Why Homejoy Failed • Hacker News Board

Re: Why Homejoy Failed

#11

Post by forgetsusername » Mon, Oct 26, 2015, 2:04 PM UTC

cm2187 wrote: post #5

The difference with Uber is that it requires a lot more trust to give someone access to your home while you're away to clean it. Not sure I would want to subscribe to a service where I would have to trust any local dude to visit my home. It's like a nanny. Picking someone to look after your kid is a very personal thing. It's not a lowest bidder thing.

>The difference with Uber is that it requires a lot more trust to give someone access to your home while you're away to clean it.

In one case you're risking personal items and privacy; in the other your life is actually in that person's hands.

Re: Why Homejoy Failed

#12

Post by jusben1369 » Mon, Oct 26, 2015, 2:04 PM UTC

ChazDazzle wrote: post #9

sageabilly wrote: post #2

"The steady leak of its best workers to direct employment arrangements with its own (now former) clients." This is a huge hurdle in any direct services market. While you're not likely to hire your own private driver and thus end your working relationship with Uber, you're probably very likely to find a cleaner that you like a lot and who does a great job cleaning your house and go on to form an exclusive working rela…

I've done this several times with TaskRabbit and i'm actually surprised the same thing hasn't happened to them.

tbh it might be. I don't get the sense TR is doing very well these days. Very quiet out of there.

Re: Why Homejoy Failed

#13

Post by saalweachter » Mon, Oct 26, 2015, 2:05 PM UTC

sageabilly wrote: post #2

"The steady leak of its best workers to direct employment arrangements with its own (now former) clients." This is a huge hurdle in any direct services market. While you're not likely to hire your own private driver and thus end your working relationship with Uber, you're probably very likely to find a cleaner that you like a lot and who does a great job cleaning your house and go on to form an exclusive working rela…

I think it's an important question any entrepreneur has to answer: what value do I add to the business?

If you're providing some expertise or startup costs to purchase expensive investments (buildings, machinery...) or creating some sort of efficiency of scale, you've probably got a viable business.

If your business plan is to skim money off of workers who could do their jobs and get paid without you, your workers are going to eventually figure that out and cut you out of the equation.

Re: Why Homejoy Failed

#14

Post by kra34 » Mon, Oct 26, 2015, 2:06 PM UTC

Fred Wilson recently wrote a blog post about this:

http://avc.com/2015/10/negative-gross-margins/

A lot of companies will fail because their investors will lose patience and no longer support subsidized pricing.

Re: Why Homejoy Failed

#15

Post by jusben1369 » Mon, Oct 26, 2015, 2:06 PM UTC

Homejoy raised $40 million. I doubt it was ever even close to Unicorn valuation. Am I wrong or is this headline fairly misleading?

Re: Why Homejoy Failed

#16

Post by ThomPete » Mon, Oct 26, 2015, 2:06 PM UTC

Compare it to the Danish facility company ISS [1] whos been around since 1901 has more than 500K employers and is in more than 75 countries and pay their employers a fair salary. No freelance contracts or anything like that.

The real challenge isn't growing a company like that, it's being profitable from day one. And so the real innovation is going to be a company that find a way to either completely automate many of those areas or somehow manage to provide benefits beyond the stability a company like ISS can offer which is no easy task.

Managed by Q seems to be doing things in a much more realistic fashion IMHO.

[1] https://en.wikipedia.org/wiki/ISS_A/S

Re: Why Homejoy Failed

#17

Post by mdorazio » Mon, Oct 26, 2015, 2:08 PM UTC

ghaff wrote: post #4

After reading this, I'm left to ponder why anyone would think this was a potential "unicorn" business where it made sense to take big losses to grow revenue. After all, as the article notes, cleaning services like Merry Maids are a well-established thing. (As are personal references for housecleaners.) That doesn't make a potential new entrant bringing a better UX to the process a stupid idea. But it would seem to li…

Maybe ask sama? Homejoy was a YC company and Adora even game a lecture during the most recent Startup School. I'd personally like to see a "lessons learned from failed YC companies" lecture next time since it seems we're starting to see more high-profile failures in the market, often based on high-growth with negative margins.

Re: Why Homejoy Failed

#18

Post by arxpoetica » Mon, Oct 26, 2015, 2:08 PM UTC

sageabilly wrote: post #2

"The steady leak of its best workers to direct employment arrangements with its own (now former) clients." This is a huge hurdle in any direct services market. While you're not likely to hire your own private driver and thus end your working relationship with Uber, you're probably very likely to find a cleaner that you like a lot and who does a great job cleaning your house and go on to form an exclusive working rela…

Seems like there might be a model that works better by focusing on managing relationships-- not necessarily a home cleaning service--

Re: Why Homejoy Failed

#19

Post by denniskane » Mon, Oct 26, 2015, 2:08 PM UTC

ghaff wrote: post #4

After reading this, I'm left to ponder why anyone would think this was a potential "unicorn" business where it made sense to take big losses to grow revenue. After all, as the article notes, cleaning services like Merry Maids are a well-established thing. (As are personal references for housecleaners.) That doesn't make a potential new entrant bringing a better UX to the process a stupid idea. But it would seem to li…

Exactly.

The very idea of investing in a unicorn business is that it will either corner the market or go bankrupt, is it not?

How anyone can imagine that they can corner the market in this industry is beyond me!

Re: Why Homejoy Failed

#20

Post by cm2187 » Mon, Oct 26, 2015, 2:09 PM UTC

jdmichal wrote: post #8

cm2187 wrote: post #5

The difference with Uber is that it requires a lot more trust to give someone access to your home while you're away to clean it. Not sure I would want to subscribe to a service where I would have to trust any local dude to visit my home. It's like a nanny. Picking someone to look after your kid is a very personal thing. It's not a lowest bidder thing.

Getting in a car is pretty much the most dangerous thing a person does in an average day. You may be trusting a cleaner with you possessions, but you're trusting that Uber driver with your life.

This is a VaR vs Average risk discussion. Yes the potential harm is higher in an absolute worst case with a taxi but it is a really rare event. Cleaner stealing stuff is unfortunately quite common. When you know the person the risk is relatively low but when it is a complete stranger that has been selected by an online company which itself never met that person, I would say the probability is too high for my own taste.