In the classroom, Acton students are in a safe zone, where they can pitch creative ideas and strategies. Here they hone their skills so, in the real world, they’ve already seen the traps and know how to build efficient and effective businesses.
By focusing on a special niche service, Idea Labs has quickly built an expertise that helps it market to clients more effectively than larger one-size-fits-all firms.
We caught up with Joe Shiraz (’11) and Evan Spaulding (’11) who founded Idea Labs Consulting in 2012. They shared their back story, and how they’ve managed to launch and grow quickly in a competitive space by identifying an unexplored market niche and using service and performance as a barrier to competition.
Company: Idea Labs Consulting
Founded: July 2012
Headquarters: Austin, TX
Idea Labs Consulting helps home service providers attract new leads and customers through the use of online marketing, promotion, search engine optimization (SEO), and social media tools. Its target niche of home service providers is suprisingly a huge segment, made up largely of family-owned business. Their clients each bring in $3 to $5 million annually and provide lawn care, pest control, electricians, plumbing, air-conditioning, cleaning, and similar services to Austin homeowners. The company is currently planning to expand its footprint and service model to additional cities in 2013.
Joe and Evan met at Acton, when they both were students in the Class of 2011. Before Acton, Joe had built and run Longhorn Delivery and Evan had worked as a CFO for both a construction company and an IT service and software company. After graduation, Joe dug deeper into online marketing services while Evan focused on business operations and creating processes that attracted customers, and drew them back for more. Both followed paths that put them in advisory roles, consulting with different Austin business based on their backgrounds and expertise.
As they began comparing notes about what they saw in the Austin marketplace, they recognized an opportunity. Joe and Evan saw that many local home service companies—such as electricians, plumbers, and home care providers—knew that they needed to reach their customers online, but weren’t getting the specialized help they required.
“Most of them are using mass-market search engine marketing firms who are more focused on gaining market share than on helping their customers,” said Evan.
“These marketing firms are large-scale companies, not locally based, that don’t give a lot of value to these customers,” explained Joe. “And we saw a lot of smaller companies in the same space. And while they may be local, they don’t know how to interact with the clients nor understand the nature of their home service businesses.”
“So we did a small test with one client and proved to ourselves there really was a need there, and a way to make a difference for the business owner in that niche,” said Joe. “We saw this middle ground, where we’ve been able to come in and offer a service that’s different from our other competitors.”
With evidence that they could make a difference and just a small $5,000 capital investment, Joe and Evan got to work and began building Idea Labs through bootstrapping. Based out of Joe’s home, they hired a key employee and then got to the first order of business—to go out and sell.
They closed their first new account quickly, and began doing the dual job of bringing in new businesses while serving their new and growing customer base. They continued to bootstrap the company which was growing with the new revenue they generated.
Within three months, they had moved into new offices. Within six months they had six full-time employees and multiple contractors. Now, Idea Labs is set up in its own office near downtown with a full roster of Austin clients. And they have room to grow both locally and in other cities.
“This is in an industry where, in Austin alone, we easily have more than 100 local competitors. But nobody is really doing what we are doing,” added Joe.
By focusing on a special niche of service, Idea Labs has been able to quickly build an expertise that helps it market its clients more effectively than the larger one-size-fits-all firms. And rather than telling clients to view an online dashboard, they personally make sure that their clients understand the results, what they mean, and how they need to respond in order to turn leads into customers.
Joe highlighted the experiences of two of their actual clients, whose experiences align with the two basic scenarios that Idea Labs sees.
“The first client was using a large, mass scale company. They called him up, sold him and told him he didn’t really need to worry,” explained Joe. “They didn’t explain it to him well, they didn’t understand his business, and they were also representing his competitors, which he didn’t like. He wanted it to integrate with his business, and they just didn’t support that. We came in, totally revamped the online marketing, found tons of opportunities to increase his reach, and last year he had his best year ever. Now he’s referring customers to us.”
Meanwhile, Joe said that the second client had relied on a bunch of small, local companies.
“They were friends of friends, specialty shops. But even then, none really explained their services to him. They had the technical skills but not the personal skills to explain what was going on. A lot of these companies just do social media, or just do SEO. We increased his web traffic by six times, and his online leads increased by five, and his revenue more than doubled.”
The Acton Difference
Both Joe and Evan credit what they learned at Acton for the efficiency of their launch and quick growth.
“One thing that really helped us has been the sales and customer philosophy that we learned at Acton in our Customers class,” said Evan.
“We really do focus on creating a great customer experience, figuring out what they want, and what they need, and serving them,” he explained. “As opposed to being transaction-minded, we’re building relationships and long term success of our customers. It’s about their growth and not our income.”
“Evan was really good about driving the use of the Socratic Method to determine our one primary focus,” said Joe. “It’s really important to debate, determine, and refine what the three most important things are for the company.”
“It really helps with buy-in,” said Evan. “We’ve got folks who don’t view this as a job. Everyone has a voice and we’re all on a mission to grow the company.”
“That’s an area where Evan and I really complement each other,” laughed Joe. “Even after Acton, I still wanted to buck the idea of these sort of sessions. My nature is that I want to take things on and get them done. But Evan’s proven how effective the Rockefeller habits and Socratic Method can be with our team.”
“People from our class can’t believe we’re working together. Because we’re quite a bit different,” said Joe. “But there’s a good balance. And I think that’s why it works so well.”
“I’m more of a planner, organizing the operation, while Joe is more of the Tasmanian Devil with the vision,” laughed Evan.
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And learn about other alumni experiences at Acton—based upon their own backgrounds, professional interests, and experiences.