00:00You guys have a lot going on, Jeff, since we talked with you in mid-February, got changes to your
00:07CFO and COO that happened in March and April.
00:10What's what happened that you guys said we got to do something different?
00:16So we have been working on the same technologies at HomeAdvisor for over 20 years from the Angie's List and
00:25Handy Business is a little less.
00:26But we've had three old platforms we've been working on.
00:30The older your technology gets, the more code is layered on top of other code, slows you down, makes innovation
00:36harder.
00:36And we have been plotting a path to a new platform, but we have just decided now's the time we
00:42needed to move quicker.
00:43The big catalysts are what I would call the biggest changes in technology in a generation, which we really saw
00:50February when you saw things like OpenClaw, Cloud Opus 0.6 released.
00:56And now our engineers are able to move a lot faster and the capabilities we have are a lot greater.
01:01And it's time for us to stop fighting the old platform and kind of move into the present, if you
01:05will.
01:06So what does that look like, not just from, you know, this is a two-sided market.
01:10So what does it look like from the provider and the home services professional standpoint, but also from the customer
01:16standpoint?
01:17So if you think about the homeowner customer, I think we are going to be able to have a more
01:22nuanced, more natural language conversation with the homeowner.
01:26Homeowners are not natural experts at describing their problems that they need pros to work on.
01:31And we're going to be able to ask better questions, upload photos, and get to a better identification of the
01:36details that need work, give the homeowner better estimates.
01:39So we'll be going there over the course of the next year.
01:42The first stage of our new platform is to put the homeowner experience into place over the course of this
01:46year.
01:47On the pro side, we're going to build a set of tools for the pro.
01:51We referred to it in our release and our letter as the Engie Pro Chief Revenue Officer.
01:56Pros are very good at doing work.
01:58They're not always good at calling the homeowner right away.
02:01They're not always good at making sure there's a sales trained technician or a salesperson at the appointment.
02:06They're not always good at following up.
02:08They're juggling a lot of balls in the air.
02:10We believe that agents really change the game for pros.
02:14You can already see it out there.
02:15There are startups out there doing pieces of this.
02:18We believe we can build a toolkit to make sure that our pros win jobs at a much higher rate,
02:24gets more value from the platform.
02:25And then if our pros are winning, the homeowners are getting more value from the platform, too, because their jobs
02:31are getting done well by our pros.
02:32So what are the changes that happen internally at Engie to facilitate something like this?
02:37And what can investors understand about how this changes margins, what it looks like for the business, and where they
02:45actually see differences?
02:47So internally, we need to change the way our teams work and the way they code.
02:53So what Cloud Opus 4.6 did, and you can read about all over the place, is that now you
02:59can not only write code, but you can write more code, and you can check code using AI.
03:04Now, you still have to have engineers who understand systems, understand the business, and understand the optimal product.
03:10They also need to understand how to test and spot issues in the code.
03:13But there's really a game changer there that it's going to allow our organization to move much quicker.
03:19One piece of what we're doing is we were midstream on building our homeowner experience afresh.
03:25We're now writing some of that with AI, but we're going to rebuild our entire pro backend much faster using
03:32AI.
03:32So effectively, our teams are going to move to AI-first coding.
03:36So we're going through a really material transition with our product technology, UX, and data teams to make sure that
03:43we can do this effectively.
03:44But we think it's going to double our speed to market.
03:46You know, some analysts are out with different views.
03:49I'm just going to read from Benchmark's note.
03:52They say, we have no idea how much this is going to cost and over what time frame we should
03:56expect a return on investment.
03:57What would you say to Benchmark?
04:00So Dan is a great guy, very, very smart guy.
04:04I think that we are going to fund it effectively internally.
04:08In other words, we're not going to add headcount.
04:10We are probably going to add some token and AI software costs, but not massive.
04:16So we're going to fund it internally.
04:17I think what we're really talking about is opportunity costs, where the reason we decided to pull our guidance is
04:23instead of working away at our old platform to optimize revenue and deliver product changes that deliver revenue, which ultimately
04:30are hard to do on the old code,
04:32we're going to go fast forward to the new platform and be able to develop from there.
04:37We've estimated it's going to take us a year or so to get to the new platform.
04:40And in that time, we're also going to start building our first pro agents, which we don't plan to monetize.
04:46We plan for it to improve the experience of our pros and maybe ultimately we'll monetize it if they want
04:51to use it for other leads from other platforms.
04:53But effectively, what we said is we're not going to talk to you about where our revenue is going for
04:58a year.
04:59We gave some very rough directional comments.
05:02And so that's really going to be the cost.
05:04Hey, one of the things, well, and also in that note from Benchmark that we also got Jeff, he said,
05:12given the out-of-the-blue nature of the new game plan,
05:16we suspect investors are simply going to assume that Angie's core business model just is not working.
05:22The strategy could work out, but a lot of questions have to be answered for investors to get even remotely
05:27comfortable.
05:28Is that the case, that the core business model was not working?
05:32And I bring up to the decline in revenue, 56% drop in network revenue related to the implementation of
05:39homeowner choice last year
05:42as a practice of letting homeowners on the platform select which professionals they match with.
05:46Was it a strategy mistake?
05:47And is the core business not working?
05:50Because is this just a case about creating velocity?
05:53Yeah.
05:54The core business is working quite well.
05:56Well, fundamentally, if you look at Angie over the last few years, we've gone from $1.5 billion to roughly
06:02$1 billion in revenue in the last few years.
06:05Most of that is giving up less profitable and lower quality revenue.
06:09So we've actually made a decision to move off what you might have termed an inflated model,
06:13bring it down so that the quality of the experience is much better for the homeowner and for the pro.
06:18You can see that.
06:20Our NPS has moved 30 points over three years.
06:22That is a cataclysmic change in the world of NPS.
06:25Our pro churn has come down 30%.
06:28We see that our win rate for pros has moved directionally about the same amount in terms of improvement.
06:34So we've dramatically changed the experience.
06:36Yeah.
06:37We had a bit of an overbuilt revenue base, but we've pivoted.
06:39And we still have the strongest band, the best acquisition machine, and the largest pro network of anybody in our
06:46space.
06:46Right.
06:47And we're spinning the flywheel as we go through this change.
06:49Jeff, real quickly, 20 seconds.
06:51How long is this going to take to kind of have an impact positively, much more positively, real quickly?
06:58We think we need a year to get our new platform in place and build out the first set of
07:02agents.
07:02But we think we should start seeing good moves by the end of this year and start accelerating our revenue
07:07in 2027.
07:08We'll see you next time.
Comments