By Hagan Kappler
Home technology service is the most important service of all, and will quickly become the most valuable. The average home has over 20 connected devices. People are working from home, logging on to do homework, streaming for entertainment, and connecting to doctors from home. Yet, homeowners are overwhelmed and frustrated with their technology. Customers are concerned with security and they do not always find their systems to be reliable, returning devices almost 50% of the time.
The home technology services market has historically been incredibly fragmented, with over 20,000 local businesses helping homeowners with their technology needs. As the first national franchise brand in the space, Daisy has the capability to not only delight customers with proper installation of their systems, but also provides ongoing service that others can’t.
Within less than a year, Daisy raised $35M, dedicating half of the funds raised to building support systems for its owners, managers, and technicians. These support systems have included an end-to-end tech stack, marketing tools, M&A support, call center, and coaching. Within 14 months, the Daisy team acquired 14 companies and franchised 10 businesses, a combination of converting existing businesses as well as starting up new businesses through the franchise model.
Why invest in this space?
The smart home installation market is a $30 billion space growing 13%. Technology companies, from Apple, Amazon, and Google to startups developing new apps and devices, continue to innovate to meet consumer needs in the home. Companies like Tesla, for example, recently announced the development and planned launch of humanoid robots who one day will be able to help with household tasks such as folding laundry, doing dishes and cleaning the house.
At the same time, continued trends around consumers looking to outsource their household chores have led to an increase in highly valued home services companies who can “do it for me.” Investors recognized this trend of large markets, combined with high fragmentation, and high growth in other home services segments such as home cleaning, pest control, HVAC, plumbing, and landscaping. Valuations for even smaller, local companies have soared in the past 10 years. These businesses profiles also consisted of high recurring revenues, leading to increased investor demand.
Daisy’s founding team of experienced home services executives have quickly built a successful recurring services business that provides customers with the ongoing support and stewardship for their lifetime of technology needs.
Why franchising?
Rising consumer demand explains why aspiring business owners might give a second look to the smart home technology space— but what makes franchising, in particular, such an advantageous business model?
In home services, brand matters. Enlisting the services of a smart home technology company requires homeowners to invite installation techs not only into their personal living space and systems but also into their personal preferences and passwords—and this requires a certain level of comfort and trust. Earning that trust can be difficult for a fledgling company; however, it can be more easily achieved when working under an established brand name like Daisy, which boasts high customer reviews in more than 20 locations.
The franchising model also offers centralized support—proven processes for efficient operations, built-in marketing collateral, recruiting and training resources to support team development and retention, and more. Getting involved in smart home technology no longer requires a formal technical education or significant industry experience. Instead, Daisy’s central support systems can get franchisees up and running provided they have business acumen and a passion for technology, for building talented and happy teams and for providing exceptional client services.
Those same support systems also mean that franchising has a lower cost threshold. It’s more affordable to buy into a franchise than to start a new business from scratch, simply because resource-heavy tasks like planning which products and services to offer, answering phones after hours, building brand awareness, or recruiting a team, are supported by the central office.
To dive further into just one of many examples: a franchisor may offer a call center staffed with industry professionals to ensure high quality after-hours support. When business owners don’t have to choose between disappointing clients, paying their own technicians overtime, or being online 24/7 themselves, they can actually take a break and enjoy their time outside of work.
Finally, a key element to look for in any business model (including a franchise) is the opportunity to generate predictable, recurring revenue. This goes back to the fact that smart home technology itself is ever evolving – which makes the industry a great candidate for a recurring service model. As an example, Daisy branches offer their local clients not only the initial tech installation but also regular maintenance services to keep everything properly updated. This service consistently leads to consultation opportunities with clients regarding the latest innovations and best new products that further enhance their living spaces.
Seeking opportunity
As technology advances rapidly, there is a growing desire among homeowners to ensure a frictionless tech ecosystem that seamlessly integrates with their unique spaces and preferred home decor aesthetics. Professional installers who understand that desire—and work intentionally to meet that demand—have real opportunity. And franchising with a nationwide brand may be one of the smartest ways to seize that opportunity.
Hagan Kappler is the co-founder of Daisy, a nationwide home and small business technology installation and services company. Her extensive background includes leadership roles at nationally recognized brands such as Goldman Sachs, McKinsey & Company, Starbucks, ServiceMaster Clean, Merry Maids, and Threshold Brands. Under Kappler’s leadership, Daisy has recently raised its Series C funding round and experienced significant organic and inorganic growth through a strategic combination of franchising and acquisition. Kappler lives in Newport Beach, CA with her four kids.