19.11.21
In this week’s episode of The Propcast, Louisa speaks to Michael Werner, CEO and Founder of HomeX, a home services platform for both homeowners and service providers, radically improving the complex and fragmented home services industry. In this episode they discuss the trends and problems that exist within the residential home services industry and how these challenges can be addressed through proptech to create a complete consumer and supplier service that creates jobs and is underpinned by the value of being a positive force within the industry.
Click here to listen to this episode of the Propcast!
Keywords: home services, contractors, consumers, tech, trade, assistance, home improvements
Michael Werner
https://www.linkedin.com/in/michael-e-werner-09258/
Michael is the Chief Executive Officer and co-founder of HomeX. He has built HomeX to be a positive force, leveraging technology to radically improve the home services industry for consumers and service providers. Prior to HomeX, Michael was President and CEO of Globe Union Group (Gerber Plumbing Fixtures and Danze Faucets) and served as President of Werner Ladder Co., a family operation that spanned 75 years.
Michael is a Phi Beta Kappa graduate of Stanford University, where he earned a bachelor’s degree in International Relations and a master’s degree in Engineering Management and Science. Michael is past Chairman of the Lymphoma Research Foundation, on the Executive Committee of the Chicago Council on Global Affairs, and has been active in the Economic Club of Chicago, the Young Presidents Organization, and the National Kitchen and Bath Association. When he’s not working or volunteering, you’ll find him with his family at hockey games or on his skis, mountain, or road bikes. He resides in Chicago with his wife Laura and they have three grown children, including Stephanie Werner-Payen, who is a co-founder of HomeX.
About HomeX
HomeX is a first of its kind home services platform for both homeowners and service providers, radically improving the complex and fragmented home services industry. HomeX is making home maintenance less complicated for homeowners by providing quick, trusted solutions for issues that arise related to heating, cooling, plumbing, electrical systems and appliances. Scaled amid COVID-19, HomeX Remote Assist provides virtual, personalized solutions with expert guidance through video, call, or chat. The HomeX suite of business solutions helps established, local service companies thrive, automating their booking, driving qualified demand, simplifying their operations and improving their holistic customer experience.
About HomeX Remote Assist
Remote Assist is a virtual service from HomeX that connects homeowners to trained technicians who can offer expert advice, a diagnosis, or one-on-one guidance through the repair process right over a phone or video call. With professional, personalized attention — and at a fraction of the typical in-home service fee — Remote Assist is the quick and contactless answer to homeowner headaches. If the issue is complex enough to require hands-on support, HomeX can book you an in-home visit from a trusted home pro to finish the job quickly and efficiently. Remote Assist is also now available on the HomeX app, so homeowners can access a trusted expert from anywhere.
Louisa Dickins
https://www.linkedin.com/in/louisa-dickins-ab065392/?originalSubdomain=uk
Louisa started her career in property working at a well-known estate agency in London. Realising her people skills, she moved over to Lloyd May to pursue a career in recruitment. She now is a Director at LMRE, who are a specialist recruitment firm driven by PropTech and recruitment professionals, and Louisa oversees their 5 core areas. Louisa co-founded LMRE and provides a constructive recruitment platform to the new disruptors in real estate. Louisa is also on the board of Directors at UK PropTech Association (UKPA).
About LMRE
LMRE believe there is a better way to recruit. LMRE focus on a more comprehensive, client led focus delivering exceptional talent to the place at the time. They are passionate about the industry and passionate about people’s careers. LMRE spend time with each client to become and an extension of the business, and their transparency and core values help them grow with the sector. LMRE simplify recruitment and innovate with our clients and evolve the people driven, PropTech community.
Louisa: Today on the Propcast, we will be speaking with HomeX co-founder Michael Werner on how and why the home service industry has changed. So welcome to the show, Michael.
Michael: It’s a delight to be here with you today. Thank you.
Louisa: On today’s show, we will learn about HomeX and how the product improves the complex and fragmented home service industry, in what way it affects both consumers and contractors. We’ll also hear about the pandemic and other variables such as housing shortages has in the sector. Not only that, but Michael will be talking us through the new jobs that have come from the industry, but also stepping away from all of this, outside of recruitment, outside of tech, Michael’s going to be advising us on the core values of the industry and why people in the team are so important in any business.
But before we delve into the questions, let me give you a very brief introduction to Michael, who is the CEO and Co-Founder of HomeX. Michael has built HomeX to be a positive force, leveraging technology to radically improve the home services industry for consumers and service providers. Now, prior to all this, Michael was President and CEO of Globe Union Group, served as President at Werner Ladder Co, a family operation that spanned 75 years, and Michael’s going to be telling us a little bit more about what he loves so much about, and what he’s learned from working in a family business.
So, once again, thank you so much for joining me, Michael. Why don’t you start us off with your journey and how you came to found HomeX, and maybe about how did you know there was such a market for it as well?
Michael: Well, great. Thank you. It’s a delight to be here with you today. My journey actually goes back about 25 years. I joke that I’m a recovering investment banker and I have my IBA card, Investment Bankers Anonymous, in my wallet. So I spent about seven years first working at Goldman Sachs and then working for a client of Goldman who actually was very big in the real estate market and really built his fortune worth several billions of dollars in real estate.
So I got exposure to real estate quite early. When I joined my family business Werner Ladder, and hopefully many of our listeners have ladders in their house at home, I learned how important it was to have great tools for contractors as well as for consumers. And I helped grow that business, and our family was very prolific.
We actually had over a hundred family shareholders. So in the late nineties, we sold the business in order to provide liquidity for everybody. I stayed around another few years and then ultimately left and I joined another company that manufactured kitchen and bath products called Globe Union.
At Globe Union I also learned how important products were to consumers and particularly making kitchen and bath products. One of my favourite memories was actually watching my own father, bathing my daughter in the tub, and I saw how important those products were to really having a great life. And then at the same time, I was working a lot with contractors and realised how important, not just the products were for contractors, but how important it was to help contractors run their businesses better.
So after I had been at Globe Union for a little over 10 years, I realised that there was a huge need to do two things at the same time. One was to help homeowners actually have a much better experience at home. And if you think about the digital world today, we can actually watch on our phone a Domino’s pizza being made, but it’s really hard today to take care of your home from a digital perspective.
And in the same sense for a contractor, they are just superheroes. They work so hard. They do such important work for homeowners. And for contractors, they have some real challenges, the biggest challenge being labor. There aren’t enough of them. So as we went about building the business of HomeX, what we really wanted to do was to radically improve home services, both for homeowners and for contractors.
Louisa: So talk us a little bit more through your product. Where did it begin? And also I’m sure it’s changed and probably slightly pivoted and as well, since you founded the company.
Michael: So we actually have products, both for consumers and for contractors. As we think about it from a consumer perspective, what we’re really trying to do is solve some big unmet needs, and we actually call them the three T’s.
So from a consumer perspective, there’s quite often a lack of trust. There’s a lack of transparency. And they don’t have control of time. So what we’re doing is we’re building digital experiences that provide convenience and reduces the friction of taking care of a home. And that’s actually why we call it the company HomeX or Home Experience, because it’s really about enhancing the experience of home ownership and empowering homeowners.
For contractors, as I said earlier, we see them as absolute superheroes and they’re challenged by the labor shortage. So for them, we’re trying to help them be more efficient and be more effective. And we do that by creating products that help them schedule their work more efficiently.
One of the key ways we’re doing it is by creating a product that we call HomeX Remote Assist. And what’s really fun is the team that’s created a lot of the science behind it, and we’re using artificial intelligence and machine learning, they’re the same team who created what became the brain of Amazon’s Alexa. And what we’ve done is we’ve created the ability to remotely an expertly diagnosed an increasing percentage of home service issues. And in doing that, what we’ve created is the telemedicine of home services. So we’re helping contractors by providing the technology to them that helps them increase one call resolution, and also decreases the number of trucks they have to roll, so they can really spend their time on the most important jobs where they have got the best opportunity to help consumers as well as to make the most money for themselves.
Louisa: How have you gone about scaling the Remote Home Assist during the pandemic? I’ve see you’ve brought out, as you mentioned, the virtual assistant.
How was that? What what was the sort of major learnings you’ve had in the past year and a half of growing a business?
Michael: That’s actually a great question. So the pandemic, like many companies, hit us square between the eyes and really at first was scary. It was really frightening because we saw an industry that for eight to 10 weeks was literally shut down.
What we realised is that the demand for home services was only going to go up. It wasn’t going to go down. So we said, let’s accelerate the things we’re doing around virtual services and let’s figure out how we can help consumers and help contractors be able to do more without having to be in front of each other.
So what we did for the consumer, we built out what we call HomeX Remote Assist. And it effectively leverages our knowledge base. We actually have gathered over a billion data points, and this is where we’re really using science and technology and where PropTech comes to work. So we actually have built out a data lake that enables us to take many typical home service issues and be able to very quickly go through a decision tree and diagnose what might be wrong. So rather than having to have a tech go out to our house and spend time talking to the consumer or spend time rummaging around the house, we’re able to use virtual technology to diagnose a significant number of the problems. And then in many cases, what we’ve also done is we’ve taken the techs and we have them working remotely.
Which is great from multiple perspectives. So for example, from a labor perspective, we’re able to provide opportunities for techs who no longer physically want to work in the field. And in many cases, physical can’t, because it’s really demanding work. And we’ve enabled these techs to have our data set behind them.
They use our AI question sets, and our question and answer sets to be able to address a high percentage of the problems that homeowners face. And in doing that, we enable the technician to work remotely and they work through HomeX to be able to do that. And then we’re able to, from a consumer standpoint, address a lot of the questions they have, where the consumer can self-diagnose some things based upon the information that we can serve up to them.
And if they can’t answer the question themselves, they can then click, either on our app or on our website, HomeX Remote Assist. And we’ll connect them directly with the technician who can give them expert advice, give them a diagnosis and provide them with one-to-one guidance.
My favourite example, there was a gentleman and I think this happened in April of last year. He had just finished treatment for lung cancer. And he was at home and he had reached out to us digitally and said, my air conditioning, my HVAC system, my heater is not working. Can you help me solve this? And we were able to actually remotely diagnose what his problem was, identified that he actually needed a new system. We, over video, we’re able to identify which equipment he needed, what size he needed, the configuration of it. And then we arranged to have it serviced and literally a new install done without him being anywhere near any of it. And then we taught him how to use his new digital thermostat remotely over video.
So when you think about the impact it has, how it reduces cost for the consumer. It increases convenience for the consumer and for the contractor. It helps them be much more effective and efficient. It’s an absolute home run. It’s interesting COVID at first was very scary because nobody knew what the impact was going to be.
And as we really worked through it, what we realised is that the demand for our services has gone up exponentially. In fact, over the last year, we’ve serviced about a million and a half consumers, either virtually or in person. And we’ve grown more than 375%.
Beginning to do for the home repair industry, what telemedicine has done for the medical field. Which is more access, more flexibility and more connectivity. And it’s giving customers a more affordable and convenient option than in-person services might.
Louisa: Beautiful. And, obviously your business is radically evolving. So it’s a home industry and it’s changing, but despite all this forward moves there are no doubt, still issues and variables that affect it.
So I think when we first spoke, Michael, you mentioned about rising property values, he ageing housing stock, labor shortages. How does this impact HomeX and how can it HomeX help manage the effect of these variables?
Michael: And as you think about the residential real estate market, there’s really four big trends. And I think COVID actually accelerated those trends. We’ve probably seen in 18 months what we would have seen happen in five years. And the big trends are first, the experience economy. Now, if you think about it, 300 years ago, the world was agrarian, and then it became extraction, then a makers, when I was growing up, it became a services economy.
But today it’s about Apple, Starbucks, Disney. It’s that people want experiences. The second big change is in demographics. I simply say that my parents’ generation can’t physically take care of their home. I’d rather be on my bike or my skis. I really don’t want to be taking care of my home. And our kids are absolutely brilliant, but I’m not sure if they know the difference between a Phillips and a flat blade screwdriver.
The third big change is our housing stock is ageing. In the US the housing stock is just under 40 years old, and it is in real need of repair. And so many of the homes were built pre-financial crisis. So they’re now 10 to 15 years old, and they need new air conditioners, new water heaters. They need a lot of work so that the housing stock really is getting much older.
And now there’s a lot of demand because millennials are looking for their first homes. And the fourth, big driver is a labor shortage. The average plumber’s 56 years old, and the work’s hard and it’s hard to do it into your sixties. So as we look at the future, the demand for techs is actually three to four times the demand for the general labor in total.
So the net result of all this is that there’s significantly more demand than there is supply. And the company that can really help on the supply side will win. So as we take a look at the core of HomeX and what we’re trying to do, we’re trying to make it easier for the contractor to be more effective and be more efficient by leveraging technology.
And we’re trying to make it easier for the consumer to be able to have a great home experience. To love living in their home and feel that it’s carefree and the same digital technology that you get, whether it’s, as I said, like ordering a Domino’s pizza, or managing anything on your phone today. Housing is way behind and it’d be great to help housing be able to make the same kind of leap that every other industry has made with digital technology.
Louisa: Agreed with that. Are there any sort of major trends or stats you’d share, whether it’s consumers or contractors, any a major takeaway or learnings you could share with the audience, what you’ve seen in the past, maybe two, three years?
Michael: I’d say the most important takeaways is that housing is central to our existence.
I think about Maslow’s triangle. Maslow being the psychologist who talked about the core things in the world being the very basics; food, water, security and shelter. So what we’ve learned during COVID is that housing is even more important than it’s ever been. And people really are in a nesting phase.
And as we think about millennials and millennials beginning to form their families, they’re looking to grow their home. Home improvement, statistically, is growing exponentially. So it’s a $350 billion market just for home improvement. The overall home services market is about a $500 billion market, and it’s highly fragmented in a need of innovation.
And when you think about housing, only a very small percentage of homes today are digital. So one of the takeaways that we have is, as you think about the next two to three or five years in the prop tech market, it’s going to be about digitisation. It is going to be about bringing the same kind of convenience to the home that has been brought to so many other areas. And housing really lags behind it.
Louisa: Yeah, it’s crazy to think how big some of these markets are when you think of proptech, there’s so many different verticals in that. And obviously we’ve seen a huge amount of investments, but particularly in the US and now it’s globally going into each of these verticals and VC’s really paying attention to it.
So, I’m sure far more investments going to be flooding into the home services industry, especially the next five years. Stepping away from investments, stepping away from contracts, stepping away from consumers, there’s often a debate over whether technology is causing job losses or job creation. Tell us more about HomeX is providing sort of more jobs to a network of contractors, and maybe driving more efficiencies amid an industry, which already has a shortage of qualified workers.
What’s in it for our audience who might be looking again to this space?
Michael: So a core element of our business is really driven by our core value. And our core value is pretty simple. It’s to be a positive force in our industry and in our communities. So you say, well, what does that mean for contractors?
Let me contrast it with the ride share industry. If you go back to when taxis kind of ruled the world. And I grew up working in New York city and getting a taxi was always a challenge. And it was exciting when you first saw the ride sharing companies come about, but they literally decimated an industry.
In our industry we’ve taken a very different approach. We recognise how important the licensed and the skilled technicians are. So we said our mission is to actually help them do what they do. And do it even better. So what we’ve been able to do is we’ve actually built out our tools, whether it’s the tools, the front desk type things we’ve done for contractors, to help them run their business better, or it’s Remote Assist that helps them when they go out to a job, actually do better jobs, work on the more higher value jobs and be able to increase the one call completion rate.
So we actually are helping them solve the supply issue in the industry making the contractors more effective. And one of the things that we’re going to be doing next, as we build out Remote Assist, we actually are going to start building a marketplace. We’ve got the first version of it that we’ve set up a partnership with Allstate Insurance.
And we started testing that in Pennsylvania and we’ll be rolling it out further in other areas later this year. And the beauty of our marketplace is that a consumer might come to us through our web presence. And we actually, next month, we’ll have over a million visitors to our website. And that’s because we answer so many questions on Google and then the consumer then can come to us and they can click through and have a Remote Assist session.
If we can’t remotely fix the problem, then what we’re going to be able to do is actually match that consumer up with a contractor who’s in our network. So the beauty of what we’re doing for contractors is we’re making their work more effective and efficient, and then we’re actually giving them jobs. And rather than giving them leads, we actually will give them a fully vetted job.
So they’ll know exactly what the job is. They’ll be able to go to the consumer’s home and take care of the issue for the consumer and be a superhero to an even greater extent because they know what equipment they need. They know what inventory they need. They’ll be able to complete the task in one call more efficiently and to a much higher degree.
And then for the contractor themselves, they don’t have to waste their time running around, giving lots of bids and chasing other leads because we’re going to give them actually jobs. And it’s really the key in leveraging technologies what’s behind it, because we’re tying it together with scheduling technology.
We’re tying it together with being able to answer the phone and handle chat for them. For the contractor we’re making their lives better. And for the consumer, we’re making their lives better because as a consumer, which you care about is you, again, go back to the three T’s. You want to be able to trust somebody.
You want to have convenience and you want to be able to have some transparency. So you know what it’s going to cost. And as part of what we’re building out with our database is we’re able to give consumers a really good feel for what a project should cost and what the work will involve before they ever sign on to do it.
So in a very simple sense, we’re taking an industry that’s been around since the caveman, when we all lived in caves and we’re bringing technology to it and making it better for everybody. And that’s consistent with our core values and what we’re trying to build as a company.
Louisa: Yeah. you make it sound so simple. Especially during lockdown. Well, I’ve just sold my place in London, but when I was trying to reach out to reliable contractors, I was never too good at explaining what I needed to be done. I would love to have your service and make it a lot more easier and more cost efficient and less at a time consuming and painful.
As you said, the whole process is so fragmented, especially between the consumers and the contractors.
Now moving on to our final question, sadly, before we get into LMRE part. HomeX is obviously a family business. Vincent and Stephanie, who are members of your family, who are two co-founders sadly couldn’t join us today, but let’s talk about the core values of the business.
You know, you’ve worked previously in a family run business, you’ve gone into another one again that has proven to be very successful. What makes it a successful business? Is it about the people? Please share some of your golden advice with me and the audience.
Michael: I think the two most important things in any business are going to be number one, your core values and number two, the people.
And I think it’s really important to have alignment of your business and your core value. As you mentioned, and I mentioned, I grew up in a family business Werner Ladder, and our core value in that business was to be a positive force. I brought that same ‘why’ to HomeX and our why at HomeX is how do we make life better for consumers at home, and make work better for contractors.
And as we build this business, what’s really important is to keep to that core value of being a positive force in our industry. To make housing, which is a trillion dollar industry and as you know, shelter is so important. So our why is really noble. And if our colleagues believe in our why, and they make life better for homeowners, they make work life better for contractors.
It really makes a huge difference. Of course, it’s necessary for business to be profitable, you know, unless you’re a tech company and can just go public having lost a lot of money, but even then it’s going to catch up with you. So our view is that it’s important to be profitable, but it’s also important and really being profitable as necessary, but not sufficient.
So it’s really important that we give back. We give back to our communities and that we give back to our industry and that’s where it ties into the people and ties into our culture. So we’ve been really fortunate to attract people. I mentioned that the team that’s built out our science is the team that built the brain behind Alexa.
And we have people who’ve got backgrounds working for tech companies like Google and eBay and Facebook and Amazon. And there are people who really understand marketplaces, they’re people who understand what it takes to scale a company. And part of the key is to be able, once you have those great people, to be sure that you’ve got alignment of your core values and your vision, and then you give them room and you let them run.
And part of what makes us different. And I think it’s part of the family business background is we really take a generational approach and a stewardship approach to our business. So we’re not looking just to build something that we can flip tomorrow. We’re looking to build something that has enduring values and it makes a lot of sense because as you think about the contractors out there, these people typically have been in business for 20, 30, 40, 50 years.
They’re also family businesses, they hand the business down from one generation to the next. So our whole approach of taking a long-term view, a stewardship view and a view that’s really based upon understanding how the contractors work, how homeowners want to work, enables us to really complete the circle to be able to look at the whole housing market from an ecosystem standpoint and to be able to respect, not just the homeowner, but the contractor and all the different players in the channel.
So we really look at it quite broadly and we think that HomeX is going to be a company that helps not just contractors and homeowners, but distributors and manufacturers all do better.
And that’s what we’re trying to achieve overall.
Louisa: Now, unfortunately we have come to the final part of the podcast, which is the LMRE part, so if Michael you talk us through some major lessons you’ve learned in your career. This could involve any tips you’d give to someone wanting to join your business or advice for people getting into the home services industry.
M – mentioned anyone or product or service give a shout-out. R – what’s been the most rewarding aspect of working in PropTech or home services. And E – what are you most excited about?
Michael: I think that’s a great group of final questions. So I’ll kind of go through it pretty quickly on the lessons.
I would say that the key lesson is combination of both being true to your core values. Because if you’re not in alignment with your core values, particularly as an entrepreneur, and it’s tough to be an entrepreneur. I mean, you’re never not working. You’re never not feeling the pressure. You’re never not feeling responsible for all the families that your company is helping support and take care of.
So the key thing is to be in alignment with your core values, and also to recognise that what you’re doing is different than how most people are going to approach things. So take the word no, as meaning, not now. And my career I’ve had so many people tell me that my ideas are just stupid. And each time somebody tells me something like that, what I do is I smile and I try to pull out the kernels of wisdom and try to refine my idea a little bit by what they’re telling me, but I’m never dissuaded when people tell me that something’s not going to work. Because I know that when you’re creating something that’s new and different, it’s not as easy as just doing what everybody else has done. You’ve got to be willing to swim against the tide a little bit.
And in terms of the mention, the key that I would mention is our HomeX Remote Assist. The idea that HomeX is fundamentally bringing the equivalent of telemedicine to home services. And there’s no reason why taking care of your home shouldn’t be as easy as taking care of anything else in your life.
So by building out HomeX Remote Assist, we’re making it easier for the consumer and we’re making it better and more profitable for the contractor.
And when I think about what’s been most rewarding, that’s really simple. It goes back to our core value. It goes back to the idea of Maslow’s triangle. Shelter is so central, so critical to people’s lives that if we can make home life better, we’ve made a huge, huge contribution to the world. And that’s what we are focusing on doing, both for the consumer to make their life easier, more enjoyable. I picture all the time, my father bathing my daughter. Who’s now a mother with two kids of her own, and I bathed her kids and I’ve got that same feeling of joy and delight when I can do that.
And that’s what home life should be all about. And again, for the contractor. It’s making their jobs better. And then when I think about what I’m most excited about, that’s really easy. It’s bringing together two great things, technology and home services. And by being able to leverage the appropriate technology and making it real, and it’s not technology just for the sake of having some great gizmo, it’s technology that actually improves how people live and how people work.
And we’ve been so fortunate because having the team that built what became the brain of Alexa, having all these brilliant people from different elements in the tech world, working at HomeX has enabled us to really bring technology to an industry that needs it. And because we actually understand the industry, having grown up in the industry, we’re able to really accelerate what we’re doing.
And by leveraging that technology, we’re going to make this whole industry better, hopefully for everybody. So we’ve got big ambitions, we’ve got big goals. We’ve been fortunate. We’ve been able to build our company pretty quickly. We’ve done some successful fundraising so far, and we’re hoping that in the next three to five years, people just HomeX it when they want to take care of their house.
Louisa: A big thing which you mentioned that it’s big values, which is key to any business, as we’ve just spoken about. Michael, it’s been an absolute pleasure having you in the Propcast. Thank you for giving so many takeaways for our audience listening in. And obviously for audience, we’ll be sharing Michael’s details, how it can touch with HomeX to learn more.
Michael, I’m looking forward to catching up with you after the show. Thanks for joining me.
Michael: My pleasure. Thank you very much for having me today.
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