Best deep-dive into the Homejoy downfall I’ve come across. A few things come to mind:
- Growth should definitely be prioritized if there’s a steady (growing) war chest of funds. This sounded like playing, and losing every spin on roulette with a burn rate of no limits.
- If you had to pick, growing the supply-side first in these types of on-demand marketplaces should be prioritized. A healthy, reliable, and eventually growing supply base drives growth in organic and word-of-mouth demand. Sure the growth levels may not equate to hockey stick growth initially, but it builds a sustainable long term business which will eventually lead to point 1 above where you can focus on paid channels, subsidies and incentives.
- This is a case where regulations (employer vs. contractor, antiquated vs. new guard, etc.) need to keep up faster with the hot on-demand economy. It was somewhat disheartening to read this because every on-demand you-name-it startup wants to be the next Uber (or thinks they already are), and that’s not possible — perhaps toxic “growth” goggles on (or lack of)?