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On Demand Businesses 101

Honk – providing fast roadside assistance in breakdown situations – Startup Story #29

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What will you do if your car breaks down while you are on the way? Ah, it can be quite a hassle to get some help on the road. Making such breakups less stressful is HONK, an on demand app which offers roadside assistance at amazingly low prices, that too with an ETA of 15 to 30 minutes. Honk has already received funding of $13.25 Million. We interviewed Corey Brundage, the CEO of Honk to know more about his on demand startup.

Q1. Starting on demand Roadside assistance platform is definitely a great idea. Tell us a little about HONK and your personal motivation for starting this platform.

In December 2013, my fiancé broke down in our car. I out rushed to help her, using Uber, and arrived to what then became one of the worst consumer experiences of our lives. In the following weeks, I couldn’t stop thinking: why was I able to get a taxi so seamlessly, but not roadside assistance? The more I looked into the industry, the more I realized that it’s horribly broken. Some people pay auto clubs $100 a year, “just in case,” for a decade, and only use the service once. Would you really want to pay $1,000 for a tire change? More importantly, did you know the “big guys” pay their towing companies just $13 – $23 to perform that same service? The more I learned, the more I knew something had to be done.

Q2. Can you give us a rundown of how it works?

HONK is really very simple. If you have an issue with your vehicle — dead battery, flat tire, keys locked in car, ran out of fuel, need a tow, etc. — you simply open the HONK app and, with just a few taps, you can order roadside assistance. HONK instantly dispatches your information to the closest of our 35,000 trucks nationwide. In a matter of seconds, we automatically select the closest truck and show them coming to you on a map. Best of all, the peace of mind HONK gives you is free: you only pay for service when you need it.

Q3. What is the value proposition you are offering to the customers and the service providers?

For customers, it’s three things: quality, speed and price. Nationwide, we work with the same professionals as the bigger guys, our average time of arrival is ~25 minutes, and our prices start at just $49.

For our service providers, it’s two things: higher pay and the ability to do more/closer jobs. We typically pay double the other companies in the space, which makes our customers the first priority for towing professionals. Additionally, they’re able to do more jobs per hour with HONK and grow their businesses.

Q4. You are present in all 50 states across the United States. What is your strategy while launching services in new regions?

When we launched HONK in November, 2014, we were already a nationwide company with 22,000 trucks in our network. Today, we have more than 35,000 trucks. I believe this makes us the second largest tow and roadside assistance provider in the country! A unique benefit for HONK in launching service regions was that the supply side of the business didn’t need to be built — it’s existed for over 100 years.

Q5. Could you shed some light on the technology and tools used to build HONK?

Honk-1We utilized all the usual programming languages companies use today: Ruby on Rails, Swift for iOS, Java for Android, Node.js for high concurrency, etc.

Q6. What is one particular Marketing Tool or process which you swear by, that has helped you gain more users on the platform?

I find it hard to differentiate between product and marketing in tech companies these days. The two are tightly interwoven. When starting out, I used paid advertising (eg, Google AdWords or Facebook) as a proxy for latent demand in the market. It’s the fastest way to acquire early users — even if the economics don’t work right off the bat. Buy some early users, then rapidly iterate and innovate your technology to make them happy and ultimately achieve product-market fit. That’s the secret sauce.

Q7. You’ve recently raised $7M in funding. What are your future plans? Are you planning to integrate more features in the app?

We recently raised $12M in funding, bringing our total to nearly $14M. We are focused on changing the game for towing and roadside assistance, but our worldview is larger than that. I like to say that Uber is the app you need when you don’t have a car and HONK is the app you need when you do. Within that framework, there are many other services, on-demand and otherwise, that we can bring to market to revolutionize the vehicle ownership experience.

Q8. What is your onboarding process for service providers? Are they on contractual basis or full time basis?

All of our tow and roadside assistance partners today are businesses (as opposed to individuals), and are thus classified as 1099’s. This is actually the standard for our industry. All those AAA trucks you see on the road? They are 1099’d independent service providers. (In fact, many of their trucks work for us too!)

Q9. What is HONK ’s biggest achievement to date? How did you go about accomplishing this?

I’m very proud of HONK’s progress to date: we’ve built a service that truly helps people in a time of need, saving them more than 50% while providing a significantly faster, high quality experience. We pay towing companies double compared to the industry standard and we’ve built a nationwide network that rivals the best of them. All of this has been accomplished with a relentless focus on customer experience and technology.

Q10. Where do you see HONK  in five years?

HONK will be the new institution for roadside assistance with today’s mobile-first millennial in the US and abroad. We will roll out a handful of (currently “top secret”) features to further solidify our position as the app for automotive owners. If you look out a little further, maybe you’ll see us fully integrated into your vehicle’s infotainment unit, scanning your vehicle for problems before they occur and making sure they’re taken care of in a way that never disrupts your day.

Q11. Any advice for startups trying to make it big or join the On-Demand space?

I see a lot of on-demand companies starting up today that use technology to offer some convenience, but don’t solve a serious problem. Just because you can, it doesn’t mean you should. Find a legitimate business problem in a sizable market, start small, test your ideas aggressively and “wow” your early customers. If you’re successful at that, the rest will come naturally.

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