CAMBRIDGE, Mass.—A few years back, Rob Infantino, CEO and founder of Openbay Inc., needed to get a wheel alignment for his BMW M5.
When he brought the vehicle into a local Boston shop, he was handed an estimate of $4,000. He declined the service and wanted to find a better quote.
“I went home and looked on the Web to see if I could find an easy way to get pricing information on repairs and find a local shop, and there wasn't anything out there,” he said.
He thought there had to better a better way of getting quotes. This coupled with the desire to follow his passion of cars, ignited his desire to launch Openbay, an Internet-based business that allows users to compare quotes for automotive repair and maintenance services and book appointments with nearby dealerships.
Mr. Infantino previously had started three companies, all in the enterprise software market, but he wanted to venture into something autorelated. After the experience with his car, he knew what the project should be.
His first step was to go through a “customer discovery phase,” which allowed Mr. Infantino to see if there was a market for this type of service application. He said his goal was to “build a marketplace where I could connect both consumers and shops together and be part of that whole transaction.
“And to do that, I built a prototype and brought it to shops,” Mr. Infantino said. He sat down with dealers, went over their “pain points” and how this could possibly alleviate some of them.
“It appeared like I was getting the green light on both sides of the marketplace,” Mr. Infantino said, noting that both dealers and consumers seemed interested in the idea.
“Whenever you build a marketplace, you have that chicken-and-egg problem where you need both sides of the marketplace to work.”
He said just like eBay, to work Openbay needs both buyers and sellers. He started with a private beta version in the summer of 2012 with about 20-30 providers, then started to reach out to friends and family to start using the service. The company then launched its public beta program in January 2013.
This story first appeared in ServiceZone, Tire Business' automotive service e-newsletter.
Openbay received funding from Google Ventures, a16z seed, Boston Seed Capital L.L.C., Stage 1 Ventures L.L.C. and several individual investors.
After the company received funding, it was able to build a mobile app to “mirror the functionality that was found on the Web,” Mr. Infantino said.
“It's been a fun process for us,” he added.
The initial target of the public beta was an area about 15 to 20 miles outside of Boston, where Openbay signed up about 400 shops. The company launched the business nationwide at the end of October and within weeks had expanded to upwards of 40 states.
“They are coming in droves every single day,” Mr. Infantino said.
There is relatively little risk for a dealer to sign up on the website, he added, because there is no annual, monthly or subscription fee. Every shop that signs on gets its own free website in the marketplace so customers can see what kind of services the shop offers and what vehicles the business supports.
“Most providers, their pain points are around marketing dollars: How do they spend their marketing dollars? Are they getting a good return on investment? And with us, they pay us on performance,” Mr. Infantino explained.
He said there is no guesswork involved like in some other marketing ventures, such as taking out an ad or putting up a billboard. The dealer can see what he or she is getting.
“They can sign on and become a member and look at all the traffic and make a decision on...what service requests they want to respond to,” Mr. Infantino said.
How this all works is that a customer logs into Openbay and type in the services needed for his or her vehicle. Different auto service providers can respond to the service request with quotes.
“We tell people how far they are from that location, what their ratings and reviews are, what their certifications are, what the amenities are and then, obviously, pricing information as well,” Mr. Infantino said.
He added that usually the lowest price does not win, but other factors—such as convenience and location—play into customers' decisions.
Once the customer selects the desired provider, Openbay processes the customer's credit card information and gives a code to provide to the dealer. Openbay charges a 10-percent service fee and then an additional 3-percent credit card processing fee.
Participating dealers have received positive feedback from their participation with Openbay.
“I've gotten a lot of clients from it,” said Barry Steinberg, owner and president of Watertown, Mass.-based retail dealership Direct Tire and Auto Service.
He said when most people buy tires or need automotive repairs, they will ask a friend or someone they know if they do not already have a loyalty to a facility.
“What this has done is sort of taken that whole 'ask a friend' kind of thing out of the loop,” Mr. Steinberg said, “and has allowed the consumer to go in there, do their own homework and put it out there for bid.”
He said it allows customers to base their repair decisions on quotes, prices, geographical location or reviews.
“We found that a number of clients that we've gotten from it have been very new to the Boston area,” he said, “a number of students, people who have been transplanted here for business, a couple of military people....”
The method is simple and private, making it “a seamless event for the consumer.”
Mr. Steinberg said that since Openbay is still in its beginning stages, the venture is “working out what's working best, not only for the client, but for us.”
For a detailed explanation of how an Openbay transaction works, check out the Dec. 9 edition of NewsPoint.
There are people who will type in service for oil changes, which is sort of a waste of time for the dealer, he said, but he tries to get around that by having prices for those pre-priced services listed on the company's page on Openbay.
This also allows the customer to immediately have access to those prices, instead of having to wait for a quote.
Alexander Tallett, founder of Driveway Doctors, a Peabody, Mass.-based auto repair shop that does mobile repairs, said his business has seen a fair amount of business as a result of the Openbay website so far.
Mr. Infantino attributed some of Driveway Doctors' success on the site because of its convenience, which is proving to be important to consumers.
“We definitely try to offer the highest level of convenience for our customers,” Mr. Tallett said, noting he thinks although that definitely plays into it, the company also is “relatively aggressive on price.”
Mr. Tallett said one downfall of the site he sees at this point is that the company can put out a lot of quotes and not hear back on most of them.
“There's a lot of time you put into putting quotes out,” he said, “but if you are efficient about it,...the company is a very solid company, there's no risk of not getting paid or anything like that.”
The mobile app supports iOS 6 and iOS 7 and is available on the Apple App Store. The company plans to release an app for Androids, but does not have a date set at this time.
More information is available on the Openbay website at www.openbay.com.
To reach this reporter: [email protected]; 330-865-6143.