Go ahead call me crazy!
Back in 2015 I had the idea to automate the way to price architectural services, my goal was to remove the typical RFP process (request for proposals) which I always considered a moronic waste of time, it takes time from everyone and nobody moves a finger into production for days or weeks. I wanted to use my time to focus on quality and speed rather than writing worthless documents or figuring out how to charge my customers; I thought that if Artificial intelligence, Machine learning, Blockchain and other technologies are possible my approach couldn’t be wrong, and that I could change the way customers buy services forever.
In order to achieve it, I needed to first identify all the variables that take part in the cost of production, how each variable affected cost, and I needed to also measure every possible step in the process E.g. How many square feet can be measured, drafted, modeled, etc per hour, and the range difference from simple to complex projects; I was on a mission. At first, I named it asbuiltsos then the name was changed to Floorhacker.
The initial pricing algorithms were really wrong, we had huge gaps of error and knew that we could lose money or overcharge our customers, but we also knew that by selling services this way we reduced cost of operations significantly; every service was requested, paid for and appointments were self-scheduled online, we literally killed the proposals, billing and waiting for retainers to get started, we were down to just production, it was a “Hole in one” scenario. Thanks to this competitive advantage we decided to have low rates which even with the huge gaps of error it wouldn’t compromise our profit or overcharge anyone, our prices would be the most competitive in the market.
Selling the idea:
To buy services the way we proposed it was a hard idea to sell, customers did not trust that pricing or the scope of work would be done correctly, yet because we have been providing services since 2001 our initial online customers where businesses who already trusted us; within a few months our referrals doubled, more and more development, property management, brokerage and design firms kept coming for more and referring new customers, most of them were still not comfortable with the idea of requesting the service and paying online but the did enjoyed how fast they could get us started and they could get results,
Improving the algorithms and managing uncertainty:
We were on the mission to keep the track of time for every step of the process for every project; the type of structure, the size of the project, the complexity in construction, the scope of work required, etc. We still do and after 4 years and 4 algorithm updates, I can say that we have cracked the code; this last updated created a path that now allow us to price very much any service and also opened the door to provide coverage anywhere in the US by calculating and including cost for room and board if necessary; it also set the path to begin building partnerships nationwide and scale up our model.
With online sales also comes uncertainty, there was no way to control influx of projects so how could we handle large number of incoming projects and how to deliver to customers in a timely manner. The reality is that it was a good problem to have and because customers would be ahead of scheduled when requesting services though us, even if it took us a couple of days more, we were still faster than anyone in the industry.
A vision for the future:
As years passed and having become the technology nerd I am, I have been blessed with the awareness of what technology can do, it’s capabilities and the sea of new solutions that are sprouting everywhere. All which also makes me believe that in a very short future aided by machine learning and artificial intelligence, we will be able to price services with higher accuracy that any human can. What in 2015 began as a curiosity, developed into a strategy and slowly transformed into a clear vision; to become the enabler or services on demand and the best technology partner for every service provider and customer up there.
We haven’t figured out every variable but now we know what to do, we have successfully test multiple other services that can complement our offerings and add value to customers, we can adapt our algorithms to different price levels depending or geography, and soon we will include additional pricing algorithms to cover for traveling and logging expenses when customers require services not readily available in their area.
Our next steps in the agenda is to establish partnerships with top notch service providers who can respond to sudden online requests, we will increase services coverage throughout the U.S. We currently operate in New York and Miami metropolitan areas.