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Why Homejoy Failed
121–130 of 342 posts
Re: Why Homejoy Failed
#122I 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.
Just use the laundry on-demand apps, they've been working fine for me, they do much better job at washing AND folding clothes than me doing it for hours.
Re: Why Homejoy Failed
#123There is a Rocket Internet clone of Homejoy in Germany, Helpling, which already raised a high double-digit million euro amount [1] and tries to grow as fast as possible at all costs (ads with vouchers in every local train and on the streets). They also had talks about a possible acquisition of Homejoy before the shutdown.
I always wondered who invested that much in a not-proven market, will be interesting to see if they succeed where Homejoy failed (my guess: they won't).
[1] http://www.reuters.com/article/2015/03/25/rocket-internet-he...
Edit: Just saw that they already ceased operations in a few countries and fired 1/5 of their employees, so it seems they have the same problems.. (found only sources in german on that news)
Re: Why Homejoy Failed
#124Earlier 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…
>I don't even have anything expensive to steal or break!
That creates a peculiar Venn diagram of people paid too much to clean and simultaneously don't own anything.
This limits growth potential. The customer pool is always going to be extremely small.
On the other hand "everybody needs a taxi" sooner or later for some reason.
Re: Why Homejoy Failed
#125Postmortems like this are always a bit unfair. You ask employees who lost their job when the company folded what was wrong with the company, and they'll air every little complaint or inefficiency that existed within the company. Isn't the ethos of Silicon Valley to 'hack it together' with tape and glue? Moreover, I'm pretty sure that's the reality of almost every high growth company. I'm sure you could find matching…
> Isn't the ethos of Silicon Valley to 'hack it together' with tape and glue? Couldn't that be the problem, too?
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Re: Why Homejoy Failed
#126I 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 t…
If netflix could rent you a new release, life would be so much simpler. One simple consistent api.
Re: Why Homejoy Failed
#127Earlier quoted context omitted.
The snark us unwarranted here. The article explains that all employees went through a house cleaning during on boarding. There are plenty of ceo/founders who would consider themselves not responsible for doing the dirty jobs that make a company work, particularly on a holiday such as thanksgiving (in the US, a very family-time centric holiday)
Again: the premise of the business is that there's a premium to collect on top of the work of housekeepers, who generally do that job because it is the only way they can scrape by, and that the premium should be assigned to people who can code. The article's author thinks that performing the gig once is somehow an illustration of a startup founder's determination. I winced.
Mild disagree here: the premium isn't coming from cleaners, it is coming from a hundred thousand or so local mom-and-pop operations which own one to five trucks. They hire substantially the same workers by demographics and do not appear to give their employees meaningfully superior compensation than the on-demand service companies.
The model appears to be centralize lead generation nationwide, pool support resources, and then price below market. In some cases that pricing is a result of VC subsidization of middle class customers. Longer term it would have to be through operational efficiency gains.
Re: Why Homejoy Failed
#128Earlier quoted context omitted.
I've noticed this even with Groupon. Walk into place with a Groupon, they offer you the same price but just bypass Groupon. They get a new customer in the door, the customer is fine with it because it's the same price, but the business makes more money because they don't have to pay Groupon their cut.
How would that work? Groupon takes their cut when the the customers pay for the deal itself, days or weeks ahead of them showing up at the business.
Walk in and say "I'm here for the groupon deal but I haven't brought it yet. Can you sort that out for me, or is it easier for you if I buy it on groupon now using my phone?"
Re: Why Homejoy Failed
#129"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…
"While you're not likely to hire your own private driver and thus end your working relationship with Uber"
Not likely to end your relationship with Uber entirely, but Uber doesn't do pre-planned trips; an individual driver may.
Re: Why Homejoy Failed
#130"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 actually did this once with Move.com. I have moved a lot over the past decade and used them pretty extensively to hire movers. Since two consecutive moves were local and I told the movers that during the first one, they told me to contact them directly for the second one. I got a discount, they got to keep more of the money.
I was involved with another company that used to operate in the same space, and they had a big problem with that. Movers would show up, offer the client a slightly lower rate if they paid cash, then both parties would cancel with the company and just work it out directly. Finding reputable contractors who wouldn't just cut the service out turned out to be a very hard problem.