I wanted to take a quick moment today to congratulate RepairPal and its indefatigable CEO David Sturtz on news of the company’s recent $4m funding, led by new investor Tugboat Ventures and some prominent angels. David is a longtime friend – he and I having shared an office some years ago at a technology-focused investment bank – and I have had the pleasure of watching RepairPal take shape from its earliest and humblest origins to the industry leading company it is today. Watching that maturation has been a rewarding experience and there have been a number of “teachable moments” – for both of us.
Virtually all early stage companies evolve dramatically as they add talent, sharpen their focus, and learn things about their respective markets and customers. Some become almost unrecognizable as they adapt their businesses to address market realities. Others still hew closely to the original idea but learn to make adjustments around how and where they choose to compete in their ecosystems. What has impressed me about David and his team is how they have held firm to their original hypotheses about their market, how they invested sufficient time and energy to prove (or disprove) those hypotheses, and how they have always sought to apply new insights and revelations in a way that the business has been able to leverage.
RepairPal, for the uninitiated, provides accurate auto repair and maintenance information for almost all passenger vehicles within every zip code in the country. The company has built patent-pending technology from a team of factory-trained and ASE-certified technicians, which generates more than 70 billion unique RepairPrice Estimates. It also has the most comprehensive directory of auto repair facilities in the U.S. and a proprietary database of each model’s common problems. [faulty timing chains, anyone?]. The idea, simply enough, is to be able to see the expected cost of a typical repair and then see all the local shops that can perform that repair, along with appropriate reviews and other content.
RepairPal is an attractive business on a variety of levels, but I am most excited by how the company is cleverly applying a host of new web and database technologies to remove the opacity that effects much of the $180 Billion auto repair market. However, unlike many other B2C and B2B web businesses of the past, RepairPal is delivering this new transparency without necessarily pitting repair shops against one another or enforcing price compression that can have the effect of undermining the participation of shops on the network. Bringing transparency to an infamously opaque and perplexing industry is not a simple task. Too many other web businesses that have sought to create this kind of ‘marketplace function’ in their respective industries made the mistake of going after quick and easy revenue by seeking to lock up service providers before they fully developed a product that was truly compelling. Too often the result has been an adverse selection problem whereby lower quality providers (dentists, contractors, plumbers, etc) are disproportionately represented while higher quality providers stay away — the logic being that higher quality providers don’t seem to require the additional business or marketing opportunities that inclusion in such marketplaces can sometimes provide.
I believe David and his team succeed because they chose to focus first and foremost on building a robust price estimating engine that drew users to the site and great early reviews by reputable auto authorities. In turn, those usage metrics organically created a network effect whereby shops felt compelled to be included in the RepairPal network. Solid, reputable strategic partners have followed closely behind and become part of the RepairPal network.
Kudos to the RepairPal team. Keep up the great work.