

What Really Killed Homejoy? It Couldn't Hold on to Its Customers - akanet
http://www.forbes.com/sites/ellenhuet/2015/07/23/what-really-killed-homejoy-it-couldnt-hold-onto-its-customers/

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sarwechshar
It seems the main problems Homejoy faced were:

\- not able to increase retention rates and get organic growth \- heavy
reliance on discounted pricing \- rapid (too ambitious?) expansion strategy \-
customers and contractors bypassing the service for subsequent bookings \-
pressure from investors

This is a real shame as Homejoy seemed to have a great team leading it (I
enjoyed watching Adora's part for How to Start a Startup). Lessons should
certainly be learnt and I wish the best of success to everyone who worked at
Homejoy.

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WalterSear
>This is a real shame as Homejoy seemed to have a great team leading it

How does that follow? Who else is responsible for such an overarching part of
their strategy? It sounds like the talked they talk and too much.

Fwiw, I don't think that customer/supplier retention was their only problem,
according to a number of people I've talked to who tried their services.

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sarwechshar
I agree it is up to the people in charge to ensure the company succeeds. I
just meant they seemed like hard-working people but perhaps could have
identified the failures earlier on.

Also I listed 5 failures (not just customer/supplier retention) I identified
but the formatting got screwed up.

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itsdevlin
Isn't the supply side of this being neglected? This article (and tbh a few
others I've read on it) feels as if they're trying to say the following, but
in 500 words: "They couldn't increase revenues enough."

The piece of this equation that I'm much more interested in is the cost side.
By handling the training & bookings all in-house, it just feels like they
couldn't get a low enough unit cost per job. Especially in something as low-
skilled (read: low-margin?) as house cleanings, it sounds like what actually
happened was that Handy couldn't get costs down low enough to deal with the
true market equilibrium.

While I'm not disagreeing that the legal fees from lawsuits may have made the
next round of funding a challenge and was likely a heavy drain on cash on
hand, I think jumping on the 1099 vs employee debate is a bit of a cop out.

It's another company failing to launch a double-sided marketplace, which sucks
for all parties involved, but I'd be really really interested in reading about
what actually broke.

