The Primary Customer: Our W-2 Employees
Bringing nobility, dignity, and people power to the on-demand economy
When we launched Hello Alfred at TechCrunch Disrupt SF in September 2014, we didn’t know that a single decision would be the most important we would make for the future of the business. It seemed so insignificant at the time that it didn’t even make it into the pitch.
Staring into the sea of faces and cameras, we told the world a story about “A busy guy who had Alfred to get back time and mental space.” The pitch would win us the Disrupt Cup, $50,000, and be watched by thousands of people.
We may have won Disrupt that year, but in many ways we also lost. There was a strong backlash, as we were hailed the “Uber for servants” and reporters suggested that Silicon Valley was “officially running out of ideas.”
ValleyWag reported, “Just as Uber introduced the world to its private driver, Alfred brings butlers to the masses at the low-low-wait-that’s-an-unlivable-wage price of $99/month for weekly home visits.”
Yet our intentions had been miscommunicated or misunderstood. We didn’t have a startup that was exploiting people for the ultimate uberization play. In fact, our singular focus was on the people doing the work.
Building a company for your employees
This may sound strange, but my co-founder Jessica Beck and I did not begin Alfred with the customer primarily in mind. Of course we wanted to build a service people loved that changed how they lived every day; but to do it, we had to build a business for our Alfred Assistants. Jess and I had made a small decision:
We were building a business where our employees were our primary customer.
It was a radical idea that came from Bob Simons’ book, Seven Strategy Questions: A Simple Approach for Better Execution. Many of us have been taught to think that consumers, vendors, investors, and the public at large are all stakeholders to consider. Simons argues organizations have trouble making good, clear decisions when they cater to multiple stakeholders with competing priorities. If you have more than one customer, over time, you end up in a web of twisted tradeoffs that make it difficult to scale, grow, and compete. He cautioned that most decisions in any business would come out of this one decision: “Who is your customer?”
Ultimately, our goal with Alfred is to help our customers be the best version of themselves — to balance the demands of life and have time to do the things that matter most. Customers have an interface to ask for help with any service and are then paired with a dedicated Alfred Assistant that visits each week to take care of to-dos from grocery shopping, dry cleaning, home cleaning, and much more.
If we wanted to be a critical component in the service value chain and the future of how people lived and got things done — we believed that our competitive advantage wouldn’t be the technology alone — it would be the people power and the care and heart only people can bring to the table.
If we oriented the business around Alfred Assistants, designing tools and systems that made their job easier, we knew our end users would be served well and ultimately be happy.
Putting It Into Practice
This framework — that our primary customers were our employees, our Alfreds — led to some counter-intuitive decisions.
Making your employees your primary customer means making decisions and trade-offs that prioritize their experience.
W-2 vs 1099: In practice, that looked like us deciding to make them W-2 workers instead of contractors when our entire industry was doing the latter. When we went down a list of questions contained in the IRS guidelines designed to help an employer determine if they have independent contractors or employees, we came up 50/50. Essentially, we could follow the well-worn footsteps of Uber, Lyft, Instacart, Handy, Shyp and others to select 1099 workers, or take on the challenge of making our people salaried. We accepted that challenge.
By our calculation, this choice has cost us an additional 30–40% and had some difficult second-order consequences, but it allowed us to train our employees, hire better candidates, and message their importance to our mission.
Competitive Pay: We also pay above the market and seek to understand our employees’ financial goals, enabling us to tap into a higher quality supply pool (pay starts at $16/hour and can be as much as $30/hour for our Team Managers). While some rely on us to be their primary source of income, many see Hello Alfred as a way to supplement their household income. We transparently do the math with our employees so they can decide if this is the job for them.
Communication + UI: How our people show up within our company and customer UI was also a top focus area. Our app is designed to be a dashboard to control your home, giving you the visibility to see what things are happening. At the top of the app is a picture of your dedicated Alfred Assistant. This central location reinforces that they are the most important part of the equation.
Self-Expression: We also do not require Alfreds to wear uniforms. It is their choice to wear Alfred gear and therefore acts as a barometer of how they feel about our company. We built it into how we have pictures of all the employees who have ever worked for us, whether they leave or not, on the walls of our office, as they are a part of our DNA.
Small decisions and touch points are what ultimately communicate that ours is a human company, made for humans.
Trust: Finally, we had to trust that people could scale alongside tech and to do it we learned to push power to the edge of our organization to evolve. Our analog: biology, where organisms evolve at the edge. This is where all learning occurs.
In our industry, it’s almost a given people cannot scale like algorithms. However, people can scale if you have cumulative institutional knowledge, where every decision ever made in the company adds and is learned and held by the entire system. Less abstractly, what does that mean? That means our employees are hiring other employees. Our employees are training our new employees. There is a guild mentality and every day we are getting better together.
The People + Machine Equation
Silicon Valley companies that emphasize people over algorithms do not signal the end of good ideas. If anything, it opens the door to the next era. Especially as a coming AI revolution will change how we work.
AI promises to eat up routine work that can be mechanized or automated. Including your job. So for now we all have to be thoughtful and pay attention to the responsibility we have to shape a new generation of jobs, which frankly have the potential to commoditize skills into transactions and sidestep hard won protections and benefits tied to current employment.
We believe we need to put humans back in the computing loop. Technology is a tool that can be directed to good use as the job of your employees continue to change.
We see the marriage of technology and service as one that pairs Human Intuition with deep learning and machine memory. Investing on both sides of the equation will give you the opportunity to unlock a special power. People power. An intangible thing you cannot pay for, but that you earn through a relationship of trust and care. That intangible is where your whole team authentically, meaningfully, almost elaborately cares about the end customer.
The single most important lesson is how you treat your primary customer and design for your tech and employees to work together in a new, positive and exciting ways. Ultimately, there are few businesses without some form of people power. That is a strength, not a weakness — so tap into it.
