A case study based on the 7-Key Model Business Model Canvas
Background of the entrepreneurs
How to find a business idea? What is the motivation to start your own business and why becoming an entrepreneur?
FIXING IT is a Swiss company, founded in 2017 by Eliya Devay and three of his friends during their time at the FHNW. Their goal is to build a platform to match handymen with people who are in need of renovation and small repairs. By acting as a neutral intermediary, their goal is to protect clients from getting ripped off and to provide customers with high-quality handymen. Soon they realized that it would cost a lot to have a platform programmed by a professional company. As they were sharing their ideas with friends and family, they found Andreas, a technician who was willing to work with them and build the platform.
After Eliya and his three friends graduated, the friends shifted their focus to other projects and left the company. Eliya and Andreas further developed the platform and the company itself. They first called their company Fixit. As they wanted to register the company’s name and buy the domain for fixit.ch, they realized that someone else had already secured it. Therefore, they changed their name to FIXING IT, even though they thought that this name was a bit long and not that easy to remember.
The core of a successful business model
FIXING IT is operating in a two-sided market. On the one hand, their clients are all the people or companies who need to do any renovation or small repair work. On the other hand, their clients are craft businesses that provide handymen, such as electricians, plumbers, carpenters, etc.
Regarding the users, FIXING IT further segments them into owners and renters of a property. The big difference between those two types of clients is the amount of money they spend for renovations. Renters normally have to pay for renovations costing up to CHF 300. Property management normally pays bills above that amount. In contrast, owners must often spend more money, as they are responsible for bigger renovations. As such, FIXING IT would have a high number of renters who need to do some small renovations, and the revenue from them will not be that big. Of greater interest are the owners of a property, as their renovation costs are usually higher and therefore the revenue much greater.
FIXING IT emphasizes the quality of their handymen and their trustworthy offers. Therefore, every new company that wants to offer their work on FIXING IT’s platform is checked in the commercial register and verified as having liability insurance. Furthermore, FIXING IT is in contact with some architects who give them reviews about different companies and their quality of work.
One of the main challenges is to build up a platform where both customer groups are satisfied and their needs covered. The handymen are not willing to pay any fixed subscription fee for being listed on the platform if there is not demand. The same goes for those who need to renovate something. If they are asking for offers and do not get any due to insufficient supply, they will not be happy with the result and will never go back on the platform.
To address that issue, the company tries to build up both sides step by step. As a starting point, they are focusing on Basel, as the founders are familiar with that area and the size of the city has the potential to grow.
Products & Services
FIXING IT is a two-sided platform connecting handymen and clients in need of repairs and restorations.
On the one side are the handymen, all certified with a federal diploma of Vocational Education and Training. Furthermore, they carry liability insurance to guarantee the work if something goes wrong. All handymen are part of their respective craft association and therefore know the common quality standards. In addition, past projects are inspected as well as customer reviews to help show the quality of the handymen.
On the other side are the customers who require help in repairs and restorations. The search for a handyman is designed to be as user-friendly as possible. On the webpage, clients can enter the type of handyman they need (carpenter, painter, electrician, etc.), the region where the work has to be done, and a description of the problem that has to be fixed, including the ability to upload pictures.
FIXING IT then forwards the request of the clients to three different handymen in the area. After receiving bids, the clients are informed of the offers and open to choose between them. The whole process is done manually by Eliyas and Andres and is therefore very time-consuming. Subsequent to the client’s decision, details are discussed between the handyman and client directly. Furthermore, the payment is also handled directly between the two parties, and FIXING IT excludes all liability with regards to payments.
In the countryside, many people have their preferred handyman and do not have the need for such a platform.
In contrast, in more urban areas or in shared flats without knowledge in handicraft work, many people do not know how to proceed when something breaks, when moving in, when making reparations upon moving out, and when making restorations. In this case, FIXING IT is an easy answer to these situations.
All about the revenue model and revenue streams, the financial plan and the financial goals
Firstly, the service is free of charge for clients looking for reparation and restoration to be done.
The revenues are generated from the other side of the platform – the handymen. There are different models to choose from. There is the option to pay a monthly fee of CHF 75.- and 5% provision of every job that’s done by the handymen. The other model is to pay CHF 150.- monthly without any additional provision. In the beginning, in order to build a solid base, they offer a model with a provision of 5% per job without any monthly payment.
FIXING IT does not handle the transactions between the handymen and the clients. In the beginning, they wanted to implement this service in the platform, but then they realized there is no customer need for it.
The marketing plan of the startup
At the moment, FIXING IT focuses on the market of Basel. However, if they receive a request from another area (e.g. Zurich), they will look to see if they can find a suitable handyman in that area. Sometimes handymen in Basel know a good one in Zurich. If FIXING IT cannot find a matching handyman in a region out of Basel, they inform the customer, that right know they are focusing on Basel, but that they will put him on an email list for the future. In order to enhance the number of handymen, FIXING IT asks architects for good handymen and then approaches them.
When they founded the company, they took part in a startup challenge and won. The support and coaching sessions they have received helped them very much to set up the business.
Later, to get leads they did a lot of guerilla actions like wearing shirts with the name on them and running down the streets and distributing flyers. Unfortunately, this did not lead to the expected reactions.
FIXING IT also had a stand at Muba with a wheel of fortune and showed promo video on the screen. Since every other stand had a wheel of fortune, they did not attract much attention with this, but the children loved to watch the video, which consequently attracted the parents to the stand. So, the team of FIXING IT could get in touch with the parents via the children. At the end they had several hundreds of new E-Mail addresses. FIXING IT did not expect, that the children were key to the people.
The main competitor of FIXING IT is Renovero. Although Renovero is also a website where people can look for handymen and ask for offers, FIXING IT sets itself apart by sending only three offers, all from vetted handymen. In contrast, at Renovero, anyone can send an offer whether the person has the necessary knowledge or not. This makes it very difficult for the customer to decide which offer to take. On the FIXING IT platform, the customer can be sure that all handymen are certified and will do a quality job, since these are professional companies and not private individuals. The handyman also has the opportunity to write a short statement as to why he should be chosen.
There are several components that distinguish FIXING IT from other offers and therefore establish the unique selling proposition (USP). FIXING IT exclusively offers certified handyman holding liability insurance and therefore a lot of security for clients. Furthermore, clients receive three offers, not 20, and therefore are not overwhelmed by the number of proposals. In general, they focus on quality rather than price.
Another source of competition, which FIXING IT cannot avoid, is that after hiring a handyman via the FIXING IT webpage, people can then hire the handyman directly and not via the platform in the future. Eliya does not have a concrete solution for this issue as of yet but does not regard it as a significant threat.
The starting capital was rather low – according to Eliya a few hundred francs. As Andreas is a programmer himself, he could set up the platform. Marketing expenses were kept at a minimum as they just started off with a few guerrilla actions. Therefore, they already broke even with their initial expenses.
Currently, they are in contact with bigger companies who see opportunities and are interested in collaborations and supporting FIXING IT.
Know your USP: What makes your product/service different? What is your unique selling proposition? Why should customers buy from you instead of your competition? If you have answers to those questions, make them visible to your potential customers. If you can’t find an answer yet, there is no need to worry, but take some more time to work on your business model.
Smarten up your processes: Follow the customer journey on the website. Analyze when they cancel the purchase process and what the reasons are. As mentioned in the case study, people prefer to have some few quality offers instead of an overwhelming amount of proposals. Recognizing and removing those stumbling blocks and therefore improving the customer experience will directly enhance your selling numbers.
Secure your domain: As an online B2C company, it is absolutely crucial to have a customer-friendly website. This starts with the domain of your homepage, which should be catchy, closely related to the company, and easy to remember (especially the name of your company). Many entrepreneurs start planning their online business and choose their business name without checking if the domain is still available. This will automatically lead to additional effort, because there is a high chance that it is already taken and you’ll have to go the extra mile. Therefore, it is highly advisable to check if your preferred website domain is available at an early stage of your start-up project and to secure it as soon as possible.
Listen to the needs of your stakeholders: Your business model will not be perfect from the beginning. You need to adapt to the market situation. Successful start-ups listen to their environment and adapt to their needs. The market does not want new products but is highly interested in solutions that help to cover or speed up an existing issue.
Founder: Eliya Devay
Thanks to the authors from FHNW: L. Gerber, S. Glauser, L. Lehmann, M. Brack, C. Zahno
This article was edited from the original
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