Hiring a contractor has always been a gamble based on word of mouth. ImproveNet, founded in 1996, built an online service that screened contractors and matched them with homeowners planning a project. It checked licenses and references, and contractors paid for the leads. Projects ran from kitchen remodels to new roofs. ImproveNet went public in March 2000, one of many companies promising to bring an old local trade onto the web.

Too Early for the Web

ImproveNet bet that homeowners would trust a website to vet contractors, and that contractors would pay for qualified leads. It also offered tools to estimate project costs. Fees from homeowner job leads and contractor bids made up about 55 percent of its 1999 revenue of $2.1 million. The idea was sound, and later companies built large businesses on it. In 2000, too few homeowners were looking for contractors online.

A Remodel of Its Own

ImproveNet priced its IPO at $16 a share in March 2000 and listed on Nasdaq. By then it had lost $42 million since its founding. Its shares fell steeply within months, and the company cut costs to survive. In 2002 it merged with eTechLogix, a private software firm based in Arizona, and new management took over. The combined company moved away from its original consumer focus.

Cover: The Builders, Donald Shaw MacLaughlan. Art Institute of Chicago, public domain. Chosen for builders at work (finding a contractor).