

Ask HN: Startup Lessons from Homejoy - diminish

During startup school class the lesson I enjoyed the most was Lesson 4: Building products, talking to users and growing. I watched the video many times.<p>http:&#x2F;&#x2F;startupclass.samaltman.com&#x2F;courses&#x2F;lec04&#x2F;<p>Homejoy&#x27;s recent exit is quite interesting and valuable. What lessons do you see there? Any ideas are welcome.
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silverlake
From what I've read there are a few lessons: (1) what is your value as a
middleman, and why wouldn't providers go around you? (2) Make sure customers
are happy. Homejoy didn't get reliable cleaners, which hurt their brand. (3)
Adjust to regulatory changes. Homejoy claims switching from workers from 1099
to employees caused them to close.

Uber does well on all these. Customers don't need a regular driver, they just
need any car right now. Uber is 10X better than taxi service and customers
love it. Uber aggressively crashes through regulatory hurdles. Homejoy failed,
but Handy and Amazon Home Services and Thumbtack are still around. Google
might jump in, too. So it might be an issue with Homejoy, not with the
business model.

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danieltillett
The major lesson is ask why your business has not been done before. If your
business could have been done before technology and it hasn’t, then just
creating a app is not going to make it viable all on its own.

Also avoid businesses where your margins are wafer-thin and you are competing
with undocumented labor.

This probably won’t be a popular opinion here, but think about how you are
going to be able to scale early on. It is fine to start out doing things
manually as a way to delay building infrastructure, but you really need to
think right from the start about how you are going to be able to scale and
make a profit.

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manidoraisamy
It had product-market fit. But, was a no-margin business. Although Uber is the
same, it makes it up with surge pricing. Still, it was a good try and I am
sure some startup will figure out a business model in future.

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dylanjermiah
Many people said their product wasn't very good, in the last HN thread.

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manidoraisamy
I think quality was the result of no-margin business. They could have fixed it
(through training & skilled/hired employees) if they had good margins. Today's
TC article was bang on - [http://techcrunch.com/2015/07/31/why-homejoy-failed-
and-the-...](http://techcrunch.com/2015/07/31/why-homejoy-failed-and-the-
future-of-the-on-demand-economy/)

