Homejoy Fails While Handy Succeeds

Homejoy has filed for chapter 11 bankruptcy and the news is nothing shy of outright shocking. Homejoy thought it was tapping into a very popular market. In truth, the startup was getting a foothold in an industry that was poised to experience huge growth: home maintenance and cleaning.

Homejoy was backed by Google Ventures and a host of top investment firms. The company had launched services in several countries. A campy advertising campaign looked to be the perfect one for tapping into the lucrative United States market. Things just didn’t work out that way.

Why? People need such services. Not everyone likes to deal with the chaos of keeping a home clean or dealing with basic maintenance work. The skillsets required to handle such tasks correctly are based on experience. Contacting someone who can actually do the work is the far better plan than stumbling through DIY instructions.

Homejoy simply did not generate enough revenue. The company faced fierce competition from Handy and could not overcome it. Also, Homejoy was hampered by lawsuit threats challenging the independent contractor status of workers. For these reasons and more, Homejoy could not make the dent it needed to be a success story.

The tale of Handy reveals it is one of the top success stories of the many startups that have emerged over the past 20 years. The funding was raised through private investment firms and the money went to establishing a brilliant concept. People in need of home services could take advantage of a Handy app on a smartphone to book a freelancer. Rather than struggling with trying to rely on a local home cleaning service, Handy allows clients to book freelancers who are less costly and capable of providing outstanding service.

Handy ensures the freelancers hired to work for the company do possess the necessary skills to handle various tasks. The screening process to approve a freelancer to be featured on the site is extremely rigorous. The extra steps are intended to ensure only the most highly qualified are allowed to work through Handy. This, in turn, increases the likelihood clients will be thrilled with the results.

And Handy ends up with profits as opposed to losses.

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