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Why Homejoy Failed

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Re: Why Homejoy Failed

#21

> Adora Cheung opted to sit among employees, rather than in a swanky corner office. It's a pretty sad state when it's considered admirable and rare that the CEO of a company that is spending other people's money, and making none, doesn't have a "swanky" corner office.

No one should be sitting "among employees" - everyone should be in a private office with a door that closes.

Re: Why Homejoy Failed

#22
I found the scheduling process to be flawed. The assumption that I'll be home at the same hour every week was not a good one. There wasn't a confirmation phone call, text or email to remind me. But yes, I could manually reschedule. The phone support wasn't glowingly friendly to boot, very forgivable though.

The initial cleaning needed to be deep and thorough. I honestly think that's what people want. Get you back to square 1 and then do maintenance cleanings from there on out. I wasn't blown away by the service enough to continue it. The guy spent 15 minutes polishing my tea kettle when I had much larger issues looming.

Also the experience of saying "I need an extra hour or time on my oven" was odd. Maybe I don't? Maybe I do? I'm not the professional cleaner, you guys are. What I want is to not have to think about this. If the onboarding process was actually harder as in - provide us keys, your first cleaning is going to be an overhaul a big one, etc. I think retention would have gone up even though conversions would have been low. But no one wants to play the long game nowadays...

Re: Why Homejoy Failed

#23

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

Well, there's no formal definition of "unicorn valuation." But $40 million is a fair bit of money to raise and, if you figure 10x return as a target ballpark, that brings you up to $400 million which is at least in the ballpark of $1 billion.

Re: Why Homejoy Failed

#25
I think this is a demonstration of the limits in "app-ing" an industry. Uber worked fantastically because it leans heavily on the geolocation facilities in a smartphone - you're always moving, getting picked up from different places, by cars located in different places.

Homejoy had none of that. You rarely move home, and your cleaner rarely does either. Effectively, from transaction #1 you're in a perfectly replicable pattern - Cleaner X comes to your house every Y weeks and works for Z hours. No matter how great that initial app experience is, it's basically not needed afterwards.

There's also something interesting in here about the limits of the "gig economy". Arguably, by creating a marketplace of cleaners competing with each other for your money, they'd drive costs down for customers. In reality, inviting someone into your home is a very personal thing, and people much prefer to build a relationship with someone that they might pay a little more on a regular basis, than get a different person each time. It is a premium service, after all.

Re: Why Homejoy Failed

#26
The underlying question is "Does skirting employment law by using only 1099'ers make a profitable business solution?"

In this case, the answer is no. But the general answer to that question is "Yes, it is very profitable to upend employment law for the profit of the few, on the backs of the many."

Re: Why Homejoy Failed

#27

> Adora Cheung opted to sit among employees, rather than in a swanky corner office. It's a pretty sad state when it's considered admirable and rare that the CEO of a company that is spending other people's money, and making none, doesn't have a "swanky" corner office.

No one should be sitting "among employees" - everyone should be in a private office with a door that closes.

I'm always wary of the "one size fits all people" mandate.

Re: Why Homejoy Failed

#28

I read a comment on HN a while ago that went along the lines of "there is a new breed of startups that's in the business of selling dollar bills for 95 cents". I really like that formulation. Your job gets a lot easier as soon as you provide more value than you charge for it. Seems like that was one of the big problems with Homejoy: they were not able to charge more. The reality is that home cleaning is very price co…

Competition is really the big thing. Redbox has pretty much doubled their price in the past few years, and they can because by now all the meat-space video rental stores are pretty much out of business. However, at $2 for a blu-ray, it's already at the point where if I'm not going to the store anyway, I will just rent through the cable company for $4 or $5 bucks. And then I don't have a chance of forgetting to take the movie back and getting charged again. If Netflix got more new-release movies, I wouldn't even have to do that.

Re: Why Homejoy Failed

#29
post #20
post #8

Earlier quoted context omitted.

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 tast…

That's a reasonable evaluation to make. I'd note though that people use cleaning services all the time so Homejoy wasn't in any way unique in this regard (which was one of their problems).

Re: Why Homejoy Failed

#30
The risk here is that many of the comments are extrapolating to the larger market. Yet Handy seems to be doing well and has much higher retention rates. Homejoy could just be bad management. Seems like a classic case of a leader who was good early on (rushing off to do a bathroom on a holiday) but couldn't solve for the bigger problems at scale (retention) which Handy has.
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