Embarking on a commercial or residential renovation is a daunting task, one that is often fraught with costly miscommunications, uncertainties, and a lack of quality control. In this episode of Mastering Innovation on Sirius XM Channel 132, Business Radio Powered by The Wharton School, Bridget Best, COO of Sweeten, discusses how the service works to connect general contractors with clients and oversee a smooth renovation experience for both parties.
Renovating space in a home often coincides with a major life change such as expecting a new family member, making them a relatively infrequent occurrence. Due to this sporadic nature of the business and the independence of general contractors, many homeowners experience inconsistency in the quality of service and lack of transparency that leads to confusion and frustration. After encountering this frustration firsthand, Sweeten founder Jean Brownhill conceived of a service designed to streamline the process. Using a combination of software and human judgment to match clients with Sweeten’s network of general contractors, the company then monitors their transactions, providing trust and clarity throughout the process.
An excerpt of the interview is transcribed below. Listen to more episodes here.
Transcript
Nicolaj Siggelkow: Many of us will have had prior experiences with contractors. Why is this such a hard market? In some sense that’s the good news for you; it gives you the reason to be there.
Bridget Best: It’s a combination of things. Renovations are something that people don’t do regularly, they’re a one- or two-time thing. It tends to coincide with a particular moment in life: either you’re introducing new family members or experiencing other life changes that cause a need to make over a new bathroom or bedroom. There are always extenuating circumstances. It’s also a fractured market with a lot of independent individual sole proprietors.
People aren’t necessarily using the same systems; there’s not a ton of transparency and easy apples-to-apples comparisons out there. You can’t sit at home and do a lot of comparison shopping. The market doesn’t have the qualities that make people comfortable and confident in making these decisions. What we try to do is bring transparency and trust to the process through understanding the customers’ needs. We’re understanding what our contractors are great at and then making sure that the communication and the process is as standardized and clear as possible for both sides.
Siggelkow: Just to give us an idea, what’s the average size project for a Sweeten contractor?
“We’re understanding what our contractors are great at and then making sure that the communication and the process is as standardized and clear as possible for both sides.” – Bridget Best
Best: The average size of a renovation on Sweeten is about $100,000. We certainly do just a single bathroom. You can come to us for projects as small as about $15K and upwards of $15 million. We have people looking for renovations of commercial spaces, a restaurant, or a retail space, as well as people doing development work in an entire building or office space. We have people who have done many renovations who still find it more helpful to come to Sweeten even if they have a general contractor that they really like. They enjoy the ability to get competitive bids and think about who is available for this work, who is really specialized, and what in-house traits are important for the job. There are a lot of different qualities that don’t carry over. Just because you get a successful renovation in your home doesn’t mean your business will use the same contractor.
Siggelkow: Tell us a little bit more about how much technology is involved versus how much a human is sitting there poring over these details. It’s combination of both, right?
Best: It absolutely is. There is software involved in different parts of the process — everything from the content, estimates, and cost guides that we provide, to helping you detail your scope. We use software to match customers to general contractors. A human is involved in making sure that those matches make sense and that they work from a perspective that technology can’t always see. We’ll be introducing payments to the platform in 2019, which will further enable the trusted transaction on Sweeten.
Siggelkow: Tell us a little bit more about that, because that’s clearly another pain point that comes out.
Best: There are several different pain points around paying a general contractor. What we’re trying to do is make it a clear and trustworthy process for both sides. Sweeten will sit in the middle of that transaction and allow people to put their money toward the milestones and identify when a milestone has been completed. When both sides agree, the funds are released. It’s a process that works as you might hope in terms of making sure both sides are protected and getting what they need.
Siggelkow: A classical two-sided marketplace. On the one hand, we need to have the contractors. On another side, we need to have the clients, the renovators. With any typical two-sided marketplace it’s a bit of a chicken-and-egg problem: without the contractors you don’t get the clients, and without the clients you don’t have the contractors. How have you tried to jump-start this process? On which side did Sweeten focus earlier, or what did you do early on?
“There are several different pain points around paying a general contractor. What we’re trying to do is make it a clear and trustworthy process for both sides.” – Bridget Best
Best: I can’t really say one side or the other definitively, but we do see the general contractors as our repeat customers. We’re currently in the process of planning our holiday party with our general contractors. Hundreds of them will come to our office and celebrate the holidays with us. Many of them get upwards of 60% or 70% of their business from Sweeten. We’re a part of their business and for a lot of us, a part of their family. We celebrate together throughout the year. They’re the people that we’re in close contact with.
The renovators are usually one-time users. It’s important to understand their needs, service them to make the process easy and clear, and make them feel confident. We do that through content and a team of account managers who work closely with the general contractors every day, and can talk to the people posting renovations on our site about those contractors. It’s not one side or the other, but there’s definitely a big place in the Sweeten heart for our general contractors.
Siggelkow: How did Sweeten start out? Where did this idea come from?
Best: It was founded by three trained architects and our CEO, Jean Brownhill. She had the idea for Sweeten when she was trying to renovate her own brownstone and ended up in a very frustrating process where she’d hired the wrong person. The process took much longer and cost much more money than she was expecting it to. She realized, even with her training as an architect, she was not able to rely on her network or rely on one of the many sources on the internet for contractor listings. As many great ideas are, it was born out of that pain point.
Siggelkow: I’m trying to put myself into these shoes. A lot of my students have ideas in how they see a pain point, maybe personally, and say, “Okay. Now, I have an idea. I want to create this marketplace.” How did it start? Did they get two contractors and three customers? That’s always intriguing when it’s this two-sided marketplace.
Best: It started like a lot of these ideas do, with a lot of hassle with people. Jean had to convince people she knew who were thinking about making some changes to their home, “Hey, why don’t you hire someone through my website? I’ve got a few guys.” Whether she had those contractors or not, she promised that she would, and then she went out, found them, and made those connections.
About Our Guest
Bridget is the Chief Operating Officer at Sweeten, a service that helps you find and hire a general contractor, and complete your residential or commercial renovation. Prior to Sweeten she spent more than 5 years at Kickstarter where she was the company’s SVP of Operations.
Before joining Kickstarter in 2012, Bridget worked for ten years as a Portfolio Manager at Estabrook Capital Management, managing a socially responsible investment strategy. She graduated from Trinity College in 1998 with a bachelor’s degree in modern languages and literature.
Mastering Innovation is live on Thursdays at 4:00 p.m. ET. Listen to more episodes here.