
Homejoy says goodbye - philip1209
http://blog.homejoy.com/homejoy-says-goodbye/
======
jclune
I run a company similar to HomeJoy in Japan, and I disagree with most comments
here.

1\. Those who claim cleaning is not a "skilled job" should get off their
keyboard, spend a day cleaning their moms house, and get back to me when they
learn they are 3X slower than a pro and destroyed something with bleach-based
spray.

2\. It feels like nobody here actually read Adora Cheung's quotes about
multiple lawsuits coinciding with investment timing. That is obviously the
reason they shut the doors.

3\. Those who claim flaws in matching business model are to blame are making
non-quantitative assumptions. Just ask yourself, how high of a percentage of
users sharing direct phone # would cause a growing company to collapse? Also
the supply side risks losing stable income or insurance coverage.

I do quite a number of things much differently than HomeJoy, and quality
control being a major one. There are certainly a lot of challenges and
operational complexity to keep my team innovating. Japan has the highest
customer service standard in the world (and hardest to satisfy customers),
which is great for building a more solid foundation. If any hackers are
leaving HomeJoy and want to move to Tokyo, I'm hiring!

~~~
zaidf
_1\. Those who claim cleaning is not a "skilled job" should get off their
keyboard, spend a day cleaning their moms house, and get back to me when they
learn they are 3X slower than a pro and destroyed something with bleach-based
spray._

x100. There is a lot more variance between two cleaners than say two Uber
drivers.

~~~
Lawtonfogle
Due to the regulations needed to drive. Put someone with no experience driving
behind a wheel and you'll quickly see how skill based driving is. Just, unlike
good cleaning, we have a lot of training and experience with good driving.

Or if this is too extreme of an example, look at what happens when you give a
driver who has only driven small cars a big truck pulling a loaded trailer.
They'll definitely be slower than the driver's with skill.

~~~
hkmurakami
There's a great place to see this in action in SF: the Anchor Steam brewery in
Potrero Hill.

The truck drivers turn around 18 wheelers in an impossibly tight space there
and it's jawdropping to watch.

------
jasonwilk
I wanted HomeJoy to work and tried to use the service a few times. What the
failure came down to:

1\. The cleaners were not professionals. It felt like they were just
recruiting anyone who wanted a job. You could really feel this with the lack
of passion from the cleaners and the severe lack of quality cleaning. Most of
the people complained and were quite rude sometimes. Cleaning is very much a
skill as much as it is manual labor.

2\. People don't want to let just anyone into their home to clean. Especially
for those that have valuables, you want someone you trust who is going to
hopefully be your maid for years to come. I wouldn't want someone new every
time and for that reason, I used HomeJoy only at our office but even that
wasn't enough due to poor quality.

Someone on this thread further explained this well, which is that HomeJoy is
at a high level, a match making service. Once you find a match, why do you
need HomeJoy? Connect directly with the maid and have them come on your own
schedule for a fraction of the price.

I used to feel the same way about Uber. If I found a good driver back in the
day I would get his phone # and take him exclusively to the airport. Uber
solved this with UberX and by having a wealth of seemingly skilled drivers
that made it a true on demand service. Having to book an appointment like
HomeJoy seems like it is not a true OnDemand service, just a nicer UI than any
other maid connecting service.

AirBnB I feel had a similar problem. For frequent business travelers, finding
the right place at the right price is awesome and I would usually try to stay
at the same place and connect with people directly. AirBnB solved this with
overwhelming demand for the service (the place I like may not always be
available) and with their insurance policy and scheduling tools for renters.

In any event, I don't feel like HomeJoy failing is indiciative of a bubble in
the On Demand economy. There were inherent principles of this business that
made it destined to fail that others in the space won't have a problem with.

~~~
markonthewall
> the lack of passion from the cleaners

I doubt cleaning other people's shit is anyone's passion.

~~~
curun1r
You'd be surprised.

My Parents use AirBnb to rent out an in-law apartment they have at one of
their houses (they each had a house prior to getting together). They're
retired and they now treat it like their job, despite it only bringing in
around $30k/year. I've recommended that they find a local cleaning person
since I think they can find someone good who's willing to do it for the
cleaning fee they charge ($50), but they're finicky about it being done
perfectly and value their star rating (full 5 stars). So they do it themselves
before every new renter arrives. Sometimes this involves driving 1.5 hours in
each direction just to go up there and clean, but they insist on doing it
anyways.

Similarly, I used to have a cleaning person come once a month. She was an
immigrant single parent who had built up a large number of loyal, repeat
clients and was making enough to send her daughter to college. Doing our
dishes and vacuuming our floors probably didn't provide much enjoyment, but
you can bet your ass she did it passionately because of the larger context in
which she was working.

You're probably right about the actual act of cleaning...almost everyone won't
have a passion for that. But your comment is incredibly myopic and shows a
complete lack of understanding of human motivation.

~~~
simoncion
> ...you can bet your ass she did it passionately...

Hmm. I would be more comfortable with "professionally". Frankly, I think
that's the far better word to use here. In your comment, you even go on to
doubt that almost anyone would have a "passion" for cleaning.

Professionals do an excellent job where an excellent job is required. Passion
is not a factor in the quality of the work.

------
fraXis
I used Homejoy and I liked it's ease of use. But after the cleaning lady they
sent me was done, she offered me her direct phone # and told me I could
contact her directly for any future cleaning needs.

I always wondered how this business model was going to work if Homejoy's
contractors could just give out their phone # at the end of their first
service and the customer could just contact them directly for any future
needs, instead of going back through Homejoy for any future bookings.

~~~
brianmcconnell
A prediction about "sharing economy" companies. Almost all of them are tacking
on a thin rind of web/mobile UI and smart dispatch technology to an existing
service. The long-term winners will be companies like Flywheel that recognize
this and focus on providing that service to existing operators, much like
payment processors. This, of course, is perceived as a smaller market since
they can't count revenue the same way.

EDIT: on the other hand, an advantage is they don't have to worry about
acquiring customers, drivers, etc, nor the regulatory overhead of the
underlying business, but instead just focus on customer experience,
schedule/dispatch, etc.

~~~
austenallred
> The long-term winners will be companies like Flywheel that recognize this
> and focus on providing that service to existing operators, much like payment
> processors.

I don't think this creates a very big moat - that's essentially what Uber
started out as (dispatch for private driving companies that already existed);
they started letting anyone drive in order to meet demand.

If all the services are interchangable (and now, at least for ridesharing, it
seems like they are), the winner will be the app that's used by default.

~~~
psadri
Uber is different than Homejoy.

You would use the same house cleaning professional over and over again but you
will likely never ride with the same Uber driver again. This means that the
Homejoy house cleaner can bypass Homejoy but the Uber drivers/users can't do
without it.

~~~
ProblemFactory
> you will likely never ride with the same Uber driver again.

In theory, having your "own" driver would not be a bad thing. But the main
difference is in scheduling.

With taxis and Uber, you want a car to show up in 10 minutes at any time of
the day without advance booking. This requires a large pool of drivers on
standby and a middleman to handle the communication.

A cleaner can visit pretty much any time during the week, and is usually pre-
booked for every week indefinitely into the future. This doesn't need a
middleman, since you can arrange the details directly.

------
tptacek
I get the sense that many of the people involved in Homejoy are well-
intentioned and hardworking. But I can't say that I think it's a bad thing
that tech startups are finding it difficult to monetize unskilled labor.

The technology that most companies like these offer (with the possible
exception of Uber) is a commodity. The real asset they have is the network
effect. Which makes the balance of power between the tech company and the
"1099 contractors" deeply suspicious. What are these companies doing for the
laborers that makes them valuable enough to be skimming returns from the work?

~~~
radmuzom
It appears from this article that recent worker classification lawsuits also
had a part to play - [http://recode.net/2015/07/17/cleaning-services-startup-
homej...](http://recode.net/2015/07/17/cleaning-services-startup-homejoy-
shuts-down-after-battling-worker-classification-lawsuits/)

~~~
oroup
From the article: > Homejoy was able to raise funding, but not enough to grow
> the company as big as its founders and backers had hoped. > “We declined
those investments because it wasn’t enough, and > we wanted to stay true to
our vision,” Cheung said.

I'm sorry but shutting the company down because the round you could raise
wasn't as big as you hoped feels like wimping out. Alive beats true to your
vision and dead. In "The Hard Thing About Hard Things", Ben Horowitz coins the
term WFIO (pronounced wiff-e-o) for that "We're Fucked, It's Over" feeling
that entrepreneurs get on a regular basis. Lawsuits spooking investors is
certainly bad but hardly even qualifies.

Given how big an issue the worker classification issue is for the whole
economy, I could see the regulatory issues getting sorted out over the next
few years. Quitting seems like a premature move to me. How do the investors
who put $40m into the company feel? Who's going to invest in this team again?
Who's going to go work there?

------
callmeed
So Forbes named Homejoy one of the hottest startups of 2013 (and they make a
30 under 30 list). They raise money from top-tier VCs and angels. Adora does
quite a bit of speaking (it seems) on growth, regional expansion, and startup
inspiration. They expanded to 30+ markets.

But they were really just selling cleaning services for below cost–on the
backs of 1099 workers. It's a worse model than Groupon and I can't fathom how
the founders or investors thought it would work.

It all feels icky to me.

~~~
CrackpotGonzo
Exactly this. I always felt that this was just another doomed startup that
couldn't possibly survive. Curious how we'll revise our views on the company
and Adora.

I guess this is the playbook, right? Doesn't matter if you build a sustainable
company or not. As long as you raise crazy amounts of VC $ you're considered a
success.

~~~
slackstation
I thought about this. Someone made a reddit article outlining how to do this
and the profit margin depended on skirting the 1099 rules. This isn't a
scalable business. Technology doesn't change the basic factors of the business
in any meaningful way. I setup plans, bought a domain, had a partner but,
never ended up doing it. My partner was disgusted with it as we were planning
and over time convinced me.

Home cleaning is a well established business. The market is well served by
multiple traditional companies. A Bootstrap 3.0 website and mobile app aren't
really going to change that much. It's an uphill battle and trying to take the
Uber model of skirting worker protection laws is your only real source of
competitive advantage over time.

~~~
myth_buster

      Technology doesn't change the basic factors of the business 
      in any meaningful way.
    

I think this is the key point. Add to it the loose coupling with the workforce
may make the sharing economy model rattle. One exception I can think off is
AirBnB.

------
storgendibal
Higher prices, questionable convenience, and poorer service.

The quality of the cleaning had deteriorated over time and the price was
higher than independent cleaners I later found through personal referrals.

I had 4 different Homejoy cleaners. The very first one was _awesome_ and I
thought, "Wow, this is great". Then every single cleaner after that was
terrible. Two of them started wet mopping before vacuuming or using a dry
swiffer, thus pushing wet dirt around. Another one let the toilet brush sit in
the toilet in a way that the entire brush, handle and all, fell in. When I
came over to oversee her, to make sure she doesn't do other things like that,
she got angry and refused to work until I went into another room.

As other's have said, the model sucks. In order to make money, you need to
charge above market rates to get your cut. In order to justify that, you need
to offer something to both sides of the market. The customer expects
convenience and high quality service. If you cannot provide both those things,
why would people use Homejoy? And of course, what are you offering the service
provider to stay on your platform?

Lastly, there was no Android app and the web app had so many bugs that even
the sign-up flow was hit or miss. The sign-up flow! Logging in from my phone
never worked and I always had to use a laptop. Unreal.

~~~
brazzledazzle
>she got angry and refused to work until I went into another room.

I would have kicked her out. Yikes.

~~~
storgendibal
I was tempted. The atmosphere got very uncomfortable. I canceled all my
recurring appointments after that cleaning.

I had a cleaner through a personal referral in Seattle, who for $60, cleaned
my place so well that I'd be happy just coming home to the neat and spotless
apartment. When I moved out of Seattle, she packed up my stuff for $160.
Movers would have charged >$700. Needless to say, I paid her a lot more than
the $160 that she was asking for. When you have had service professionals like
that in the past, the crappy and rude service from Homejoy contractors feels
even worse.

Someone else wrote a similar thing about a cleaner who took 45 minutes to
clean the bathroom floor and then got angry when the customer asked them to
move to the next room to clean.

Another person wrote how they suspect the cleaner attempted to steal their
jewelry.

~~~
icelancer
Can you refer me that personal cleaner? I am in that same situation. Used to
use Homejoy but looking for someone good. Can provide references to you if you
don't trust an anonymous HN guy! Thank you.

mike.anon@hotmail.com

~~~
storgendibal
Hi icelancer,

I will see if I can dig up the contact info for that cleaner. It was over
phone and I left Seattle three years ago. Will try!

------
acabrahams
I never used the Homejoy service, but I was in the audience for the Startup
School Europe talks last year where Adora gave a fantastic speech (Notes:
[http://theinflexion.com/blog/2014/07/26/notes-from-
startup-s...](http://theinflexion.com/blog/2014/07/26/notes-from-startup-
school-europe-london/#adora_cheung_homejoy)) about going through so many ideas
and working so hard to get to Homejoy. The talk's ending had a 'And look, we
made it, so you can too' feel, and I had no idea that they were doing anything
but crushing it after all those years of grinding work.

Its hard not to be disheartened when a pair who seem to have worked as hard as
they have still don't make it with an idea. I just hope they keep going.

~~~
lesingerouge
The question that comes to my mind is: should an entrepreneur really "fake it
till you make it"?

~~~
jaxomlotus
Yes. Especially in a game where you are dependent on raising capital, you
always need to have an air of confidence about you.

------
gsharma
I never used Homejoy, as they were pretty pricey. I have cleaners charging me
1/3 of what Homejoy quoted.

That being said, I talked to several (10-15) people who used Homejoy at least
once. The responses I got from most of those people was that the cleaners
weren't professional. In fact several of them mentioned that cleaners didn't
know what Homejoy was. They were sent for cleaning by their contractors. In
other terms, the cohort I talked to had a really low NPS for Homejoy.

I think Homejoy wasn't able to nail down that user experience of their real
product (i.e. Cleaning) no matter how amazing their on-boarding/booking
experience was.

It must be very disheartening for the founders and the team. All the best to
the their next adventures!

------
birken
At the end of the day, this is a lesson in unit economics. If you want to make
a successful startup, your unit of sale better be super profitable.

Most successful technology companies sell bits, with high fixed costs but very
small marginal costs. This means if you grow really big, your fixed cost
growth will eventually flatten out but your profit can continue to grow.
Facebook, Google, AirBnb, Uber.

If you are selling something in the real world, especially if you are owning
the whole process, then your marginal costs are going to be pretty high, which
means your profit margin is going to be lower. This is completely fine and a
ton of businesses run like this, but these businesses have to be very careful
with their fixed costs. You can't grow like your average tech startup because
this model is different than most tech startups.

The exact reason they are going out of business is less important than the
fact that a business with high marginal costs is very fragile. A slight
increase in a high marginal cost can destroy your profit margin, whereas if
your marginal cost is extremely low then you are much more resilient.

High fixed costs + low marginal cost = Good

High fixed costs + high marginal cost = Be careful

------
philip1209
They've raised almost $40M in funding:

[https://www.crunchbase.com/organization/homejoy](https://www.crunchbase.com/organization/homejoy)

~~~
BinaryIdiot
I wonder if they will be returning any money to investors and if so how much.

~~~
philip1209
If they shut down due to lawsuits, don't debt holders (plaintiffs) get
priority access to remaining cash?

------
zaidf
My problem with Homejoy/Handy etc. is the high degree of unpredictability in
the quality of each cleaning. My conclusion is that for something like home
cleaning, you want to find a regular person -- not someone new each week.

Our regular cleaner(which I found through nextdoor) recently had to quit. It
was enough to upset me for a bit because finding a quality _and_ consistent
_and_ affordable cleaner is very hard. Luckily I was able to find another
promising cleaner from nextdoor.

When looking for a regular cleaner, one of the things I have learned is that
you want a "career" cleaner. You don't want someone who is doing it as a past
time to make some extra cash. That might work with Uber/driving but it doesn't
seem to work with cleaning that well. If a non-serious Uber driver cancels the
ride, you just call another one. If your cleaner doesn't show up, you can
easily lose a day before finding a replacement(and hoping he/she delivers).

~~~
qq66
> You don't want someone who is doing it as a past time to make some extra
> cash. That might work with Uber/driving

Until your Uber driver takes a left turn onto Shoreline Boulevard without
looking, and nearly kills you.

~~~
zaidf
That is hardly an Uber problem. In fact, professional cab drivers are famous
for dangerous driving. Example: [http://www.nydailynews.com/new-york/nyc-
crime/taxi-driver-in...](http://www.nydailynews.com/new-york/nyc-crime/taxi-
driver-involved-fatal-crash-loses-license-officials-article-1.2158133)

------
7Figures2Commas
Homejoy was (at least at one point) the fastest growing company in YC history
according to PG[1], and if you go back and read the press, particularly around
its funding, it was treated like it was already a success.

Its rapid demise is a good reminder that growth isn't profit, and funding from
top tier investors doesn't actually signal that you are building a sustainable
business.

Incidentally, I have pointed out the employee misclassification issue numerous
times[2][3], and wrote last year[4]:

> It's going to be very interesting in the coming years to see which of these
> on-demand companies continue to thrive because I personally think it's
> inevitable that many of them are going to be forced to reclassify their
> workers as employees. I suspect some investors aren't giving this enough
> consideration in their due diligence.

If investors are now doing their due diligence (gasp) and realizing that many
of these portfolio companies are not going to be able to effectively defend
against misclassifcation class actions, Homejoy is _not_ going to be the last
of these highly-funded on-demand companies to literally hit a wall.

[1]
[http://www.reddit.com/r/EntrepreneurRideAlong/comments/1uyr6...](http://www.reddit.com/r/EntrepreneurRideAlong/comments/1uyr6r/homejoy_is_the_fastest_growing_company_in_the/)

[2]
[https://news.ycombinator.com/item?id=8489834](https://news.ycombinator.com/item?id=8489834)

[3]
[https://news.ycombinator.com/item?id=8468863](https://news.ycombinator.com/item?id=8468863)

[4]
[https://news.ycombinator.com/item?id=8709632](https://news.ycombinator.com/item?id=8709632)

------
mbesto
As tptacek said, I'm sure many of the people who created and work for these
businesses are well intended and hard working, and we have to applaud them for
that.

However, the writing is on the wall for any "sharing economy" service that is
simply a technology wrapper for non-SSN'd workers in the US. A couple of
challenges that aren't solved by technology:

1\. Many unskilled labor positions, especially those that incorporate illegal
immigrants, are paid in cash.

2\. The price points are absurdly low to create any sort of margin to sustain
a business (I can only assume most of these companies are doing < 10% gross
margin)

3\. Response of workers turns sour when they realize the system inevitably
becomes indentured servitude.

4\. "Rigorous background checks" \- I have yet to see how technology has made
background checks any more "rigorous" or how this has allowed companies to
scale the quality of workers.

5\. Scaling quality - many of these services (moreso for services like
Thumbtack) start by hiring skilled people (usually MBA students, aspiring
actors, etc) who are looking to earn a few extra bucks for fairly unskilled
activities. People enjoy the service since they not only get a higher quality
service but also because "it comes with a smile". There is only a limited pool
of these type of workers, which inevitably means the supply side of the
business gets eliminated at a certain scale.

I think there might be a place for these type of businesses, but perhaps not
in the venture world.

~~~
jeremyt
Cofounder of thumbtack here. I think you misunderstand our business model. We
don't hire anybody; we're just a marketplace. A request comes in, we connect
it with qualified professionals, and then they bid directly on the job.

At no time have we gone out and hired "MBA students or aspiring actors" to
fill our provider directory. From day one all of our providers were actually
working in their industry prior to signing up with us.

Further, I would say that we don't have the same quality problem that Homejoy
does. If you submit a request on our site, you'll get a choice between several
providers at different price points and quality points. You choose the
provider. Poor providers will get low ratings and will either have to lower
their prices or exit the system.

~~~
mbesto
Fair enough, thanks for clarifying. I'm having a hard time finding the article
but I believe a FastCo/Wired/etc (one of those sites) did a longform article
about how many of those type of workers (students, actors, etc) existed on
Thumbtack, which was further backed up by someone who had interviewed with
you. That was the basis for my conclusion.

Out of curiosity, given you're a marketplace how do you handle reoccurring
work then? Or do you focus entirely on net new business?

~~~
jeremyt
Interesting. I haven't seen the article, but if it says what you say it does
then I think they've got it wrong.

To be clear, I'm not saying that an MBA student or an aspiring artist can't
decide to start a home cleaning business and sign up with our service.

I'm no longer with the company, but I will say that the entire time that I was
there, at no point was our business model based on recruiting/training
unexperienced people to fill our verticals. In fact, our biggest worry was
getting enough high-quality experienced providers.

I'm not privy to future plans, but currently any recurring work is just an
added benefit to our service providers.

------
iblaine
Their HQ was a mess. If your business is cleaning then you should have
cleaning in your blood and dream about pine sol when you sleep. I get the
sense that the company was started for the sake of starting any company. In
doing so they created a company without any vision.

Look further into the company and you see things like the founders saying
working on Christmas Eve is ok. Presentations where they say luck is
irrelevant and working hard and smart are the keys to success. That's some
American Psycho sh*t.

~~~
DarthMader
The holy grail of success isn't working hard, vision, or values. The holy
grail is understanding the competitive environment so well that you impose a
sustainable competitive advantage that isn't easily copied and a strategy that
executes like hell. This is why Musk, Jobs, Buffett were/are so successful.
This is also why Uber is absolutely crushing any other competitor in the U.S.

------
ChuckMcM
And the recode story ([http://recode.net/2015/07/17/cleaning-services-startup-
homej...](http://recode.net/2015/07/17/cleaning-services-startup-homejoy-
shuts-down-after-battling-worker-classification-lawsuits/)) which has a bit
more clarity. Trying to fund raise a sharing economy business just after Uber
gets a bad court decision on the employee/contractor question is hard. It is
almost like having your company go back to being a 'seed round' level risk for
some investors.

It also lends credibility to the 'not a bubble' discussions if stage C
investors are showing restraint but that is a different discussion.

~~~
7Figures2Commas
> It also lends credibility to the 'not a bubble' discussions if stage C
> investors are showing restraint but that is a different discussion.

Yes, It's Not a Bubble(TM) if companies with significant and _obvious_ legal
risk are only raising $30+ million Series Bs but not $100+ million Series Cs.

Oh wait[1][2].

Employment class action attorneys couldn't have designed companies more
vulnerable to lawsuits if they tried. Some of these VCs should have just
written checks directly to the class action attorneys.

[1] [http://www.businessinsider.com/instacart-
raised-220-million-...](http://www.businessinsider.com/instacart-
raised-220-million-2015-1)

[2] [http://time.com/3748438/instacart-
lawsuit/](http://time.com/3748438/instacart-lawsuit/)

~~~
danieltillett
I agree 100%. The VC should have put all the class action law firms in this
area on a retainer.

------
telecuda
Homejoy customer here. For me, they succeeded in making home cleaning
accessible to a guy in his early 30s who clicked a few buttons past a Facebook
ad to schedule 2x/mo cleaning - a big stress reliever and quality of life
improver. I never used a cleaning service prior to Homejoy.

Where they failed was in providing an adequate supply of cleaners (no one
available for weeks on occasion) and last-minute cancellations without
substitutes.

Never did a cleaner solicit me to hire direct, but I DO think Homejoy should
leave their customers with a way to reach the cleaners I did like for
rehiring. Why not, after all?

------
artag
There is a ton of analysis in this post about what went wrong. As someone who
runs a service marketplace business, I know how hard it is scale this type of
business (scaling quality, managing a remote workforce, supply churn, repeat
usage and all the other things...). The founders had worked long and hard to
succeed (knowing them first hand). They also happen to be incredibly nice
people - always willing to help others. All the best to Adora & Aaron. I look
forward to seeing what you launch next!

------
stevejohnson
For a house with 4 roommates, this service worked great as a solution to the
"tragedy of the common [space]" problem. We've been using them for a year or
more now and I'll be sad to see them go. I hope they follow through on putting
people in touch with the actual cleaners.

~~~
reagency
How are you not in touch with the person who cleaned your house for a year?

~~~
stevejohnson
(1) It was a different person every time, and (2) all booking is done online,
with SMS interactions piped through Twilio.

~~~
mynameisvlad
Not necessarily for #1. After my first cleaning was good, I requested the same
cleaner for all following appointments.

------
pyrrhotech
I really loved the idea, and maybe I'm just being cheap, but no way I was
going to pay $250+ a month to have my 1296 sq ft house cleaned. That's a
$150/month value at market rates in my area. $100/month for a bit of
convenience was not worth it at all to me.

~~~
pdabbadabba
I had the same experience. I signed up but, when it came time to actually make
a reservation I did some comparison shopping and found many cheaper
alternatives. I think Homejoy's main challenge is simply the vast pool of
available labor out there, much of which is also bonded and insured, like
Homejoy, and that is already quite accessible to customers. The added layer of
technological ease that Homejoy brought to the table was welcome, but
ultimately not worth too much monetarily. For me, the real barrier to hiring a
home cleaning service is the awkwardness and trust problems of having a
stranger cleaning my house. And the technological mediation that Homejoy and
similar services provide actually heighten this feeling of alienation, if
anything.

To make matters worse, I then got an almost comically confrontational phone
call from a Homejoy rep demanding to know why I hadn't completed my booking.
This is probably an isolated case (maybe the rep was just having a bad day?),
but it certainly didn't make me feel like I was missing out on much--all the
more so since this experience was so at odds with the rest of the Homejoy
brand.

------
zach
A lesson to take away here is that a startup which faces legal/regulatory
threats to their existence has to be small enough to be ignored or huge enough
to change the rules.

Uber is probably the first company you think of, with their absurdly large
investment rounds, or maybe PayPal, but don't forget YouTube. They went from a
little video portal with everyone else's stuff on it to a protectorate of one
of the world's largest businesses so quickly the copyright holders had no
chance to deprive it of existence.

The danger zone is in the middle. Homejoy didn't expect to be in this kind of
trouble, but once they were, it made finding a huge round of funding both
necessary and impossible. So this is the rational decision.

------
binarysolo
I'm surprised they didn't offer to transition/sell their customers to Handy...
that's prolly mid-tens of dollars in lead-gen fees off an active customer list
of... thousands of customers probably (as well as a less-active list prolly in
the tens of thousands range)?

~~~
tomlongson
Yeah, cost of acquisition is a big deal.

------
ylhert
Is this the beginning of the end of the on-demand bubble?

~~~
why-el
There is a qualitative difference between this and other on-demand services
such as Uber in that you will never see the "here is my phone number"
phenomenon in Uber.

~~~
ylhert
Uber will be the eBay of this "bubble", which I think is limited to on demand
startups but not startups as a whole. It'll be one of the few co's to survive,
imo

~~~
DarthMader
I can see Postmates and Uber as the only eventual survivors in 10 years.

------
nicholas73
I once asked Adora why they are not a marketplace instead. She replied that
the branding and bonded/insured cleaners would be more attractive to
customers.

Obviously easy to say in retrospect what mattered in the end, but I'm
wondering what is a method to test this kind of assumption?

I go by my own use case - I really only care about price, and I build trust by
the person and not by the company. I prefer to stay home while it's being
serviced as well.

~~~
ghufran_syed
I had the same thought about making it a marketplace, which of course means
you have to provide value to both the buyers and the sellers. Some ideas on
how you might do that: 1) allow cleaners to set their own prices / times /
availability at short notice 2) have users give reviews -> encourages quality
3) provide the bonding / insurance as an optional service to the contractor,
not the customer, but make clear on the listings who is and is not bonded /
insured. 4) only have reviews from current customers be easily available (or
maybe bad reviews live for ever, good reviews only show if from current
customers ??), so there is an incentive to stay on the platform, as it
represents your marketing channel 5) take a fixed, smaller percentage

It seems like there is a problem in the market when you have an overwhelming
supply of people willing to clean, but low actual demand due to high
price:value ratio. You can interpret the difference in price between the
cheapest 'craigslist' cleaner and the professional cleaning service as the
'price of ignorance' regarding the honesty and quality of the cleaner. It
seems that Homejoy was trying to control quality, and then claim that price
premium for themselves (as does every other professional cleaning company),
while pretending that their cleaners were contractors, not employees.

I think they might have been more successful if they tried to build tools that
actually reduced that price premium, by making it easier for people to judge
the quality of cleaners, in turn making it easier for the better cleaners to
charge more, and driving the bad cleaners out of the market. You would expect
the average quality/price to go up due to competition and better information,
which would raise volumes, and you would still end up making money, just a
smaller percentage of a much bigger market.

I recall the story about how Ms Cheung spent some period of time working as a
cleaner, to learn about the cleaning business. I suspect she learnt a lot
about the mechanics of cleaning a house, but not necessarily what it is like
actually trying to survive for several months only on the income generated as
a self-employed cleaner: I wonder if Homejoy's relationship with its' cleaners
and its' business model might have been different if she had?

------
bryanlarsen
Problem A: good cleaners bypass your service, using you as a cheap referral
service.

Problem B: paying cleaners as contractors is legally problematic.

The solution to _both_ those problems is the same: hire your cleaners as
employees. Then you can prevent them from free-lancing on the side in a
competitive business. In states where a non-compete isn't enforceable (like
California), I believe that you can still enforce it while they are employed
by you.

~~~
dragonwriter
So, the solution is to be Merry Maids. Which is great (and, you know, exists
already), but not exactly the kind of disruptive model that attracts VC money.

------
bkjelden
I think the key differentiator between successful "uber for X" companies and
unsuccessful ones will end up being the customer experience in the industry
each company attacks.

Before uber, getting a taxi _sucked_. Talked to anyone who traveled
extensively before uber, and they'll have plenty of stories about cabbies who
tried to rip them off.

AirBNB is having similar success because getting a hotel also sucked - it was
often overpriced, and the quality of the room often sucked, and as a consumer
you didn't really have any feedback into the system.

But home services? Most people I know are able to mine their personal network
pretty easily to find good home cleaning and home repair services. Or at
least, it's a lot easier for them to do that than not get ripped off by a taxi
driver.

These companies won't win in every industry "just because". In order for these
companies to be successful, they have to bring some improved experience to the
table that customers simply won't be able to live without once they've tried
it.

Sad to see things come to an end for the team, though. I hope they find great
success in whatever they pursue next.

~~~
bryanlarsen
My experience is the opposite: finding a good cleaner is harder than finding a
taxi or a good hotel.

Sure, you can ask all your friends for recommendations for cleaners, but the
good ones are always fully booked.

------
throwaway239842
Posting with a throwaway to address a few realities:

1) I used Handy to book a cleaner for the first time -- I loved her, she did a
great job, and I immediately cut out the platform and hired her directly. I
felt a little bad about it, but not enough to not do it. Handy got a single
transaction out of me, for what is now approaching a year of work.
Transaction-fee marketplaces work best where there isn't a natural inclination
towards an ongoing relationship (Uber, AirBnB, eBay).

For example, on AirBnB, I'm actively looking for a different adventure each
time, so it's hard to cut out the platform. When I'm traveling on business,
it's the exact opposite, I'm looking for a reliable, consistent experience
with no surprises. That's why hotel chains try very hard to ensure a
completely consistent experience between stays, and even between hotels -- so
that I can book a Westin anywhere in the world and know that I will be getting
the exact same bed: [https://www.westinstore.com/westin-heavenly-
bed.aspx](https://www.westinstore.com/westin-heavenly-bed.aspx)

2) Homejoy is at a disadvantage because they cannot hire illegal immigrants,
and cannot pay them under the table. Under-the-table payment, and illegal
immigrants, are common in all cash service business, this is no exception (My
cleaner is not an illegal immigrant, since she was able to work through Handy,
but she always shows up with a different partner, and very few of her partners
speak any English -- I suspect that at least some of them are not licensed to
work legally). I also suspect that she does not report everything, or
anything, on her taxes.

3) Home cleaning is a high-trust business and one where I'm likely to want the
same cleaner each time. The marketplace is interested in sending me a
different cleaner each time. The company's needs are in conflict with its
customers needs.

------
jimjamjim
As a former customer (have not used in years), I actually felt uncomfortable
with the cleaners. Not because of anything they did, but because you could
just tell they were low income and being paid very little by Homejoy (I think
less than $15/hr). It didn't feel right, and I stopped using them in part
because of that.

~~~
ryandrake
You felt uncomfortable that they made less than $15/hr and solved that by
making sure they never got any business from you again?

~~~
jimjamjim
Not just that. Uncomfortable with Homejoy's relationship with the cleaners.
From everything I read, including Glassdoor reviews from the cleaners it
sounded toxic and demeaning.

------
ivankirigin
Cofounder Adora Cheung is worth following. The story is a great example for
founders. Check out her lecture at Sam Altman's startup class:
[https://www.youtube.com/watch?v=yP176MBG9Tk](https://www.youtube.com/watch?v=yP176MBG9Tk)

~~~
BinaryIdiot
This was a good talk but I can't help to think that she should have spent more
time working on the business than doing these types of speaking engagements
(because she had done quite a lot of them, not just this one).

Though the time spent doing these engagements and preparing, maybe that was
worth it for the advertising? Not sure but they don't sit right with me.

~~~
enraged_camel
One of the primary responsibilities of a CEO is building (and maintaining)
relationships with external parties, such as prospective clients, partners, or
even potential employees. Speaking engagements are a great way to do that
because it gets you in front of such audiences _and_ helps you demonstrate
authority, which builds trust.

So I'd say that she was simply doing her job.

~~~
DarthMader
She was involved in a lot more speaking engagements than any of her other on-
demand counterparts though.

------
outside1234
Pretty interesting analysis around how the funding in the sharing economy is
drying up after the "they are employees" decision by California.

~~~
Diamons
I read it as: We had 3 years to exploit a loophole with $40MM in the bank and
couldn't build a real business, so we're using California's law as a
scapegoat.

------
bane
Having recently spent a bit of time finding a roofer, an all purpose handyman,
a drywaller, a cleaner and a yard guy, I finally have a good personal team I
can use. But my god it took a couple years to assemble them. And there were
quite a few duds along the way. I went through 5 roofers just to get one small
job done and finally had my handyman just go rent some ladders and do it.

It sounds like such a first world problem, but finding quality people and
reasonable prices to do this stuff is such a pain. I didn't use homejoy to
find these folks, I just worked my personal network until I got them, but I
can definitely see a market for something like homejoy.

It's a really great idea and it's a shame it didn't work out.

------
tomlongson
I have a hard time understanding this. The markup and demand is extremely
high. Were they just overvalued so couldn't meet expectations?

~~~
uptown
If you believe the reviews on Glassdoor, internal management was a major
problem:

[http://www.glassdoor.com/Reviews/Homejoy-
Reviews-E686596.htm](http://www.glassdoor.com/Reviews/Homejoy-
Reviews-E686596.htm)

------
piratebroadcast
This is the same company that posted the infamous Christmas Eve job opening ad
to HN:
[https://news.ycombinator.com/item?id=8794956](https://news.ycombinator.com/item?id=8794956)

------
cjf4
This one's interesting to me, because it seems like they had done all the
right things, had a real product, and worked really hard (I think I remember
Graham saying she worked as a cleaner part time during YC).

Without knowing any of the specifics, this seems to be a good correction of a
couple threads of thought. Most notably, startups are not a science, and not
every business that is technologically lagging will be drastically changed by
a modern tech platform.

It really comes down to value. Seems so simple but I think the startup
community would do well to incorporate the importance of creating value in
their pedagogy.

------
sprkyco
Looks like Google may have picked up some of the team:
[https://news.ycombinator.com/item?id=9904483](https://news.ycombinator.com/item?id=9904483)

So not ALL that bad.

------
classicsnoot
_1\. Those who claim cleaning is not a "skilled job" should get off their
keyboard, spend a day cleaning their moms house, and get back to me when they
learn they are 3X slower than a pro and destroyed something with bleach-based
spray._

Finally someone said it. Some moron posted ITT that 'no one is passionate
about cleaning someone else's shit', which I find ironic as this website is
populated by many people who clean up other people's shit _online_. It never
ceases to amaze me how easy it seems to think the only job with subtle nuances
is your own. Thus far in my life, I have done construction, plumbing, lawn
care, film, 'fixing', security, and professional driving (not chauffeuring),
and I always thought it cute how the pros in each of those vocations could go
for hours about the skill and attention to detail required to be proffecient,
then in the same breath speak of another vocation like it is simple. I think
it is safe to assume that if someone is willing to pay for a service it
probably requires some level of skill.

Full disclosure: in my "unskilled", workaday life I am constantly explaining
the immense amount of time, effort, and skill required to make internet fix.

------
jjarmoc
When I hear about companies like this going under, I always think how odd it
is that I've never previously heard about them.

Then I realize, that may have been part of the problem.

~~~
bishnu
This is surprising to me. I'm INUNDATED with Homejoy ads all over the
internet. I've never used them (which also might have been part of their
problem). Perhaps you just live somewhere they don't provide service to yet?
:)

~~~
jjarmoc
I don't know.. Google confirms they covered my area. I really don't look for
house cleaning services, so maybe I just didn't get targeted for ads.

------
andersonmvd
I saw them on How to start a Startup. Was a good lecture. Sad to see they
closing the doors.

------
shah_s
How can they raise $40m and fail so quickly? How did they burn through that
much cash? I hope they actually explain why they failed so others can learn
from it.

------
soheil
I live in SF and the few times I used the service I was relatively happy. I
certainly thought the cleaning was done better than Handy, but Handy got them
beat in pricing. I also thought their UI was much friendlier than Handy. With
Handy there is no way to terminate a recurring cleaning without contacting
customer service.

In busy places like SF traffic and parking seem to me to be a major hinderance
for services like Homejoy. Perhaps if they provided shuttle service of some
kind for their cleaners it would solve that problem.

Also there is a lot of customization when it comes to cleaning vs Uber for
example. With Uber you just go from point A to B, a pretty well defined
problem. With cleaning services it's a bit more complicated, do you clean the
light switches, door knobs, under the sofa (what if it's a 1 ton sofa?)... I
think people have vastly different expectations to what it means to have
someone clean your house. Sure, with Uber you care if they driver is not rude,
plays your favorite music and doesn't drive like a lunatic, but there isn't a
hundred others things that would significantly influence the experience, with
Homejoy there is.

~~~
icelancer
>I certainly thought the cleaning was done better than Handy, but Handy got
them beat in pricing.

I've heard this a few times on this post. It is not remotely true in Seattle.
I just checked, Handy is 20%+ more expensive. Weird

------
narrator
I think the problem here is low quality and lack of adequate screening. This
seems to be a problem with a lot of online businesses. In a different way it
was a problem for PayPal when they started. They were overrun with fraud and
had to find clever ways to control it. Anytime you interact with the general
public, especially people with out a resume doing cheaply paid work and with
the general public internationally you are going to have, among the quality
people, a bunch of bad apples, people with mediocre talent and weirdos,
disgruntled and otherwise. The value that a sharing economy online service
adds is screening out all that and delivering high quality.

When moving into a new area it takes a while to figure out who the trusted
providers are. Sometimes the top guy on Yelp is outrageously expensive and
overbooked and you have to ask around the neighborhood. Then when you've found
the right people you trust, you form a relationship and use them forever and
they take care of your stuff. The problem is that once I find my trusted guy
for X I just stick with him. Homejoy seemed to be turning that experience into
a dice throw.

------
arihant
Could they operate as small business and/or flip the company as a running
small business? I imagine home cleaning is sort of loyalty space, where they
must have a good number of regulars?

It's also interesting that they are managing a workforce of around a 1000
cleaners, and they burnt through $40 MM. That's the amount of seed Elon Musk
needed for SpaceX.

~~~
loganu
I'm assuming they folded before burning $40m. IMO, it would be hard to go
through that much money when you have (hundreds of?) thousands of customers
and (should have) a decent profit margin. I'm more inclined to believe that
HomeJoy was sold to investors as the beginning of a platform, and when it
failed to hit traction, or growth potential seemed to stall, the investors
decided to cut their losses and move on.

------
mslev
"Unfortunately, we cannot process any refunds or credits at this time."

Ouch. What would cause them to not be able to offer refunds?

~~~
joslin01
I reckon running out of money -- money which is also needed to employ those
who process the refunds.

------
serkanh
Any type of business that based on being intermediary between buyer and seller
run the risk of "losing" customers. This holds especially true with service
business. I ran a nationwide lead generation service which basically matches
POS/Payment processing companies with retail/restaurant business which was
purely performance based. No initiation fee, no monthly fees to enroll with
only 5% commission on the closed leads. And guess what; even if i sent the
business tens of leads (averaging $7000 value with at least 40% profit) per
month they resorted to either not pay or simply became incredibly sloppy on
follow ups so i required to be in the loop. I may have not bring in any
additional value to acquirer of the service, but for the service provider i
was offering them a qualified business opportunity which they would not
otherwise obtained.

------
philip1209
Looks like Google is hiring the Homejoy engineering team:

[https://recode.net/2015/07/17/google-hires-homejoys-
technica...](https://recode.net/2015/07/17/google-hires-homejoys-technical-
team-to-build-its-own-home-services-marketplace/)

~~~
callmeed
Interesting considering Google Ventures was an investor in 2 rounds

------
myohan
They were also sued. [http://arstechnica.com/tech-policy/2015/03/startup-
workers-s...](http://arstechnica.com/tech-policy/2015/03/startup-workers-sue-
to-be-recognized-as-employees-not-mere-contractors/)

------
euphoria83
I tried using Homejoy multiple times but decided against it each time. The
reasons varied from their cost, to not getting specific enough services, etc.
I think they lacked in implementation, at least a little bit.

------
Simulacra
I thought HomeJoy was an awesome idea at first, until I started reading about
the experiences, and tribulations, of their ...contractors? Not even sure what
to call them, other than hardworking people who, when you balance it all out,
weren't making that much. I'm sure the CEO and her brother made a killing, but
house cleaning is tough work, even for people who do it professionally every
day, for a living. I think those people should be employees, they should be
given job protections, and they should be treated (and paid) a lot better than
they are.

------
aranibatta
Rather than looking at it from a purely business perspective, I think that
HomeJoy accomplished a lot in its tenure. It set an industry standard and a
format that I'm sure will stick for a long time. It made huge strides in
quality control and tackled a lot of the problems in the industry, if not
completely solving them. You can only hope that Google keeps that spirit
alive, and having met her, I have only amazing things from the impression that
Adora Cheung left on me. I'm sure whatever she chooses to do next, she'll do
it well.

------
handy_nyc
I can very confidently say that Handy is headed in the same direction Homejoy.
Handy is facing a myriad of class action suits in Boston and is facing a
number of legal battles with exempt and non-exempt employee suits. I've seen
the cash burn in the space and it is very unfortunate senior leadership
doesn't pay attention to it. It's all about making it look like hockey stick
growth to investors. The cleaning professionals working on the platform are
all very unhappy too.

------
codingdave
HomeJoy seemed OK, but I never seriously looked at them because I have always
been so happy with ServiceMagic (now HomeAdvisor). When you have a solid
competitor who has been in business since 1999, you need a strong
differentiator. HomeJoy was/seemed more focused on cleaning, HomeAdvisor on
repairs and improvements... but it always seemed to me that they were trying
to re-invent a wheel that didn't need re-invention.

------
nodesocket
I literally just had my place cleaned yesterday by HomeJoy. I have a small
studio apartment in SF, and it cost $110 total. While it was expensive, the
cleaner actually did a really great job, though it was a bit difficult
communicating (she is Chineese, and not fluent in English).

I honestly never saw this coming, as I assumed HomeJoy was doing awesome. It
will be interesting to see how Exec/Handy handle things moving forward.

The startup game is tough!

------
iaw
I met someone who worked for homejoy and was stupidly compensated, before
homejoy he had worked at groupon. Verbatim he said to me: "I never want to
work at a company that is profitable."

I had horrible experiences with their service, and I believe that multiple
factors contributed to this shutdown, but I can't shake that quote from
someone being paid a quarter million dollars a year by homejoy.

------
somberi
Benjamin Harrison said this circa 1890s:

I pity the man who wants a coat so cheap that the man or woman who produces
the cloth or shapes it into a garment will starve in the process.

My sincere question is - Why not just make them employees? It does increase
the cost of the service from 20$ to 30$ an hour, I would still have the
service but use it at half the frequency. But I will be glad knowing the
cleaner is treated fairly.

~~~
calbear81
Because if they were employees then it wouldn't be a "platform" and it would
just be a maid service company with an app.

------
amerf1
"I used Homejoy and I liked it's ease of use. But after the cleaning lady they
sent me was done, she offered me her direct phone # and told me I could
contact her directly for any future cleaning needs."

I used Airbnb and the host told me the same thing, he said book 3 nights and
the other 20 pay me cash or transfer the amount to my account and avoid the
Airbnb fee

------
blake8086
I actually just had my home cleaned yesterday through this service. I'll be
sad to see it go =(

------
Skrypt
As happy customers & friends of the company I'm sad to hear this news today. I
wish everyone on the team all the best.

I'm curious to one day read a post mortem on the company, and especially about
these last few months.

Our last appointment is scheduled for Monday.

Thank you Homejoy.

------
kevinkimball
what happened?

~~~
smt88
Many stories about their problems, but here's one:
[http://fusion.net/story/142578/homejoy-uber-for-x-
startups-m...](http://fusion.net/story/142578/homejoy-uber-for-x-startups-may-
be-in-trouble/)

And maybe the main one: [http://recode.net/2015/07/17/cleaning-services-
startup-homej...](http://recode.net/2015/07/17/cleaning-services-startup-
homejoy-shuts-down-after-battling-worker-classification-lawsuits/)

~~~
legutierr
If Homejoy cleaners were going to be classified as employees, entitled to
minimum wage and subject to being verified as citizens or legal residents,
then this seems like the right move. I can't see how they would ever be able
to compete on price with all of the independent outfits out there that employ
undocumented workers.

It's one thing to sell your services at a loss while you're growing. In the
home-cleaning business, though, there will never be a shortage of undocumented
immigrants willing to work for less than minimum wage, quite possibly at a
higher quality level. There would be no way to ever raise prices to fully
cover costs without immediately losing out to that competition.

------
S4M
I'm surprised. I don't know much about Homejoy but I read once that it was the
company in the YC portfolio that has the highest growth, so I thought they
would become a unicorn at some point. What happened to them?

~~~
boston345
You can always spend dollars to buy quarters. It's very different to flip that
and the folks at Homejoy couldn't. I believe the key problem is that you can't
train a housecleaner and still treat them as a contractor.

------
icelancer
The service was getting increasingly terrible in my market. I am not surprised
at all to see it go the way of the dinosaur. Too bad, this type of service has
a lot of value to busy professionals and people with families.

~~~
dragonwriter
> Too bad, this type of service has a lot of value to busy professionals and
> people with families.

 _Housecleaning_ service has a lot of value to professionals and people with
families, to be sure. But that service existed long before Homejoy, exists in
more places than Homejoy ever served, and was served by plenty of providers
not working through Homejoy even where Homejoy provided services.

I'm less convinced that Homejoy brought indispensable new value to the table
for customers or cleaners.

~~~
icelancer
I only started using housecleaning when Homejoy came around. The ease of use
of the platform was a significant value-add. Also the price.

------
samstave
I really REALLY wanted to use Homejoy -- but only for the folding/ironing of
laundry. (I have three kids - so a house of five produces a lot of laundry)

$25/hour with a several hour minimum... Wow - no thanks...

------
confiscate
Sorry to hear this guys. Know you guys worked hard on this. Best of luck

------
ryandrake
When I first heard of this company, I thought, "Too small a niche to grow--
they'll never survive". This is a service for a very limited market--rich
people who don't already have a housekeeper and can't manage to keep their
houses clean. Nobody I know socially would actually pay someone to clean their
house for them.

Yet, so many customer testimonials here on HN. Are there really that many
people so busy/well-off that they can't take a few minutes once a day or so to
pick up after themselves and rather pay someone more than their mobile phone
bill to do something so trivial? I guess I was wrong about the market size but
damn...

------
jtwebman
What was the added value over other smaller cleaning services?

------
minimaxir
This serves as a strong counterpoint to the infamous "Dear Future Homejoy
Engineer" HN job posting:
[https://news.ycombinator.com/item?id=8794956](https://news.ycombinator.com/item?id=8794956)

Working as a family on a holiday may not be enough to save a startup.

~~~
kaihanga
Not only that but apparently "this is not an overnight venture; we know it'll
take a long time, and we’re all committed to it." Appears to have been exactly
a 204 day "commitment".

"You keep using that word. I do not think it means what you think it means."
seems apt.

For job hunters, be alert and suspicious when hiring and marketing overlap.

Best of luck to the ex-HomeJoy engineers.

------
h2014
There are a lot of these types of on demand startups creeping up in Europe so
it'll be interesting to see how that plays out.

------
jondubois
That's surprising considering how heavily marketed they were. I think everyone
assumed that they were going to be a success.

------
soheil
What is the urge to hijack scrolling so high? Is it because people who those
developers work for have shitty mouse/trackpad?

------
cobrabyte
Crap... really liked this service.

------
dlu
What? I had no clue this was comming. I'm surprised there wasn't more signs

------
h2014
I also wonder what their exit strategy was supposed to be?

------
kzhaouva
best of luck to the founders on their next venture

------
blhack
This really bums me out :( -- My girlfriend and I have been making use of
homejoy a lot lately, and it has really been helping us keep up with the
house.

------
icpmacdo
This is a pretty big company going under right, a billion + ?

~~~
ivankirigin
They've raised $40M. I'd be surprised if they were valued at more than $400M
when they raised the last $38M, but I don't think that was public.
[http://techcrunch.com/2013/12/05/homejoy-38-m/](http://techcrunch.com/2013/12/05/homejoy-38-m/)

------
taigeair
Rough landing...

------
smt88
No surprise there. Tone-deaf marketing and there was a horror story a few
years ago about the culture.

~~~
krstck
Was this the company that posted their ad directly onto HN talking about how
happy they were to be working on Christmas eve (or whatever holiday it was)?

~~~
npizzolato
Yes. Someone else linked it earlier in the comments, so here you go.

[https://news.ycombinator.com/item?id=8794956](https://news.ycombinator.com/item?id=8794956)

~~~
duderific
From the post: "i wonder — how am i so fortunate to be the ceo of a startup
where people are so driven?"

Wow, that woman sounds incredibly obnoxious. Talk about a humblebrag.

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notNow
_We’re determined to support you to keep your homes humming and business
buzzing, so we will do our best to ensure partners and clients who want to
continue to work together get a chance to do so independently of Homejoy._

Is this why they had to terminate their operations because clients and
partners managed to cut them out of the loop and to do business independently
of their platform?

------
curiousjorge
I remember listening to her talk way back when there was sam altman's startup
video series.

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/](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.

------
ianlevesque
I'm just so glad they didn't say it was an incredible journey.

~~~
frou_dh
Evidently we'll be exposed to the phrase either way.

------
jwise0
It looks like they have taken the Steve Miller Band approach [1] to users who
are also creditors:
[http://blog.homejoy.com/faqs/](http://blog.homejoy.com/faqs/) . Hope you
didn't have a gift card!

[1] i.e., hoo hoo hoo, go on, take the money and run

------
aestetix
If your company cannot afford to stay in the black with real employees (as
opposed to contractors), you need to re-evaluate your business model.

Edit: and the downvotes are rolling in! Would anyone who has downvoted this
comment care to share why?

~~~
moommooo
The labor force participation rate is at its lowest level in 40 years. When
companies like Homejoy come in and make it easy for people to pick up gig
work, they are making real and substantial contributions to human welfare.

~~~
aestetix
That's a much more complex issue, which involves how many people simply give
up trying to find work after six months or so, as well as companies replacing
employees with automated robots and such. I would be much more in favor of
Homejoy using contractors if they also allowed them to become a full time
employee if they desired to, after meeting some requirement (like working
there for 3 months).

