On Campus

Ask Her Before You Hire: Angie Hicks (MBA 2000) and Angie’s List

Angie Hicks (MBA 2000) was recently at lunch in Indianapolis with several members of her consumer review service, Angie’s List, when one member began telling her about an encounter he had with a pest control salesman. After hearing a brief sales pitch at the doorstep of his home, the member stepped away to check Angie’s List on his computer while the salesman waited patiently outside. After five minutes the member returned and said, “I’m sorry, but you didn’t make the grade.”

“I hear these stories all the time and I love every one of them,” Hicks said. “People tell me they wouldn’t ever hire without looking on Angie’s List first.”

Angie’s List, where Hicks is co-founder and Chief Marketing Officer, is an online database that aggregates customer reviews across more than 550 categories of home, health care and automotive services. Plumbers, electricians, carpet cleaners and dentists are all reviewed and given a grade ranging from A to F. The company has 1.7 million paying subscribers in 219 local U.S. markets who post 65,000 new reviews per month.

The members behind these reviews—like the man who denied the pest control salesman—have become the focus of the company’s television commercials as Angie’s List has ramped up its expansion efforts. In one of the ads, a satisfied member says, “Angie? I’ve got her on speed dial!”

Hicks is also featured alongside her loyal customers in the ads, which debuted a couple years ago, marking the first time she has appeared on television since the company’s founding in 1995.

“The most common question we got over the years was ‘Is there an Angie?’” Hicks recalled. “So we made the decision that it would be good for the brand to have me out there.”

Now, she’s adjusting to her new life in the spotlight.

“I’m a pretty quiet person, and in my everyday life it’s not a big deal because I have a pretty small circle of people in the Indianapolis community who knew me to begin with,” she said. “But, yes, when I’m on an airplane, I do get noticed, which is a little unnatural for me, but it’s neat to see how far the brand has extended.”

Indeed, the company has expanded at a rapid pace. In the last five years, revenues have increased from $34 million to $156 million, growing 73% in 2012 alone. In 2011, the company raised $130 million in an initial public offering on NASDAQ under the ticker ANGI. Since then, the stock has traded up almost twenty percent.

It has been a long but entertaining ride for a company that has its roots prior to the Internet age. Hicks’ co-founder, venture capitalist Bill Oesterle (MBA 1992), came up with the idea for the business after using a service in Indianapolis called Unified Neighbors to find contractors to renovate his house. When he moved to Columbus, Ohio and was again confronted with a new home in need of a face lift, he had the idea to replicate the Unified Neighbors model in Columbus. Oesterle called Hicks, who had interned for him during college, and asked her if she wanted to help him start the company. She soon became the first employee of Columbus Neighbors, later renamed Angie’s List on her behalf.

In 1996, Angie’s List bought Unified Neighbors and relocated to Indianapolis. At the time, consumers called into the service and Angie, using the same phone she had in her bedroom during high school, read them reviews in real-time. When she wasn’t answering the phone, Hicks spent her days hustling from door-to-door signing up members and collecting customer reviews.

“I built out the list at the same time that I was out selling memberships,” Hicks remembered. “I would literally ask people, ‘Can you give me a list of everyone you have ever hired and what you think of them?’ But that wasn’t always fast enough. From time to time I would get a call from a member asking for something I didn’t have, so I would tell them, ‘You know what, let me get back to you later this afternoon.’ I would then call other members to ask them if they had a recommendation for that particular service, and eventually the list grew.”

After three years building the company from the ground up, Hicks began to think of business school as a logical next step.

“I had a lot of experiences that were difficult to synthesize,” she recalled. “We had done an acquisition. I had done sales, advertising, and many other functions. But I had no formal business training. Bill suggested it would be a great time for me to go to business school, so I applied and soon I was at HBS.”

Hicks found herself in somewhat of a unique position entering business school in the late nineties. Many of her classmates were leaving early to start their own companies with no prior management experience, whereas she had already founded Angie’s List and was back in school for the formal training.

But although she continued to work on Angie’s List every week while at HBS, Hicks still found the time to reflect that she had promised herself.

“HBS was an amazing time for me. It was an opportunity to think deeply about all the experiences I had. I was 22, being guided by a great group of mentors on our board, and going to HBS allowed me to step back and realize, oh, maybe that’s how I should have handled this situation, or now I understand why we did this one thing this way. It was a great time to take in everything that I had come across.”

After HBS, Hicks rejoined Angie’s List as Chief Marketing Officer. Today, she still leads the company in that role as it continues to defy the traditional free-to-consumer model by charging its members a subscription fee to post and read reviews online. Hicks explained the rationale behind the business model:

“People are willing to pay for quality information. At Angie’s List, we don’t allow anonymous reviews because we want accountability in the system. Therefore, the value for the service provider is immense. People don’t join Angie’s List just to join Angie’s List. They join when they have a need. So the odds that they will complete the transaction are very high. I see companies that drive fifty percent of their business from Angie’s List. They have learned the process of taking extra care of the members and that pays off tremendously for them.”

As technology continues to evolve, Angie’s List will also need to adapt. Just as the company moved all of its reviews online and now offers a mobile app, the future will require new strategies for catering to both members and service providers.

“Today, we’ve really understood how you find the best company in town,” Hicks said. “But now the question is, how do we help facilitate the communication with those companies? Once you’ve found the company, how do you make sure that they respond to you, that they show up on time, all those things? So we’re really working on putting rules and tools together to continue to improve the cycle of connecting consumers and service companies.”

Executing that strategy will require taking risks and Hicks’ message to current MBAs seeking entrepreneurial opportunities is that they must be willing to take a plunge.

“I was never the person who was going to be the entrepreneur,” she said. “If my college friends looked back, they would say, ‘she’s not the risk taker.’ But sometimes, opportunities present themselves and it’s a skill to be able to recognize them. People ask me, at 40-something, would you start a business? Well, it was a lot easier at 20-something. At 22, I was responsible only for myself. So don’t be afraid to take that risk at this point in your career because it’s a great time to do it.”

 

April 7, 2013
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