
Pondering Homejoy’s Failure - brianchu
https://medium.com/@rockstox/an-inside-look-at-homejoy-s-failure-391d74524a19
======
MattRogish
I think a theme that I keep hearing re: HomeJoy (I was a customer in 3 cities
over 3-4 years) is they weren't solving the right problem.

My problem as a customer wasn't finding a cleaner, but finding and retaining a
cleaner I liked, was good, and I trusted. Their platform did none of the
latter, and barely did the former.

I couldn't pick cleaners based on rating. I couldn't even see rating. It took
forever until I could request the same person come every week. And, I knew in
the back of my mind I was paying Homejoy a premium that the cleaner didn't
see. For what? They were begging clients and cleaners to setup an outside
relationship. Price goes down for the client, cleaner gets paid more. Win/win.

In my opinion what Homejoy should've done is paid for the connection - given
my time preferences, match me with the best cleaner in my price range. Then I
pay the cleaner directly. If Homejoy wants to setup stripe, collect just the
3% fee.

Charge the cleaner for access to the platform, or charge me for the
matchmaking. Or both.

How do you get around the 1099 -> W2 issue? Have a series of training classes
that the cleaners can optionally take, list this on their profile, allow them
to level up.

Provide services to allow individual cleaners to differentiate them from the
pack (having dealt with dozens or more individual cleaners, there were clearly
some that were just doing it as an experiment and some that made this their
career).

Yes, HomeJoy maybe wanted to treat cleaners like replaceable robots, but
humans don't work that way. As the author stated, Homejoy was solving a human
problem with engineering.

~~~
birken
What you are talking about is essentially what Thumbtack does, and not
surprisingly Thumbtack is a much healthier business.

It is also nice that such a platform works pretty similarly across hundreds of
different service categories, whereas such an ultra-specific platform like
Homejoy only works for a few.

------
leothekim
This epitomizes the arrogance and drowning self-absorbedness of Bay Area
startups. And it does it in a Medium post.

And wow, there are some real gems in this post. For example:

"Customer interactions happen inside of their homes (anything that went wrong
was grossly amplified)"

What did you expect? THIS IS WHAT YOU WERE SELLING.

"Client expectations vary wildly"

Yup, different people like different things. News at 11.

"High cleaner turn-over when product quality demands consistency"

What did you expect? Any warm body off the street can be trusted to go in some
stranger's home?

"I could go on, but the point I am trying to make is that the Homejoy team was
exceptionally talented and did amazing things given how punishing the industry
was."

Oh I'm sorry. What you were trying to do was _hard_. That's because you were
doing it wrong in the first place.

"To be fair legal constraints did throw a wrench into some of our plans."

For serious? _To be fair_? Fair to whom?

"Given what I’ve taken away from Homejoy I don’t look at it like a failure. I
think there’s a morbid curiosity about what went wrong with a failed startup."

I don't give two shits about your failed startup. You failed for patently
obvious reasons. _You trivialized the problem_ which, for a company founded by
so-called two engineers, is the ultimate sin of engineering.

"Homejoy will always be more synonymous with success than failure."

Delusions of grandeur.

~~~
nostrademons
It's very common for the reasons for business failure to seem obvious in
retrospect. That's because building a successful business requires getting _a
lot_ of independently trivial things right, and doing so under very tight time
and resource constraints. If you're a commenter on Hacker News or a student in
an MBA course, you have the time to focus on what went wrong, and of course it
seems obvious. If you're an entrepreneur building the business, your attention
was probably elsewhere, and it's likely that the you didn't even think about
the things that killed your business.

~~~
visakanv
> If you're an entrepreneur building the business, your attention was probably
> elsewhere, and it's likely that the you didn't even think about the things
> that killed your business.

Great point, and it also explains the "always a success rather than a failure
in our minds" perspective. From their point of view, they just kept fixing one
problem after another, which looks (and feels!) like progress.

Unfortunately, feeling good != doing good. It's unenviably difficult.

------
xiaoma
Interestingly, even after it had failed Homejoy was one of the few startups YC
specifically called out as on the home page as examples of what the program
could provide. I've only just now seen it updated not to include that section.

What was it about Homejoy that got it so much attention, promotion from its
investors and press from the media? What's the underrated startup that
everyone has been overlooking during the same period?

------
dangoldin
Two years ago I was wondering why there was such a glut of these cleaning
startups. The entire idea of applying the Uber model just didn't make sense -
one is a commodity product with no way to bypass the middleman while the other
requires letting someone into your home and encourages going off platform.

Dug up the old post for those interested -
[http://dangoldin.com/2013/12/09/why-are-there-so-many-
cleani...](http://dangoldin.com/2013/12/09/why-are-there-so-many-cleaning-
startups/)

------
detaro
> _Getting to that consistent Homejoy Cleaning proved to be way out of reach.
> As a result each product interaction could be wildly different, unlike the
> consistent factory packaged product vision that we were pushing. As a former
> colleague put it “Our product should’ve been positioned closer to finding
> the right match on OkCupid, as opposed to finding the right macbook”._

Interesting quote that IMHO nicely sums up the differences between something
like Homejoy and something like Uber. Not everything can be neatly packaged in
a one-size-fits-all service.

~~~
danieltillett
Homejoy would not have succeed even if every one of their customers were to
fall head-over-heels in love with their cleaner. Homejoy’s business model was
fundamentally flawed and no tweaking or pivoting could ever solve this. There
was no problem that could be solved with technology. No solution = no
business.

The only interesting thing out of the whole homejoy experiment was in exposing
the shallowness of some VC’s business acumen. I wish we would see a reasoned
explanation from the investors of why they put their limited partner’s money
into Homejoy.

~~~
visakanv
> I wish we would see a reasoned explanation from the investors of why they
> put their limited partner’s money into Homejoy.

"There's a 0.1% chance we could 10,000x'd our investment. It might be the next
Uber or Airbnb or [[insert_supposed_unicorn]]. You don't want to look like a
dinosaur who missed out on the next big thing, do you? It'll only cost you a
fragment of your $$. C'mon. For Glory! For Frodo!"

When it fails: "Eh, what can you do. Startups, amirite?"

~~~
danieltillett
This might be accurate, but it is hardly reasoned :)

------
luluki
A couple things stood out to me about Homejoy: -When seeing the founder Adora
speak at YC female founders day, she talked about doing cleaning herself to
learn how things worked, and something along the lines of it being
embarrassing if she'd been "seen" by someone she knew. That underlined to me
there wasn't really a respect for cleaners. It seemed strange to start a
business where you think it's embarrassing to be one of your own staff. -When
I did order Homejoy, the cleaner was sooo bad/slow that I felt that they'd
secretly sent me one of their engineers who'd never cleaned an apartment
before. He just seemed lost. He spent an hour and 45 minutes just cleaning my
bathroom which was really strange. When he left, I realized that he'd moved
the plunger out of the bathroom and left it on the bedroom floor and I had to
move it back! It was just weird, an experienced cleaner wouldn't move a
plunger into a clean area and just leave it there! I wrote a long email to
them about the experience and they offered to send someone back to finish up
the clean - of course I'd finished cleaning myself by then and said I wasn't
interested. I didn't feel they really took my feedback to heart - it was
detailed an took a while to write, but they didn't respond to any part of it
directly.

------
stevebmark
_> Homejoy was led by two software engineers. Both wildly talented humans, but
both wildly out of place given the nature of the problem we were solving._

A tangent: This is something that scares me about many Bay area startups. What
do software developers _really_ care about home maintenance? This is a serious
question. Some startups you can tell the founders are in love with the idea.
The founders ARE the idea, and they're devoted to it. They believe it entirely
independent of making money.

Home care seems like a nuisance and a real world problem. But why devote your
life to it? Again, this is a serious question, not a stab at Homejoy. It
doesn't seem like a problem that anyone could seriously put their life's work
into. It's not like you're a home repair person crafting the finest cabinets
you can for clients. From an outsider's perspective, this seems like the
founders could only superficially be in it for the money. For the

 _> majestic startupville spell_

, but not for for the true, deep love of the idea.

I've seen the Stanford engineer dropout start the clothing company. The bored
engineer spin up yet another time tracking app that they don't use themselves.
The car-less developer vagrant try to "disrupt" auto sales. I've been there
before, brainstorming "startup" ideas. I'm glad none of them panned out,
because I can't imagine being attached to any of them. Fringe ideas to make
money and solve problems I didn't have.

I don't know what makes a company successful, but to me a red flag is a
mismatch of founder lifestyle and true, obvious investment in the idea. Can a
successful startup be founded by someone who's only in it for the money?
Probably, and many Bay area startups are probably in that category. The
money's here, after all.

Is it an unattainable ideal that the founders of a company truly believe in
the product, entirely independent of financial success? Does that correlate
with company success? I'd like to think so, even if just a fantasy. As an
outsider, Homejoy doesn't appear to fall into that category, because I have a
hard time believing two software engineers cared about the idea at their core,
outside the obvious desire for something you build to succeed.

~~~
liamcardenas
I don't know much about Homejoy or its founders, however, I wouldn't assume
that they weren't dedicated to their idea. I believe that being excited about
something is largely a choice. I, personally, could easily be excited about a
cleaning related start up. And trust me, I hate cleaning... but there is a
huge difference between the act of cleaning and making a cleaning service.

Maybe you are right, but I think it is awfully speculative to say that they
didn't "[care] about the idea at their core."

~~~
stevebmark
I'm actually hoping someone will reply and show me why I'm wrong, because it's
a scary view. As a software engineer in the startup scene I personally don't
see how they _could_ care about the idea deeply, based on all of my
experiences. I'm hoping someone has an experience that proves me wrong.

------
visakanv
This (both the post and the comments here) are very interesting to me from a
"some people are intrinsically optimistic and some people are intrinsically
pessimistic" point of view.

> Homejoy and ‘fail’ have gotten tethered together in the tech headlines
> recently but for myself and many of my colleagues Homejoy will always be
> more synonymous with success than failure.

Rationalization is a hell of a drug And I don't mean that in a snarky way–
synthesized happiness every bit as "real" as "genuine" happiness. The brain
doesn't discriminate.

Dan Gilbert did a great TED talk [1] about this:

> "Who are these characters who are so damn happy? The first one is Jim
> Wright. Some of you are old enough to remember: he was the chairman of the
> House of Representatives and he resigned in disgrace when this young
> Republican named Newt Gingrich found out about a shady book deal he had
> done. He lost everything. The most powerful Democrat in the country lost
> everything. He lost his money, he lost his power. What does he have to say
> all these years later? "I am so much better off physically, financially,
> mentally and in almost every other way." What other way would there be to be
> better off? Vegetably? Minerally? Animally? He's pretty much covered them
> there."

Startups are often started by wildly optimistic people, while Internet
messageboards tend to be populated by wildly pessimistic people. I'm not
saying that either is better or worse, but it's an interesting phenomenon to
witness.

So the interesting thing here is... while Homejoy is obviously a failure, I
legitimately believe that OP feels good about himself, and probably better
than some successful founders feel about their successful startups.

Rationalization is a hell of a drug. [2]

PS: Another lesson I think the cynics and pessimists could take away from this
(but, by definition, probably won't) is that you can get away with a lot more
failure in this world than you imagine, and still probably end up on top. OP
is still probably better off than a lot of us career-ily and in many other
ways.

I wonder, if blind optimism could be sold in a drink like coffee, would it be
worth buying (in terms of net impact on well-being?) Seems like it might be.
Curious for your thoughts.

\---

[1]
[https://www.ted.com/talks/dan_gilbert_asks_why_are_we_happy](https://www.ted.com/talks/dan_gilbert_asks_why_are_we_happy)

[2] [https://www.psychologytoday.com/blog/dont-
delay/200912/downs...](https://www.psychologytoday.com/blog/dont-
delay/200912/downside-manufacturing-our-own-happiness)

~~~
danieltillett
It is fine for the team from Homejoy to be wild optimists, but not the VC
investors. They are supposed to be a fiduciary with their limited partners
money.

~~~
visakanv
> It is fine for the team from Homejoy to be wild optimists, but not the VC
> investors.

Hmm... I don't know if I agree or disagree. I think a VC's experience must be
pretty unnerving– she probably turns down seemingly lousy deals and then
watches them go on to be staggeringly successful. And that makes her wonder if
she's too conservative, maybe. I don't know.

I believe that the partners also expect their VCs to take risks, and would
rather burn money (which is difficult for common folks like us to relate to)
on 100 bad startups than miss out on 1 home run.

After all, if the VC screw-ups are not tolerated, the partners will just cut
off their money supply. This isn't happening, or hasn't happened yet. Which
signals to the VCs to continue taking risks.

~~~
danieltillett
I would love to be a VC. Someone gives you 100s of millions dollars which you
don’t have to give back for 10 years and which you can spend on whatever crazy
ideas you like. Just follow the herd and no one will blame you if you lose the
lot and if the herd is right you make out like a bandit. It is a game of heads
you lose, tails I win.

~~~
nostrademons
I'm pretty sure I'd hate it. (I had the opportunity a few years back but
turned it down because it wasn't the right time to leave Google. Also, my wife
is an institutional investor, but in philanthropy and not tech.) Some of the
downsides:

Your life is consumed by pitch meetings, and you have to say no to the vast
majority of them. You have to constantly be out hustling for deal flow. If you
miss the wrong startup, you've probably missed your chance to get a return.

You are a support role. Your job is to direct resources to the people who
actually make things happen, not to make them happen yourself. You don't
usually get to build things yourself, and when you do, nobody can know about
them.

When things go terribly badly, you are frequently on the hook for cleaning
them up.

Your compensation _can be_ pretty awesome, but your liquidity sucks. Many
times, you have to buy into the fund with your own personal money. The fund is
locked up for 7-10 years. During this time, you basically can't leave, or if
you do, you better be comfortable with someone else calling the shots for a
significant portion of your assets. You draw a salary which (if you're not a
GP) is fairly generous & adequate but is not going to make you wealthy. The
way to get wealthy is off the carry of the fund, which, of course, requires
that you got into one of the hot startups of your era.

I would much rather be building things. Even if I wanted to get rich managing
money, I think that running a hedge fund, doing prop-trading for a big
company, or managing the endowment for a pension or university is a much lower
stress, higher-return option.

~~~
danieltillett
This sounds like hard work - I think I might just have to keep running my own
business :)

Out of curiosity why can’t anyone know that you built something? Do you mean
for your own company, or you can’t help your portfolio companies build things?

~~~
nostrademons
When you build stuff, it's usually to gain a competitive advantage over other
firms, and so it's only useful as long as you keep it secret.

------
alaskamiller
600 days ago Exec pivoted and left the game.

[https://news.ycombinator.com/item?id=7380912](https://news.ycombinator.com/item?id=7380912)

Can we stop now?

------
7Figures2Commas
> ...the point I am trying to make is that the Homejoy team was exceptionally
> talented and did amazing things...

> Homejoy was led by two software engineers. Both wildly talented humans...

> Homejoy and ‘fail’ have gotten tethered together in the tech headlines
> recently but for myself and many of my colleagues Homejoy will always be
> more synonymous with success than failure.

The entire post describes a litany of horrible business decisions and mistakes
that are hard to reconcile with the author's compliments of the Homejoy team.

~~~
reikonomusha
It is entirely possible to have an extremely good team and talented,
knowledgeable people as leaders, but that doesn't make good businesspeople or
imply a good vision.

~~~
danieltillett
This is true and it is where the investors should have stepped in. A good
investor would have said to the Homejoy team "we believe in you and will back
you in any viable business venture, but the home cleaning market is not a
problem that will be solved by technology. Go and find something better and we
will talk - here is $50K so you don’t starve in the mean time."

~~~
7Figures2Commas
Yes, investors should be putting twenty-something would-be founders who think
it's a good idea to "lock customers into discount rates that even with
infinite retention won’t become profitable" on $50,000 retainers to come up
with ideas that they can then fund.

That's an efficient way to deploy a nine-figure fund if I've ever heard of
one. I'm sure LPs will love it.

~~~
danieltillett
Well considering the 50K is basically a rounding error to most VCs the money
is not an issue. Given the difficulty of assembling a world class team to let
one disintegrate just because their current idea is poor is not a good use of
a limited resource.

Actually why VCs think good ideas and good teams should come as a package has
never been explained to me. The is no reason to think that the best teams will
have the best ideas. If the limiting factor in success is the quality of the
team then why let great teams work on anything but the best ideas.

~~~
7Figures2Commas
> Well considering the 50K is basically a rounding error to most VCs the money
> is not an issue. Given the difficulty of assembling a world class team to
> let one disintegrate just because their current idea is poor is not a good
> use of a limited resource.

You do not seem to understand how fund management works in the real world. A
venture firm simply cannot deploy a nine-figure fund by writing $50,000 checks
to keep on ice every entrepreneur it thinks has potential.

Furthermore, I don't see how you can conclude that founders who thought it was
a good idea to "lock customers into discount rates that even with infinite
retention won’t become profitable" represents a world-class team. The post-
failure behavior of one of the Homejoy co-founders[1] is even more damning.

[1]
[https://news.ycombinator.com/item?id=10468700](https://news.ycombinator.com/item?id=10468700)

~~~
danieltillett
VCs don’t have to lock up every entrepreneur, just those they think are world
class with a bad idea. If the team truly is world class then they should be as
rare as unicorns. To let a world-class team explode over just because they had
a bad idea is silly if 50K would keep them going until they came up with a
good idea.

I don’t think the team at Homejoy was world class, but I also didn’t back
them. We have to assume that the VCs that did back them thought they were a
world class team or else they would not have given them the money they did.

I am more lenient towards delusional founders (especially young ones) than
delusional VCs. The team at Homejoy would have done very little damage if they
had not been backed.

