
Apply HN- FixSmarter: Mobile App So You Don't Get Screwed by Your Contractor - theoconn
You break your front, plate glass window.  What do you do?  Join Angie&#x27;s list, redbeacon, pro.com, homeadvisor, thumbtack, or search local contractors?  Maybe.  But all you&#x27;ll get is one or more recommended contractors who will come over and give you whatever estimate for a price they think they can get from you.  You&#x27;re really no better than looking in the yellow pages.<p>FixSmarter puts you back in control.  With FixSmarter, you take a video of window.  The video is distributed to local contractors for actual bids.  The price is confirmed by both parties upon inspection.  The cost of the job is held in escrow by FixSmarter until completion of the job.  Disputes over price and performance are resolved in house by experts in FixSmarter through video evidence.  FixSmarter takes a small percentage of the money held in escrow as a fee. All contractors will be vetted, licensed, and have liability insurance.  If they don&#x27;t have insurance, FixSmarter will provide the means to get insurance.<p>Unlike what&#x27;s out there now, contractors don&#x27;t pay for unsuccessful bids, consumers don&#x27;t pay to join and both parties can feel certain in price, payment, and performance. FixSmarter&#x27;s video project proposals combined with in-house dispute resolution takes a giant step forward for consumers needing home repairs.<p>I&#x27;ve been frustrated by getting home repairs for years and believe in this solution.  I&#x27;d love to hear from everyone on why I&#x27;m wrong or if I have a Dumb and Dumber like chance.
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davemel37
I agree the current model is broken and I also think this can improve it
incrementally...but I think this problem needs to be rethought from the ground
up.

I think multiple bidding strategies or price comparison is inherently flawed
for service businesses. It forces adverse selection on both sides.
Essentially, to the buyer, all contractors are vetted, licensed, and have
insurance, and they have no other context, so they are forced to choose the
cheapest bid. However, the sellers (contractors) don't know what type of
client this is, how much they might try to change scope, or what the actual
project might end up costing, so they are forced to charge as much as possible
to cover the unknown.

By forcing them to bid on the project, the better contractors, who are more
aware of the potential costs and risks will bid higher than the less competent
ones.

Essentially, this will skew the process in a way that the customer will always
end up with the worst vendor.

Further, the contractor needs to confirm price upon inspection. If this leads
to changing bids, as most industries do, either the customer will be too
annoyed with your site and the contractor, or just go with the new bid...and
contractors will quickly learn to bid low and quote higher on site.

I would love to hear your thoughts about this and how you hope to overcome
adverse selection from a bidding model.

For what it's worth, I have my own ideas for the space, but they aren't
technology driven solutions, they are people driven solutions.

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SocksCanClose
@davemel37 I like where you're going with this, and I agree that this is a
very good problem to address. I wonder if you could design some sort of system
similar to Uber pricing algo where you give an estimate ("[Startupname]
believes that this job will cost between $70 and $120"), and then include
various multiples (I imagine that getting a window repaired in Menlo Park will
cost more than doing so in Topeka, KS) for locality, current demand, etc.

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davemel37
I think the challenge is in consumer psychology and emotional fear of looking
like a fool more than the need for better data. This is why recommendations
from friends and neighbors is the go to solution today.

I specifically think the problem is in information asymmetry about the true
costs to service the project. Especially considering that some jobs or parts
of jobs need deep expertise and others are contracted out to the cheapest
labor possible.

In other words...there are things the contractor knows that they consider
trade secrets and wouldnt want to reveal them...that is what consumers need to
know to be comfortable IMO.

I have a project I am working on along those lines, but its not trchnology
driven.

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bestattack
I am pretty into this! I've never been a homeowner or landlord, and a big
reason why not is that I don't want to have to keep a rolodex of people to
call when things break. I'd love it if you guys would fully automate this for
me, and am willing to pay a lot (because my alternative is the rolodex thing,
or a property manager).

Idea one: I'm a renter, I want my landlord to fix something for me. Can you
enable me to video it with your app and get the landlord to either signup, or
at least fix it with his normal contractor?

Idea two: Say I'm a landlord, my renter complains about something being
broken. Instead of hiring a property manager, I want to make my renters
download the app, submit a fix request and then I'll approve the proposal thru
you guys. I'm not a landlord but I could imagine wanting to become one if I
didn't have to deal with handling these requests.

I think this is one of those ideas that's hard to distribute, because you
aren't needed often enough for people to even remember your app's name when
they have to get something fixed. So you'll need a really compelling
distribution strategy; maybe landlords can talk to each other or you can go
through landlord associations or something.

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theoconn
@bestattack Big thanks for your comments. That's an intriguing angle and one
we have not discussed yet. It could work very well for landlords to get people
out to their jobs. I also think many small landlords do not have contractors
they can trust so they could also use it to farm out jobs. Greatly
appreciated!

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buss
What kind of arbitration agreement am I signing up for as a contractor?

As a contractor, why would I do this instead of waiting for customers on
Angie's List?

What if my initial estimate was wrong and the window costs 2x what I thought
it would cost?

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theoconn
It would be a streamline AIA arbitration agreement. Angie's List and the other
websites have fees in order to get leads. When you get a lead, you are one of
multiple leads and you are charged whether or not you get the job. Here the
contractor has the fee extracted from the payment he is receiving. If the
initial estimate is wrong, the contractor can change estimate (joint
approval). As the company developed, a method would be instituted to evaluate
the percentage of time/amount a contractor sticks to original bid. Thanks for
commenting.

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theoconn
Also, supplies would come out of escrow as agreed and needed. Thanks again.

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davemel37
what about other ongoing costs, like labor?

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theoconn
@davemel37 I think it starts with smaller jobs but I plan on also allowing for
releasing escrow for completion of labor on bigger jobs (with video
documentation on each stage)

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brudgers
Considering all the administrative overhead why would a contractor use this
service?

How will Fixsmarter comply with state insurance laws when selling insurance to
contractors?

How would the dispute resolution process superior to that of organizations
like the American Arbitration Association that is typically standard in the US
construction industry?

How does holding the money in escrow resolve with state various mechanics lien
laws?

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theoconn
@brudgers thanks for the comments. The contractors that I've been working with
on this believe it cuts down on the overhead. They have to be somewhat tech
savvy but they welcome takingaway the billing and collecting aspect of the
jobs. Fixsmarter wouldn't sell insurance but provide referrals and get
referral fees. I think it could comply with the state insurance laws in that
capacity. The AAA is great but it is basically a mini-trial and very expensive
to get through. This would be agreeing to resolve dispute internally so the
parties would be giving up that forum. It would be like when people submit to
the jurisdiction of the People's Court rather than going to state court.
Mechanic's liens secure non-payment on a job. Here, the money would be in
place so that a contractor would not have to start a state court proceeding to
enforce a mechanics lien. Appreciate the feedback! I still have to fully vet
all the issues that you raise but my preliminary surveys and interviews point
to them working out.

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mgberlin
How do you scale decision making with regard to whether or not a job was
completed to spec? What about conflict resolution in the case of a
disagreement?

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theoconn
Good point. Escrow gets released if both parties submit approvals. If there is
a dispute, videos of what was done are submitted to independent mediator who
has final say (reviewed in house as well). The customer objecting will have to
pay a small fee to object which is refunded with escrow if they are correct.
Thanks for comment.

