Handy Home Cleaning

Oisin Hanrahan and Umang Dua, co-founders of Handy, know that growth is no longer considered crucial for startups. New businesses are being tested on whether the big idea is reasonable enough to grow in profits without tons of cash.

Handy.com began in 2012. The financial crisis was receding and venture capitalists were keen for on-demand ideas. The VCs that joined with Handy suggested that the co-founders ask for more money, and focus on their start-up full time. The land grab against rivals, for the next couple of years, often meant outspending rivals.

In July 2015, Handy’s biggest competitor, Homejoy, went out of business; a bad and good news situation. The bad news was that capital markets had changed and the good news was that there wasn’t a big competitor fighting with aggressive unit economics. There was room at the company to focus on sustainability rather than pure growth.

The biggest problems Handy was facing were low ratings and complaints by customers and typical home cleaning business internal structural issues. Home cleaning businesses have a “high-cost-of-failure”.

The cheaper solution was to outsource customer service although it meant giving up some control. Both co-founders say it was a painful experience to lay off their customer service workers.

The initial loss of revenue during the rolling out of the self-service platform was worse. But as time went on, the shift to more chatbots has proved successful. It’s effective and got the company to a size that made economical sense.

Although Handy has stayed in 28 markets instead of expanding to new ones it has made gross margins positive and with the adjustments made internally the burn rate has steadily fallen. The company expects that sometime in the latter half of 2017 it will turn over profits and be able to launch in new cities and one new service, at least. For more info, visit https://www.handy.com/cleaning-services/new-york.