Walking Away Successful - A Homejoy Postmortem

As a former employee of Homejoy ( ~2 years ), a startup that was focusing on how to best leverage the internet and technology to improve the process of getting your home cleaned, I have been meaning to compile my thoughts on my experience, and its ultimate failure. Homejoy, after raising 40 million dollars and being backed by investors including Redpoint and Google Ventures, shut its doors and many people were left with just guess work as to why. I was originally intending for this to be a reflection that I kept personally, but I thought that a public post-mortem might be more valuable. 

First things first, the home cleaning industry is absurdly tough.

- Razor thin margins
- Customer interactions happen inside of their homes (anything that went wrong was grossly amplified)
- Client expectations vary wildly
- Legal red-tape acts as a guiding hand for product decisions
- High cleaner turn-over when product quality demands consistency
- Ideal experience for cleaners and ideal experience for consumers are often times misaligned( ie. everyone wanted the 8am or before work cleaning, cleaners wanted consistent cleanings throughout the day )

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.

With that being said, we did make some mistakes.

Here are some of my takeaways from them.

Software is eating the world, but it isn’t eating it proportionally. Figure out which parts of the problem can be solved with software right now and which can’t and then move on

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. While we threw software at every problem that existed on the periphery of the actual cleaning experience, we never found a way for software to move the needle on the actual cleaning experience itself* (On demand drones that drop off Roombas?). We tried to brute force a very human problem with software. It didn’t work. Turns out that some problems are still best left solved by ‘old school’ methodologies. Software solutions couldn’t be substituted for domain expertise. By the time we made the big operations hires/investments it was too late.

*To be fair legal constraints did throw a wrench into some of our plans

FOMO?—?fear of missing out?—?is a very real force in business, don’t let it hijack company direction

Launching Europe killed our momentum and possibly Homejoy altogether. Out of fear of Rocket Internet gobbling up the European market before Homejoy could plant its flag, Homejoy decided to prematurely enter Europe. Basically Homejoy had a huge case of FOMO. So, much like a bloated flip-flop wearing American reading from their english to French guidebook might be ready to integrate into the intricacies of European culture, here came Homejoy. We were given the insane task to push our product to Europe in just a couple of months. This included internationalizing on a technical front, an operations front, a marketing front, a client support front, and a cleaner support front. Anyone who knows about the difficulty of internationalizing just a codebase should sympathize here. This effectively handcuffed the productivity of almost every department in the company and sapped our ability to build and react quickly. I think everyone in the company agreed that this was a bad bad idea.

Product vision needs to be grounded by execution feasibility

We positioned ourselves incorrectly as a product in my opinion. The Homejoy product was about facilitating the payments, scheduling, and demands of a cleaning. We were unable to penetrate much deeper than that, but our product was marketed and treated as if we had turned a home cleaning into a product that was constructed on an assembly line. The reality was of course, that the cleaners and the cleanings themselves varied dramatically. 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”.

Don’t let current buzzing startup adages hijack business 101

At Homejoy a lot of us, myself included, got drunk under the majestic startupville spell. The hangover was rough. The swirling tales of companies that had found success circumventing basic business principles had taken root. We were all too often a pack of disillusioned startup junkies that swore that even basic math could be defied by growth and startup voodoo. Let’s discount $100+ cleanings down to $19. Not to worry, growth fixes everything. Let’s lock customers into discount rates that even with infinite retention won’t become profitable. Let’s just rub the magic startup lamp. The startup genie never showed, and growth didn’t fix everything. Growth is very pretty and shiny though. Growth is also incredibly distracting, and it won’t fix everything. It’s kind of like being data-informed as opposed to being data-driven.

Build for the current state not the future state

We would often shy away from building solutions for the now state of Homejoy. Instead we would build for some future state of Homejoy where problems X, Y, and Z had been solved. Why build scaffolding? We should be building for the future Homejoy utopia that we’ll certainly have in a few months. Scaffolding turned out to be kind of important. Building for now turned out to be kind of important. Sure the numbers don’t work right now but once retention goes up, this feature will work great! Scaffolding is important. If building something or doing something now will get you to healthier numbers, you shouldn’t be afraid to do it. Use judgement here but never assume that everything will work out as planned or that no problems will arise in the future when making product or company decisions. Building products that hinge on a number of future successes is a dice rollers game so play wisely.

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. That’s especially true for a startup like Homejoy that was the poster-child of growth for so long. Now that the taste of failure has washed out of my mouth, I look back on the experience as a tremendously positive one. I know that’s not the case for everyone, but what I saw was a group of people from all over the world, from all different walks of life, working extremely hard together to try and beat the odds. It was a pretty magical period of my life. While on a macro level Homejoy failed, most of us walked away smarter, more competitive in the work world, and more aware of what to look for going forward. 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.