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Angie’s List Competitors & Alternatives

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.

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 and transitioned towards a “pay per lead” model that was free for homeowners, but cost homeowners more money. 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. 

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 old 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, created Unified Neighbors, the first systematic compilation of live consumer experiences, enabling objective recommendation of quality home service providers.”

Bill Oesterle had used Unified Neighbors when an HVAC contractor took advantage of him for a remodeling job back in Ohio. He 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 moved to Columbus Indiana, no such service existed. So, In 1995, Bill Oesterle 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, and 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. Angie Hicks later added over 1,000 new members entirely by going door to door. Pretty impressive!

Originally, homeowners paid a small price of about $40-$50/year to be a member. Homeowners paid for a subscription to the newsletter and periodical, which was sent out monthly. In the newsletter was reviews from other members of local contractors. 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 Oesterle bought out their original inspiration for the idea: Unified Neighbors. Quickly, they combined both businesses, and took to the hard work of scaling up this simple business model. By 1999, at the heights of the internet craze, they launched their first website, www.AngiesList.com. From there, Angie’s List took off like a rocket.

Back in the early days, the primary value to homeowners was that it was based on authentic reviews and experiences from neighbors and other homeowners. 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.” 

Well, there’s a caveat to that. 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. 

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. 

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. 

Angie’s List has learned there’s a bigger way to earn 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

________________________

They had 1.5 Million Paid “Members”. (I’m guessing homeowner) => $60M – $75M in revenue each year.

They reproduced what a local company directory was doing called: “Unified Neighbors”

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?

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 Yelp and Google Reviews 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.

What it used to be, as they transitioned towards a “pay per lead” model that was free for homeowners, but costs homeowners more money.

This was popularized by a Angie’s List competitor known as HomeAdvisor, who aggressively hit the markets with this business model. 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 Thumbtack, Houzz, Facebook Recommendations, Facebook Local Groups, Neighborly, Next Door, Handy, Task Rabbit, Task Easy

After HomeAdvisor bought Angie’s List and rebranded both companies under the “Angi” brand, this massive behemoth of a company is a 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: 

  1. 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. 
  2. They sell the lead to multiple contractors. They do this for a few reasons:
    1. 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: 
    2. It’s in the homeowner’s best interests to have multiple options.
      1. Contractors are sometimes notoriously difficult to get a hold of. They can’t always answer their phones. They often are busy and on jobs.
      2. 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.
    3. 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. 

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