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Why Homejoy Failed

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Re: Why Homejoy Failed

#131
post #36
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.

nope... not where the density is lower

Re: Why Homejoy Failed

#132

The unnatural way Homejoy raised their seed rounds, with Cheung basically calling up Levchin and PG [1] was instrumental in setting up a failed business. This gave the startup undeserving social proof and let to the huge funding it should have never received. [1] https://www.youtube.com/watch?v=lVDmyRxeGCo&list=PLQ-uHSnFig...

tl;dr; summary of video -- "The theme that most people want me to talk about and which I will oblige today is ... how not to die in the context of a startup. ... Our goals (1) make people happy, (2) build a huge humungous business, which is a proxy for making a huge impact." She goes on to talk about how they spent years looking for the Homejoy idea since they did not have any personal problem that they cared enough about. At 22:00 she talks about getting $25K each from Max L. and PG: "It's like skydiving... and a hundred feet before hitting the ground, you magically get pogo sticks and bounce up. ... Now we have over 40 million in investment and we are living the dream. ... The good news is that you only fail if you stop trying." She also ends saying that her success is due almost entirely to hard work, not luck.

Re: Why Homejoy Failed

#134

Earlier quoted context omitted.

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,…

Sure, but that's tu quoque, isn't it? Meanwhile: none of those mom-and-pops are shooting for billion dollar valuations on the backs of people who by rights shouldn't be 1099s.

What makes this easier to stomach is the poetic justice of contractor "leakage" eventually killing the business.

Re: Why Homejoy Failed

#135
post #51

Earlier quoted context omitted.

I don't know too much about it, but just from an initial glance it seems like it is better positioned, simply by offering things like plumbers, electricians, etc - again, they aren't services you fall into regular patterns with. They're very much on-demand when there is water leaking all over your apartment. That said , I'm sure "doesn't seem to be struggling from what I can tell" could have been said about Homejoy,…

Yeah, Homejoy's demise took everyone by surprise. Unless the company is public, it's almost impossible for a casual observer to tell how healthy it is.

No it didn't.

My first question when I heard of them is how they prevent cleaners from ever using the platform again. This seems to be the single biggest long term stumbling block, that they never really got close to solving.

http://techcrunch.com/2015/07/31/why-homejoy-failed-and-the-...

Aside: I saw Adora at the London StartUp school hosted by YC. She really didn't come off that convincing to me. Then she said something really, really strange - "You don't fail until you give up", and I wondered why someone would say something like that.

Re: Why Homejoy Failed

#136

"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…

Non circumvention agreement solves that beautifully. And I think it is more enforceable.

How? Keep in mind that most jurisdictions take a VERY dim view of a company trying to prevent someone from working.

Re: Why Homejoy Failed

#137
post #46

Earlier quoted context omitted.

I use a service called Handy (app-based home cleaning and handyman). It works fine. And doesn't seem to be struggling from what I can tell. https://crunchbase.com/organization/handybook/ edit: I'm in Chicago

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 money for services.

Re: Why Homejoy Failed

#138
post #57

But on this particular holiday, a booking had slipped through unnoticed, due to a website malfunction, according to a former employee. Rather than cancel an appointment at the last minute, Homejoy’s cofounder and CEO Adora Cheung grabbed a toilet brush and a vacuum cleaner. Then she headed to San Francisco’s Mission Dolores neighborhood and scrubbed. “The customer had no idea,” said Arjun Naskar, one of the earliest…

The premise was more that services like Merry Maids charged a 300% markup on cleaner's labor, but Homejoy could charge 15% because they automated everything.

Perhaps there are CEOs who've scrubbed exactly one toilet for the photo op. Cheung isn't one. She learned the job and led from the front. Some stories are here: http://www.femalefounderstories.com/adora-cheung.html

Re: Why Homejoy Failed

#139

Earlier quoted context omitted.

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,…

What value is there in national lead generation for something that is extremely local?

Re: Why Homejoy Failed

#140

"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…

Non circumvention agreement solves that beautifully. And I think it is more enforceable.

That's usually too taxing for startups to enforce, and suing customers isn't really positive for your reputation.
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