Heroic Investor Overview

NOVEMBER 2012

THE EASIEST WAY TO FIND A TRUSTED HANDYMAN
HOUSE CLEANER
GARDENER

HEROIC INVESTMENT OVERVIEW / 2012
WINNER RUNNER-UP, TECH

FINDING HOME IMPROVEMENT PROVIDERS IS FRUSTRATING

Mary Jeff

The Homeowner The Handyman

•  Runs a chaotic household •  Handyman for eight years
•  Needs a handyman, but •  Needs more work and current
doesn’t know where to look marketing isn’t working

2

HOMEOWNERS PREFER REFERRALS FROM FRIENDS & NEIGHBORS

“A bunch of my
neighbors use the same
person to mow their
lawns, so we just used
them.”
- Mary

YET SERVICE PROVIDERS ARE SPENDING AD DOLLARS ELSEWHERE

“What makes it hard for
people to book my
services? Establishing
trust without the benefit
of a mutual contact.”
- Jeff

3

THE FUTURE IS SOCIAL RELEVANCY

PAST
PRESENT
FUTURE

“I don’t trust the phonebook; “Online search is “I could be a great resource for
there are no referrals to overwhelming and does not my neighbors and they don’t
cross-check against the do a good job at showing even know it!”
business’ claims, which is for me people who work in my
me is huge!” neighborhood.”

- Diane, homeowner - Courtney, homeowner - Meg, Homeowner

4

HEROIC PROVIDES AN INSTANT VIRTUAL REFERRAL

Now Mary can instantly view recommendations from
her friends and neighbors

Mary tells Heroic what she needs Mary is matched with a Hero based on Mary books Jeﬀ after reviewing his
and when she needs it done ratings, location and virtual referrals profile. Jeﬀ meets all of Mary’s
qualifications – a perfect match!

HEROIC INVESTMENT OVERVIEW / 2012 5

HEROIC HELPS PROVIDERS GET MORE BUSINESS

In 20 minutes Jeff creates a polished profile that
helps homeowners discover his services

Jeff would like more business – Jeff Jeff completes a six-step application that Jeff’s profile is complete; he’s now
clicks on the “Become a Hero” link ends with a payment option ready to receive leads!

6

FREE FOR USERS - HEROES PAY MONTHLY FEES

Instant virtual referrals – see who your
friends and neighbors recommend
User FREE My Heroes page
Find Heroes
Contact Heroes
Mary

Full Hero profile page

HERO $29.99/MONTH Email and text alerts for jobs
Portfolio section for photos
Appear in User dashboard and feed

Jeff

Full Hero profile page

Enterprise $99.99/MONTH Email and text alerts for jobs
Portfolio section for photos
Appear in User dashboard and feed

Handyman, Inc.

MANY MORE INDEPENDENT WORKERS ARE ON THE WAY
“By 2020, an estimated 50% of the US workforce will be made of independent
or freelance workers. A stunning 400% increase in less than a decade.”
- The Wall Street Journal

REPRESENTING A MAJOR OPPORTUNITY


HEROIC GENERATES HEALTHY MARGINS ON EACH SUBSCRIPTION

ONE-YEAR SUBSCRIPTION ECONOMICS, INDIVIDUAL

GROSS MARGIN OF 50% FOR INDIVIDUALS

GROSS MARGIN OF 85% FOR SMALL BUSINESS

9

HEROIC DRIVES CUSTOMER LEADS TO HEROES

FINDING MARY ONE MARY, MANY LEADS

SEM and SEO Referral Program

Promotions

Open Graph

Partnerships

10

THIS IS A TEAM WITH MARKETING AND TECHNOLOGY EXPERTISE
THIS IS A TEAM WITH MARKETING AND TECHNOLOGY EXPERTISE

ETHAN OTTERLEI DAN LINSTROTH
CO-FOUNDER & CTO CO-FOUNDER & CMO
- Founder Book a Lesson and Velolet - Freelance marketing expert
- Development expertise in Ruby, - 50+ team management at
PHP, JavaScript and MySQL Edward Jones
- University of Minnesota, B.S. - Purdue University, B.A.

REED ROBINSON JUSTIN BARRETT
CO-FOUNDER & CPO CO-FOUNDER & CEO
•  - Founder Usuits •  - Founder Holy Cow, Dirty Work
•  - Consumer research marketing •  - 9+ years expertise B2B/B2C
expertise, Iconoculture marketing
•  - University of Minnesota, •  - University of Minnesota,
Carlson School Carlson School

STARTUP EXPERIENCE FORTUNE 500 EXPERIENCE

Suits
12

HEROIC BECOMES THE FIRST ONLINE REFERRAL ENGINE

TOP COMPETITION

13

HEROIC IS ON A PATH FOR RAPID GROWTH
$60M

$44.2M
$40M
Revenue $28.9M
Operating
Expenses
$20M
$12.6M
$7M
$1M $20k $1.1M $970k

.2 3 35 95
.8 42 620 2230
.9 62 941 2812
1 3 13 33

20 970 12,618 44,271
(110) (1,115) (7,042) (28,912)
(96) (223) 5,460 14,981
SEED
SERIES A
SERIES B 14

USES OF CASH AND MILESTONES
Unit
economics
$250k

$450k

$240k

$60k Minneapolis/St Paul market formula

$100k 50,000+ leads thru 2013

$1.1M 5,000 active Heroes thru 2013

15

NOW, BUYING HOME SERVICES IS EASY

GIVES MARY AND JEFF WHAT THEY WANT

Free referrals from More work at an
the people she trusts aﬀordable price

…and it’s a connection worth $31 billion
16

APPENDIX

17

HEROIC IN THE PRESS

18

FINANCING HEROIC GROWTH

Raising an additional $630-930k Seed convertible oﬀering
•  Investors include Gene Munster, Rob Weber, Ryan Weber, Paul
Linstroth, and John Otterlei
•  Discount rate of 25% to Series A
•  Targeted closing in next 3-4 weeks

Use of proceeds / Product Roadmap / Goals
•  $200k-$300k: hire 2-3 FT engineers, 1 PT Designer, 1 PT Marketing/
Customer Support
•  $350-$500k: marketing campaigns and lead acquisition
•  Get to 5k active Heroes; 50,000+ connections thru 2013
•  Minneapolis/St Paul market formula

19

ALPHA RELEASED, BETA IS IN PROGRESS

Alpha Beta
Product Discovery Sharing
Market Minneapolis/St Paul Adding Denver/Chicago
Revenue Per Lead Subscription
Financing Seed Series A
Metrics 3,000 Hero Applicants, 2,000 Leads 5,000 Active Heroes/50,000+ Leads
20

ADDITIONAL REVENUE STREAMS

ADDITIONAL REVENUE OPPORTUNITY: $45B+

EMAIL AD SPACE

MOBILE AD SPACE

21

HEROIC MARKET GROWTH

SEED
SERIES A

SERIES B

Hero applications: 2,754 Heroes active: 5,000+
Users: 1,500+ Users: 50,000+
Heroic lead requests: 1,850 Heroic lead requests: 75,000
Sales email signups: 5,000+ Sales email signups: 50,000+
Landing page conversion: 39% Landing page conversion: 40%

22

CASE STUDY
A good company…
•  1.5M subscribers, 40K reviews per month
•  Revenue last fiscal year was $90M
•  Total venture funding $135M
•  Valuation at IPO $805M

But…
“The company made $38 million so far this year. Its selling costs -
the cost of a call center full of sales persons pitching merchants for
new business - was $22 million in the same period. (Those costs are
rising, too, but at least Angie's spends less than it makes to acquire
new merchants). All that suggests Angie's might be better oﬀ if it
abandoned its unprofitable membership side and made its site free,
and then simply sold ads to plumbers.”
11/11, Jim Edwards on Businessinsider.com
23

LISTENING TO CUSTOMERS

24

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