HelpHive Tests “Pay Per Job” Model, Connects Home-Service Businesses with Consumers

Doing some home remodeling? Need someone to clean that pesky gutter? Karim Meghji has an offer for you.

Meghji and Dave Richards, both veterans of Seattle-based RealNetworks (NASDAQ: RNWK), have been busy working on their home-services networking site, HelpHive, since it was first publicly introduced in May. The community site helps people find reputable businesses in the Seattle area that do home repair, maintenance, remodeling, cleaning, and the like. The idea is that consumers leave reviews, and people in your social network can recommend local businesses for getting specific jobs done. If done right, it should work a lot better than doing Google and Yellow Pages searches.

Up to now, HelpHive has been free for both consumers and businesses that sign up to be on the site. But today, the company is starting to test a paid model for businesses. (It’s still free for consumers.) So home-services businesses—everyone from plumbers and electricians to landscapers and carpet cleaners to pest control—can pay an annual fee ($99 for an introductory premium plan) to be listed on the site. Then HelpHive uses a “pay per job” model, whereby the company takes a 5 percent commission on any referral that leads to an actual job; if the referral doesn’t lead to a job, the business pays a nominal $5 fee, which is aggregated monthly. That’s different from a lot of online services that charge primarily for leads or referrals, or phone calls, whether or not they turn into revenue for the company. (Which approach is more lucrative depends on how well the service companies do.)

“As their business ebbs and flows, we’re more directly tying our compensation to their compensation,” Meghji says. And, he adds, “Our leads or referrals are higher quality.”

Meghji says the site is getting 9,000 to 10,000 unique visitors per month, and has some 7,600 businesses listed. The plan, he says, is to “stay focused on Seattle. Get it right, get the business model working, and once we get the formula really figured out, then we would look to replicate it in other markets.” Other Internet companies working in the home-services space include Colorado-based ServiceMagic and Silicon Valley’s Redbeacon.

HelpHive has been self-funded since its inception in the summer of 2008, with some contributions from friends and family. The company has four full-time employees and a couple of part-timers. Meghji says it’s still too early to talk about raising outside funding. “The goal is to show the business model connects to the overall value proposition,” he says. “We want to make a good case with real data, and prove the model.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] xconomy.com. Follow @gthuang

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