Itai Hirsch (CEO) and Eyal Ronen
Sequoia Capital Israel, Temasek, Red Dot Capital, and Viola Ventures
Anyone who has ever had a home electrical appliance break down, in other words all of us, knows what a nerve wracking, frustrating, lengthy, and stressful experience it is.
Startup Puls (formerly CellSavers), founded in 2015 by entrepreneurs Itai Hirsch and Eyal Ronen, former Israelis now living in the US, wants to solve exactly this problem.
The company built an Uber/Airbnb-style online platform that connects the customer to the most appropriate technician. The idea is to make repairing the breakdown simpler, more pleasant, and more worthwhile for both sides. The system current serves hundreds of thousands of customers a month in the US, and it seems that this is only the beginning.
"Finding a technician by yourself is a long and frustrating process that can ruin your day, and even your week," Hirsch, the company CEO, says. "But this is the customer's default option all over the world, as far as I know. People try their luck on Google, Facebook, and Yelp; ask friends; and waste a great deal of time and energy. Then they have to wait for hours to get the service, guess whether they can trust the person who comes and let him or her into the house, and bargain over the price. We tried to solve all of these difficulties, both technologically and practically, in order to give people peace of mind."
In contrast to all this, customers entering the puls.com website select the type of device that needs repair or installation, the type of malfunction, and the desired date for the technician to come, and get a price in advance. The customers then fill in their address and personal particulars. From here, Puls's platform does its part, matching the customer to the technician according to the criteria provided without the customer having to look for someone, just like hailing a taxi through an app.
The service works 24/7 on the website (used by 90% of the company's customers) and by telephone, and is currently available in 55 US cities. "We now support thousands of different products," says Hirsch, "including all of the major companies' cellphones, installation service for most types of television sets, and home electrical appliances, such as washing machines and dryers.
The system's flexibility comes to the fore in allowing the option of ordering a technician days in advance, or the same day, or even asking that he should arrive within the hour. Hirsch says that Puls comes through in 97% of the cases where customers ask for a technician arrive to within the hour.
Puls is not the first company founded by Hirsch and Ronen. "We're serial entrepreneurs, and we've known each other for 25 years," says Hirsch. "The two previous companies I founded were in air-conditioning repairs and home appliances repairs throughout the US. The first was sold in 2006 and the second in 2011. Eyal's background is in gaming, and this is the fourth company that he has founded."
The paths of the partners are nevertheless parting. Ronen, who was CEO up until recently, has decided on a new direction and is leaving Puls. "He is still a large and important shareholder in the company," Hirsch points out, adding that the company is now recruiting executives to take it to the next stage. "We are a growing company, and the board of directors sets very ambitious goals for us. As in the case of many other startups, this probably means that new management will come in that knows how to work on a large scale," he says.
Who are your competitors?
Hirsch: "Our biggest competition is from small and local repair providers, but their models are outmoded and their customer service isn't the best. The fact that we can free up quality time for people is huge. People don't really need to deal with the question of how to get their home appliances to work, just as they don't think about who will bring them a pizza or which taxi will transport them; these things just happen. And there is still a lot of frustration and fraud in this area."
Other than ensuring quick repair, why should a customer whose smartphone stopped working go to you, rather than a laboratory?
"Going to a laboratory means getting in a car, driving, looking for parking, and giving my device to a stranger to repair behind a curtain. With us, the service comes to the home or to any place that the customer specifies - work or a café. It takes place in front of the customer and is carried out by a technician whose professional skills we have assessed and whom we have checked for a criminal background, so information leaks from the device are prevented."
What are the most common types of calls you receive?
"In cellphones, there are many malfunctions involving a broken screen or a device that can't be charged, which means that someone has to come before the battery is used up. During holiday seasons, we see a very steep rise in installing television sets, because there are huge sales in the US, and the smart home sector is also growing very fast every month."
What about urgent repairs?
"In the US, when the garage doesn't open, you can't get the car out and drive to work. People call us at 6:00 AM for a technician to come and repair the problem at 7:00 AM, so that they can leave by 8:00 AM. In addition, many people have food in their refrigerators worth hundreds and even thousands of dollars, and the speed at which a technician comes is critical. Repairing home electrical appliances in the middle of the night is also a very big segment, and there are also the telephones, of course - many people go out for the evening and break them."
How exactly do you price each repair?
"Our AI system constantly learns about the types of service, the probability that a given product will break down, and how much its repair will cost. When a customer tells us that his or her iPhone is behaving in a certain way, the system knows what repair is needed, because we have supplied hundreds of thousands like it, and we can price the service fairly and accurately."
Are there cases in which you set a price in advance and the repair was more expensive?
"It happens very rarely, but even if the technician has to do additional things, we stand behind the price we set. The customer will pay the price we promised, the technician will receive the appropriate payment, and we'll probably absorb the cost. If the user was unable to specify the problem in advance and we couldn't make a commitment to a price, we have developed tools so that the technician can present the pricing alternatives in a way that is convenient for the customer in his or her home. There is still no bargaining with the technician: as soon as the customer agrees on a price, work starts."
Puls's artificial intelligence (AI) system does much more than calculate prices. It is responsible for matching the technician to the customer, which requires weighing many factors: suitable skills ("not every technician who repairs iPhones also knows how to repair a washing machine," Hirsch explains); availability of the right parts, which Puls supplies to the technician in advance; the rating given to the technician by previous customers; and the number of jobs done by the technician in a day, in order to maintain good performance and avoid fatigue.
Obviously, geographic availability of a technician near the customer is also taken into account. Hirsch says that this item alone is quite complicated. "We make a forward projection, thanks to customers who order in advance, so the system knows to route the technicians and save them from spending too much time on the road.
In dense cities like New York, it is easier to meet timetables, whereas in cities with long travel times, such as Los Angeles, the system works in a more sophisticated mode in order to accomplish this," he explains. In addition, the AI system helps to plan the future of the service, to understand which products are worthwhile supporting, and how to provide customers with simpler tools for making an order.
How does your revenue model work?
"The customer's payment is divided between the technician, the components supplier, and Puls. We plan to also launch a subscriber model soon. The home insurance model today requires customers to chase after insurance companies and technicians, and we want to offer a more convenient monthly payment solution.
"It will be possible to cover only basic electrical appliances, or more sophisticated systems, and we'll offer subscribers benefits, such as a discount on television installation. Insurance companies usually first create the insurance, bring the customers, and then worry about where to get the service providers. We're in a special position, because we built the service layer first."
Asked about Puls's annual revenue, Hirsch says only, "The company is generating revenue on a very significant scale."
Hirsch says that the decision to focus on the US market was made because he and Ronen live in the US, and also in the belief that most successful companies working directly with customers (B2C) were founded there. "The aim is to expand to more global markets, but the US market itself is huge, and therefore constitutes a good test case."
What markets are you thinking about expanding to?
"First of all, we're only beginning in the US. The market is $600 billion, and our share isn't enormous. In the middle of next year, we plan on going to Latin America or Europe."
What about Israel?
"Not at the moment. The Israeli market isn't large. We'll probably want to launch the service first in markets with 20 million people or more. It's definitely an option in the future."
Although the Israeli market is not in Puls's plans right now, they regard themselves as an Israeli-American startup. The company's third office, after San Diego and San Francisco, is in Ramat Gan, where 30 employees work. "Our development and marketing teams are there," says Hirsch. "We opened an office in Israel first of all because we're Israelis, and there's no substitute for the technological know-how Israel, so it was very natural. There are amazing people here, and we want to substantially increase our personnel in Israel in the near future."
Puls currently works with nearly 4,000 freelance technicians. "A very large proportion of them work exclusively with us. Some work less than a full month; maybe they're students, or have other commitments. We also have technicians who go in and out of the platform. We don't like that so much," Hirsch says.
Companies like Uber that use a model similar to yours, and match customer and driver, receive many complaints about salary and conditions. Have you encountered similar criticism
"I want to distinguish between the gig economy and the skilled economy. We check the technicians' qualifications and make sure that the opportunity that we offer is suitable for them. Only 8% of those seeking to work on our platform are accepted. When someone is accepted, we aim to raise the level of their involvement rather than employ more technicians in the same district, as long as we are satisfied with them and they meet the demand. The technicians work as much as they want, early or late hours, as they wish. The pay of a technician working exclusively with us can reach $60,000-80,000 a year, while a service technician in a store earns $30,000 a year, so there's great desire to work with us."
Puls also plans to recruit air-conditioning technicians soon, a service it does not yet offer - something that would probably have raised eyebrows in Israel, but that makes sense in the US market. In addition, the company wants to expand its collaboration with retail chains and manufacturers. "Today, when people buy a television set or smart home appliance from the dozens of stores of the Target chain, they offer exclusive installation and training in using the device by a Puls technician. They also offer telephone repair through us. We want to expand this relationship and to partner with other retail chains," Hirsch says.
Do you also cooperate with the product manufacturers themselves?
"Yes, among others with LG and Samsung, both for telephones and for clothes dryers, refrigerators, and so on. They don't maintain a repair service, and allow the customer to repair their products through Puls. This is an enormous opportunity for us to reach more customers around the US, and for them to retain customers. I think that cellphone manufacturers realize that when they don't give support for a device, the customer will simply go into a local store. If they don't get service there, they are likely to upgrade to a new device, of a different company."
What is your biggest challenge?
"The challenge is to remain focused on the products, markets, and services on which we decided and sometimes to say 'no' to opportunities, and that's tough. For example, there are many small makers of smart home products asking us to install their products. That isn't our focus right now."