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Comment by RollAHardSix | Hacker News Reader

65 an hour! Even with two people that seems a bit much. I have a woman I pay 30 dollars for an average of 3 hours of cleaning and she does such a good job I only have to have her over usually once every two weeks. She also does laundry, dishes, windows, sweeps and mops the floors, the whole shebang.

Still I like how Exec is looking at their customer base and adapting, that's how you stay relevant in an ever-evolving market!

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Seriously, $65/hr is nuts. If that's the going rate for cleaning service in SF, I clearly picked the wrong profession. Even for two workers that's high. What are they doing, cleaning up hazmat? How can it be that their regular service functions at $25/person-hr, but cleaning is $32.50/person-hr?

I wonder if they have trouble finding trustworthy workers, or if they are intentionally targeting the the upper segment of the market. (Perhaps to drive sales for other Exec services?)

Is it possible they are providing benefits to their workers, and that explains the cost? It probably makes sense for someone who is around harsh chemicals all day to have decent healthcare.

If people actually pay taxes/ssi, $65/hour isn't that nuts any more.

Sure, you can go ahead and go the "no paperwork" route, that'll get the job done cheaper. But it's probably not a good plan for a web service.

How can they make their regular service work for $25/hour then?

Contractor vs. Employee would be one easy difference. Cleaning is a more specific task. I'm guessing they have a list of "do's and don't" for the 2 people @ $65 rate. If you have someone performing random "on demand" tasks paid after completion, they could easily just be 1099's. Profit could be similar.

This pricing is not out of line in the least if you're treating this as a real business. Hourly wages would probably be in the $12-18 range. With 2 cleaners per job, that looks like an acceptable margin while also providing for all the normal overhead. Certainly a different approach from PathJoy.

What percentage would you estimate as the normal overhead for something like this? What would an acceptable margin be? They have $3.3M in investment funding, so it seems like the margin would not need to be very high at the start (if they're going for growth).

There are a lot of factors in overhead but 20 - 40% would be right assuming all the common expenses for this kind of business. I also assume they employ their cleaners and aren't all contractors.

Sure they have some cash but this is a service business with the biggest money to be made in recurring customers. Providing a deep discount upfront and then having to adjust later to make a profit seems short sighted.

Before they launched the cleaning service, Exec was already offering cleaning (and providing cleaning supplies to their workers) as part of their normal $25/hour service. I suspect they realized that the costs don't work out, and with two people at $65/hour it's "only" 30% more expensive that their standard service.

For everyone quoting super low numbers:

I live in a dorm at Stanford University. I have contacted about a dozen different services looking for someone to clean my 300 square foot studio. The _cheapest_ thing I have found is $65, with the range being about $65 -> 120

Is it because I don't live in a city? I am seriously confused.

I'm in the same area and it is basically the same. You have to find a private individual who is willing to help. Usually these people work 1 or 2 houses per week. Ask your profs for a recommendation.

Can't help on cost but for most things there is a another type of MVP. Minimum Viable Price. It just costs a certain amount to perform the service even if you think it's only X.

How did you find this great lady for $10 an hour? Do you buy the supplies or does she bring her own? Do you tip? Do you give a holiday bonus?

Does she provide liability insurance in case she breaks your washing machine?

Potentially, as long as you don't run out of Lemon Pledge, you're ok on supplies. I think homeowners (or renters) insurance would cover you on liability (I would be unhappy if she broke my washing machine, more unhappy if she broken/stole/etc. my laptop, but really worried if she got hurt and I might be liable, and incredibly worried if she accidentally hurt someone else in the building while I was employing her... but I think a homeowner's policy would cover all of that).

Yes supplies, are only a small factor. A Broken laptop is an expensive cleaning. A quality owner/operator/business is going to take care of it to keep you happy but, that comes with a slightly higher cost per job. For the other scenarios you mention, I'm not sure your going to have that easy of a time filing a claim, especially if you mention "employee". To flip it around a bit, would you also bear the cost if a plumber/electrician made a mistake and flooded/burn your house?

Recommendations from friends. Fully insured, licensed, independent business owner. As for supplies it's really nothing I don't keep on-hand anyways. Dish Soap, SOS pads, windex, pine-sol(have to love wood floors), swiffer, feather-duster, laundry detergent, dryer sheets; to count these in my costs would be a misnomer, I have to buy them anyway lol!

To be fair if I were to make a cost of living adjustment it would probably be closer to 15-17 an hour in a place like Silicon Valley. Still, people simply need to ask around for references if they want to find someone reliable and affordable.

Indeed there is an entire underground, for lack of a better word, for these kinds of services. They work on referrals and some continue to grow and add employees while, others are happy to just get paid for the hours the can work. However, because of the nature of these kinds of services opinions vary and that's the problem. One persons great is another persons sucks. I think Exec discovered this and is now aiming for quality and consistency rather than sending some random person over to "clean".

I'm sure they'd have problems running a sustainable cleaning business on $30/h considering taxes, supply costs and other fees you'd have to pay as a business owner.

That is a great reason why they never should have tried to approach this as a business where they employ cleaners. If they were just a service to hook up cleaners and customers, the pricing would not be a problem. You'd avoid all of it, and so would the cleaners and the customers. Step in the middle and say 'I employ the cleaners' and, bam, you have just destroyed the entire concept. You've just radically restricted your geographic reach. You've massively multiplied the cost to EVERYONE, including yourself, your customers, the cleaners, everyone. The cleaners are immediately divorced from receiving benefits of efficiency improvements. If they become more productive, their employer pays them the same (or less) and expects continued improvements. As opposed to actually making more money for less work, the way productivity improvement is supposed to work.

There are a million cleaner lead generation companies... They all suck.

What are their weaknesses? Do they mostly only deal with cleaning companies rather than individuals? I know that with cleaning there are certain concerns when it comes to being bonded and whatnot since you're going into peoples homes, but I don't know a great deal about it. I'd love it if there was a nice site I could hit up to find a cleaner in my area or get bids from multiples for what I want. For instance, the few places I've searched out myself around here insist that they come every week, won't even take laundry down to the laundry room, etc. There are more and more sites every day that would let me locate people to do work without having to pay the overhead necessary to keep an entire corporate structure oiled and upright even though they're not providing any service technology couldn't do better and for almost no cost. I just don't know of any for cleaning, and I expected this to be one of them... was a bit disappointed when I found out it wasn't. Even if they are hugely successful, I can't imagine them expanding to West Virginia any time soon.

I accidentally filled out a leadgen form for movers once. What it did was forward my personal information to 20 different moving companies who contacted me individually wanting me to fill out the same detailed paperwork 20 times about my move for a quote.

It's tragic because you can't turn off the inbound calls. There's no one thing to block.

Lead gen in general is an internet history lesson. The focus on local/reviews over the last few years was intended to be the fix for the trash lead gen created. The fact is, the vast majority of businesses like this are very small (even the franchises) and there is no corporate structure. They only make a profit if the come every week and they need to set limit on the kinds of things they do. For most of these, Google does a good job of putting the customer and service together even if reviews are another waste land. The missing questions are: is this service what I want and is it worth paying for?

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