contractors are sometimes notoriously difficult to get a hold of. They can’t always answer their phones. They often are busy and on jobs.
- If a contractor already has a very busy schedule, this can lead to them not prioritizing smaller jobs, or jobs that they won’t be able to fit in. Put simply: they can’t take on every single job, all the time. Unfortunately, this means that contractors can’t always respond to every phone call and text message, which can be a frustrating experience for homeowners.
- Angie’s List and HomeAdvisor take advantage of this fact.
What is the Difference Between Angie’s List, Angi, and HomeAdvisor?
At this point in time, there is no difference. Angi is now HomeAdvisor, and HomeAdvisor is Angi. Angi is the new company that came from the merger of HomeAdvisor and Angie’s List.
What is the Difference Between These Pay Per Lead Models, and Field Rocket?
We don’t charge per lead. We help you build up your own marketing presence so that you can generate your own leads over time. See, the best way to build a business is to build your reputation, and to have proof that you’re the real deal.
We help you collect that proof, and we help you use that proof to help more customers find you. We do this through helping you with your website, gather more online reviews from your current customers, and to continually remind the world that you’re in business, and that you offer a GREAT service to your customers.
We have a free mobile app that also helps you with scheduling, invoicing, payments, and more. This mobile app also ties into your website, so that as customers visit your website they can message you and submit job requests, and they will appear in the app, making it super easy to schedule the customer, create quotes/estimates, and then get paid.
Download our app by clicking on “Get Started” above.
This article will be continued!
