# wyc's domain

## Small Business Spotlight: LawnMowingOnline.com

Posted on June 13, 2017
Tags: business, spotlight, disruption

My lawn was getting scraggly, and I wanted to do something before it started to raise eyebrows. I don’t care for keeping up with the Joneses, but if this something that keeps my neighbors happy, then it’s absolutely worth it. I value:

• Low cost
• Low effort to book
• No management overhead on my part

## The Value Story

I heard about LawnMowingOnline.com from some neighbors’ posts on NextDoor. Upon visiting the website, I immediately valued:

• “$19 Lawn Mowing” • No app to download • Straightforward instructions It looks like a standard Rails project, has no single-page app, and is as bare-bones as the service price. But I don’t care–my needs are being met, and it even has a nice mobile-friendly intuitive design. In short, my workflow went from: 1. Find multiple vendors. (20-30 minutes) 2. Call each one to get quotes. (20-30 minutes) 3. Each vendor insists to schedule a time to come over and give said quote. 4. Wait for vendors to show up late and give quotes. (15 minute property walk per vendor, 1-4 hours lost due to late vendors) 5. Gather quotes and call best vendors. (15 mins) 6. Negotiate and get pressured into a monthly service contract. (5 mins) 7. Schedule time for the actual work. (5 mins) 8. Pay$40-$100 per mowing. To: 1. Log in to LawnMowingOnline.com. (30 seconds) 2. Pick a date and time and pay$19-$25 fixed-fee. (2 minutes) 3. Receive confirmation. (5 minutes) 4. After the appointment, receive pictures of the mowed lawn. That is real value. For every vendor I have to talk to, I could call an additional prospective client or catch up with a friend instead–not to mention the time suck it is to schedule meetings in person. I am a repeat customer. My only gripe is that they don’t currently offer additional services such as hedge trimming, debris removal, or application of insect repellent. ## Business Model and Revenues LawnMowingOnline.com creates an online marketplace that matches consumers with lawn mowing needs and mowers. Two sided markets tend to have a subsidized side. In this instance, the consumers are clearly the subsidized leg, as mowers are always looking for more work because they have excess capacity. Consumers are enticed by low prices, and as long as those prices are above the mower reservation wage, then transactions should occur. In a sense, this is a form of price discrimination that targets lawn mowers with idle workers and equipment. To keep prices low, it offers them below-market but above-reservation wage rates, still a lot better for mowers than sitting there and doing nothing. I think this will eventually drive down the price of lawn mowing services and benefit the consumer. From their blog: The best part is helping the people that contract with the website to mow lawns. Many do not own large lawn mowing companies, they don’t do this full-time, they mow evenings and weekends to help make ends meet. #### Contracts for Future Work LawnMowingOnline.com reduces search costs thanks to technology, which provides a trusted escrow for the consumer, and brokers the transaction. The consumer demand is packaged into an attractive pre-paid request for service, complete with location details, yard sizes, and pre-determined pricing. This request for service is then presented to prospective workers as an itemized future work contract. They make money by taking a$1 flat fee. From the website:

Do I have to pay any fees?

Out of the $19 for basic lawn mowing about$1 goes to credit card processing fees and $1 goes to LawnMowingOnline.com so the contractor receives$17 out of that $19. #### Revenues Their blog does not release exact figures, but it states that tens of thousands to low hundreds of thousands of lawns have been mowed by 2014, and reportedly, sales have been consistently doubling through 2016. With these rough figures, we can attempt to deduce this year’s revenues: $$TLM_{2014} = \sum_{n=1}^{4} (2^{n-1})YLM_{1} \\ \text{If }TLM_{2014} = 50000\text{, then }YLM_{1} \approx 3300 \text{, and }YLM_{7} \approx 420000 \\ \text{If }TLM_{2014} = 200000\text{, then }YLM_{1} \approx 13000\text{, and }YLM_{7} \approx 3300000$$ Where: • $$TLM$$ is Total Lawns Mowed. • $$YLM_{n}$$ is Lawns Mowed for year $$n$$. • $$n$$ is the years since founding (2009), starting at 2010 and stopping at 2014. We multiply by $$2^7$$ to get from 2010 to 2017. This translates to (probably wrong) current annual revenues of between$500k and $3MM. This company was founded in O Fallon, Missouri in 2009 by James Hassinger. Crunchbase reports 100-250 employees, which is a bit of a stretch assuming$70,000 fully-loaded annual per-FTE costs.

The technology side of the platform, while important, should not require more than a team of 1-3 skilled engineers.

## Defensibility

The most obvious defensible aspect of this business is the network of lawn mowers and buyers. I imagine the streamlined workflow and low price point hard to compete on for new entrants and existing competitors. It would be difficult to establish the same network given the budget/margin constraints, and this company already has an 8-year head start, trending well on search engines and with consumer trust.

A similar company, Lawnlove.com, quoted nearly double the price of LawnMowingOnline.com at $40 (vs.$24) for a basic mowing. Lawnlove.com is venture-backed and has at least ten employees. It offers more sophisticated service lines such as fertilizer and sprinklers, catering to people who care more about lawn appearances.

## Disruption

This company has some marks of disruptive technology:

• Using the Internet and software, it has the unique advantage of low-cost transactions and matchmaking.
• It is attacking the low-end of the market, namely people who just want their lawn mowed and don’t care so deeply about lawn aesthetics.
• It has a simpler offering than standard lawn service companies. No hedges. No sidewalks. No leaf blowing. Just cheap lawn mowing.
• Its increased value dimensions are in price and convenience.
• It is cheap and “good enough.”

#### Downsides

As part of the “low-end” aspects, (to my knowledge) the individual workers are not required to carry insurance, although some of them advertise that they do in their site profiles. My home owners’ insurance happens to protect against personal injury liabilities, so it’s a risk I can afford.

## Future Improvements

• Geographic segmentation to optimize for pricing that maximizes volume

Aside from my purchases, I don’t have any affiliation with LawnMowingOnline.com.