Editor's Note, February 19, 2013: Angie's List reported profits on Feb. 13 for the first time in the company's 17-plus years, showing a take of $2.4 million in its most recent quarter. The story below on founder Angie Hicks hails from the May 2006 issue of IM.
Angie Hicks settles into a loveseat at an immaculately remodeled Lockerbie home to tape a few of her regular news segments for WISH-TV. Today she’ll do one piece on mortgage refinancing and another on companies that are in the Angie’s List Penalty Box—her company’s hall of shame. Two businesses enter the Box this month, meaning Hicks and her namesake company are cautioning consumers about using their services. To the guilty parties—a lawn-care company that failed to fulfill a contract and a concrete firm tagged for poor workmanship—Hicks’ declaration is a costly black eye, a juicy bit of home-improvement gossip devoured by tens of thousands of empowered consumers. Yet she delivers the news in a straightforward, non-condescending manner, like a grade-school teacher announcing the cancellation of recess.
With her no-nonsense haircut, conservative outfit, and understated demeanor, Hicks’ approach is a far cry from the styles of other top businesswomen—Oprah, Martha—who market themselves by their first names. Her company, a self-proclaimed “homeowners’ grapevine,” allows consumers to file reports about the service providers they use—firms in more than 250 categories, from plumbers to funeral directors, boat upholsterers to private investigators. More than 300,000 subscribers in 33 cities rate providers on an A to F scale, and consult the ratings whenever they need any sort of service. The roster of Angie’s List members and the cities it serves is growing like crazy, and the company plans to be in the country’s 50 biggest cities by the end of 2007. Over the past decade, Angie’s List has grown to become a well-known national brand, though Angie herself is a reluctant celebrity.
Hicks, 33, who grew up in Fort Wayne, was the first in her family to go to college. She graduated with an economics degree from DePauw University in 1995—she says she was a “math geek”—and had a lock on a job with the Arthur Andersen accounting firm in Indianapolis. But just before she embarked on that career, she got wind of a no-guarantee gig that involved knocking on doors in Columbus, Ohio. It sounded immensely more interesting than the job with an accounting firm, but much riskier. It was a difficult decision for a sensible Hoosier. But then her Depression-bred, money-conscious grandfather surprised her by saying, “What do you have to lose?”
So she went to work for Bill Oesterle. He had hired Hicks to work for him as a college intern at CID Partners, an Indianapolis investment-capital firm, and he remembered her as being exceptionally smart and hard-working. He was living in Columbus and trying to restore an old house, a task that had been much easier when he lived in Indy, thanks to a company called Unified Neighbors, which helped homeowners find reliable contractors and other service providers. Columbus didn’t have a similar service, but Oesterle thought it could. So he collected a year’s worth of seed money (less than $50,000), tracked down Hicks and convinced her to start Columbus Neighbors, a business structured much like the Angie’s List of today—with one major difference. Now, the company acquires a new member every 10 minutes. Ten years ago, signing up one a day was a windfall.
“It was horrible and excruciating,” Oesterle recalls. “Angie’s phone never rang. She’d call me up to have coffee; she’d cry for an hour. On the third one of these she cried so hard she couldn’t speak—she was blubbering. The only words she got out were ‘I’m not going to quit.’”
Hicks literally was going house to house to try to convince consumers to sign up for the new service. She survived doors being slammed in her face, membership drives that resulted in only one new member, and seven-day workweeks. After all, she had to sell the service, sign up new members, renew old members, take phone calls from members and maintain the list—which, before it went online in 1999, meant consulting the actual list every time a member needed a referral and updating the list every time a company’s rating changed or a new service provider was added.
Nearly a year into the job, Hicks’ perseverance began to pay off. Columbus Neighbors started running ads in weekly newspapers, which Hicks says was key to getting consumers’ attention, and she attended home shows and other events where homeowners looked for advice. Membership grew to around 1,500, not exactly a conquer-the-world figure but enough to believe the idea would work.
All that was missing was a better name. Candidates included The List, The Homeowner’s Fix and Find List, and Jackie’s List, named for the mother of one of the original investors. But none described what the business really was: Angie’s List. In May 1996, the name became official.
A decade later, the basic business model of Angie’s List remains simple: A member’s annual fee of about $45 provides access to the list (online or via phone). Ratings are tabulated in the list’s report-card format, graded from A to F on punctuality, professionalism, price, quality, responsiveness and overall performance. There’s room for more-detailed comments, too, which can range from glowing praise to don’t-let-this-guy-near-your-house. Companies that maintain at least a “B” average are permitted to advertise and distribute coupons in Angie’s List’s monthly newsletters, and the “A” providers are deemed “Super Service” companies, earning a mark of distinction that stands out in a Yellow Pages ad or on a company truck. Some businesses are savvy about asking their clients to rate them, carrying postcards stamped and addressed to Angie’s List, but in the end, the list works because consumers do the rating based on their own experiences. [Editor's Note: The annual fee for members in veteran Angie's List cities such as Indianapolis is $60-plus now, whereas newer markets have annual fees around $30.]
“It’s a nice feather in your cap. I probably get two to three new clients a month that are Angie’s List members,” says Gloria Heath, co-owner of Euro Motorworks, a far-northeast auto-repair shop. “Those people are generally a lot easier to deal with. They already trust you to a certain point because they’ve read favorable comments on the list.”
Companies that receive bad ratings do have recourse: Any firm that gets a low grade from a consumer can file a report telling its side of the story. If a company gets a C rating or lower, a complaint-resolution specialist from Angie’s List asks the customer if he wants help. If he does, and if the work was done in the last six months or is covered by a warranty, the specialist contacts the provider to get its story. If the company doesn’t participate, or doesn’t provide satisfactory resolution to the problem, it can end up in the Penalty Box, the most-read feature in the monthly members’ newsletter. Being in the Box isn’t necessarily a death sentence for a business, but it does mean 20,000 to 40,000 consumers in a given market may think twice before using that firm.
“People feel this is much more of a club than a service. They feel an obligation to give reports. They take a lot of pride in it,” Hicks says. “I thought that was a phenomenon in Columbus, but I see it in other markets as well.”
In mid-1996, with the Columbus market firmly entrenched, Oesterle, Hicks and their investors bought Indianapolis’ Unified Neighbors, which had 15 years of service in Indianapolis and Carmel and a membership base of nearly 5,000. Angie’s List spread to Cleveland in 1996, then Charlotte, North Carolina, in 1998. Angie’s List now has 135 employees—most in Indy, except for field managers in six other markets—and $9 million in revenue last year. Hicks herself, who owns a chunk of the company, took 18 months off from 1999 to 2000 to attend Harvard Business School. When she returned, the list was being moved to an interactive Web site, and her role was about to change. She needed to be the Angie.
“Our consumers have a desire to be connected to the matriarch,” says Scott Brenton, Angie’s List’s chief operating officer. “People want to understand more about her. It helps them understand more about the business.”
One could argue that there’s nothing to learn about Martha Stewart from watching her toss a salad, and indeed, there’s little to glean about Angie Hicks’ life from a three-minute segment on the 5 p.m. news. (For the record, she’s married with two children and lives in Meridian-Kessler.) You can tell that she wasn’t born to do television, but she takes it for the team.
“She’s sort of the quiet, thinking type, as opposed to the extroverted loudmouth,” Brenton says. “Stepping into the spotlight was absolutely challenging for her, but she understands that’s where her mark on the business could most be felt. She didn’t set out to make a name for herself as a public figure—perhaps because of that people think she’s genuine.”
Hicks’ role is one of adviser, not demonstrator. When it came time to discuss spring cleaning, her advice of wiping down your house with a hose and a soft-bristled brush was delivered from the couch with her hands in her lap, not in a soapy bucket. Yet it works, as evidenced by a schedule that keeps her in demand by local media in many markets. “It’s not necessarily my personality, but it’s great to get out and talk about the business,” Hicks says. “You get used to it—a little bit.”
While Angie’s List is trying to boost recognition for the woman who started it all, the company’s logo—designed by a member who won a contest—says it all. It features a woman carrying a clipboard in her left hand, sporting a “thumbs up” with her right, wearing a cap emblazoned with an A. But most notably, the woman in the logo, whose hair peeks out beneath her cap, is faceless.
Photo by Tony Valainis
This article appeared in the May 2006 issue.