Consumers are demanding improved digital experiences in every aspect of their lives. They expect the process of coordinating an appointment for car service, dog grooming or pool cleaning to be as easy as ordering a meal from their phone. Many of these service providers are small businesses, however, and they do not have the time, resources or sophistication to implement a digital presence with a high-quality customer experience. York IE’s newest investment, Zippity, is aiming to help these owner/operators provide a high level of customer experience to help them grow their top and bottom lines.
In early 2020 Ed Warren and his co-founders were living the startup dream. They were building a field service business, Zippity, that was providing on-site automotive services at corporate offices, and it was positioned for a breakout. Already over a $1 million revenue run rate, they were just beginning to implement their scaling strategies when the COVID-19 pandemic hit the United States and their business was wiped out.
Showing true entrepreneurial grit, Warren looked at the remains of the business to see if there was anything worth salvaging. During the analysis he recognized that while Zippity’s core business offered a ton of convenience to its customers, what seemed to really separate the company from the competition was its industry-leading customer engagement. Ninety-four percent of Zippity’s business was booked online, and the company had over 2,000 five-star reviews with a 50% repeat purchase rate and a 92 net promoter score. Upon realizing this, Warren decided to take the software platform that was built to run Zippity and pivot the entire business to SaaS. He sold the service business to a local operator in New England and took the reins of the new incarnation of Zippity, publicly launching the software platform in January 2021.
Warren’s perseverance does not come as a surprise when you know his background. After graduating college he spent five years in the United States Air Force as a nuclear weapons officer, leading operations of a multibillion dollar nuclear weapon system. After leaving the Air Force he spent time at Digital Lumens in application engineering, technical sales and customer support before earning his MBA from The Tuck School of Business at Dartmouth College. Warren co-founded Zippity while in his final years of graduate school.
Warren has surrounded himself with executives who have experience at Amazon, CarGurus, TripAdvisor and Housecall Pro. The combination of complementary skill sets that he has assembled is well-tailored to bring a modern customer engagement platform to small and medium-size service providers.
The Zippity team believes that modernizing customer engagement is imperative to the survival of small service providers. Not only will it help them build strong and sustainable customer relationships, but it also reduces manual back office work for them and their employees, which can drive increases in revenue and profitability.
Zippity is a business in a box for onsite service providers that they can run from their phones and is built on top of the common tools these businesses use, such as Square, Google Calendar, Stripe and Intuit QuickBooks. Zippity’s application is the interface that service providers’ customers use to schedule appointments, chat with a technician and receive reports. Customers can get live estimated time of arrival insights, receive bills and make online payments. On the service provider side, Zippity is providing scheduling and GPS tracking functionality along with day-of quote building, customer messaging and dynamic service reports.
It is important to note that Zippity is focused on small businesses owners/managers who need to modernize their operations but don’t have back office staff to do so. It is not building a solution for heavy back office use cases or businesses with a dispatch function. The Zippity team has a deep understanding of their customers and know the resource and time constraints these business owners and managers face in managing their operations.
As previously mentioned, Zippity is primarily targeting small quick service providers under the broader field service umbrella. The company believes this market represents a $5 billion opportunity. Its initial target market of onsite auto services represents a $700 million opportunity. The majority of its addressable market, approximately $4 billion, comes from an expansion vector: home services such as carpet cleaning, pool cleaning and handyman services. The company also sees an additional $600 million market in pet grooming and phone/device/bike/tool repair. The company identified these market opportunities by researching the number of businesses in the country in each sector and attaching a market share potential and the Zippity pricing model to the top-level numbers.
In many ways Zippity’s target customer is similar to that of Toast, the Boston-based restaurant software company that recently went public with a $20 billion valuation. Toast built its business on small restaurants, racking up almost 30,000 customers (about 50,000 locations) with a small average contract value for its software offering ($6,000) and substantial growth coming from payments.
At this point it’s important to define quick service since it is Zippity’s target market. Zippity defines quick service as any low-complexity, transactional service that takes less than four hours to complete and is often recurring. The reason Zippity is targeting these day-of service providers is because they benefit most from improved customer engagement due to their need for quick scheduling, transparency and frequent coordination.
Based on their service provider days, the Zippity team initially targeted onsite automotive service providers. In 2022 the company will start marketing and selling to companies in home services.
To date, Zippity has utilized an outbound sales go-to-market (GTM) strategy. It has brought on former account executives from Housecall Pro (a platform for home contractor service providers) to lead the charge, as well as a team of outsourced sales developer representatives to serve these.
With its new funding, Zippity plans to invest in self-service, product-led growth strategies, as well as partnerships. It is important to add self-service purchasing and onboarding to the platform because many of its potential customers are practitioners/technicians themselves and don’t have time during the course of a normal workday to speak with sales or customer support personnel.
Partnerships will be a key strategy for Zippity because of their cost-effective nature. Since Zippity is not trying to compete with the large companies providing business tools to small and medium-size businesses (SMBs), they can partner and integrate with them on technology and GTM. Zippity will start off as an option in these larger companies’ marketplaces but will work to develop deeper relationships over time.
It has already been noted that Zippity is not aiming to compete with the incumbent software tools that SMBs use to run their business (Square, Quickbooks, etc.), but it bears repeating when analyzing the competitive landscape facing Zippity. These tools represent technical integrations and partnership opportunities that enable Zippity to deliver on its value proposition of being the all-in-one operations management platform for the thousands of small businesses overlooked by the software industry.
Beyond those businesses, there is the wide range of field service management software vendors that Zippity may see in the market. Growth-stage companies such as Service Titan, ServiceMax, Housecall Pro, and FieldEdge have raised significant venture capital, but York IE does not see these players as directly competitive because they are primarily focused on providing back office tools to the home contractor space (i.e., plumbing, HVAC, etc.). These vendors believe that customer interaction is going to be run by a back office employee, but in the quick service segment that isn’t necessarily accurate. Quick service vendors need agility in their scheduling and coordination that a back office employee can’t provide. Additionally, many of these companies don’t even have back office employees. Owners/managers are in the field themselves and don’t have the time to run back office while performing their services. A mobile-first software platform is the only answer for them.
York IE is thrilled to partner with Zippity as the company works to provide a customer engagement platform to hundreds of thousands of small businesses across the country, improving customer experience and quick service providers’ businesses.