HomeJoy’s new business model


Earlier today I wrote a post summarizing the three key factors that led to HomeJoy’s demise. Since then I’ve been thinking about how some these issues might have avoided and it all seemed to come down to the business model. I will try to address those issues, though in a different order than I originally wrote.

It seemed that there was one fundamental flaw in HomeJoy’s business model, which is that the business as a middleman, but wasn’t relevant beyond the first transaction. all of the facts, and considering the other service models in the market, I wonder if the company misbranded itself.

Rather than the Uber for home cleaning, HomeJoy should have been the Angie’s list/ Craig’s List for home cleaning.

Customer’s Perspective

  1. Customer goes on the site to find a housekeeper. She pays a fee to access the service
  2. As part of her access fee, HomeJoy provides the option to try and choose from 3 different housekeepers before committing to 1. This allows HomeJoy to deliver better quality housekeepers by matching the best housekeeper for that customer based on her reviews
  3. The first three housekeeping services are also processed on the HomeJoy system and the company is able keep a portion of the cleaning fee
  4. After the customer has decided on a housekeeper, the platform choose can choose to offer additional products to process the offline arrangement or not

Contractor’s Perspective

  1. The incentive should be for the contractors to want to stay on the platform. How? By building a reputation on the site that then allows them access to more lucrative jobs and perhaps more flexibility as to what schedule she works. She is able to manage her list of clients and if she loses one, easily find another easily
  2. For this access she pays an annual fee. Because this is an upfront fee, she’s incentivized to return to the website to scope out job requests even if she has a full schedule of clients and to access the management tools this service would offer

Other monetization opportunities could include:

  • Training videos and badges for each on completed. Since HomeJOy can’t mandate training under law for their contractors, the company can still find ways to reward those who go the extra mile
  • Forms and easy filing. This could be for tax purposes, client contracts etc
  • Third party apps to service this economy
  • Partnerships with relevant cleaning product companies i.e. use Pine Sol at a client’s house and leave a free Pine Sol branded product ( this could be crossing the privacy line)

Because HomeJoy customers were looking for a recurring service, there was no need to continue to return to the platform for each following transaction. Also the company was stuck charging and making the sam from each housekeeper regardless of the quality of their work, rather than allowing customers + contractors to settle on a price that both parties found fair.

This model could address HomeJoy’s retention and leakage problem, while keeping the contractor model. It also addresses some of the issues that stemmed from the contractor model (mainly lack of control over quality of service).

Clearly, this is an ideal plan from someone with no visibility into the operations or day to issues of the company. So how applicable it is, I’m not sure.

But it seems the founders are relaunching and exploring different models Maybe they’ll come across this post in which case, I hope it gives them something to much on.

 

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