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Peeking Into Your Neighbor's Remodel, With Porch's Founders

Story by Benjamin F. Kuo

 

Earlier this week, a new startup, Porch (www.porch.com), launched its service to let people get a look at their neighbor's home improvement projects -- complete with before and after photos, costs, and details on contractors and more. Co-founder and CEO Matt Ehrlichman and CTO and co-founder Eric Schleicher sat down to talk to us about the new startup, which is split between San Diego and Seattle. Matt sold his last startup, Thriva, to Active Network, and was part of the team that build up Active Network until its successful IPO in 2011.

What exactly is Porch?

Matt Ehrlichman: Porch is really the first, home improvement network. Over the last year, we've been quietly organizing a tremendous amount of data around the home and home improvement projects. At this time, we have 1.5 million professionals and 90 million home improvement projects, representing 2 trillion dollars in spending insights, around improvements in the home. By organizing this, we let homeowners see what their neighbors have done, what their neighbors have actually spent, and more importantly, what home professionals that people around them have used, and who their friends and neighbors endorse. What Porch is all about, and it's a pretty fun problem, is helping people improve their home, and help improve what can be a painful experience of fixing, maintaining, and improving your largest asset.

What inspired you to start the company?

Matt Ehrlichman: Mine was a very personal story. I was in the process of building a home for my family in Seattle. Going through the process, I figured out that it's ridiculously hard to have confidence in knowing what to do, or how much a project will cost, whether you're just hiring a plumber or fixing your roof. I was going through that process and trying to figure out which professionals would work with my budget, and tried to figure out that data on other projects in the area and types of homes like mine just did not exist. It was a personal problem, which I thought we could also solve for other homeowners.

Eric Schleicher: For me, my background is I have spent the last 15 years in improving the business value of data. When Matt and I started talking about this domain, and what types of business opportunities we could identify, we realized that there was quite a bit of data, but there was nobody who was integrating it, and producing information from it that was actually transparent and visible to consumers. One of the major opportunities, we realized, was to address this incredibly painful exercise we all experience as homeowners. We thought we could add lots of value by servicing that pain, by producing real information for consumers, to help guide them through the process of maintaining and improving their property.

What were you two doing before Porch?

Matt Ehrlichman: My background has been on the entrepreneurial side. Eric's background is on the data engineering side. I actually started my first technology startup out of Stanford twelve years ago. I dropped out of school after my sophomore year, and started a company, and took a year off trying to raise a bit of money. After finishing up my degree, we had a great 3.5 year run, and I built up that business and sold it for a little more than $60M, and became the Chief Strategy Officer of the acquirer. We had a great run. We built the company from $65M to $420M in revenues over four years, and took it public. I went through the IPO, rung the bell, and went through that whole check-the-box process. I was trying to decide if I'd take a year off, but after just a couple of weeks, I started Porch. The market is so ripe for something to be done in this space--it's a mssive market, and there's massive spend, and pervasive pain. That's a pretty fun thing to go and fix.

Eric Schleicher: I've been involved in technology since the late 90's. My background has been predominately in business intelligence and decision support. When I got the opportunity to be involved with this business venture, it was a clear opportunity to take what I'd learned over my career, and apply it to solve a big, consumer problem. From the time Matt and I started brainstorming on how we'd build the business, this has been an unbelievably compelling venture. There's some really great stuff around our technology which we're tackling head on.

How was it that you two connected?

Matt Ehrlichman: Eric and I got to know one another at Active Networks. He had worked closely with me, when I was the executive sponsor for a project he was doing around big data problems at Active Networks. He led the data team. He's framed our business around organizing data, the core expertise of our company, which is why this has been a really good partnership.

We understand you already have some angel/venture backing for the startup?

Matt Ehrlichman: We closed a $6.25M seed round a year ago, and just announced we existed in June. We kept the company quiet until we were able to organize the information and tackle the problem in a unique way. We specifically didn't go after venture capitalists. Instead, we talked to some really well known angel investors up her ein Seattle, in Southern California, and in the Bay Area--the regular cast of characters. After we went through that process, we ended up with 26 investors in our seed round, which gave us the ability to be quiet, to go solve this problem in a unique way, and ramp really quickly. We've got 30 employees right now.

The real estate/home improvement is a very local market, how have you tackled that problem?

Matt Ehrlichman: It's exceptionally hard. It's really hard to crack the marketplace on the supply side, and get enough information into the system to create a really compelling experience for homeowners. It's also very hard to find professionals. That's what we did for a year--more than a year. We just focused on that, and building out our data, aggregating it from hundreds or even more sources. It's certainly a non-trivial thing to do, and that's the big challenge of the company. We kept quiet until we cracked that. Now, as we launch, we're able to launch nationally, with the ability to do this in your neighborhood, and across the entire country. That's very unique from other solutions.

What's the biggest lesson you've learned so far, in starting your own company?

Eric Schleicher: I don't want to say I haven't learned anything, but really it's been a finer appreciation of how challenging it is to work with so many data sources. We have had to consider a multi-level, content strategy, and have had to be able to deal with collecting and organizing all of that information at the engineering level. That's the most significant challenge we've tackled as part of this exercise. One of the major things we learned on the business level was how poorly serviced professionals are. We've had to work with individual professionals to collect their project history and data. Because of that, it's been a big learning experience, to figure out what offering to present to have them participate in a framework like what we're building. It's really about creating a win-win scenario for everyone involved.

Matt Ehrlichman: We've learned a lot about the process of building a business like this. Very early on, sixteen months ago, we build a number of minimum viable products (MVPs), certain pieces of what we though we were going to build. After testing them with users, it completely debunked what we thought before we built our first MVP. That really helps us in thinking about the overall model of the business, and helped us along the way in organizing the information. Now, we're not only helping to provide homeowners with tools and information on hiring a professional, they not only just see a review but get to see the actual work and who has worked on homes like their own. In addition to organizing the data, we've created a really engaging solution where people can see the kitchen remodel from down the street, what they spent, and before and after photos. It was a great learning process. It was learning how to acquire customer inexpensively, and effective entertain and engage them, while solving a real problem and creating real value.

Thanks!


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