The Rise of the MMB (Middleman Business)

I’ve always been a champion for entrepreneurs that find an opportunity to insert themselves in an already existing business transaction. At the end of the day, if there is additional value being created or the problem is being solved with more fervor, both parties will always justify paying for a third party’s involvement.

That said, I fear that this mentality has gotten out of hand lately.

Perhaps the internet is to blame here, but I have been finding businesses that are selling services only to offload it to partner (often competitor) businesses at a negotiated cost. In other words, it’s as if service providers are pivoting their business into a referral business - even though they are known for having their own licenses and team members.

When this is performed one layer down, it feels appropriate. After all, a company should have partners that can field surplus work during busy times and lend expertise when they can add value.

It’s when a customer can sense there are many rungs to the ladder that this becomes dangerous. I had this experience over the weekend. As a customer, I have to admit, it was sloppy and absolutely dreadful.

Here’s what happened….

I needed some very specific house work done. This would be the type of work that a specialty business would have to provide. Think about something similar to needing a locksmith to fix a door handle.

After posting all of the details to Thumbtack, I was courted by a persistent business owner that led us to conversing via text message. Time passed, and mostly due to my own schedule, we didn’t get around to booking anything until several weeks after the post.

A phone call later, someone would be out to “take a look.”

Upon the worker’s arrival, two confusing things happened simultaneously. First, the van he showed up in promoted an entirely different business than the one I was choosing to hire. Secondly, he seemed “ready to work.” My understanding up to this point was that someone was going to come and look at the project. At that point, we would discuss pricing options, timeline, etc.

So there we were talking about what he’s going to be doing. Whether a language barrier or a “I’m just doing what I was told” mentality was to blame, he persisted to work through the project. It wasn’t until about halfway through that I finally caught his attention with my repeated confusion. Since he didn’t know much else at that point, I decided to call the owner of the company I “hired” to come out and assess the project.

Long story short, I could immediately detect that the business owner was trying to fast track this project, hired another company to do it, and planned to bill me 2X+ what his cost to pay the contractor would be. I sniffed this out, not just because the arrangement was so sloppily put together, but because I wasn’t actually getting my door handle fixed (from the example above).

I had to say things like “You obviously didn’t read my post” or “It’s as if I have a cold and you’re treating me for a broken arm” to get my point across.

I was savvy enough to see where this left everybody. The business owner was about to be out the cost of the incorrect work and thus needed me to pay for it. The worker himself was an innocent hard worker stuck in the middle of a lazy business man making costly mistakes.

Although I had work done that I didn’t need and that I otherwise would have never hired anyone to do, I felt it would be best to pay the contractor directly for his time and lecture the business owner for running a poorly constructed operation.

What baffled me the most is how these types of situations don’t educate the business owners at all. He never admitted his mistake, said he would negotiate down to where he would only make “a little profit,” and tried to convince me that his company has the best customer reviews on the internet.

Stepping away having done the right thing by paying the worker allowed me to audit everything I was told. Lo and behold, the company is a fraud and they will undoubtedly continue putting customers in situations like these. My only hope is that he’ll at least spend a minute or so to understand the project before throwing it over the fence for someone else to do.

Lesson learned.