There are a few prominent examples of companies in the tech sector that have gone far afield of where they started. Consider Amazon.com, once known only as an online bookseller. It now not only sells almost everything, but is a leader in Web services and has developed a host of its own high-tech products ranging from tablets to home personal agents such as the Amazon Echo.
Or consider Google, which started life as a search engine, then developed the world's most popular smartphone operating system in Android. It is now in so many businesses that it has created a parent company to sit atop its broadening portfolio.
Obviously, these companies are leaders in their space. But when a company is in its fast-growing stage and looking to seize an opportunity, focus is paramount. I caught up with HomeAdvisor, an IAC company that assumed its current identity a couple of years ago. It had previously been known as ServiceMagic and was in businesses such as elder care. But since settling in on matching homeowners and contractors, it's seen improvement in a number of areas:
Resources. HomeAdvisor notes that, when it was pursuing many different consumer services, it was difficult to meet internal political expectations about which verticals to pursue. The company notes that different kinds of service businesses require different customizations, and that it risked becoming a jack of all trades while mastering none. By focusing on home improvement, the company has been able to move beyond being a directory by investing in a just-released Instant Booking service.
Constituencies. All companies must be concerned about their customers. As a marketplace, though, HomeAdvisor services both consumers and contractors and so must improve the lives of both constituencies.
The company says that it is helping to modernize many contractors’ dealings and ultimately help them with record keeping. That can actually help them expand their business with younger homeowners who prefer electronic communication to phone calls. As a contractor recently told me about the often informal arrangements, "There are a lot of talented guys out there, but a lot of them can't run the business end."
Branding. As the old saying goes, if you try to be everything to everyone, you’re not anything to anyone. Changing the company's name to HomeAdvisor more clearly represented its position in the marketplace, helping it compete against its main competitor, the more amorphously named (and more broadly focused) Angie’s List. HomeAdvisor has decided not to chase Angie’s List down the path of being a resource for finding virtually anything. It notes that while Yelp, for instance, includes reviews of attorneys, it still does the best job and has the most recognition for restaurant reviews.
HomeAdvisor is not blind to the idea of entering adjacent specialties. Going back to the example of Amazon, the retailer launched CDs (remember those?) after it had mastered selling books. Online dominance in music then led it to sell more and more categories. But while HomeAdvisor reports that it has the highest market share in the contractor matchmaking space, there’s a long road ahead as a small percentage of contractors are reachable online. That should keep it on the pathway home for some time to come.