Aaron Cheung and Adora Cheung launched their house cleaning service Homejoy two years ago, and guess what — they literally worked as traditional house cleaners for a month as part of the research process, and they discovered two things right away:
1) Cleaning people’s homes is really really hard;
2) the current system was so broken and inefficient that there was opportunity to change everything.
“We worked on a team of about a dozen cleaners,” says now CEO Adora Cheung. “We had plenty of clients, but for scheduling we literally worked off an Excel spreadsheet that couldn’t possibly factor in transportation time, breaks, or clients’ schedules. As an engineer, I just thought, ‘Wow, software could solve all of this in less than a second for thousands of cleaners.’”
In just over six months, the company expanded into over 30 U.S. and Canadian cities, and it just established a new headquarters in London to spread into Europe. In this exclusive interview with First Round Review, Adora Cheung shares the strategies and hard lessons that allowed Homejoy to sprint across two continents while keeping service quality high.
The number one rule for any startup creating a platform to provide a human-powered service is that you absolutely can’t afford to reinvent the wheel every time you launch somewhere new. Sure, there are parts of your business that have to remain unscalable to make this possible (more on that later), but there’s a lot you can solve with a solid, automated plan. The more you have ironed out, the faster you can go, and the simpler it will be.
“Every city we went to, we learned something new and modified our plan just a little bit,” says Cheung. “You could say we had a playbook — which sounds fancy — really it doesn’t have to be more than a Google Doc with a checklist. No special features required.”
Here’s the rough list that she and the Homejoy team have developed to think about entering new markets:
1. Carefully identify where to expand next based on market size and opportunity for your specific business.
2. Pay crucial, painstaking attention to your first hire in every new city or region. They are the linchpin in your plan.
3. Invest time and energy in top-to-bottom quality control that is replicated everywhere you go, no exceptions.
4. Pay constant attention to both sides of your marketplace, and continuously think of new ways to support them.
5. Dig into data whenever and wherever possible to streamline operations.
“Invest in one process and write it down. Then keep optimizing every step.”
“We do a ton of work before we ever step foot in a new city,” says Cheung. “Our centralized team in San Francisco does a great deal of research into why we should expand into a specific city. And you really have to think beyond ‘is the market big enough?’”
“3 questions you should pay special attention to before opening up shop somewhere else “(Cheung)
1. What is the demand for your service now, and how will that change based on current trends?
2.What are the marketing channels for a launch in this specific city? How will you reach your relevant audience and how expensive is that likely to be?
3. Perhaps most importantly, what does the supply side of the equation look like? For example, are cleaners interested in working with a service like Homejoy to coordinate their work? Sometimes the answer is no, and this requires a marketing effort of its own.
“When it came to making things more efficient, there were some clear places to start,” says Cheung. “The most obvious to me was that there was no way to easily book house cleaning online.”
“Before Homejoy, we’d ask people if they’d want to have their home cleaned by a professional on demand for $20 to $30 an hour. Everyone we asked on the street said, ‘That’d be awesome, but I have no clue how to find that.’” Generally, a search online would bring up too many choices of dubious quality with uncertain pricing or the need to negotiate — which is always uncomfortable, especially if you don’t know exactly what to expect.
“We have a solid first step that is complex enough that it screens out people who aren’t really interested, but easy enough to navigate for people who really do want to work with us,” Cheung says. “We’re able to filter out candidates who we would have spent time phone screening in the past.”
To reduce friction, Cheung recommends the following to founders pursuing similar business models:
1. Don’t obsess over making every practice scalable at the expense of the bigger picture. Capitalize on your domain knowledge to figure out how to do everything really well — and what you’ll need to do it really well — before you try to do it fast.
2. Keep a sharp eye out for patterns. When you find yourself or your team repeating actions three or more times, find a way to automate them in a way that will produce the fewest questions or issues. This list (or Google Doc) will continue to grow.
3. You should only attempt to grow when you’ve written your process down so that someone else is able to implement it flawlessly with little to no oversight. That’s your inflection point.
Find Your Local Anchor
When Homejoy stakes out a new city, it sends what it calls a “City Launcher” to scout things out on the ground. But the most important job of all is to vet candidates for the first crucial, permanent hire in that community: the City Operations Manager.
“We typically line candidates up for that role in advance so that when the launcher touches down, the first thing he or she does is dive right into interviews with a bunch of candidates,” Cheung says.
“We’ve found the best City Operations Managers to be people who know how to work with a distributed workforce and how to clean to a very high standard,” Cheung says.
“The No. 1 value all employees share is making happier homes for both our customers AND our cleaning professionals.”
“Everyone at Homejoy knows there are two customers on the platform: The homeowners and the independent cleaning professionals. We have support teams and communities for each one,” she says.
“Scaling rapidly is the one thing that keeps me up at night,” Cheung says. “But it’s not about how many cities we’re in and how fast. It’s about how do we keep delivering that ‘Wow’ factor and ‘five-star’ experiences.”
“Eventually, we’ll be able to build to meet all of these needs,” Cheung says. “The important thing was knowing what was required to expand, what we could tackle later, and what would give us the next big boost in growth.”
First shared with First Round ReviewFollow @Alltopstartups