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Homejoy says goodbye

blog.homejoy.com

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Re: Homejoy says goodbye

#171

Post by Eiriksmal »

icelancer wrote: post #101
unchocked wrote: post #91

Earlier quoted context omitted.

Sure, but is it worth their margin? The market resoundingly answered "no".

Er, I always went through them. So did many others. They stated they are folding primarily because of lawsuit pressure, not referral issues.

> They stated they are folding primarily because of lawsuit pressure, not referral issues.

I haven't seen any reasons for the closing. Where was this mentioned?

Edit: More reading turned up a shady Re/Code article proclaiming that the Uber decision shuttered Homejoy. Loads of clickbait, nothing firm in the way of substantiating the title.

Re: Homejoy says goodbye

#172

Post by S4M »

I'm surprised. I don't know much about Homejoy but I read once that it was the company in the YC portfolio that has the highest growth, so I thought they would become a unicorn at some point. What happened to them?

Re: Homejoy says goodbye

#174

Post by 7Figures2Commas »

Homejoy was (at least at one point) the fastest growing company in YC history according to PG[1], and if you go back and read the press, particularly around its funding, it was treated like it was already a success.

Its rapid demise is a good reminder that growth isn't profit, and funding from top tier investors doesn't actually signal that you are building a sustainable business.

Incidentally, I have pointed out the employee misclassification issue numerous times[2][3], and wrote last year[4]:

> It's going to be very interesting in the coming years to see which of these on-demand companies continue to thrive because I personally think it's inevitable that many of them are going to be forced to reclassify their workers as employees. I suspect some investors aren't giving this enough consideration in their due diligence.

If investors are now doing their due diligence (gasp) and realizing that many of these portfolio companies are not going to be able to effectively defend against misclassifcation class actions, Homejoy is not going to be the last of these highly-funded on-demand companies to literally hit a wall.

[1] http://www.reddit.com/r/EntrepreneurRideAlong/comments/1uyr6...

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

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

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

Re: Homejoy says goodbye

#175

Post by brudgers »

_sentient wrote: post #78
justinzollars wrote: post #12

Earlier quoted context omitted.

This is exactly their problem. I wonder if LawnLove will have the same problem?

Founder of Lawn Love here. We think a lot about disintermediation risk. We do a number of things to prevent it, but it ultimately comes down to providing enough value to the supply side of your market. If you build a product that drives real, ongoing value for your service pros, they will be much less incentivised to cut you out of the transaction. The same is true for the demand side. Also, lawn care has a reduced r…

I think one of the issues with Homejoy and disintermediation is that cleaning inside the home is well up the intimacy scale. It's different from say a commercial cleaning service. The risk for the customer is that next time they will send someone different. The new person will be more of an unknown quantity whereas the current cleaner, if they are good, is exactly who the customer wants sent out next time. When this happens, the customer benefits more from coordinating their schedule with the individual cleaner than from the on-demand scheduling via Homejoy.

For Homejoy, saying "we are bonded and insured" reduces reluctance for a first you or when on-demand service is the primary consideration. But for recurring service, having trust with an individual beats the crap out of being able to point to the contract or collect against a bonding agency if something goes wrong.

[aside: I found Adora Cheung's presentation for How to Start a Startup thought provoking: http://startupclass.samaltman.com/ ]

Re: Homejoy says goodbye

#176

Post by nikolaj »

product50 wrote: post #73
tptacek wrote: post #16

I get the sense that many of the people involved in Homejoy are well-intentioned and hardworking. But I can't say that I think it's a bad thing that tech startups are finding it difficult to monetize unskilled labor. The technology that most companies like these offer (with the possible exception of Uber) is a commodity. The real asset they have is the network effect. Which makes the balance of power between the tech…

I think you have it wrong here. The fact that HomeJoy was actually playing in a market which required skill labor was responsible for their downfall. Think about it - if there is an HomeJoy operator who's actually good and did her job very well (and thus is skilled), next time I will want to deal with her directly (to save on cost) and not deal with HomeJoy at all. I certainly did this. In fact, many HomeJoy operator…

I see this a bit differently.

Uber and AirBnB caters to immediate needs for a short term engagement, so the dispatching capabilities are the real value (find me someone who can do X right now).

Homejoy is dispatching for a long term relationship, so it has a hard time staying engaged in the relationship as it progresses.

I think the skill is less important than the duration of the engagement for a dispatching service like this.

Re: Homejoy says goodbye

#177

Post by Retric »

austenallred wrote: post #143
brianmcconnell wrote: post #71

Earlier quoted context omitted.

A prediction about "sharing economy" companies. Almost all of them are tacking on a thin rind of web/mobile UI and smart dispatch technology to an existing service. The long-term winners will be companies like Flywheel that recognize this and focus on providing that service to existing operators, much like payment processors. This, of course, is perceived as a smaller market since they can't count revenue the same wa…

> The long-term winners will be companies like Flywheel that recognize this and focus on providing that service to existing operators, much like payment processors. I don't think this creates a very big moat - that's essentially what Uber started out as (dispatch for private driving companies that already existed); they started letting anyone drive in order to meet demand. If all the services are interchangable (and…

Defaults can change really quickly. Unlike Facebook Uber has basically zero network effect between cities. So, a competitor can win one or two small cities and just keep growing.

Consider there are only 40,000 taxi drivers in New York.

All it takes is for a company to find the top 5-50% of Uber/Lift drivers in a city offer them a minimum income of a few k/month assuming they take A% of rides and work y hours and boom instant driver network. Sure, doing it now when Uber is flush with cash is a bad idea, but after it pop’s there is no way they can stay competitive without paper thin margins long term.

Re: Homejoy says goodbye

#178

Post by qq66 »

zaidf wrote: post #146

My problem with Homejoy/Handy etc. is the high degree of unpredictability in the quality of each cleaning. My conclusion is that for something like home cleaning, you want to find a regular person -- not someone new each week. Our regular cleaner(which I found through nextdoor) recently had to quit. It was enough to upset me for a bit because finding a quality and consistent and affordable cleaner is very hard. Lucki…

> You don't want someone who is doing it as a past time to make some extra cash. That might work with Uber/driving

Until your Uber driver takes a left turn onto Shoreline Boulevard without looking, and nearly kills you.

Re: Homejoy says goodbye

#179

Post by cookiecaper »

markonthewall wrote: post #152
jasonwilk wrote: post #129

I wanted HomeJoy to work and tried to use the service a few times. What the failure came down to: 1. The cleaners were not professionals. It felt like they were just recruiting anyone who wanted a job. You could really feel this with the lack of passion from the cleaners and the severe lack of quality cleaning. Most of the people complained and were quite rude sometimes. Cleaning is very much a skill as much as it is…

> the lack of passion from the cleaners I doubt cleaning other people's shit is anyone's passion.

I have an ex who LOVED to clean. She got a lot of satisfaction from improving peoples' living space and she was awesome at it. Anytime something was dirty, she would have a natural compulsion to clean it and you had to drag her away if she got distracted while she was supposed to be doing something else. Maid work would be a dream job for her.

Re: Homejoy says goodbye

#180

Post by aestetix »

yummyfajitas wrote: post #123
aestetix wrote: post #75

Earlier quoted context omitted.

There are laws surrounding employment? California is an at-will state. Further, 1099 contractors don't get health insurance, workers comp, or any coverage by the employer. There's also no assurance of long-term employment, thus no reason for the company to be loyal.

There are laws surrounding employment? California has extensive laws that impose fixed costs on employers (paid family leave, for example). CA is also notorious for lawsuit risks. There are also federal laws - Obamacare for anyone working 31+ hours, and many more. In economics, fixed costs and regulations like this are called "rigidities", and are well known to cause shortages/surpluses and misallocation of resources…

Those laws are usually based on the size of the company. FMLA (not CA, but relevant) only applies to companies of over 50 employeees, and if you've been there for more than a year. You can get around a lot of those laws with using contractors.

Regarding Obamacare, one of the criticisms of the law was that companies promptly began offering employees one hour fewer a week than would meet the health care requirement.

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