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Why Homejoy Failed

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Re: Why Homejoy Failed

#231

Post by kamaal »

amorphid wrote: post #226
kamaal wrote: post #219

Earlier quoted context omitted.

My dad is a cab driver. I myself have a lot of experience managing cab business, I can tell you cab business works pretty much the same way. You can sign up with as many cab drivers you like and offer them as much business they can handle. Sooner or later they will find permanent paying customers and move on. Especially among elderly, kids and women. Its the standard in every industry. Once you've built your ground,…

That's one big reason it's hard to scale a service business. Why maybe a fraction of X when you can make X?

Its not just paying commissions to the third party. If you are a good taxi driver, who keeps their car clean, provides bottled drinking water to customers, are punctual, polite, trustworthy etc you will get many people who would like to call you directly instead of going through a service like Uber. And along the way you would have met many customers who are exactly like you- polite, trustworthy and nice.

It becomes a natural fit.

Uber kind of services work because they are currently burning millions of investor money to subsidize your travel. Once they run out of money, you are back to the same thing again.

Which is why some times you must do extra work for free, because it keeps people around you happy and in return they are indebted to do something in return for you(Recommend you, tip you, hire you etc)

Re: Why Homejoy Failed

#232

Post by shostack »

trimbo wrote: post #95

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.

I found that ironic as well. Seems like every new customer acquired increases the risk of losing them more cleaners. A steep discounting through Groupon would just expedite that as it would reduce the risk/cost of trying a cleaner.

Re: Why Homejoy Failed

#233

Post by untog »

kamaal wrote: post #231
amorphid wrote: post #226

Earlier quoted context omitted.

That's one big reason it's hard to scale a service business. Why maybe a fraction of X when you can make X?

Its not just paying commissions to the third party. If you are a good taxi driver, who keeps their car clean, provides bottled drinking water to customers, are punctual, polite, trustworthy etc you will get many people who would like to call you directly instead of going through a service like Uber. And along the way you would have met many customers who are exactly like you- polite, trustworthy and nice. It becomes…

Taxi services are different though - you might be nowhere near your valued customer when they call. And they might be more inclined to take an "OK" driver rather than wait 30 minutes for you to get to them.

Re: Why Homejoy Failed

#234

Post by akshatpradhan »

yaur wrote: post #182
akshatpradhan wrote: post #152

Earlier quoted context omitted.

>I can't imagine using a service that sends someone different every time, or even someone for whom I can't see reviews and receive references before the first visit. This is a service that requires putting a lot of trust in the service provider. The alternative is if Homejoy would have treated Cleaners as employees and properly trained them. A properly trained and paid Cleaner as an employee would have provided that…

No way. If I'm paying someone less than 100$ to come in to a place where they could walk out with $10K+ worth of electronics, jewelry, etc I either need to be there to supervise or have a long standing relationship with the person. Ideally I would like to know enough of their other clients that a single robbery doesn't make economic sense for them. Once the relationship exists the agency brings minimal value.

That statement is conditional that you're paying the person less than $100.

What if the highly qualified employee from Homejoy was for $200-$250?

Re: Why Homejoy Failed

#235

Post by JonFish85 »

potatolicious wrote: post #137
kevingadd wrote: post #116

Earlier quoted context omitted.

Handy's a terrible service, actually. Creepy automatic recurring subscriptions for house cleaning, no way in the UI to cancel the subscription (!), frequent site downtimes. Had to go to great lengths to cancel an appointment I didn't create in the first place.

> "no way in the UI to cancel the subscription" Handy isn't the only one, and this ought to be illegal. If I can sign up online I ought to be able to cancel online. These companies can lie to themselves and the public all they want - the exclusive purpose of making you call to cancel (or worse, visit a physical location) is to discourage cancellations. It compromises the notion of a free and voluntary exchange of mon…

I'd love for this to be the case. The New York Times also does this (you must call to cancel), which is a fantastic pain.

Re: Why Homejoy Failed

#236

Post by ghaff »

debacle wrote: post #159

> Home cleaning represents an estimated $400 billion global market Any limited critical thinking will show that this number is likely off by 1-2 orders of magnitude. Your median US homeowner is spending $0 on home cleaning a year, and the average is likely very close to that. Outside of the US and Europe, labor costs drive that small amount to almost nothing. I would be amazed to learn that the actual size of the mar…

Almost certainly high. US seems to be about a $10B market: http://www.sbdcnet.org/small-business-research-reports/comme...

Note though that, outside US and Europe, labor costs are indeed a lot lower but having a lot of personal help (cooks, housekeepers, nannies, etc.) is far more common also as a result.

Re: Why Homejoy Failed

#237

Post by pbreit »

kamaal wrote: post #219
jkyle wrote: post #198

Earlier quoted context omitted.

> 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. This is the key failure. Anyone's whose regularly procured cleaning services knows the dance. You find a reputable cleaning service, they send out a cleaner. If you don't like them, you keep asking for a different one. When you find one you like, you ask them what they'd cha…

My dad is a cab driver. I myself have a lot of experience managing cab business, I can tell you cab business works pretty much the same way. You can sign up with as many cab drivers you like and offer them as much business they can handle. Sooner or later they will find permanent paying customers and move on. Especially among elderly, kids and women. Its the standard in every industry. Once you've built your ground,…

No, that's wrong everywhere I've lived and traveled. With non-recurring trips (pretty much everything except commuting), you almost never migrate to a single provider. The advantages of tapping into a pool of providers is too great. In house-cleaning, there are no advantages to tapping into a pool, and in fact people are leery of it.

Re: Why Homejoy Failed

#238

Post by jarek »

vinayak147 wrote: post #197
emmett wrote: post #167

Earlier quoted context omitted.

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.

I asked my neighbor about cleaners, they use X and gave me her phone number. I called X and she did an amazing job. Turns out, X has a higher incentive to clean my house because she can synchronize timing with my neighbor and reduce her overhead cost. The arrangement has worked great for everyone, running 9 years in a row and more neighbors have joined. I see this as an ideal win-win experience for all parties involv…

Talking to Your Neighbour as a Service? Asking People You Trust for Recommendations as a Service? I'm not sure there's a VC-growth business to be had in there exactly.

I mean, Airbnb kinda tried to the latter by getting you to add your Facebook friends so you can see their reviews, but I don't get the impression that's gone far.

Re: Why Homejoy Failed

#239

Post by robotresearcher »

dsl wrote: post #184
preinheimer wrote: post #88

Earlier quoted context omitted.

I gave Handy(Book) a try, and consistency in who arrived was my issue. The first person they sent was absolutely fantastic, send her every week!. Trying to book her again was a nightmare, the docs didn't match the application, and support pointed me back at the documentation. Finally a month later, after several support calls and emails, I had the same cleaner booked. Success! The morning of my appointment I looked o…

Just had the same issue with Handy. They notified my girlfriend 20 hours before an appointment that our requested cleaner was unavailable, and when we canceled charged us $15 for canceling within 24 hours. After 4 different attempts to cancel we gave up and called American Express. They blocked Handy from charging the card again and did a chargeback for every dollar we ever spent with them.

How can Handy survive in the real world where workers reasonably call in sick with less than 24 hours notice if their customers behave like this?

Re: Why Homejoy Failed

#240

Post by pbreit »

kamaal wrote: post #231
amorphid wrote: post #226

Earlier quoted context omitted.

That's one big reason it's hard to scale a service business. Why maybe a fraction of X when you can make X?

Its not just paying commissions to the third party. If you are a good taxi driver, who keeps their car clean, provides bottled drinking water to customers, are punctual, polite, trustworthy etc you will get many people who would like to call you directly instead of going through a service like Uber. And along the way you would have met many customers who are exactly like you- polite, trustworthy and nice. It becomes…

Wrong. On a gross margin basis, Uber is wildly profitable.
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