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Why Homejoy Failed

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Re: Why Homejoy Failed

#91

Post by smileysteve »

jrochkind1 wrote: post #40

The lawsuit over independent contractors may not have been the deciding factor in their failure, but: > For example, according to Zietsman, Homejoy city managers were tasked with buying up and distributing cleaning supplies They chose and supplied the cleaning supplies to workers? And still thought they had _any_ chance of prevailing in a lawsuit where they claimed the workers were independent contractors and not emp…

Many franchise systems work like this, I wonder if they had provided a business class on llcing and then required training , supplies, and maybe even equipment how a lot of these cos would turn out.

Re: Why Homejoy Failed

#92

Post by jeffwass »

samstave wrote: post #60
untog wrote: post #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 replicabl…

For me it was price. I have three kids, so we do a lot of laundry. I simply wanted someone to fold and put away about twice a week... Home joys minimum worked out to be about $75 per visit... So about $37.5 per hour... And I don't think folding clothes as a service worth $600 per month.

Does your local laundromat have a wash&fold service cheaper than this?

It's more of a hassle to schlep the clothes to & fro, but may be better value to you.

Re: Why Homejoy Failed

#93

Post by aianus »

sageabilly wrote: post #85
TheCondor wrote: post #33

Earlier quoted context omitted.

Taxis have been tampered with. There are medallions and monopolies and such, the fair market hasn't reigned. Uber can change that, there is room to wiggle. Has cleaning been unionized or tampered with? If anything, I'd almost think it's shifted further to the other side, there might be undocumented workers and more cash businesses than taxis have, even less regulation if you will. If the market is working, then what'…

The initial value is the piece of mind on the customer side plus ease of use/scheduling. With maid service, you're letting someone in your house unsupervised for long periods of time, so it becomes extremely important to have accountability built into the transaction. I have considered getting a monthly maid service and I live in the DC metro- somewhere with a ton of choices on that front- and I have not quite pulled…

Couldn't you get someone to clean while you're home watching football on Sunday or something? I don't see why it has to be totally unsupervised.

Re: Why Homejoy Failed

#94

Post by 7Figures2Commas »

enraged_camel wrote: post #63
untog wrote: post #51

Earlier quoted context omitted.

I don't know too much about it, but just from an initial glance it seems like it is better positioned, simply by offering things like plumbers, electricians, etc - again, they aren't services you fall into regular patterns with. They're very much on-demand when there is water leaking all over your apartment. That said , I'm sure "doesn't seem to be struggling from what I can tell" could have been said about Homejoy,…

Yeah, Homejoy's demise took everyone by surprise. Unless the company is public, it's almost impossible for a casual observer to tell how healthy it is.

> Yeah, Homejoy's demise took everyone by surprise.

No, it didn't. Some of my previous comments:

https://news.ycombinator.com/item?id=8468863

https://news.ycombinator.com/item?id=6856221

https://news.ycombinator.com/item?id=8489834

https://news.ycombinator.com/item?id=8709632

Homejoy won't be the last company of this type to collapse.

Re: Why Homejoy Failed

#95

Post by trimbo »

It was odd to see Groupon (somewhat) blamed for HomeJoy's demise.

Groupon's problem for businesses is that the customer has no intention of ever coming back, they just want the deal.

HomeJoy's problem, no matter how they acquire a customer (Groupon or other) is that once the vendor-customer relationship is established, there's no reason to ever involve HomeJoy again and let them take a cut.

Re: Why Homejoy Failed

#96

Post by Kurtz79 »

gloves wrote: post #42

Soon the floors of Silicon Valley will be littered with the corpses of Unicorns. Sustainability surely has to take precedence over growth at any cost soon?! One can hope...

Haven't they always been ?

Possibly the only difference is that before they were given a sensible name (like "failed startup") instead of "dead unicorn".

Re: Why Homejoy Failed

#97

Post by mason55 »

jusben1369 wrote: post #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.

Right, I think there is plenty of space for value-add in this market, it's just that Homejoy wasn't doing it. They thought they could act an uninterested intermediary whose focus was on scheduling and on demand cleaning but that's not where the gaps are in this market. It seems like there is a ton of room for them to leverage their economy of scale and that provides the moat that keeps cleaners from striking out on their own.

Some easy things I can think of where it makes sense for both cleaners & customers to stay with Homejoy

From the cleaner side:

- Offer help with the business side of things for the cleaners (taxes, setting up retirement accounts, etc) - Instead of giving cleaners supplies, raise the rates you pay and sell supplies to the cleaners at a discount by leveraging your economy of scale - Group negotiation for health insurance

From the customer side:

- Give customers a reason to continue ordering through the app. Maybe it's randomly giving away free cleanings, maybe it's a frequent buyer discount, maybe you offer monthly/yearly subscriptions - Mentioned elsewhere but have a way to request the same person

Re: Why Homejoy Failed

#98

Post by w4 »

mgkimsal wrote: post #10
IgorPartola wrote: post #3

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…

IMO, that's the late 90s bubble all over again. I know... we're not in a bubble now... but losing money and making it up on volume was the big joke back then, iirc.

> I know... we're not in a bubble now... but losing money and making it up on volume was the big joke back then, iirc.

It's ok to say we're in a bubble. These companies that are selling goods at a loss predicated on the availability of venture capital, with no clear path to profitability, show that we're almost certainly in a bubble. The real question to worry about isn't whether or not we're in a bubble, but rather how substantial of a bubble it is, and how many companies might have exposure to it.

Re: Why Homejoy Failed

#99

Post by mason55 »

untog wrote: post #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 replicabl…

IMO they focused on the wrong parts of the chain. Like you said, anyone can start a cleaning service and if all Homejoy does is match you with a cleaner who might or might not show up then there's no reason for them to exist.

But there is no reason that an app-based cleaning service can't succeed, full stop. There's plenty of room to add value, just like there is in any other business where you can get economies of scale. Homejoy just didn't focus on those parts of the business.

Re: Why Homejoy Failed

#100

Post by mmayberry »

I pay my housekeeper $80 to deep clean my entire house. Homejoy wanted $145 for their non-professional apathetic cleaners to do a light cleaning. Thats why they failed
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