The pandemic spurred Overland Park-based Lula to slow down and take a hard look at its business.
And through entrepreneurial fellowship organization Pipeline Inc., the startup realized that it needed to nix a segment of its customer base to catapult revenue. It worked: Last year, Lula reached profitability and more than $1 million in transactional volume on its software platform. Now, only halfway through the year, it has eclipsed last year’s volume.
“We have a list of potential customers a mile long right now,” Lula co-founder Bo Lais told the Kansas City Business Journal.
Lais was accepted into the 2020 class of Pipeline, a yearlong business development program that includes workshops, mentorship and networking among Pipeline members. One workshop challenged Lula to identify its ideal customer and ensure that it had a viable business. Lula's on-demand mobile platform for home services initially targeted homeowners by connecting them to vetted service providers. An investment from Kansas City-based Worcester Investments in 2019 expanded the focus to property managers, particularly in multifamily.
Lula’s consumer base had grown to about 2,500 homeowners in the Kansas City market, but revenue growth lagged.
“We were spending a lot of money on marketing and getting very little penetration,” Lais said. “We were going to have to raise a ton of money to make that work and compete. … Homeowners ended up being a distraction.”
Through Pipeline, Lula slowed down enough to discover that 80% of job orders were coming from 10% of its customer base — property managers who primarily oversaw single-family homes and duplexes.
Maintenance is particularly painful for managers of single-family homes and duplexes because the properties are geographically spread out and on-site maintenance doesn’t exist like it does at multifamily properties, Lais said. Lula streamlines the process, and its technology can integrate with existing property management software. Property managers also don’t pay a fee to use Lula; it makes money by taking a percentage of a service provider’s completed job transactions.
Last year, Lula stopped serving homeowners and started targeting property managers of 200 or more residential units.
"It was painful,” Lais said of cutting ties with homeowners. “When you’re an entrepreneur and you’re first starting out, you have this idea, and you think you’re right. … No one wants to hear that their baby’s ugly, but sometimes you’ve got to really open up the hood. … Pipeline really helped: We’re going to open up the hood and see what’s really going on so that we can help you make the right decisions in order to be successful.”
Lula has added three employees since early 2020, bringing its head count to seven. It plans to hire at least 10 more this year in sales, service provider acquisition and account manager roles. Revenue has grown 1,000% between 2019 and 2021, he said.
This year, Lula expanded to two new markets: St. Louis and Dallas/Ft.Worth. It plans to add Orlando and Indianapolis this month. Several clients have a national presence, giving Lula an opportunity to grow where its clients are.
“We want to change the way the world feels about maintenance in the property management industry,” Lais said. “We want to make it a streamlined process that everyone knows that Lula has their back and it’s going to get taken care of in the right way.”
