I thought it was very cool that she worked with her brother. You don't see sister/brother as business partners usually. She was also a hard worker from the impression, reading quarterly statements to find 'gems'. Lot of doing this and that. It really sounded like they were doing great, she and her brother knew what they were doing. $39.7M in 5 Rounds from 15 Investors seem like a pretty good winner.
And then suddenly this. A shift in the industry or inability to be profitable and sustainable ( I don't know why homejoy failed). Cleaning houses to find out what home services would be like (lean startup approach) and YC branding (quit your job and lets go) with 5 rounds of funding and still did not emerge as a winner. In hindsight it looked like they were doing everything out of the YC/lean textbook without really forming their own ideas. It's probably comfortable this way.
It appeared like they did everything right and they probably were but it did not produce success from the investors point of view. I think what we can learn from this is that just because somebody or something looks like they are doing everything right or talk like they know what they are doing it may not be the case.
I wonder had they bootstrapped and operated as a small business catering to a focused market instead of trying to expanding to different markets with easy capital flowing to SV, they could have ended up with a cash flow positive and recurring source of income.
I wonder if the bubble is popping and the skewed flow of capital is forcing stakeholders to operate outside of their means or comfort zone and resulting in failure. It was valued at $130 million dollars apparently. Who else out there YC or not, have unsound valuation? Surely, there will be similar stories in the future.
http://wpcurve.com/homejoy-adora-cheung/
Reading that article it is the same type of very logical and well rounded writing found on YC that shows expertise but then in this case it wasn't enough. What I observe to be interesting is that it mentions 'from failure to $XX million dollar in funding'. Perhaps raising a ton of money feels like success and that gives false confidence and incompatible strategies.
I find it really hard to swallow that it took 50 million dollars to figure that out where investing 150k in airbnb would've yielded immense return. Back to my original strategy of avoiding piling up positions on a single bet no matter how certain you are it's a winner and instead making numerous limited bets across large number of startups. Sell half of your equity to the guy investing $15 million dollar in the next series round in case it fails.