I’m sure taxicab companies used to worry about their corporate culture. Their mission, vision, and values statements were probably papered everywhere throughout the office. Company picnics, retreats and fun events were the norm. Then one day, it all ended. Uber figured out the barrier to entry into the taxi industry boiled down to a simple question: “Do you own a car?” The rest is history. As we ponder disruption and the democratization of workers into a “gig” economy, the next logical question is: when will the gig economy come for the CEDIA space?
Thankfully, you need more than a car to effectively install and service home technology solutions. With some quick back-of-the-envelope math, it’s probably not far off to estimate one needs a few thousand dollars worth of equipment on each vehicle to do the job properly the first time.
There are already plenty of long-standing gig economy examples out there. DirecTV and Installs, Inc. both offer standalone contractors the opportunity to fulfill for retailers nationwide. Overall satisfaction with both gigs varies widely and no one company (like Uber) has come forward to remove the friction from the one-man contractor (AKA “trunk slammers,” “Chuck-in-a-truck” or “man in a van” (U.K. version)) market. Before you go lighting me up in the comments for insulting our brothers and sisters, I punched my trunk slammer card. My shop used to consist of a Dodge Neon (with me crammed in behind the steering wheel) and a rented generator from the Home Depot leaking gas in the back seat. Most of us started there, and it’s a badge of honor.
If Amazon were around when I first started, I would’ve picked up installation work from them in a heartbeat as a way to grow my business. The big worry I have is that their model doesn’t permit growth beyond the single person doing the work. If I’d taken the Amazon work in 2002, I couldn’t have added another subcontractor to do more Amazon work for me. There’s not enough profit in the work. That’s a scary thought for future custom installation business owners. We want to nurture along those installers or other industry players who want to hang out their own shingle and make a run at building a business. It’s the classic American dream story, and you can’t do that when there isn’t enough overhead and profit built into a single job to support any admin staff or facilities (let alone paying your own insurance, fuel, and maintenance).
We pivoted away from production/volume work several years ago because we found that while we were very busy, we were losing money doing the work. These relationships included production builders, installation fulfillment companies like Installs, Inc., and several others. The hardest part for me was making the decision to let go of the business. I’m glad we did because once we set our sights on changing, higher end custom work came walking in the door, and our business grew as a result.
We wouldn’t have had that luxury if we didn’t already have a significant book of business built up. My fear is the current gig model will keep potential integration business owners busy but not profitable in perpetuity and will distract them from ever trying to scale beyond their day-to-day workflow. We could make the argument that this phenomenon has been true for years and that Amazon is just drawing it into sharper relief. We could also argue that any time friction is removed, markets open up and commerce grows. The question remains: will it continue to flow in our direction?
As an irrational optimist, I choose to believe the future is bright, and I’m wearing shades. We will continue to deliver fantastic service and offer the best and brightest Amazon installers a comfy home at Livewire, where we have fun and still talk about cool things like our mission, vision and values every day.
Stay frosty and see you in the field.