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Why Homejoy Failed

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Re: Why Homejoy Failed

#171

Post by DanBC »

debacle wrote: post #169
gertef wrote: post #165

Earlier quoted context omitted.

That's not true. The regulatory system surrounds day care centers, which is not care.com's business. care.com's business is in 1:1 care (nanny) where there is not regulation or quality control, except a bit of tax control.

> where there is not regulation or quality control In my state, you need to be licensed to provide child care. It looks like California and a few other states are similar.

https://www.berkeleyparentsnetwork.org/advice/childcare/lice...

It seems to depend on how many children are being looked after and where the care takes place.

Re: Why Homejoy Failed

#172

Post by debacle »

DanBC wrote: post #171
debacle wrote: post #169

Earlier quoted context omitted.

> where there is not regulation or quality control In my state, you need to be licensed to provide child care. It looks like California and a few other states are similar.

https://www.berkeleyparentsnetwork.org/advice/childcare/lice... It seems to depend on how many children are being looked after and where the care takes place.

Yeah, California law seems more lax in that regard.

Re: Why Homejoy Failed

#173

Post by toomuchtodo »

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?

> The wage floor is way below $15/hour in much of the country

As a W2 employee, yes. If you're asking someone to work as a 1099 and eat their own self-employment taxes, transit costs, etc, that's going well below minimum wage.

Re: Why Homejoy Failed

#174

Post by vegabook »

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…

In old-economy-speak what you just said basically translates as "you entered a crowded market".

When you're standing on an unknown, rainy street corner far away from home, a taxi's services are urgently required, and not abundant. When you're lounging on your sofa and start contemplating how it would be nice for someone else to bin the pizza boxes, it's the opposite on both counts.

Moreover, I don't see the money men being impressed by a founder who can put out a piece so toe-curlingly embarrassing as "Dear Future HomeJoy Engineer".

Re: Why Homejoy Failed

#175

Post by gotchange »

emmett wrote: post #167
cletus wrote: post #53

It can be pretty much boiled down to this one quote: > ...and the steady leak of its best workers to direct employment arrangements with its own (now former) clients. Services such as Homejoy create value by providing a market for the discovery of those seeking work with those seeking workers. For any regular type work the incentive for the employer and the employee (if you can call them that) is to cut out the middl…

And now I am sad again because cleaning service discovery is still broken. Not that you're wrong, just that it would be really nice to be able to find cleaners through a service with good reputation tracking and recommendation. Which is intrinsically difficult to build for exactly the reason you specify.

They should start then considering owning their operations or assets and not renting them like what happened with Homejoy. It seemed at least from this analysis to me that they were on the fence all the time torn between going full-scale and building a reputable home cleaning business that's adequately equipped for the 21st century life or keep feeding off those maids through commissions into perpetuity which is totally unrealistic in my opinion.

This indecisiveness and the lack of vision or clarity of business goals really cost the company very dearly in execution and contributed to their demise

Re: Why Homejoy Failed

#176

Post by mason55 »

navait wrote: post #148
mason55 wrote: post #99

Earlier quoted context omitted.

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?

- Instead of giving away supplies, raise the percentage of the fee that you pay out. Then buy bulk supplies and sell them to the cleaners at a discount.

- Partner with P&G and Unilever to get access to trial products that you can give to your cleaners to try

- Act as an agent to negotiate group rates on stuff like health insurance

- Provide business services if you book a certain number of appointments each year. Tax help, those kinds of things.

- Maybe you can provide access to events or something where Homejoy books a group of cleaners and since it's a business you can charge them good rates

- Find other way to book cushy jobs that you can give access to for your most used cleaners

Obviously there's a 1099 line that they don't want to cross but if you provide access and opportunities and tier it based on appointments booked then you provide incentives to stay on the platform.

Similarly for customers, do things like give away cleanings or discounts randomly. Use your partnerships from above to give customers free stuff or coupons. Sell cleanings in 10 packs or offer a monthly or annual subscription that comes with a discount.

Re: Why Homejoy Failed

#177

Post by kefka »

SilasX wrote: post #164
kefka wrote: post #50

Earlier quoted context omitted.

Why would it be? I'm seeing a lot of reasons to bust "employment". Here's some. 1. Unemployment insurance? Well, you aren't employed. 2. Get hurt on the job? You're not on a job, 1099'er. 3. You "get" to pay the employer's tax as well as your own. Jokes on you, bub. 4. Want to join a union? They kill your account. 5. Real contracts can agree upon wages. How do you do this via Uber/Homejoy/"sharing job"? You don't. 6.…

All of those points apply equally well to any self-employed person. Should self-employment be abolished too? To the extent that there's a problem, it's in the fact that the law doesn't treat the self-employed/other-employed spectrum sanely, such that employer incentives don't align with social goals. We should fix that, not demonize business that optimize for the current broken system.

False equivalence.

Consultants have been around for a long time. And they command a high rate, because they are pros. No, they aren't an employee, nor would either side want them to be. They do the job, paid well, and part company. Most consultants get paid somewhere between $150-$400/hr . I know of one who's compensation is $500/hr.

This new thing, the "sharing economy" is a way to shove out employees from their protected status and government-fought for rights into the plan that mainly the professionals occupied. Instead, the companies that uses these tools figured out the masses can be convinced that these roles are better, somehow. These people are evident by the fact that they "work" for one company, have standards in which they must follow, and are paid around the low-middle wage for their services (8-12$/hr).

Big differences:

1. Wage disparity

2. Knowledge

3. Lawyer or legal team

4. Difference of liabilities

5. "Works for" but not really

Tl;Dr. This is an intentional misclassification to skirt employment law.

Re: Why Homejoy Failed

#178

Post by tcdent »

Why Homejoy failed:

> "We didn’t figure out how to deliver a consistently high-quality service"

The review sites agree and so does their churn rate. If you don't have a high quality service, you don't have anything. Trying to hack growth numbers with Groupons and extreme discounts while ignoring retention numbers demonstrates a lack of respect for the dynamics (basic math) and suggests expectations of a 'silver bullet' to success.

Additionally, home cleaning has got to be one of the most subjective services you could choose. Who doesn't idealize an absolutely spotless home, but act very differently themselves when tasked with actually achieving it. "This shiny new Internet will solve my problems perfectly." Unfortunately, all you're really getting is an under-trained, underpaid human laborer.

Re: Why Homejoy Failed

#179

Post by morgante »

prostoalex wrote: post #31
saalweachter wrote: post #13

Earlier quoted context omitted.

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…

> If your business plan is to skim money off of workers who could do their jobs and get paid without you Lead generation is a viable business, as demonstrated by Yelp (and previously Yellow Pages), it's just not hot and fast-growing.

Thumbtack is also a lead gen business, and they actually are quite hot (just raised at a $1B valuation).

Re: Why Homejoy Failed

#180

Post by Domenic_S »

mikeash wrote: post #36
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…

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.

> Finding somebody to clean your house is really easy.

Finding a warm body to drag a tepid rag around your countertop is easy, sure, but finding someone who's 1) consistent 2) always on-time and 3) not $100/hr is next to impossible.

Perhaps in a large metro it's easier, but I've had basically no luck in suburban silicon valley.

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