Pondering Homejoy’s Failure | Hacker News Reader

Pondering Homejoy’s Failure

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82 pointsbrianchu41 comments

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.

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.

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.

I agree with every single thing about your comment.

That said, I wouldn't be surprised if these guys go on to do other things, try again, fail again, try again, fail again, and eventually build something that actually works.

It might not be immediately obvious, but deluded entrepreneurs (with their blind optimism and relentless trial-and-error) make the world a better place. I don't know if we should encourage or discourage it, and I'm not too sure if these people can be discouraged either.

I suppose at best we can advocate for caution and due diligence.

I'd agree with your comment. But the "Homejoy will always be more synonymous with success than failure" closing and this [1] make me believe that an important lesson wasn't learned.

[1] https://news.ycombinator.com/item?id=10466888

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.

> 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.

IMO, your vitriolic armchair attack here is a hundred times more arrogant than anything I read in the Medium post. The author isn't on trial here, he's simply relating his thoughts on the issue. I for one, found it a worthwhile read.

The only real failure here is that the author gave two years of his life (including holidays) working for the Cheungs. Hopefully he was in his early 20s, otherwise he has no excuse.

Wow, this comment has a lot of anger towards someone just doing a post-mortem of the lessons they learned.

It illustrates something that I don't understand. Why do you care so much that you significantly affect the tone on this HN discussion? You bring up some excellent points, but your tone completely changes how your comment is perceived, and detracts from your contributions.

I am now going to take my own advice -- when you perceive someone else's words as so obnoxious that you cannot help but respond -- and ditch my HN account and re-add it to my blocklist.

Thank you for providing me with the impetus to regain hours of my day.

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?

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...

> 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.

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.

> 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?"

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

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.

> 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.

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."

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.

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

[2] https://www.psychologytoday.com/blog/dont-delay/200912/downs...

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.

> 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.

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.

Except categorically is an awful business to be in. You might not have a job after your first LP, if your LP fails to return. It's an extremely binary business model - you either succeed in the top 10% of all VC funds available or you simply pack up and do something else. That's why you typically see people get into the VC business when money is not an issue for them...fund failure is much easier to stomach.

10 years is an awfully long time - if your first and only LP fails oh well - at least it is not your money. Plus if you don’t let any of your companies IPO then no one will know if you have failed or not for a very long time.

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.

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?

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.

600 days ago Exec pivoted and left the game.

https://news.ycombinator.com/item?id=7380912

Can we stop now?

> ...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.

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.

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."

Hahaha, I'm replying to all your comments:

> 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."

I think the investors think, "Hmm, I don't think the home cleaning market will be solved by technology, but the hell do I know? The last 3 times I said that, I was wrong, and my competitors made hella bank. Screw it, let's do it. They seem smart. They'll figure it out. And if they fail and make something better next time, we have the relationship."

I totally agree with you about the need for prudence, by the way. But I'm not a VC, and I haven't experienced the pressures and challenges that a VC must face. The same "it's easy to judge the man in the arena" idea applies.

There is a difference between taking risks and just throwing money at anything and hoping something sticks.

VCs should take risks, but they should be evaluating risks otherwise why should they exist - if the limited partners just want to throw money around at random then they don’t need someone taking 2&20 getting in the way.

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.

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.

> 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

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.

Which is precisely why Silicon Valley needs to get over its infatuation with young, intelligent engineering types who have no experience successfully applying software to business.

Giving a "talented" engineer with no demonstrable business acumen tens of millions of dollars to build a profitable, sustainable business is sort of like giving a "talented" pianist tens of millions of dollars to build commercial real estate. Just because an individual has "talent" and knowledge in one area doesn't mean they have it in all areas.

This also depends entirely on your definition of a "wildly talented human being".

For the record, my mom says I'm a wildly talented human being.

This is just a typical cognitive dissonance response (the author's, not yours) to "I swear they're smart! It's not that they're not smart that made them fail."

Reply on news.ycombinator.com