Lance Montgomery, CEO of HeyBryan, discusses his home services app, which is endorsed by Bryan Baeumler of HGTV.
Lance Montgomery, CEO of HeyBryan Media (CSE:HEY), spoke with the Investing News Network (INN) about its home services app HeyBryan, which launched its initial public offering (IPO) on the Canadian Securities Exchange on Thursday (October 3).
With HGTV’s Bryan Baeumler as both a major shareholder and brand behind the company, Montgomery discussed how his app, HeyBryan, has increased its user base by 800 percent, with over 8,000 users in Vancouver and Toronto.
While it may seem like an unlikely IPO, Montgomery discusses the pain points in the industry that inspired him to create this app. Struggling to find someone to work on small home repairs, Montgomery decided to create the mobile app — originally called FastTask — and leverage the business with a celebrity brand.
Through the interview, Montgomery discussed in more detail about the apps earnings structure, including plans to expand into new major centers in Canada in the next 12 months.
Continue reading to learn more about what Montgomery had to say. This interview has been edited for clarity and brevity.
INN: Your user base has grown by 800 percent. Can you talk more about your audience and how they typically interact with your app. What are the core verticals that are driving the most growth?
LM: Right how we have 16 categories in the app. We’re live in Vancouver and Toronto. We did a beta launch in Vancouver, and then we did a full media launch in Toronto with Bryan.
What we’re seeing is — as you think of home services and home maintenance — there are so many things that need to be done in the house, and we’ve tried to encapsulate that into different categories. We have things like handyman services, electrical, plumbing, painting, cleaning services — really any of those small tasks around the house. And where we’re seeing a lot of the growth is really around the handyman services — electrical and plumbing —all of the things that can be done around the house.
INN: How about your user base?
LM: From a customer standpoint, we’re at just over 8,000 customers who have downloaded the app, set up a profile and put in their credit card information.
And on the home service expert side, we have just over 600 experts that vary in all ranges of categories that have signed up, gone through a background check, criminal check, credit check, set up their bank account verifications and we set up a merchant account with them. They’re there ready to service the actual consumers.
INN: How would you describe your revenue model? What is driving most of your earnings right now?
LM: Our revenue is based off of a 27.5 percent margin that we take off of every task completed. If you think of a task of C$100, we would take C$27.50 on top of the C$100 from the actual job. How that’s broke down: 7.5 percent is charged to the customer as a trust and support fee. The reason for that 7.5 percent fee is that it covers overarching liability insurance. It also covers our payment processing because we’ve integrated with Stripe out of San Francisco as our payment processor and there’s a 2 percent hard cost for payment.
And then we also have a small loyalty for Bryan Baeumler himself, which is 1.5 percent. And then we take 20 percent from the home service expert. We don’t tell them how to set their rates, they can offset that with their rates. So at the end of the day, the total hard revenue is 24 percent.
INN: Can you tell me why you wanted to get involved with HeyBryan?
LM: So this was actually based on a personal need. About 18 months ago, I came home, my dishwasher was broken, I was working a full-time job at another startup. I came home and got frustrated with trying to fix my dishwasher and did what everyone else does. I went on Google (NASDAQ:GOOG) and typed in “dishwasher repair Vancouver.” I got served with a whole bunch of ads, I was always hesitant of who to call, how much are they going to charge to show up and when can they be here. I just got frustrated and came up with the idea: There has to be something out there that makes this easy and seamless.
The most important thing for people right now is their time. In doing a lot of investigation over the coming weeks in looking what’s out there in the market, there really wasn’t anything in Canada —aside from your typical Angie’s list, or Craigslist or Kijiji — to try and find these guys to come around and do small tasks around the house.
I kind of came up with the business idea on my own and surrounded myself with some of the most experienced people in the city that I’ve worked with through my years in the agency world. I pitched the idea to our chief technical officer and creative director and they were fully on board; we built this thing hand-in-hand. We originally started the company and named it FastTask Technologies. And then looking at the cost to market and to get brand reputation in the industry, it was going to be very expensive to bring a new brand into the industry.
My immediate thinking was, I need to get a celebrity involved, and who better than Bryan Baeumler. So I went to his contact desk form on his website, put in a small paragraph sales pitch about what I was looking to do and how we wanted to disrupt this industry. He called me the next day and said, “You got me, love this, this is exactly what I’m interested in. This industry needs to have its perception changed and I’m all in,” and he signed on as our indefinite face and brand, and is also a major shareholder.
INN: In this space right now, what are some of the challenges that you’re seeing?
LM: I think the challenge is just changing the perception for consumers of having a go-to, trusted marketplace app where everything is taken care of.
There is a customer service avenue if something does go wrong, so the customers can have confidence. If anything does go wrong, there’s insurance in place, these people are vetted — their quality of work has been checked — so customers really don’t have to worry about the risk around this industry.
That’s one of the challenges that we’re working to overcome, is instilling that confidence, and really giving people the peace of mind that if they use HeyBryan to get small things done around the house, they really don’t need to worry and they can also get it done on their time and on their schedules.
INN: You’re located in Toronto and Vancouver. Do you have plans to expand for the future?
LM: Our plan for the next 12 months is to be in every urban center across Canada. When I say urban center, we’re talking Calgary, Edmonton, Winnipeg, Saskatoon and Ottawa. We may not be in Montreal this year — just because of translation and we will have to do a lot of development work — but that’s the goal: to be in every major urban center within the next 12 months.
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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: HeyBryan Media is a client of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.