HEROIC INVESTMENT OVERVIEW / 2012
THE EASIEST WAY TO FIND A TRUSTED HANDYMAN HOUSE CLEANER GARDENER
WINNER RUNNER-UP, TECH
NOVEMBER 2012
FINDING HOME IMPROVEMENT PROVIDERS IS FRUSTRATING
• Runs a chaotic household • Needs a handyman, but
doesn’t know where to look
• Handyman for eight years • Needs more work and current
marketing isn’t working
The Homeowner The Handyman
Mary
HEROIC INVESTMENT OVERVIEW / 2012
Jeff
2
HOMEOWNERS PREFER REFERRALS FROM FRIENDS & NEIGHBORS
“A bunch of my neighbors use the same person to mow their lawns, so we just used them.”
“What makes it hard for people to book my services? Establishing trust without the bene!t of a mutual contact.”
- Mary
- Jeff
YET SERVICE PROVIDERS ARE SPENDING AD DOLLARS ELSEWHERE
HEROIC INVESTMENT OVERVIEW / 2012 3
PAST PRESENT FUTURE
“I don’t trust the phonebook; there are no referrals to cross-check against the business’ claims, which is for me is huge!”
“Online search is overwhelming and does not do a good job at showing me people who work in my neighborhood.”
“I could be a great resource for my neighbors and they don’t even know it!”
THE FUTURE IS SOCIAL RELEVANCY
- Diane, homeowner - Courtney, homeowner - Meg, Homeowner
HEROIC INVESTMENT OVERVIEW / 2012 4
Mary tells Heroic what she needs and when she needs it done
Mary is matched with a Hero based on ratings, location and virtual referrals
Mary books Jeff after reviewing his pro!le. Jeff meets all of Mary’s quali!cations – a perfect match!
HEROIC PROVIDES AN INSTANT VIRTUAL REFERRAL
5
Now Mary can instantly view recommendations from her friends and neighbors
HEROIC INVESTMENT OVERVIEW / 2012
6
In 20 minutes Jeff creates a polished pro!le that helps homeowners discover his services
HEROIC HELPS PROVIDERS GET MORE BUSINESS
Jeff would like more business – Jeff clicks on the “Become a Hero” link
Jeff completes a six-step application that ends with a payment option
Jeff’s pro!le is complete; he’s now ready to receive leads!
User
HERO
FREE
Mary
Jeff
Handyman, Inc.
Enterprise
$29.99/MONTH
FREE FOR USERS - HEROES PAY MONTHLY FEES
Instant virtual referrals – see who your friends and neighbors recommend My Heroes page Find Heroes Contact Heroes
Full Hero pro!le page Email and text alerts for jobs Portfolio section for photos Appear in User dashboard and feed
Full Hero pro!le page Email and text alerts for jobs Portfolio section for photos Appear in User dashboard and feed
$99.99/MONTH
7 HEROIC INVESTMENT OVERVIEW / 2012
MANY MORE INDEPENDENT WORKERS ARE ON THE WAY
“By 2020, an estimated 50% of the US workforce will be made of independent or freelance workers. A stunning 400% increase in less than a decade.” - The Wall Street Journal
8
REPRESENTING A MAJOR OPPORTUNITY
HEROIC INVESTMENT OVERVIEW / 2012
HEROIC GENERATES HEALTHY MARGINS ON EACH SUBSCRIPTION
GROSS MARGIN OF 50% FOR INDIVIDUALS
GROSS MARGIN OF 85% FOR SMALL BUSINESS
HEROIC INVESTMENT OVERVIEW / 2012
ONE-YEAR SUBSCRIPTION ECONOMICS, INDIVIDUAL
9
FINDING MARY ONE MARY, MANY LEADS
HEROIC DRIVES CUSTOMER LEADS TO HEROES
SEM and SEO
Promotions
Partnerships
Referral Program
Open Graph
HEROIC INVESTMENT OVERVIEW / 2012 10
JUSTIN BARRETT CO-FOUNDER & CEO
DAN LINSTROTH CO-FOUNDER & CMO
ETHAN OTTERLEI CO-FOUNDER & CTO
REED ROBINSON CO-FOUNDER & CPO
THIS IS A TEAM WITH MARKETING AND TECHNOLOGY EXPERTISE
STARTUP EXPERIENCE
THIS IS A TEAM WITH MARKETING AND TECHNOLOGY EXPERTISE
- Founder Book a Lesson and Velolet - Development expertise in Ruby, PHP, JavaScript and MySQL - University of Minnesota, B.S.
• - Founder Holy Cow, Dirty Work • - 9+ years expertise B2B/B2C
marketing • - University of Minnesota,
Carlson School
• - Founder Usuits • - Consumer research marketing
expertise, Iconoculture • - University of Minnesota,
Carlson School
- Freelance marketing expert - 50+ team management at Edward Jones - Purdue University, B.A.
Suits
FORTUNE 500 EXPERIENCE
HEROIC INVESTMENT OVERVIEW / 2012 12
HEROIC BECOMES THE FIRST ONLINE REFERRAL ENGINE
TOP COMPETITION
HEROIC INVESTMENT OVERVIEW / 2012 13
$7M $970k
$1.1M
$20k
$1M
95
.2 .8
.9
3 42 62
35 620
941
2230 2812
HEROIC IS ON A PATH FOR RAPID GROWTH
SEED SERIES A
SERIES B
44,271
20
970
12,618
Revenue Operating Expenses
$60M
$20M
(96)
(1,115) (223)
(7,042) 5,460
(28,912) 14,981
1
3
13
33
$44.2M
$12.6M
HEROIC INVESTMENT OVERVIEW / 2012
$40M $28.9M
(110)
14
Unit economics
USES OF CASH AND MILESTONES
HEROIC INVESTMENT OVERVIEW / 2012
50,000+ leads thru 2013
5,000 active Heroes thru 2013 $1.1M
$450k
$100k
$60k
$240k
$250k
Minneapolis/St Paul market formula
15
GIVES MARY AND JEFF WHAT THEY WANT
16
NOW, BUYING HOME SERVICES IS EASY
…and it’s a connection worth $31 billion
More work at an affordable price
Free referrals from the people she trusts
HEROIC INVESTMENT OVERVIEW / 2012
APPENDIX
17 HEROIC INVESTMENT OVERVIEW / 2012
HEROIC IN THE PRESS
18 HEROIC INVESTMENT OVERVIEW / 2012
Raising an additional $630-930k Seed convertible offering • Investors include Gene Munster, Rob Weber, Ryan Weber, Paul
Linstroth, and John Otterlei • Discount rate of 25% to Series A • Targeted closing in next 3-4 weeks
Use of proceeds / Product Roadmap / Goals • $200k-$300k: hire 2-3 FT engineers, 1 PT Designer, 1 PT Marketing/
Customer Support • $350-$500k: marketing campaigns and lead acquisition • Get to 5k active Heroes; 50,000+ connections thru 2013 • Minneapolis/St Paul market formula
FINANCING HEROIC GROWTH
HEROIC INVESTMENT OVERVIEW / 2012 19
Product Discovery Sharing
Market Minneapolis/St Paul Adding Denver/Chicago
Revenue Per Lead Subscription
Financing Seed Series A
Metrics 3,000 Hero Applicants, 2,000 Leads 5,000 Active Heroes/50,000+ Leads
ALPHA RELEASED, BETA IS IN PROGRESS
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Alpha Beta
HEROIC INVESTMENT OVERVIEW / 2012
ADDITIONAL REVENUE STREAMS
ADDITIONAL REVENUE OPPORTUNITY: $45B+
MOBILE AD SPACE
EMAIL AD SPACE
21 HEROIC INVESTMENT OVERVIEW / 2012
HEROIC MARKET GROWTH
SEED
SERIES A
SERIES B
Hero applications: 2,754 Users: 1,500+ Heroic lead requests: 1,850 Sales email signups: 5,000+ Landing page conversion: 39%
Heroes active: 5,000+ Users: 50,000+ Heroic lead requests: 75,000 Sales email signups: 50,000+ Landing page conversion: 40%
22 HEROIC INVESTMENT OVERVIEW / 2012
• 1.5M subscribers, 40K reviews per month • Revenue last !scal year was $90M • Total venture funding $135M • Valuation at IPO $805M
A good company…
But…
“The company made $38 million so far this year. Its selling costs - the cost of a call center full of sales persons pitching merchants for new business - was $22 million in the same period. (Those costs are rising, too, but at least Angie's spends less than it makes to acquire new merchants). All that suggests Angie's might be better off if it abandoned its unpro!table membership side and made its site free, and then simply sold ads to plumbers.”
11/11, Jim Edwards on Businessinsider.com
CASE STUDY
23 HEROIC INVESTMENT OVERVIEW / 2012
LISTENING TO CUSTOMERS
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