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To Be or Not to Be the Uber for X

Dan Peron
11 min readJul 13, 2015

A cautionary tale from the “Uber for House Cleaning” space in the States

(and how you can avoid making the same mistakes by asking the right questions)

UPDATE: I wrote this article when the fate of Homejoy was still uncertain. Will it be bought or will it just die?

Now we know.

Homejoy, the YC incubated Uber for House Cleaning is closing down on July 31st.

Their “dream was to help people keep their homes clean and cared for — and empower our partners to enjoy flexible work so they could study, raise families or ease into retirement”.

Yet they failed.

Could this article have made a difference?

May it make a difference to you.

We all have that friend.

A few weeks ago a friend asked me to build an Uber for babysitters together.

No way, man.

Entrepreneurs leverage opportunities they see in the market.

But just because nobody is doing it doesn’t mean we’ve have an opportunity on our hands.

It’s not an opportunity if nobody is doing it and we can do it.

Cause as soon as we will do it and we’ll make a name for ourselves, somebody else will do it as well. There will be competition.

The opportunity doesn’t just come from us being to able recognizing the potential of an idea and being able to execute it well.

The opportunity comes mostly from others not being able to see what we see; from not being able to live in the future that we are already living in; from not being able to build what we are going to build; from not being able to understand our audience and their need; from not being able to address those needs the way we do; from not being so organized and fast and built to scale like we do.

Where does the opportunity come from?

The opportunity comes from us having good answers for these questions:

We build it: what will stop our competitors to compete?

How will we attract our ideal customers and why will they want to stick with us?

What will be the difference we provide that will make a difference big enough for our customers not to jump ship as soon as competitor will show up with a similar product and cheaper prices?

What we are able to do differently that other won’t be able to is ultimately what will reward us. Our unique competitive advantage will make us the numero uno.

The Uber for X model comes with crippling limitations. It doesn’t give the entrepreneur a lot of room for innovation and differentiation.

It’s just a marketplace selling an commodity that’s abundant, other people services. You don’t really care about who brings your groceries home, drive you home, cook your hotdog and whoever is cheap and good enough to get the job done will be ok.

Uber for X is a plug and play, copy and paste it model that make you feel like a ‘disruptor’ and that’s cool

That’s probably why it sounds so appealing to the wannabe entrepreneurs whose best idea is taking somebody else’s model and apply to a new market.

There are currently dozens of Uber for X kind of companies. Taken from a 2014 article from Digital Intelligence Today:

(You can find more of them on this Quora thread)

Everybody can start an Uber for X and feel like they are entrepreneurs for a while.

Build a prototype, raise some money, hustle a little bit.

Take the Uber for House Cleaning vertical for example.

So you think you can Uber?

In November 2013 I was in New York for pleasure. As I was walking around the financial district Alex from a company called Handybook (now Handy) handed me a flyer/coupon to try the Uber for house cleaning and handyman jobs he worked for.

He was a marketing guy and as a guy obsessed with startup positioning I had to ask him: why should I choose your company?

I wasn’t impressed with the answer he gave me.

He said something about Handybook, being the best company yadda yadda. Yeah, everybody is the best. I made him notice that every pretzel cart in New York was selling “the best pretzel”. He couldn’t provide a good reason for me to choose his company.

So I decided to write an email to his CEO, but as I was researching the vertical, I liked one of their competitors more, Getmaid, an Uber for Housecleaning, based in New York City as well.

So I wrote them an email.

An italian tourist in NY and your edge competiting with HandyBook.com

Hello folks, Dan here.

You should keep reading this email if you want some tips and criticism about your startup marketing/brand positioning from a random dude on the internet.

(…)

So, guys, house cleaning doesn’t seem to offer a lot of room to be unique.

How are you going to pull this off?

What’s your competitive edge?

I’m thinking about that too. If you guys want to discuss it, I’m game’’

Steven, the CEO of GetMaid got back to me asking for a rendez-vous.

We met the next morning in a coffee shop in the Flatron district, just a few blocks away from a yellow McLaren mp4–12c parked in the middle of the street as the commercial for the new Xbox One was being shot.

I discussed with him what I could find about the 4 relevant players in the house cleaning on demand business: GetMaid, Homejoy, Exec and Handybook. What strenghts and weaknesses they were showing, from the outside and what GetMaid could have done to improve its fighting chances.

Steven stressed how they were spending a lot of time and efforts building a great platform for their house cleaners and customers. That was going to be how they would differentiate themselves from the others.

The next day I wrote him another email:

I want to wrap up what I told you and share some ideas I have come up with walking by myself across Manhattan.

I looked forward to meet you thinking that finding a good unique, differentiating idea to build the getmaid brand around to would be hard and I had a few vague ideas.

Anyway, you already have a potentially good differentiating idea: the best customer experience you are setting the foundation of by building the mobile apps your maids and customers will use to make sure the job is done in the best possible way.

I couldn’t have come up with something better. I’d like to think about getmaid.com not as another UBER for HOUSE CLEANING but as ZAPPOS for HOUSE CLEANING. Yeah, it hardly makes any sense but I like the focus on delivering the smoothest and sweetest experience that Zappos strives for.

How you do it will be the battleground (everybody’s probably thinking how to improve his product).

What are the most painful aspects with dealing with maids you don’t have an history with?

Make sure they will never happen and be read to go beyond the call of duty to do it.

You told me you have plans to remake the website. As you explain what getmaid is and what it does, be detailed as you were with me about all the features that will make it a no-brainer to the customer.

Stress how the experience will be amazing by describing how it will all be handled (book it in 2 hours, say how you want it, pay later if you are satisfied). Be bold and nice.

You’ll probably have to find a way to wrap it all up in a single phrase that express the whole idea. GetMaid: the amazing house cleaning is not going to do it justice.

(…)

Now what really, really excites me for you ( and for having these ideas lol)

Your edge is the platform you are quietly building. You should create a brand for that too and say “GETMAID uses the proprietary platform GETDONE/GETIT (I confess, the first idea was GETSOME :) ). It’s another thing I learnt from that italian guy: you need to have a secret ingredient. Like Redbull has taurin, the Iphone had display retina and consumer products tend to have specific features TM.

This way people don’t only get used to getmaid but to the platform too that you can later use for getplumber, getgardener, getdogsitter, getmassage, whatever. With one login the customer will be able to access all of them. He will have a profile and the reputation built on get maid will follow him on other verticals as well. With a strong platform brand it will easier to attract good professionals (plumbers) and each site will make the others stronger.

What if somebody else wants to be the uber for on-emand vets? Good luck. You have the platform ready, you have the customer base and the brand. They start from nothing. Investors will ask “ What if getsome enters your vertical?” and everybody will be silent.

GETIT will be your ultimate competitive edge.

You’ll be the AMAZON of getting things done. You could go even after uber in his vertical eventually.

I think this is genius. A billion dollar opportunity for you guys. And it all starts with nailing the customer experience of get maid. Then it will be like a snow-ball. Exponentially bigger.

I really wanted to share this cause I’m really excited about the possibilities.

(…)

I see the potential and I feel the butterflies in my belly. Go for the billions bro.

Ciao,

-Daniele

To which he replied:

“I really enjoyed grabbing coffee with you. It was amazing how much you were able to wrap your head around the space given the short amount of time you looked into it. I also appreciate the followup and email. I’m happy to say that a lot of what you mentioned is on our roadmap, but I especially agree with your suggestion of focusing on the experience through the tech that both consumers and maids use (and eventually turning it into a platform for other verticals)(…)“

A few days later, I read that Homejoy, their YC-graduated West Coast based competitor, had raised 40 millions in funding.

So I wrote him back to share my thoughts about it. I was emotionally invested in Getmaid at that point. I wanted them to succeed.

“Yesterday I read that HomeJoy raised about 40 millions and that’s a lot of money. I have been thinking “Damn, how is getMaid going to compete with all these overfunded players”. So, if you didn’t noticed I’m all about edges (and sometime it’s a limit cause you wait to be ready and you are never ready enough).

Branding/brand positioning was one. But in the house cleaning space it’s a tough game. You are all offering the same service after all while competiting on the details while I’m afraid the game is being won by the fastest player to spread all over and gain the most mind share. Even if you are different and “better”, people may just be content with what they already have and changing to another platform would ust be a bigger pain.

Bottom line: whoever expands faster (and have the funds) end up standing last. I’m also thinking about what you’ll say to potential investors to invest in getMaid given the crowded -and harder as it gets satured- marketplace of housecleaning on demand apps. They will probably ask you “yeah, but there are a few other big dogs now, how are you going to have their asses served on your app.”

(…)

If I was at Homejoy I’d do this: buying lots of ads, spending lots of money not caring about being profitable. Acquiring as many users as faster as I possibly can. Running out of money? Hey, look how many people are using our shit. We will be profitable someday. Buy in. Amazon style. In my opinion, the fastest to spread all over the country will be the winner. I remember you telling me that Homejoy is the cheapest and the quality not so good. As long as it is not incredibly bad and customers are satisfied, they will be fine imo.”

Steven never replied back.

Fast forward to July 2015, how is the house cleaning on-demand app landscape?

Then, what happened?

Exec was acquired by Handybook (that in the meantime changed into Handy) in January 2014. GetMaid was acquired by Homejoy the following May.

Nowadays Homejoy doesn’t look to be doing very well.

It looks like they are looking for a way out: first talking acquisition with Helpling, the Samwer brothers’ Rocket Internet-powered Uber for house cleaning, that according to VentureBeat, lost their interest as soon as they saw their financials.

Then, according to TechCrunch, there have been acquisition talks with their #1 competitor, Handy that according to a company spokeman, “in the past year (Handy) has grown ten times in both revenue and bookings and is now processing over 100,000 transactions per month. Handy is now more than twice the size than any other player and is the clear leader in the category.”

Looks like Handy will be the last one standing at the end of the day.

The war is not over just yet though.

Handy is being sued “by a worker alleging she should be classified as an employee, the latest in a debate over whether workers in the sharing economy are independent contractors or employees entitled to benefits.

The results of the broader legal battle could reshape the sharing economy, as companies say the contractor model allows for flexibility that many see as key to their success.

Last month, a California labor official found that one San Francisco-based driver for ride service Uber was an employee and entitled to expenses. An ultimate finding against companies like Handy and Uber could force them to pay Social Security, workers’ compensation, and unemployment insurance.” (link)

Big boys like Amazon aren’t sitting idle on the side lines: the Seattle based company has launched Amazon Home Services, a new marketplace for local businesses to sell professional services (from electricians to landscapers to yoga instructors) to customers.

In the meantime, overseas, Helpling acquired Hassle, another european cleaning on demand app, to build by far the the strongest player in the vertical on this side of the Atlantic ocean.

Hassle.com co-founder Alex Depledge, commenting the acquisition, sintesizes what could be the recipe to make it in the sharing-services-on-demand economy:

“Their ability (Helpling) to scale and raise money is impressive. This, combined with our ability to build depth in market and user loyalty, means that together we are a force to be reckoned with.”

As an italian, I know somebody that knows personally somebody working and investing in an italian Uber for house cleaning, Homyn. Do I think they have a chance against Helpling? Not at all. Chances of being acquired? Given the stronger presence of Helpling in Italy and its superiority in every aspect, from access ot capital to execution, I’d say slim to none. Not from Helpling, at least.

What can you learn from all of this?

Uber for X is a bitch.

If you really want to bet on it, ask yourself (or the people you are investing in/interviewing for):

  • how are we build something other can’t copy and be unique?
  • how are we going to be the number 1 in the mind of our customers?
  • how are we going to raise our own warchest?
  • how are we going to spend it quickly enough to scale even more quickly?
  • how are we going to hire the people that will make that possible?

And good luck.

Uber
Sharing Economy

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Dan Peron

Written by Dan Peron

99 Followers

Products built for growth. Cause luck is for amateurs. Follow me for more.

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