The sweatystartup is doomed

J

joeysoley

New member
I recently watched the podcast where
@mariusk spoke about the big players entering the service industry.
Unfortunately, I just don't see it not destroying everything. My mother (60 yo) needed a somewhat niche gutter service, She searched and was directed towards some more directory for tradepeople. All repairs had categories Eg. small window repair and her phone was ringing non stop. So she picked s few based on them having a few good ratings (2/3 were enough), 4 of them were round the house in a few hours and my mother picked the cheapest guy - months later the gutter is fine and the job was done well. Valuable people are not competing on value but on price (Within reason). It should be noted my parents are not cheap people, They have money to spare.

With task rabbit, Amazon home services and a fuckton more startups using this idea in every industry they can think of eg. midrive for driving tutors that make things 10x better for the consumer (This is true unfortunately, It's so much better to go through a directory with ratings and huge choice allowing for comparisons of prices) than traditional companies.

On the podcast, He said that you need to go after high paying clients - But then again your competing with the big guys.

How do we compete with this?
I hate to be so negative but looking from the past I don't see it going well, I'm not trying to cause any arguments I would just like to hear how others intend to handle this especially lowee skill trades E.g carpet cleaning (sorry) and pressure washing (sorry)
 
@joeysoley A few years ago a large company came into town and bought many HVAC companies and lowered prices forcing many others out of business. With high volume this company is able to make enough pennies to be profitable.

A few years ago another large company came into town and undercut the prices for commercial lawn care and captured that industry. With cheap labor and high volume they are able to make enough pennies to be profitable.

SCORE.org teaches that a small company or a sole proprietor cannot make enough pennies to compete with big companies on price. You need to find a niche where you can charge more money. You need to find a niche that some people want AND are willing to pay more for it.

Everybody wants the best service and the best quality. But most people are only willing to pay Walmart prices. You cannot pay your bills by providing custom work, unique work, the best service, or the best quality, at Walmart prices.

How do you add value to a sweatystartup?

Better service.

Better quality.

Being able to do things that the big companies don't want to be bothered with.

Not a lower price.
Click to expand...

If you are unable to add value to what you do, then you are left at trying to pick up enough pennies to pay your bills.

Best of luck to all us small business owners!
 
@joeysoley I'm following this topic for some time, and get really opposite impressions.

One is like yours, that there's too much supply so the demand can be choosy and prices hit the ground.

The second one (I believe, the one that @mariusk is talking about) is that there's a significant shortage of supply on this market, so the supply side feels free to lower the work standards (just an example from the top of my mind)

Can it depend on the operating area? Like - in big cities it's a 1, and it's a 2 in less populated places?
 
@kersh I agree, In cities it's a complete and utter shit show and maybe it's better in less populated cities simply because those types of apps require lots of people to work.

But I feel like, After seeing people from the older generation using these apps that it's only a matter of time because it is so much more convenient for the consumer.

I think it's sad for those that don't want to get rich but just work for themselves, I think Tech has fucked so many things up
 
@joeysoley It seems more of a supply/demand not being balanced though.

As I see it, these apps are only strong with the balance shifted towards supply not because they demand more people to work, but because they take their cut (which can be up to 30% of the final job price); no sane business that has enough job already is going to pay it.

Are you from a big city?
 
@kersh That's very true actually, The fees are ridiculous and often people try to negotiate to leave the service out and pay them directly.

I am, Which could be why I'm able to find anyone to do anything for dirt cheap
 
@joeysoley Its tricky, I get what you mean, but then lots of people purposefully do not want their details out to a directory of individuals because as you say the calls are endless. Do that a few times and it becomes insanity the amount of spam you get. I now refuse to enter my number into callback services even if its just for one companys online form on their website.

I agree the issue is everyone competes on price. For me thats the bigger problem. How to solve it? Grit your teeth and increase your price.
 
@coldnorth I tried setting up a tutoring business, I had my price at extremely reasonable £25 an hour, But the directories have people working for free (to build their portfolio I guess) and a ton working for less than half my price with good reviews - So I get nothing at all. Don't get me wrong, I do see companies charging for £60 an hour but there doesn't seem to be a middle ground anymore, It's either high class or its dirt cheap and the high class means again your competing with the best.
I hope things change but with everyone learning to code and becoming more entrepreneurial, It seems a trend to make these kind of middleman businesses
 
@joeysoley You can do it, dont give up! I have a friend started out in tutoring recently. He did well by getting in with an extracurricular tutor school to get clients. He has been networking privately from those original connections. He does do one client for free because they come from the same area he did which is quite deprived and they tragically lost their parents. They were scrapping together the money to have a session once every few months and he just said it was too hard to watch. They are young but very driven and so he wants to try to get them into oxford in this subject.
 
@coldnorth Cool man!
I'm gonna continue for a few weeks (it's already been 3 months) and then leave this simply because it's costing me too much time and money and I've only had interest from 1 person and try something new,
Thanks though man all the best
 
@joeysoley Once you get a client base you will get recommendations. Its difficult to get started.

I know a tutor who get a lot of work at similar rates to yours ( some what higher I think) but very good.

Are there niches? I know there are a lot of tutors who get a lot of work teaching HE kids, for example. You need to know the specifics of the niche for example.
 
@hurtbygod Yeah i guess it's difficult for everyone to get started, I try not to get bitter about it haha I know it takes time, there are definitely some really successful tutors charging 50+ quid
 
@joeysoley I definitely understand what you’re saying but I disagree. Just like HomeAdvisor, Angie’s List, etc etc, you’ll eventually have something/someone fuck up big time. I perform window cleaning in a town of about 100k and I consistently have jobs ranging from $150-700. I’ve built this biz with a reputation for not being the cheapest, but actually being premium instead, and most people prefer this after dealing with a cheap Bucket Bob who fucks up in one way or another.

But to your point that there will be a bunch of people choosing the cheapest service off of these tech platforms; yes, there will be. So build a brand that says, “ we know we’re not the cheapest, but we are the best, and will be here when something goes wrong from your cheap workers”. You’re never going to get everyone, but I don’t want price shoppers anyway. I want the lady I clean windows for every 3 months who agreed immediately when I said her house would be $700, and was fine with me doing it that same day (it was only a 2 hour job). She’s got so much fucking money that she doesn’t care what it costs, she just wants it done well.
 
@greg9505 Wow congrats that sounds sick,
I agree that these companies are still viable for the high value clients and b2b clients but I think this defeats the purpose of what the sweatystartup hates, Which is competing with the biggest and the best .
Where and when did you start you business if you don't mind me asking?
Someone else suggested my theory is probably right for big cities but wrong for smaller towns
 
@joeysoley Idk about that. Competing with the biggest & best means there is market demand. And if there are bigger and better companies out there then that means you can niche down and hopefully make more money instead of having to service all the price shoppers
 
I've been thinking all day,limited brain power haha but I asked my driving teacher how he can compete with his driving school and from what I can see his business does okay because

1)Teaching is subjective

2)It's a recurring thing that can be expensive if done inefficiently and it requires some trust and the fact he has been running a business for years makes him trustworthy

I don't think this applies to most though, Because even though he has this reputation, The startup called midrive allows any old teacher to come through and certainly got more customers than most driving schools put together quickly.
 
@joeysoley Interesting post. Honestly I hope that large players utilizing tech capture all the price shoppers. They have the size to make money off those small margins.

I definitely agree that those doing low skill/margin businesses really need to focus on value and building relationships in your community so that you can ignore all the price shoppers.

As an aside, I wish there were more people in this sub highlighting their experiences in higher margin businesses. I don't see moving companies, roofers, concrete guys, etc being pushed out by big tech companies.
 
@tiressa
Honestly I hope that large players utilizing tech capture all the price shoppers. They have the size to make money off those small margins.
Click to expand...

I get what you mean, Problem is often this changes the perceived worth of a trade and lowers the value and what people are willing to pay and lower what people are willing to work for

businesses really need to focus on value and building relationships in your community
Click to expand...

100%

I don't see moving companies, roofers, concrete guys, etc being pushed out by big tech companies.
Click to expand...

I two would like to hear from these guys, It could be because this stuff is relatively new right now, And it's a problem for the near future
 
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