David Vitek, co-founder and CEO of hipages, a web-based service for finding tradespeople, discusses how his aim of disrupting the status quo in the home improvement industry now converts some $550 million in work annually.
My Business: Why did you start your own business?
David Vitek: I started the business 12 years ago, with my co-founder and childhood friend Roby Sharon-Zipser.
Originally we started off in the natural health industry, because there was a huge lack of understanding around natural health practices like acupuncture or naturopathy, and it was also difficult for people to find relevant professionals online.
For this reason, we created an online directory called Natural Therapy Pages, so that Australians could easily get in contact with natural health professionals in their area.
We soon realised that the same problems extended much further than the natural health industry and onto the much larger trades and home improvement industry. We saw the process of working with tradespeople as being littered with friction points, and we believed that we could vastly improve the overall experience.
This led to the creation of hipages, which started as an online directory before quickly evolving into an on-demand platform for hiring trade professionals.
MB: How has your business evolved since its inception?
DV: Founded in 2004, hipages has grown to become the largest generator of job numbers and value in Australia for home improvement and renovations, and is the most-visited site in the building and construction space, according to [online competitive intelligence provider] Hitwise.
We’re now listing over $1.35 billion worth of work annually, helping over 1.5 million Australians get projects done around the home. We receive a job request every 29 seconds, helping over 70,000 tradies get more work across Australia.
Over the years, we’ve received great backing from Ellerston Capital, Australian Ethical Investment, KTM Capital, Kestrel Capital and, most recently, from News Corp in 2015.
MB: What are some of the challenges you’ve faced and how have you overcome them?
DV: The most considerable challenges have been in relation to the fragmentation in the industry we operate in.
In the early stages, it was a challenge to convince tradies that an online platform like hipages could deliver them a tangible result from their advertising spend. We spent a long time individually speaking to each of our now 70,000 tradies, performing background checks and ensuring they were seeing rewards.
The hard work paid off: we built a system for tradies to receive leads and accept the jobs that work for them. For consumers, this meant that every business was pre-vetted and reliable.
The business transformed from a directory business to one that connects tradies to consumers for home improvement work, [with annual listed jobs] totalling approximately $1.4 billion.
At an estimated conversion rate of 40 per cent, this results in $550 million worth of work [being completed directly through] the hipages platform.
MB: What’s the best business decision you’ve ever made?
DV: The best business decision hipages has made was to always focus on innovating and evolving our service. We started as a directory back in 2004, and if we didn’t evolve our service, we’d be obsolete by now.
Continually making our service reflect the needs of our customers and businesses, is what makes our business such a huge success, even after over a decade since launching.
We’re now leading the way in on-demand services and are working on the next big thing in home improvement.
MB: What has it meant for you to be recognised as the Aspiring Business of the Year and Medium Business of the Year in the 2015 My Business Awards?
DV: We have a team of hundreds of hard-working team members who’ve developed one of Australia’s most successful home-grown companies in our space. To be able to recognise their hard work with two My Business Awards is a huge pleasure and testament to our team.
In a fast-paced and rapidly evolving business landscape, hipages has stood the test of time by innovating and ensuring our customers get the service and opportunity they need, as they grow and as their needs change.
MB: Share with us some of your bigger successes.
DV: While we have huge penetration in the online tradie space, the size of the market means that this represents less than 2 per cent of the total home improvement annual spend. Our main competitors remain the more traditional methods (word of mouth, Yellow Pages, Google search).
Most consumers don’t know that there is another, better way to find tradies. One of our big wins was securing investment from News Corp. The investment is helping us in the next phase of growth, to get more exposure among customers still using traditional methods of finding tradies.
MB: Do you have a business motto?
DV: There’s a lot more to a great business than just a great idea. Building a great business takes drive, determination, great team management and the passion to evolve and adapt a business to change.
You can get lucky early and strike gold, but for most of us it takes time. You need a lot of patience and persistence. If you are persistent for long enough, then luck will find you.
It’s important to build a great culture and a great environment to work in, because you will spend most of your waking hours there and it will make it much easier for others to join and want to stay with you.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
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