From accountant to the ASX: How Roby Sharon-Zipser built hipages

Learn how hipages CEO Roby Sharon-Zipser transformed Australia's trade services industry by turning a home renovation problem into a successful ASX-listed marketplace

In the early 2000s, Roby Sharon-Zipser’s struggle with a home renovation project sparked an idea that would go on to transform Australia’s trade services industry. As a newly married accountant looking to transition from his previous business, Mr Sharon-Zipser found himself in a dilapidated apartment, facing the daunting task of renovation. The challenge of finding reliable tradespeople and navigating the complexities of home improvement projects revealed a significant gap in the market, which provided Mr Sharon-Zipser with the impetus to start what is now an ASX-listed company with a current market capitalisation of about $166 million that services about 35,000 tradies across Australia and New Zealand.

At the time of his renovations, options for connecting homeowners with tradespeople were limited. The Yellow Pages dominated the landscape, with businesses competing for prominence through large advertisements. However, this system provided little assurance of quality or reliability. As an accountant by training (with a Bachelor of Commerce from UNSW Business School) Mr Sharon-Zipser recognised the need for a solution that could address the myriad questions homeowners faced: How to assess the quality of tradespeople? What are the renovation rules for apartments? Who handles project management? What are the expected costs? How can quality be assured?

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Mr Sharon-Zipser recognised a significant problem in the home improvement sector. Homeowners faced challenges finding trustworthy tradespeople, while tradespeople struggled to market their services effectively and manage their businesses efficiently. “There wasn’t really much else out there to find trades and it just felt like there was a gap,” said Mr Sharon-Zipser, who was recently interviewed by Dr Juliet Bourke, Professor of Practice in the School of Management and Governance at UNSW Business School for The Business Of, a podcast from UNSW Business School.

Building a network and overcoming sales challenges

He conducted extensive market research, speaking with both homeowners and tradespeople to validate his concept. This research revealed that tradespeople needed assistance with operational aspects of their businesses, particularly in marketing and technology adoption. “If you think about trades – generally really, really street smart, really good at problem-solving, awesome at their craft, but sometimes the gap in managing and running their businesses, the technology to run their businesses, how to be a sophisticated marketer, they don’t teach those skills in vocational training,” Mr Sharon-Zipser explained.

Mr Sharon-Zipser faced the challenge of selling his concept to tradespeople, and he developed a unique approach to build his network and gain confidence in communicating with his target market. “I did a survey," he explained. "So I picked up the phone and I called a whole bunch of trades and did a survey. I think we called about 40 trades, and I picked them randomly from all different sources – fridge magnets, flyers, magazines, the Yellow Pages – gave them all a call and I got really comfortable talking to them."

This survey process provided valuable data for his business plan and helped him develop the skills to communicate effectively with tradespeople. To launch the platform, Mr Sharon-Zipser implemented a tiered free trial system, offering varying periods of free service to different groups of tradespeople. This strategy allowed him to build a substantial network quickly and gain experience in selling the service.

Evolving the business model

hipages began as a directory service but soon recognised the need to adapt to changing market conditions. The rise of Google’s local search capabilities prompted a pivot to a marketplace model in 2012. “We realised that Google was coming along and doing Google Local and doing it really well, and it was going to be hard for us to compete. So what we did is we flipped to become a marketplace,” Mr Sharon-Zipser explained.

This transition involved developing a sophisticated matching algorithm that connects homeowners with suitable tradespeople based on specific job requirements. The platform now offers near-instantaneous connections between homeowners and multiple tradespeople, streamlining the quote and hiring process. Mr Sharon-Zipser elaborated on the efficiency of the new system: “As a consumer today, when you post a job on hipages – so a job is anything that you want to get a trade to do something for you – our algorithms will connect you within a minute, literally a minute, with a trade, within probably two to three minutes a second trade, and within 10 to 15 minutes a third trade to give you three quotes on the job.”

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This rapid matching process significantly reduced the time and effort required for homeowners to find suitable tradespeople. Additionally, hipages introduced features to support the entire job lifecycle, including messaging capabilities for quoting and a platform for tradespeople to manage their work. “Lately, we’ve introduced a platform which allows trades to do the job management so that allows trades to do the scheduling, the quoting, the invoicing, accept the payments, integrate with accounting software, provide them with some business intelligence about how they’re tracking and performing as a business,” Mr Sharon-Zipser said.

Expanding services and addressing industry challenges

In 2022, hipages made another significant pivot in response to macroeconomic challenges and the need for a more resilient business model. The company introduced a comprehensive software solution called tradiecore, designed to help tradespeople manage various aspects of their businesses more efficiently. “What we wanted to do is we wanted to start providing more services to trades, help them run their businesses better, be more productive. It’s super competitive out there, so what we wanted to do is give them the tools in their hands, which is in the app, and soon we’ll have a desktop solution, but the app that gives them the ability to do better scheduling, more accurate coding, invoicing and collecting payment right after they finish the job,” Mr Sharon-Zipser said.

This expansion of services aims to address key pain points for tradespeople, such as delayed payments and inefficient business operations. By offering a comprehensive solution that combines lead generation with business management tools, hipages has positioned itself as an essential partner for trade businesses.

Mr Sharon-Zipser explained the rationale behind this pivot: “One of the catalysts for this was the macroeconomic environment. We were subject to major swings in the environment in that, covid was really good in the beginning but then got really bad. So, in the beginning, trades were deemed an essential service and no-one could travel. So there was a lot of discretionary money floating around, government stimulus was floating in people’s bank accounts, so they started to spend money and trade had capacity.”

However, subsequent lockdowns highlighted the vulnerability of the business to external factors. Mr Sharon-Zipser continued, “What then changed for us, though, is the Delta strain. The Delta strain resulted in trades not being deemed as an essential service. Not good if you’re running a marketplace business. And so we sort of learned from that and said, I don’t want to be running a company that’s so impacted by macroeconomic conditions.”

This realisation led to the development of tradiecore, which not only helps tradespeople manage their businesses more effectively but also provides hipages with a more stable revenue stream through subscriptions, allowing for sustained investment in marketing and technology development.

Overcoming challenges and achieving profitability

The journey to profitability for hipages was not without its challenges. The company’s transition to a subscription-based model in 2021-2022 resulted in some customer attrition but ultimately led to a more sustainable business model. “There were some customers that weren’t prepared to commit to the subscription, but it was really an economic decision. First of all, we wanted to make commitments to invest in technology and build our brand so that people would know who we are. And we were very honest with customers, like it costs us – to bring you on, set up your profile – on average $400 to $500, but if you’re only prepared to spend $300 a year with us I can’t support you as a customer,” Mr Sharon-Zipser explained.

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This strategic decision, combined with continued investment in technology and brand-building, finally led to profitability after 20 years of operation. Mr Sharon-Zipser acknowledged the lengthy investment cycle but noted that it is not uncommon for marketplace businesses due to the complexities involved in creating network effects and building brand recognition. Sharon-Zipser elaborated on the financial implications of this transition: “What we found is that customers that were on a subscription were paying us about $1000 a year. So it worked for us. And we weren’t making any money. Last year, in 20 years, was the first year we actually made a profit.”

He emphasised the importance of this milestone: “So we were always investing in the technology, investing in building brands, and we’ve reached that sort of inflection point in the business in the last year where we actually became profitable, which is great. That’s what businesses are there to do. You got to be probable after 20 years, mind you.”

Mr Sharon-Zipser also highlighted the complexities of building a marketplace business: “Marketplaces are one of the most complicated businesses to run in the world,” he said. “First of all, you have to create what’s called the network effect. So the network effect is where you actually have a network of homeowners and trades that can meet the demand, and every new additional member that joins the network adds more value to the network. So creating that network effect is incredibly hard.”

The path to going public

The decision to list hipages on the Australian Securities Exchange (ASX) was not part of the original plan but emerged as the best way to provide returns to early investors and supporters. The company’s listing in November 2020 marked a significant milestone in its growth journey.

“One of the things is it was important that we had a lot of people back hipages over the years – like really put a lot of capital behind us, took a lot of risks with us – and for me, it’s important that we provide a return to those people. As a founder and as a CEO, I have a lot of respect for people that believed in you and also people that took the risk and they put money behind you, and that’s really precious,” Mr Sharon-Zipser said.

The transition from founder to CEO of a public company brought new challenges and opportunities for Mr Sharon-Zipser. He now focuses more on strategic planning and business development, supported by a strong management team and robust governance structures.

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“I suppose one of the nice things to have as a CEO of a listed company and pass through many of the hurdles, is to have a high-quality management team, a high-quality executive that can help you run the business, so that you as CEO – and this is not a cliche – I was always in the business doing work, finding fires to put out and work on those, but I actually am working on the business as a CEO and refining our strategy, thinking about our strategy, looking for opportunities that can make our business better and stronger,” Mr Sharon-Zipser concluded.