For 30 years, Greg Spates painted buildings by day and built online businesses by night. He was one of the first contractors to take advantage of online classified ads in the late 90s – when exposure was vast and leads were cheap.
Throughout the early 2000s, online classifieds like Yelp and Angie (formerly Angie’s List) helped contractors reach new clients. Today, they’re more likely to steal them.
Google’s search ranking algorithm typically favors websites with more pages. Classifieds can therefore use their networks of contractor service pages to climb the ranks, monopolizing search results. As they funnel leads away from personal contractor webpages, contractors have to buy their lead-generation packages or lose access to their local markets.
Greg created his startup, ServiceBookie, in 2021 to help home maintenance contractors reach customers online without joining services like Yelp or Angie. He marketed his service by creating two Facebook groups now boasting thousands of members. In under two years, his business is on track to make $250,000 in ARR and is expanding into new markets like house cleaning and pet services.
An Original Internet Hustler
Greg obtained his painting contractor license in 1995 while in his 30s and began dabbling in internet businesses around the same time. He was one of the first to purchase cable internet, taking advantage of the quick speeds to create webpages and online classifieds for his painting business, Spates Painting, in 1998.
As an internet entrepreneur Greg was always slightly before his time. He created a homework help hotline long before they were commonplace but couldn’t persuade schools to refer his business. “Getting contracts with schools was such a pain back then,” he says.
In the mid-2000s, Greg joined a group of friends liquidating stock from big box retailers like Macy’s and Bloomingdale’s. They created a website called justoc.com and made over a million dollars in a year. But like most in the liquidation business, they sold after six years when platforms like eBay became too competitive.
Switching ventures every few years would discourage many, but not Greg. For him, starting businesses isn’t just about the money. He loves the challenge. “It’s always been like a jigsaw puzzle for me. I love doing stuff no one has done. When things are new, they’re not easy.”
While working on these side ventures, Greg supported himself and his family through his contract painting company. Business was good because he’d listed his services on online classified pages when they were cheap. “They only charged five to ten bucks per lead back then,” he says. “There wasn’t much competition at first and it was great.”
The Yelp Mafia
At first, online classifieds and review sites like Yelp were handy for contractors like Greg. They made it easy to rank at the top of Google search results for a low price.
Greg says once venture capital entered the online classified space, the easy days ended. As classifieds looked for more ways to earn money, they increased the number of leads contractors had to pay for. Greg argues many of these new leads aren’t truly leads.
“Now these sites have third-party affiliates bringing in leads for them but many of those are empty leads,” he says. “Often they bring in people just casually looking at costs who aren’t interested in buying. However, you still have to pay for them.”
Even worse, these high-ranking webpages started taking business from the contractors they serve.
“They steal your leads and then sell them right back to you.”
“They’re like the mafia,” says Greg. “They dominate local Google search results and can attract people to their site by using your name. When a customer fills out the form to contact a specific professional on their platform, they send the form out to your competitors too. At the same time, they still charge your business thirty-five to a hundred dollars for that lead. They steal your leads and then sell them right back to you.”
Greg isn’t the only one concerned. A documentary called Billion Dollar Bully¹, released in May of 2019, followed a handful of small business owners slighted by Yelp. Many claimed Yelp would go so far as to leave bad reviews for businesses that refused to purchase services like ads.
Review sites like Yelp wield so much power because they provide online exposure. Contractors are rarely tech-savvy and ranking high on Google with SEO is usually outside of their expertise. But Greg isn’t like most contractors. “I thought, I’ll just do what they’re doing but better,” he says.
And so, in 2020, Greg created a Yelp competitor specifically for contract painters called Painters Hub.
Marketing With Groups
If you were using Facebook in 2020, you’ll remember your feed frequently suggested groups you should join. These could be anything from local buy-and-sells to cat enthusiast groups. An active Facebook user, Greg saw its organic push for groups as an opportunity to market Painters’ Hub for free.
That year, along with his new website, Greg created a Painters’ Hub Facebook group and grew it to 4,000 members through his network and Facebook ads.
As the Painters’ Hub group grew, it attracted other home contractors like house cleaners and handymen. Greg then changed his Painters’ Hub website to ServiceBookie to accommodate his growing clientele. He also created a second group for contractors of all types and grew it to 15,000 members.
Originally, Greg marketed Painters’ Hub and ServiceBookie to his Facebook communities, but he’s adamant these groups needed to be real communities, not just marketing hubs, or members wouldn’t stay.
“You need to participate in these groups to make sure conversations happen,” he says. “If you don’t have time to do it, get some people to monitor the pages for you. I know a couple of guys who like to be on Facebook and mentor people. I brought them on just for that and they do it in the groups for free. Sometimes I throw them a few bucks to keep them motivated.”
Today, he tries to scale back the amount he markets in both groups.
“I’m over everyone just advertising,” he says. “Now that there are so many people, I’m pulling back on advertising unless it’s creative. Generally, if any of the members want to promote their business, I tell them to sign up on my marketplace. Facebook sends more people over to me now than it used to once I started implementing more content and less marketing.”
Ever the entrepreneur, Greg capitalized on the success of his Facebook groups to launch another business running personal Facebook ads for contractors.
“I find it easier to bring in leads with those than Google Adwords. We’ll run a seven-day ad for five hundred dollars and push it to people on Facebook and Instagram. We try to make it nice and artistic.”
Classifieds For Contractors By Contractors
On ServiceBookie, contractors can sign up for a free profile with a single page about their business. If they purchase an annual subscription, they can write as many web pages as they want.
“It’s best to do a bunch of different pages for each product you’re selling,” says Greg. “The more content you have, the more exposure on Google because they index by webpage.”
Because it uses the same strategy for ranking as its competitors, ServiceBookie today possesses a top-ranking position on Google searches for contractors – alongside Yelp and Thumbtack. “The more vendors I have in my marketplace, and the more content I have, the more Google likes it. In turn, our customers obtain more organic leads,” adds Greg.
While many businesses sign up for ServiceBookie daily, Greg needs to push past resistance from contractors burned by classified sites in the past. “You just have to keep marketing and keep telling them the story until they finally get it. The more people I have in my marketplace, the more believable it is that we have a good thing going.”
The Service Industry Has Expanded Incredibly
Today ServiceBookie expands outside of traditional contractors, even listing mortgage loan contractors. In the future, Greg thinks his platform will include many more house cleaners and handymen.
“I posted in the group that I was making a list of house cleaners, and within two days, over two hundred people DM’d me,” he says.
Greg also has his sights on pet services – specifically for dogs.
“When I’m driving around Orange County, I see these dog-washing trucks, people walking dogs, and people house-sitting dogs. There are so many angles to the pet industry. There are a bunch of pet service websites but they’ve been out there a long time and charge fees on top of fees for everything. We can beat them because we’re a transparent, annual subscription,” he says.
Wherever he directs ServiceBookie in the future, Greg is certain he is in the right industry.
“The growth of the service industry is $15 trillion now and was $50 billion before Covid. All of these disrupting websites created a ton of service jobs. You don’t have to join a franchise for $400,000 to get in a painter crew and start your own business. You can start right away with these platforms.”
As a seasoned entrepreneur, Greg passes on these parting words for any founder trying to create a startup or marketplace like he is:
“Build something bigger than yourself and work hard.”
“Never quit. If you don’t get in there and try to do it, it definitely won’t happen. Today’s marketplaces might be making people into millionaires and billionaires, but for them, it isn’t about the money. It’s because they had such huge passion. Build something bigger than yourself and work hard.”
Resources:
¹Billion Dollar Bully highlights why Yelp feels unfair. (slate.com)
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