Aaron Strout:     

Hi, my name is Aaron Strout. Welcome to the We Show. 

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Aaron Strout:    

Thank you for joining us on the We Show today. My name is Aaron Strout, and I’m the VP of marketing for Mzinga, a leading provider of workplace and customer community solutions.  This podcast is one in a series and can be found on the WeAreSmarter.org site, Mzinga.com, and iTunes under "We Are Smarter."

Our guest today is Angie’s List founder, Angie Hicks.  Welcome, Angie.

Angie Hicks:   
Thank you.

Aaron Strout:  We wanted to talk a little bit today about Angie’s List and your journey over the last 12 years, I believe, that you’ve been in place, which is almost dinosaur years if you think about the Internet and how long you’ve been around, which is a real testament to what a great business model I think you’ve come up with.  I guess the first question I have for you, Angie, is I noticed in your bio that you have an MBA from Harvard.  Did you ever in your wildest dreams imagine that you’d end up running Angie’s List, and then maybe you could talk a little bit about what Angie’s List for those that are unfamiliar with it?

Angie Hicks:   
Sure.  Well I actually started Angie’s List before I went to Harvard.  I started Angie’s List right out of undergrad, actually.  I started it with my co-founder, who I met through an internship when I was in college.  He was struggling to renovate a 1920s house and was having trouble finding good contractors.  We thought there should just be a better way for consumers to share information, so we started the list.  Our original goal when we started was to be in the top 50 U.S. markets across the country.  Thinking that 12 years ago and realizing it – we’re actually in 120 markets now – are two different things.  I’m just thrilled about the response we’ve gotten for the list.

Aaron Strout: 
Great.  Maybe you could talk a little bit about it.  I know a lot of people have heard about it.  You certainly get a ton of coverage, I think, in the mainstream press.  Talk a little bit about the service that you do in providing contractors and other names of folks for consumers like us to be able to go out and read reviews and validate, if I’m getting that correct.

Angie Hicks:
Right.  Angie’s List is a site where consumers can turn to get the real scoop on local service companies.  All of the information comes from consumers in their city who have actually used the companies.  They evaluate them on an A-F scale, on a number of criteria; share details about working with the company; the price they paid for the project. So, some really in-depth information.  Then we average the report, which we receive on those companies, and that’s how the company gets their rating.  It’s all driven by consumers.  Companies don’t pay to be on the list; they don’t put themselves on it, so it truly is the consumer’s list.  You can check it to find out which companies are providing great service in your area and which ones you might want to avoid.

Aaron Strout: 
That’s great.  Now you did start, I believe, back in ’95, so you have been at this for a while, and you have, I believe, if I’m citing this correctly, more than 500,000 consumers across the 120 markets that you talked about.  I’m sure that you didn’t start with the 500,000.  How has the list changed, and how has the nature of it changed over the past 12 or so years that you’ve been running Angie’s List?

Angie Hicks:   
When we first started, we started as a call-in service and a magazine.  In 1995, it was before the Internet really was what it is today, so we started as a call-in service.  I started as the only employee, and we went to door-to-door signing up members to join the service.  But we always knew that the Internet would provide a nice extra way for consumers to communicate with us – that, it would be nice for people to be able to peruse the list at their leisure.   We put up a Web site in 1999, and today about 90 percent of our traffic comes via the Internet.  But we still actually operate that call-in service – it’s open six days a week – because sometimes, you just want to call and talk to someone. That water heater is dumping water out all over your basement floor, and you don’t want to go and log on to your computer and figure out who to hire on your own.  You want some help.

Aaron Strout:
Right.  Well, that is a service, by the way, that I was quite impressed with and certainly could have benefited from that in the past.  I think I will tuck that away for future knowledge.  That is, for the listeners who are unfamiliar, you have the ability to actually call an 800 number if you have an emergency, and to find a plumber or someone to fix your heater, or if your roof has collapsed or something like that.

Angie Hicks:   
That’s right.

Aaron Strout: 
Tell me a little bit about – I’m assuming, or maybe you did start off as a paid service since you did start as a listserv in a magazine.  But I’m envisioning that I know you have a relatively low cost to subscribe to the reviews, as well as you have, I believe, a newsletter that goes up now.  Did you start off free and go to paid, and if so, how did that work and what was the reaction you got from your customer base?

Angie Hicks:   
When we first started, we started as paid, which I think is different from companies that were starting in the mid-‘90s.  A lot of companies were starting with free models.  Our view was we wanted to – we liked the recurring revenue generation of a business, and wanted to generate a sustainable – we liked our sustainable business model that way.  Our view was that consumers are willing to pay for good information.  It’s a premium service that they trust that the information has integrity.  We have several steps in place to protect on that.  One is the consumers. You have to create a username and password and start reporting on a company.  Also, you can only report on a specific company once every six months, so your handyman or your plumber.

We actually have a team of people that actually review all the reports before they go into the system, looking for any kind of red flags.  Consumers really have relied on that process for making sure the information is trusted.  We’re not just a site that you just go and get information.  I mean it’s an interaction.  We have a complaint resolution service, so if you have trouble with a company, we’ll go to bat for you to get it resolved.  We’ve got the magazine, things like that, so we’re a little different and kind of when we started, kind of the world that existed at that point – 

Aaron Strout: 
So along those lines, given the fact that you do provide such valuable content – and I didn’t tee this question up to you before we got started, so you can choose to punt if you’d like – but it seems like in a content-starved world, meaning every company out there is always looking for good sources of content, you must have had a lot of suitors over the years with the Yahoos and the MSNs and the AOLs of the world coming to you.  How have you fended them off, and where do you see the future of the company going in that regard?

Angie Hicks:  
For us, I mean, I think you’re right.  We were building kind of deep and rich content on the local service world, and really a niche.  Our magazine covers topics that aren’t covered in a lot of the mainstream media.  Things like what’s the latest in the moving industry, things like that, that we’ve got access to because of the type of reports that we’re getting from our members, and then access to companies on the list.  Our goal is to obviously use that to educate our members, to educate consumers in general.

As far as the future of the Angie’s List, we’re continuing to expand to further cities.  We’re looking at some international expansion, but we’re always looking at strategic opportunities as well along the way.

Aaron Strout: 
Great.  One final question for you, Angie.  A lot of other companies are out there.  We went through it, I think, with the whole first round of the dot-com era.  We’re seeing a heated-up market right now for a lot of smaller businesses.  Certainly I think the barriers to entry are much lower, the cost of technology is much lower, and there are so many more people on the Internet now.  What would be your one big piece of advice for some of these other companies looking to tap into their customer communities to really help market and sell their products, and generate these consumer-generated reviews or whatever would benefit their products?

Angie Hicks:   
Yeah.  I mean I think one: Listen to what your consumers are telling you.  Don’t try to get overwhelmed and going into too many directions at once.  I see a lot of entrepreneurs that attempt to accomplish way too many things, and they end up not doing any of them great. So, pick your path and stick with it.  I think one of the things that’s really differentiated us over the years is just creating a trusted venue for people to share information.  I mean, the fact that companies don’t pay to be on the list; they can’t put themselves on the list. I mean, this is truly a list for the consumers, that we’re always staying true to those guiding principles.

Aaron Strout: 
That’s helpful.  One other, I guess, follow-up question based on something you said that made me question if you’re in 120 different markets, and you’ve mentioned, I think, some of them are international: Do you find cultural differences?  And how do you overcome those, because, really, what we’ve found in providing community is trust is such an essential element.  There must be different rules of engagement as you’re going into different countries.  How have you handled that, and any observations from that?

Angie Hicks:   
Yeah.  The international expansion is slated for ’08, so we haven’t experienced that.  But we see cultural differences just across the U.S., too.  I mean, different markets are very sensitive to different things.  Our goal, when we open a city, is to build that city from the ground up.  Our goal is to have ratings on every single company in town, whether it’s the biggest company all the way down to an individual handyman.  We don’t want to just have, “Here’s two or three good plumbers.”  We want to have the scoop on all plumbers in a particular city.  So, we intentionally build each one up individually, and it develops its own characteristics, whether it’s different types of services in different areas of the country, to just things that are [inaudible].

One of our early lessons we learned was in Cleveland, Ohio – one of our first markets.  What we discovered there was geography really mattered in Cleveland.  I mean, if you’re familiar with the Cleveland area, it’s a very divided city.  If you live on the East Side of town, you’re an East Sider, and if you live on the West Side of town, you’re a West Sider, and you don’t cross.  Kind of getting service companies that are from your neighborhood is really important there.

Aaron Strout: 
That’s a good point.  Something probably you’ve learned in spades over the years.  Well, thank you, Angie, for your time today.  This was great and, I think, helpful for our listeners.  It certainly adds some nice color commentary to the chapter in the book, the fourth chapter, which is called "Customer, Sell Thyself."

So for those of you listening today, we’ve been speaking with Angie Hicks, who is the-cofounder of Angie’s list.  Thank you again, Angie.

Angie Hicks:    Thank you.

Aaron Strout:     

We appreciate you listening in to this series of the We Show podcasts. To find other podcasts like this, you can check out WeAreSmarter.org, Mzinga.com, and also iTunes under "We Are Smarter."

Thanks so much for joining us. We look forward to seeing you next week.

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