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Why Homejoy Failed

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Re: Why Homejoy Failed

#141

Post by WWKong »

aptimpropriety wrote: post #89

Postmortems 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?".

That explains the low single digit success rate. And that is not really the ethos either. It is mostly a translation of lack-of-experience.

Silicon Valley is a business arrangement. Some folks have money which they spread over a bunch of high-risk/high-return investments. They net out positive. What we get is handful of mega successes, tons and tons of failures, lot of marketing noise, opportunity to work on some cutting edge experimental stuff. It has a mix of people living well (which we hear about) and people who endure bad living conditions.

Re: Why Homejoy Failed

#142

Post by ghaff »

nilkn wrote: post #113
ghaff wrote: post #82

Earlier quoted context omitted.

In general, in Western economies, personal services that don't benefit significantly from scale or automation are going to seem reasonably expensive unless you are in the very top tier of income. Consider that $15/hour is about the wage floor and you probably need to add transit time and other overheads for an independent contractor. So, yeah, it's hard to see a couple of hours of work costing less than $50 or so. An…

The wage floor is way below $15/hour in much of the country, but I believe (correct me if I'm wrong) that Homejoy's pricing was static and independent of location. Does it make sense for someone in a modest cost-of-living area to be paying San Francisco rates?

Minimum wage is less in general but I'm pretty certain that if I took an ad out on Craigslist to get someone to come over to my house to do some task, you'd be looking at $15-20 an hour at least. As you say, I'm sure it would depend on the area.

Re: Why Homejoy Failed

#143

Post by sib »

harshaw wrote: post #131
mikeash wrote: post #36

Earlier quoted context omitted.

It also solved a problem that's more or less already solved. Uber is great because finding a taxi can be hard, and finding a good taxi can be really hard. Finding somebody to clean your house is really easy. I must get half a dozen flyers a week for cleaning services stuck on my door. If I don't trust that, I can just ask my neighbors for a recommendation.

nope... not where the density is lower

True, but the issue is, the Homejoy solution was even less effective in low-density areas...

Re: Why Homejoy Failed

#144

Post by TheOtherHobbes »

ThomPete wrote: post #16

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…

The flaw in the model is that companies like these do not exist to provide a service to customers - they exist to persuade investors they're worth funding.

Homejoy was primarily a cash hoover, not a carpet cleaner.

On that basis it worked okay for a while. But the emphasis on Insane Growth [tm] as a metric for potential unicorn-hood meant that customer care, customer retention, and service quality - never mind basic business metrics like profitability - all declined to the point where these was only an empty shell of a business covered by a paper imitation of a multinational corporation.

The lawsuits didn't help, but I doubt they killed the company on their own.

Re: Why Homejoy Failed

#145

Post by sib »

geomark wrote: post #69
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…

That's a problem even in B2B businesses. I used to run a design center where we often contracted out teams to work onsite at a client's place. Clients sometimes offered one of my guys to go direct, even though there was a big nasty clause in the contract forbidding that. But then we didn't want to start suing our clients so they usually got away with it. It must be way worse in a B2C business. I just don't see how th…

The best solutions that I've seen for that is an explicit charge / fee for doing so, in the original agreement, rather than a prohibition.

Re: Why Homejoy Failed

#146

Post by avnfish »

saalweachter wrote: post #13
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 ar…

I think this point connects quite nicely to Untog's comment [1] about why Uber succeeds where Homejoy did not.

[1] https://news.ycombinator.com/item?id=10451531

Re: Why Homejoy Failed

#147

Post by sib »

jdmichal wrote: post #28
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…

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…

For those who don't have a cable (TV) subscription, there are multiple online services that have new-release movies for rent on a transactional basis.

Re: Why Homejoy Failed

#148

Post by navait »

mason55 wrote: post #99
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 s…

Care to illustrate with a real example?

Re: Why Homejoy Failed

#149

Post by irl_zebra »

michaelt wrote: post #128
aamar wrote: post #70

Earlier quoted context omitted.

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?"

Additionally, Groupon has a three day return policy. So go to the business and just return the groupon if the business wants to bypass.
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