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!
> Those who claim cleaning is not a "skilled job" should get off their keyboard
The term "unskilled", which is commonly used to reference these types of workers, is an economic term used to distinguished types of workers by characteristics like low education levels, minimum wages, and limited economic value. The skill you are talking about is called quality assurance and customer service, which as you rightfully point out is "skilled". Finding unskilled laborers who also possess those talents are incredibly difficult to not only find but also train.
> Those who claim flaws in matching business model are to blame are making non-quantitative assumptions
Here's a really easy quantitative assumption. Go on Craigslist and get quotes for similar services direct from the workers themselves, then compare it against Homejoy. That's called a gross margin and it's incredibly low. That's an inherent flaw.
>>That's called a gross margin and it's incredibly low.
I've wondered this about every single XX-as-a-service startup. I've heard Uber is 20%, but the overhead to manage a ride-sharing service that is doing tens of thousands of dollars a day in a medium-sized city is significantly less than what is required for other XX-as-a-service startups. The only other sector I can think of where the economics even come remotely close is food delivery. All other sectors - cleaning, home repair, lawn care, painting, etc - require significantly higher marketing spend/customer for a much lower volume of transaction. In addition, as discussed here, the overhead required to ensure quality and customer satisfaction is much higher as well.
Exactly. And in typical SV fashion with the "winner takes all mentality", it's as if we can apply a Uber/Airbnb persona to seemingly any industry without understanding it's respective nuances and sociodynamics.
Winner will take all. Uber will be the Uber for X (for everything) and AirBnB (potentially) AirBnB for everything. Low margin markets are usually zero sum in the long-term.
My and mbesto's point was that making an app to get any service on demand doesn't really work except for a few high-volume, low margin markets such as ride sharing and maybe food delivery. The businesses that can be disrupted are the ones where low margins are made up by massive volume. Most service businesses actually operate the opposite way - high quality, high margin. Uber, Google, and pretty much anyone else who wants to try won't be able to successfully disrupt the majority of service business markets unless they radically alter the economics associated with the overhead costs required to maintain quality in these businesses. Slapping software with a 5 star ratings system on the consumer front end to expose your business to millions of more customers is not a radical alteration of the business fundamentals associated with many of these types of businesses.
Sorry to comment on a super dead post, but I like this comment "unless they radically alter the economics associated with the overhead costs required to maintain quality." That is my focus, but it's really challenging. The margin is comfortably high in Japan, but ignoring quality kills retention and maintaining quality brings overhead costs back up to the level of existing franchise-model businesses.
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.
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.
That comparison is confounded by the fact that most people, at least in the United States, get their driver's permit and license at a fairly young age, and don't have driving experience before that. A fair comparison would be between licensed and unlicensed drivers with the same amount of experience, but that's pretty hard to come by.
There is a skill to cleaning, but from my experience the Homejoy people were nothing special. Both times, they were basically kids, didn't do anything beyond what I would have done, one broke a plate, the other failed to clean my dirty hardwood floors (he just spread the dirt around). And it was expensive. I figured at that point Homejoy was probably limiting their market to oblivious wealthy people.
Seeing as Tokyo apartments are freakin' tiny, you could probably get the price down to make it more mainstream palatable.
>Just ask yourself, how high of a percentage of users sharing direct phone # would cause a growing company to collapse?
The problem isn't that going direct decimates your customer base, it's that it takes your absolute best cleaners out of your system, so that you're sending a lower-quality experience to your customers.
I'm not sure that Japan and the United States are comparable here... the pride taken in one's work, and the overall level of customer service, are astronomical in Japan, it nearly made me physically dizzy to see. Both your cleaners and your customers are hard to compare to their US equivalents.
2. I think that's just a convenient excuse for what was more likely a poorly run business.
3. It definitely seems like a match-making business to me. Perhaps things are different in Japan. I could perhaps see wanting a few different providers for diversification.
Agree with all three of your points, especially #2. I still can't get over the fact that it took me 4 tries to be to sign up with HJ. Eventually I had to do it on my laptop because the web app on the phone was so buggy. And if the sign up flow is so badly done, I wonder what else is not executed well.
>> 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.
Everybody did. It seems like a convenient face-saving excuse. The company didn't grow fast enough. If the all the numbers were impressive enough, investors would've taken the risk, especially the ones that already had $40m in.
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!