What Really Killed Homejoy? It Couldn't Hold on to Its Customers

http://www.forbes.com/sites/ellenhuet/2015/07/23/what-really-killed-homejoy-it-couldnt-hold-onto-its-customers/

by akanet • 11 years ago

20 6 11 years ago

sarwechshar3• 11 years ago

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.

WalterSear2• 11 years ago

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.

sarwechshar3• 11 years ago

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.

WalterSear2• 11 years ago

You downvote me for constructively adding to the conversation and I'll downvote you. ;)

sarwechshar3• 11 years ago

I don't understand, what's with the attitude, dude? I didn't downvote you.

itsdevlin• 11 years ago

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.

What Really Killed Homejoy? It Couldn't Hold on to Its Customers

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