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Honk: Disrupting Roadside Assistance's 800 Pound Gorillas

Story by Benjamin F. Kuo

 

Stuck on the side of a road, and need some help? Traditionally, you either had to be a member of a membership service for roadside help--or you had to pay an arm and a leg for a tow. Enter HONK (www.honkforhelp.com), a new startup which is looking to bring fast, easy, and affordable roadside assistance via mobile phone--without the need for a membership. We spoke with Corey Brundage, CEO of Honk, to tell us more about the service--and why it's looking to disrupt the "800 pound gorillas" currently dominating the roadside assistance market. HONK is backed by high visibility angels Paige Craig, Aaron Batalion (LivingSocial), Ben Huh (The Cheezburger Network), Naval Ravikant (AngelList), Jillian Manus, Mike Walsh, and Structure Capital, along with Double M Capital, Venture51, Expansion, and Karlin Ventures.

Tell us a bit about what HONK is about?

Corey Brundage: Honk is an on-demand, roadside assistance service. We offer towing, jumpstarts, tire changes, fuel delivery, and lockout service--pretty much assistance for anything that could go wrong on the side of the road, and we do that within fifteen to 30 minutes, without the need for any membership.

There are a lot of very well established companies in this area, why go up against them?

Corey Brundage: It's really interesting. It's a huge market in the United States, a $10 billion market which is dominated by 114 dinosaurs. The folks that might come to mind are AAA and RoadAmerica. I want to say that our average competitor is sixty or seventy years old. They're really sizeable, but they have not been disrupted by the technology industry. That's really exciting. The other thing, is these folks have had a monopoly in the space, so they haven't innovated when it comes to technology. Plus, they're using an outdated business model which the younger Millenial just isn't going to stand for. What we are doing, is using proximity based dispatching--aka Uber technology--for towing and roadside service, to provide faster ETA and service. Plus, we're getting rid of this overblown, expensive, outdated membership model, and providing peace of mind, a fixed rate, and low prices when you need the service.

I imagine the towing companies have been connected into the big guys like AAA for some time, have they been hostile to what you're offering?

Corey Brundage: Absolutely not. It's actually just the opposite. AAA has been around a long time, and is an 800 pound gorilla. The downside of that, is AAA has for decades been asking their towing partners to provide better and better service, but paying them less and less. The average towing company in Southern California is making between $23.00 and $25.00 a tow from AAA, which is utterly obscene, considering if you break down and ask for a quote, you get quotes of $200 to $300 dollars for a tow. Even if you use AAA, you are spending an average of $100 a year on services you might only use two or three times in four or five years. That's paying $500 for a tire change. Yet, the actual towing company only makes $23.00 on that! That's left those big service open for someone to do something better. We just announced that we've launched HONK, the on demand, roadside assistance app. We're announcing nationwide operations, and we're truly nationwide, everywhere in America. We have more than 20,000 trucks already online, and we are signing up 1,000 to 2,000 trucks a day right now. It's snowballed, because of the buzz and lots of word of mouth on the towing side of the market. It's a 50 percent faster ETA thatn AAA, and there are no membership feeds, and only $49.00 to start.

You're saying you're faster than AAA--how can that be, given they've been around so long and have lots of existing operators?

Corey Brundage: That's really simple. It's because they don't have proximity based dispatching. They don't know where the trucks are. That's hard to believe, but they don't. What you see, is the AAA is trying to really innovate on their business model, and not their technology. What they do is marginalize their towing partners, by promising more and more volume. They will figure out who they are trying to negotiate with, send them more calls, and force them to go cheaper than the other guy, which is just a disservice to the customer. When you break down in an area, the AAA goes into their database, and decide that's Bob's territory, and just give it to Bob. They don't know where Bob's trucks are. With Honk, we can tell you that the truck is just one block away, and will be there in six or seven minutes--it's pretty straightforward. As our network grows, we'll get faster and faster.

You have some impressive angels, how did you connect with them?

Corey Brundage: It was a bit of a whirlwind. Our first check was from Paige Craig, with the largest investment he's ever made to-date. As soon as you start signing up people like that, the word gets around quickly. We were six times oversubscribed in less than six days. I talked to seventy investors over a five day period because of the big buzz going around. Paige typically makes small investments, but his sizeable investment was a big signal to the marketplace that something was happening here. The other thing that made an impact, is the original minimal viable product for HONK was built out of my house in April. The first six hours that it was turned on, even though every piece broke and other things didn't work, we did over $1000 in gross revenues in six hours, on day zero. Even with crappy technology built in my house. We're not one of those pre-revenue startups with big crazy dreams. We have provided a marketplace for people who need help, and we're solving a problem for them.

You're a serial entrepreneur--what did you learn from your last startups that you're applying here?

Corey Brundage: It has been a long path to get here. I think by and large it started at SendLove, which is the last time I think we spoke, when you spoke with me and my co-founder Chris Lyman. We worked on that company for about ten months, and although it was ultimately successful, it was not successful in the way we wanted it to be. We kind of looked at it as a big letdown. Having a venture backed failure, which turned around to something else was very eye opening. We spent a lot of time, both of us, Chris and I, getting perspective on what went wrong. I think what I have learned, in the last three ventures I have been cofounder of and been involved in, is to learn to accept and learn from failure, analyze it, and set out to be better. Our last company was very similar to HONK, in that we were eliminating waste and helping people in a marketplace, but we figured out what we were solving was not as important. This is much more important, which is why HONK is by and large the most exciting company I've ever worked at.

Thanks!


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