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Why Homejoy Failed

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Re: Why Homejoy Failed

#81

Earlier quoted context omitted.

Wow, pretty sweeping generalization. You can't think of anyone who might prefer an open office arrangement, or you can't think of anyone like you who would prefer it?

I can't think of anyone

Many HN'ers like open offices so now you have someone to think of :)

Personally I would like a private office but I'd always leave my door open.

Re: Why Homejoy Failed

#82
post #73

Earlier quoted context omitted.

For me it was price. I have three kids, so we do a lot of laundry. I simply wanted someone to fold and put away about twice a week... Home joys minimum worked out to be about $75 per visit... So about $37.5 per hour... And I don't think folding clothes as a service worth $600 per month.

You simply were never the target audience in the first place.

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. And, if this is a weekly or more frequent expense, that starts to add up. I have a housecleaner come in every few weeks and it does help to keep my place in some semblance of order, but it's definitely a luxury expense and I would probably be too cheap to have it done weekly.

Re: Why Homejoy Failed

#83

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...

Without specific reference to any company, "Convincing an investor to invest in a company which is not, at the present moment in time, either profitable or cashflow positive" is not in any way exceptional or unnatural. That's the nature of the game in early stage investing.

They're all high-risk companies which, if you simply linearly project out where they are today, will "default to dying" (to use PG's phrasing). Sophisticated investors bet that they can perceive some X factor about the business, the market, or the founders which will cause the business to actually not achieve the default outcome. Usually they lose these bets. Occasionally they bet that two Stanford gradudate students who know nothing about business will nonetheless figure out a terribly difficult CS problem allowing them to unlock money from an oversaturated low-margin business that every smart analyst correctly believes has no future. If you invest in nine $STARUP_WHICH_FAILED_INGLORIOUSLY and one Google you do very well for yourself.

To misquote the Wire: "All in the game, yo."

Re: Why Homejoy Failed

#85

"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…

Taxis have been tampered with. There are medallions and monopolies and such, the fair market hasn't reigned. Uber can change that, there is room to wiggle. Has cleaning been unionized or tampered with? If anything, I'd almost think it's shifted further to the other side, there might be undocumented workers and more cash businesses than taxis have, even less regulation if you will. If the market is working, then what'…

The initial value is the piece of mind on the customer side plus ease of use/scheduling. With maid service, you're letting someone in your house unsupervised for long periods of time, so it becomes extremely important to have accountability built into the transaction.

I have considered getting a monthly maid service and I live in the DC metro- somewhere with a ton of choices on that front- and I have not quite pulled the trigger on it because I am pretty freaked out by paying someone to have unfettered access to my house. I don't even have anything expensive to steal or break! There is zero chance I would trust a maid from Craigslist.

Re: Why Homejoy Failed

#86
post #46
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…

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

> And doesn't seem to be struggling from what I can tell.

http://www.yelp.com/biz/handy-san-francisco

http://www.yelp.com/biz/handy-los-angeles

http://www.yelp.com/biz/handy-chicago

Handy is also facing lawsuits:

http://gbdhlegal.com/wp-content/uploads/cases/Handybook-File...

http://arstechnica.com/tech-policy/2015/07/woman-sues-startu...

Re: Why Homejoy Failed

#87
post #34

Earlier quoted context omitted.

With a driver, your life is in the hands of someone who has nothing to gain from getting in a car crash. With a cleaner, your possessions are in the hands of someone who might have plenty of incentive to steal your stuff and sell it.

This casual assumption that all housekeepers are thieves is galling. Its a kind of working-class bigotry that is tossed around by the entitled without even noticing they are doing it. Of course folks have plenty of incentive to not steal - they have self-respect.

Almost all maids won't steal, but it's a great cover for thieves who want access to houses. You can't know which is which unless you get a good recommendation or hire the person and test it out.

Re: Why Homejoy Failed

#88
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 reality, inviting someone into your home is a very personal thing, and people much prefer to build a relationship with someone that they might pay a little more on a regular basis, than get a different person each time." Yes, for sure. I've had professional home cleaners for nearly 10 years now. And over the course of those years, I've had many conversations with friends and neighbors who do as well (e.g. in givi…

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 online and they'd switched my cleaner. The new person arrived 45 minutes late, did a poor job, and tried to get me to book her outside of Handy.

Finding someone on Craigslist is easier and cheaper. Answer a random ad, asses quality after their first visit. Either book them on a recurring schedule or move on to the next ad. The only difference is paying with a cheque rather than a CC.

Re: Why Homejoy Failed

#89
Postmortems like this are always a bit unfair. You ask employees who lost their job when the company folded what was wrong with the company, and they'll air every little complaint or inefficiency that existed within the company.

Isn't the ethos of Silicon Valley to 'hack it together' with tape and glue? Moreover, I'm pretty sure that's the reality of almost every high growth company. I'm sure you could find matching stories from within almost every winning unicorn: key bugs they didn't catch, poor decisions that cost them along the way, leadership gaffes, etc.

I think there are a couple interesting points to consider that the other comments address: difficulty of direct services, customer acquisition costs, 1099s. But we should expect more from reporters than to throw in every other possible anecdote they could dig up.

Re: Why Homejoy Failed

#90
A lot of the problems with the gig-economy as it stands now is that too many everyday people feel that the elite startup entrepreneurs are trying to build a new feudal economy.If these entrepreneurs were more humble and just worked to empower the ones doing the gig then their reward would be greater. One could empower these hard working individuals by allowing them to set their own price, by building tools that they could use to gain credibility in the eye of their customers, and give them a stronger safety net longer they work. In order for capitalism to work, the ones who do the work need to be able to reap what they sow.
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