After stealing HomeJoy's customer DB for another start-up, she is now a YC partner...
Move fast and break things?
Move fast and break things?
We're now 2 years later pushing $2M ARR profitably and about to raise our Series A. YC not taking 7% of our company was the best thing that ever happened to us.
YCombinator is nothing like what it used to be. The majority of the partners are useless as venture partners.
Picking startups is hard, like picking stocks. You aren’t gonna pick every winner, but frankly 2M in ARR after two years is not exactly a home-run for YC. So, perhaps them passing was the right call for YC.
Congrats though, sounds like you’ve built something useful and you can be proud of that. Plus, taking VC money ain’t all it’s cracked up to be. If you can bootstrap to get to a level that pay’s yourself $200-300k a year, that’s a win.
It's been awhile since I looked at this deeply, but I thought the path of a good startup is to raise a seed with an 18 month runway, grow to 1m ARR, and then raise a series A. Assuming that's true, growing to 2m ARR in 2 years is in the ballpark.
I always felt really gross afterwards because I felt like the interviewee was wronged, but it just wasn't worth the potential conflict with my coworkers/friends if I did anything about it, either during or after. Walking on eggshells and all that.
What did the co. look like a year before YC application and a year after?
YC today: no Paul Graham, and too many right-wingers.
If you're open to it, I'd love if you could email me the name of your company (jared@ycombinator.com). We are extremely interested in learning from mistakes like this.
And to be clear, I've invested in plenty of startups with similar models. But I understand your perception of how things went.
I'm curious to hear more. How do you go about this?
There are far too many examples of founders succeeding with an idea after many people before them failed with same idea. I think any good investor is cognizant of this.
I have no idea how impressive Adora is and I cannot speak to her qualifications, but HomeJoy should be a textbook example of an SV failure.
Which part of this is illegal, or — I’ll meet you halfway — unethical? It seems like a straightforward business transaction.
If I’m missing something nefarious, I’d like to educate myself to avoid it. What do you see as the problem?
(Apologies if my facts are incorrect; this is info from elsewhere in the thread, so maybe you know something that hasn’t been said yet.)
> The weird tale begins with an email that John Salzarulo received Tuesday afternoon. A Los Angeles based user, Salzarulo received an email from Cheung that "$20 cleaning is back!" thanks to its local partner.
> "I wanted to reach out personally today to invite you to join a private house cleaning trial with our Los Angeles partner, Fly Maids," Cheung wrote, not disclosing his connection to the company.
> When Salzarulo clicked the email link, the Fly Maids' site logged him into his Homejoy account, which still had his credit card number and notes about where to find the trash can.
I don't know if it's illegal, but I definitely think it's unethical.
Thank you for finding that! This opens up a fascinating discussion about ethics.
So, to start from a purely capitalistic viewpoint, it seems like you are free to use your property that you own however you wish, subject to the law. That raises questions like: in this situation, is it legal for the CC numbers to be stored in that way? From the customer’s POV, they authorized HomeJoy to store their CC info, not Fly Maids. But that leads to the question of: those CC numbers are stored somewhere (or the authorization token) and those assets were a part of the sale.
I don’t know. It’s a massive advantage to have your customers in a position of “just click this button to give us money” rather than pestering for CC details.
It’s a little odd, to be sure, but... it seems like unless it’s illegal, it might not be unethical to take advantage of that opportunity. It depends how you feel about capitalism, I suppose. If there was nothing illegal here, which seems perhaps likely, then it seems valid.
From another point of view, it sounds like he was just trying very hard to succeed, and in some sense Fly Maids was the continuation of his previous endeavor. So I sort of understand why it might have felt natural to reach out to the customers you were already doing business with.
But again, all of this has two important assumptions: (a) he legally owned all assets, and (b) used those assets to the letter of the law. If those are mistaken then someone with more experience should definitely call it out.
"When we contacted customers, we didn’t tell them we were Homejoy relaunching because we wanted to gauge reception to our new model without the influence of Homejoy’s brand," Cheung allegedly wrote. "As a result, we scared many customers, who expected the worst had happened to their data. We should have told customers upfront who we were, what we were testing, and used original content."
I dunno. This seems pretty reasonable, honestly. It kind of alarms me that you see this as clearly unethical, because I could see myself making this same mistake, in a different life. If you feel like explaining more of the reasoning regarding the ethics, I’d personally find it interesting to listen.
It seems like this should be readily answerable: in the event of an aquisition, does the acquirer have the legal right to use the card authorization token from the customers of the acquired startup? Note that Fly Maid did not charge them without their consent; they merely made the option available without them having to enter any CC info.
The reason I’m pressing this is because we’re talking about a YC alum + illegal behavior, which to my knowledge might even be a first.
Hopefully a lawyer might chime in with clarification. If Fly Maid was not authorized to utilize any of HomeJoy customers’ CC info during the course of business, regardless of acquisition, then this seems pretty clear cut.
If you actually look into the details of the matter, what happened was that the co-founder acquired the failed company as it was put through a bankruptcy process.
People who weren't privy to the process thought it was stealing when it really wasn't different from any other acquisition.
So, her brother?
For reference: https://en.wikipedia.org/wiki/Homejoy#Controversies
If anyone wants a startup idea, it's to make the inverse of Stripe Atlas. Closing down a company properly is a very long and complicated process.
http://www.businessinsider.sg/aaron-cheung-brings-homejoy-cu...
I'm skeptical a neutral 3rd-party would advocate selling credit card data to a person planning an illegal scheme. Especially when that person is your own brother.