Bootstrapping a Marketplace: Sardor Umrdinov, CEO of Home Alliance (Part 2)

Sramana Mitra: You were providing technicians for various appliances. Why do you need all these software developers?

Sardor Umrdinov: Our lead generation is through website and SEO. We do SEO locally. We pipeline those leads to our CRM. You couldn’t do it with other CRMs, so we had to build our own. It was expensive to do it here.

Sramana Mitra: It’s the CRM system that was being built from abroad?

Sardor Umrdinov: Correct. Now we have in-house CTO and developer in LA, but most of it was built overseas in the beginning.

Sramana Mitra: What year are we talking now?

Sardor Umrdinov: 2016.

Sramana Mitra: You built a custom CRM to support your business for home appliance repair. You were acquiring customers through SEO. What kind of trajectory were you on at this point? How many customers were you servicing? What kind of revenue run rate were you working at?

Sardor Umrdinov: In 2012, we had 800 customers. By now, we had 300,000 customers.

Sramana Mitra: All this customer acquisition happened through SEO?

Sardor Umrdinov: Yes.

Sramana Mitra: How about revenue? How do you charge? What is the pricing model?

Sardor Umrdinov: Pricing model is like Airbnb and Uber. We charge a percentage of the transaction.

Sramana Mitra: Who is doing the technical service? Are these people on your payroll or is it a marketplace of technicians?

Sardor Umrdinov: It’s a marketplace of technicians. 

Sramana Mitra: I want to explore two things here. How did you acquire the technicians? Let’s do that first.

Sardor Umrdinov: At the beginning, it was word of mouth. Then we started hiring technicians and training them. Then we also hired a recruiter in 2014. 

Sramana Mitra: Did you grow this business geography by geography?

Sardor Umrdinov: Yes. We started in LA. Then we opened in New York, Seattle, Miami, Phoenix, Arizona, Chicago, and Boston.

Sramana Mitra: What is the revenue trajectory? How long did it take you to reach a million in revenue?

Sardor Umrdinov: About a year and a half.

Sramana Mitra: How many technicians did you have on the platform at the point at which you hit a million in revenue?

Sardor Umrdinov: It was not many – around 12.

Sramana Mitra: 12 technicians got you to a million in revenue?

Sardor Umrdinov: Correct.

Sramana Mitra: Wow. That’s very substantial. How much does each technician make on your platform?

Sardor Umrdinov: Their gross revenue is around $100,000 a year. Maybe they take $50,000.

Sramana Mitra: You take 50% of the billings?

Sardor Umrdinov: Yes.

Sramana Mitra: That’s a very substantial commission. What is the next inflection point in your business? In 2016, you put in the CRM system, which had the ability to categorize the different technicians and locations. What did that do to the business?

Sardor Umrdinov: It has made the business more efficient. We were able to move the call center to the Philippines. We were able to distribute the jobs better and more efficiently. We were also able to track not just the customer acquisition cost but also calculate the LTV of the customer.

This segment is part 2 in the series : Bootstrapping a Marketplace: Sardor Umrdinov, CEO of Home Alliance
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