Nancy Peterson got some of HomeStars’ first reviews on paper from people attending a home show. Photo: Philip Cheung Nancy Peterson got some of HomeStars’ first reviews on paper from people attending a home show. Photo: Philip Cheung

Nancy Peterson had climbed way out on a limb. She had quit a well-paying job in marketing and invested her savings, plus money from friends and family, to launch a website for homeowner reviews of renovators. But it helps if a review site has reviews. And HomeStars had just 300—far too few to get contractors to pay for premium listings, the site’s sole revenue source.

So, while exhibiting at the 2006 Metro Home Show in Toronto, Peterson used a primitive method to attract the comments she needed to drive traffic and sell ads: “I stood in a booth getting homeowners to write reviews on paper,” she says, “because an Internet hookup at the show was too expensive for me back then.”

One potential investor said he’d invest only if HomeStars dropped negative reviews. “I had to laugh,’ says Peterson. “I said, ‘Well, what’s the point, then?’ We had to stick to our guns and grind it out.”

From that shaky start, Peterson, as her firm’s CEO, built HomeStars into the go-to reno-review site for Canadians, with more reviews and contractor listings than any other reno-review portal in the country. Today, HomeStars lists almost two million home-improvement companies across North America and features reviews from 72 Canadian and 241 U.S. cities. The firm’s five-year revenue growth of 902% ranks it No. 28 among Toronto’s Fastest-Growing Companies. In the process, Peterson has learned how to attract the critical mass of users essential for online success, build credibility and serve one group while getting all her revenue from another.

View the full list of Toronto’s Fastest-Growing Companies

Peterson got the idea for HomeStars when she had her own home renovated and struggled to figure out which tradespeople would do a good job. People she knew could recommend contractors, but couldn’t speak to their consistency. Few contractors had websites, and Yellow Pages ads were uninformative. Peterson liked reading travellers’ reviews on TripAdvisor, and looked for a home-reno equivalent. But the leading site, Angie’s List, was U.S.-focused, required homeowners to become paid members to read reviews and didn’t included detailed listings of the reviewed contractors’ services. Peterson saw an opening for a Canadian site that would be free for homeowners and generate all its sales from contractors’ premium listings.

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But first, she needed some reviews. At the Metro Home Show, she won over visitors with a promise that HomeStars would scrupulously ensure that its reviews of contractors were honest and legitimate. And she tapped into the trait that has driven the phenomenal growth of social media: people love to share their experiences. By the end of the trade show, Peterson had hundreds of new reviews. “We had such a positive response,” she says. “That kick-started everything.”

Through other home shows and “tell a friend” online drives, Peterson soon landed thousands of reviews. Contractors began paying to post enhanced listings on the site—initially, at a tryout rate of $350 per year, and now for $1,800—featuring photos, detailed information and appearances in multiple categories. In 2007, with sales surging in the GTA, Peterson decided to expand into a second market. She chose Boston because it was a hotbed of venture-capital activity at a time when that financing source was moribund in Canada.

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