Dear Startup Investor:
My only question about startup Geekatoo is what took so long for somebody to do this?
Need help with your computer, smartphone or TV? Place an order online, or go through the company’s app, and Geekatoo will send a qualified technician to your home. They’ll fix your problem or you get your money back.
They’re fast, convenient and they guarantee results. What more can you ask?
Truth is, anything would be better than Best Buy’s underwhelming Geek Squad. If you’re looking for overpriced ineptitude, they’re the ones to call.
I took an informal poll around the office of who used the Geek Squad. Half the office had. I then asked who liked them. I had no takers. None.
Geekatoo is filling a gaping hole that Best Buy shoulda, coulda, woulda but didn’t fill. If anything, the Geek Squad made the hole deeper.
Geekatoo is the anti-Geek Squad. Everything the Geek Squad does poorly, Geekatoo does well. The following is a short but telling list…
- High-quality work. It has an 85.6% five-star rating across all jobs. Of its 5,000 signed-up Geeks, almost 200 have qualified as super-Geeks. A super-Geek must have at least two five-star job ratings.
- Reasonable rates. It charges 30% less than the Geek Squad.
- Quick response. Over 80% of all requests are assigned within 24 hours. Over half within an hour. Geekatoo is in every major American city and in many of the smaller cities and towns.
- Versatility. Its technicians can fix what ails you, from setting up your home theatre to getting rid of viruses.
- Customer-centric. Customers are sent a “feedback request” once the job is done.
Geekatoo’s versatility is outstanding.
Great Traction for Such a Young Company
Co-founder Kevin Davis told me he started the company four years ago. But it only took off last summer when he joined 500 Startups Accelerator’s Sixth Class. It was there that he got the affirmation he was looking for. Geekatoo had originally adopted the eBay auction model. Kevin concluded it wasn’t a good fit. So he switched to an Uber model. In other words, relying on software to bring the service to the customer at pre-set prices.
“Geeks,” Kevin says, “don’t like competing with each other.”
Since graduating, the company has pulled in about a half million dollars (from July of last year to June of this year).
Revenue has shown nice early growth.
Its revenue growth has impressed. Over the last six months, month-over-month growth has reached 29.4%. Over the last three months, 45.1%. The company is now adding weekend service. With its seven-day week, Geekatoo projects its next 12 months will bring in over $8.4 million.
And the 12 months after that? Geekatoo expects to make around $2.6 million a month, which comes to over $31 million a year.
That would be awesome. But my own calculations aren’t as optimistic. I’d be happy if Geekatoo makes half that amount in Year 2. I believe that the company has enough marketing initiatives in the pipeline to have a decent shot at reaching $15K. Why?
Kevin told me he’s now reaching out to a number of e-retailers like Amazon, Walmart, Target, NewEgg and others. Kevin wants Geekatoo to become their Geek Squads.
Take Amazon. Imagine if, as part of the package deal of becoming a Prime Member, you get Geekatoo’s one-year in-home tech support plan. It’s not a pipe dream. Amazon already had Geekatoo fulfill one of its tech repair jobs.
The AAA is also an intriguing candidate for what Geekatoo does. Geek Squad dropped its nationwide exclusive discount contract with AAA, so it’s searching for someone else to service its 50 million-plus members.
Right now, Geekatoo is partnering with AAA Minneapolis. That’s one heck of an exciting prospect.
Geekatoo will also be urging computer and smartphone manufacturers to pre-install the Geekatoo app on their devices. Dell and Lenovo already sell support plans, but they don’t cover everything, like syncing between devices. Geekatoo has begun discussions with Lenovo and is expecting a proposal soon from them.
Other companies in Geekatoo’s sights include Samsung, LG, HTC and Dell.
As you can see, Geekatoo has many irons in the fire. Of course, not all of them will work out. And not all of them have to. If just a couple do, Geekatoo will continue to scale rapidly.
One more point here: These marketing initiatives are more than just some notations of things to do on a piece of paper. The first steps have been taken on many of them. And, just as encouragingly, Geekatoo has gotten positive feedback.
The Investors
Several investors of note have made early bets in Geekatoo. They include Eric Ries (author of The Lean Startup). Also, our friends at Micro Ventures. And 500 Startups, the Silicon Valley seed fund and accelerator founded by Dave McClure, and other PayPal and Google folks.
Geekatoo must have won some fans while participating in the 500 Startups Accelerator program. In addition to the 500 Startup investment, Dave has put in his own money, as have 500 Startup execs Parker Thompson and Christine Tsai.
The Founders
Co-founder Kevin Davis is a developer/designer and a graduate of the University of California, Santa Barbara. Geekatoo’s other co-founder, Christian Shelton, got a masters from Harvard. But I’ll forgive him. Because he also earned a masters from the prestigious London School of Economics (my alma mater, by the way). Shelton is a busy guy. He’s also a team member at Sun Microsystems.
The Opportunity
The tech-support market amounts to $20 billion. The more interesting number is how much money the Geek Squad makes. Last year it made $3.5 billion. Geekatoo charges much less and provides a more efficient and convenient service. And it doesn’t have Best Buy’s universe of customers to backstop it. But Geekatoo is going after the big tech retailers and if it bags just one or two of them, you can start popping the champagne bottles.
That $3.5 billion – it seems so far away – will get a lot closer.
On the one hand, it’s a doable scenario. On the other hand, it hasn’t happened yet and it may never happen. Welcome to the realm of early investing.
So this is what we know for sure right now. Geekatoo has begun to make a serious push for revenue. It’s very early yet the startup is already pulling in more than $100K per month. That traction is real.
Looking into the future is always tricky. So while there are no guarantees, we also know that Geekatoo has begun the critical phase of forging several pathways to expanding nationwide. Initial feedback, as I said, is encouraging.
I believe the company has an excellent opportunity to sustain its rapid growth. If it hits about $15 million in gross revenue (again, half their projected amount), then the company’s $10 million valuation cap it’s giving you for its current seed round will be an incredible bargain.
How to Invest
First you’ll need to join Wefunder.com. To do so, you’ll need to verify that you’re an accredited investor. Plus answer a few questions.
Then you need to go to Geekatoo’s page on Wefunder, and click the big green “Invest” button in the upper-right hand corner (https://wefunder.com/geekatoo/invest). You may invest as little as $1,000.
Deal Summary:
Type: Convertible Debt
Interest rate: 0%
Minimum investment: $1,000
Amount being raised: $1.5 million
Amount raised so far: $734,000
Valuation cap: $10 million
Discount (on next round of financing): 0%
Good investing,
Andy Gordon
Startup Investor Portfolio
