Google I/O 2014 - How Homejoy swept the competition: Adora Cheung

0:00 MALE SPEAKER: Thank you guys for joining us here on day two at I/O here in the YouTube Distribute Space. And we're so excited for our final session here with Adora, who's the co-founder of Homejoy. And then before we get into what Homejoy is about, your story and talking about your journey, we want to talk about what exactly to expect in this talk. And basically we're going to talk about how do you get your product out there once you've designed and developed it?

0:25 How do you get your first initial customers, and how you expand on that distribution? And really, I couldn't think of a better example than, Adora, what you've done with Homejoy. So why don't you tell us a little bit about Homejoy and what it is about as a product. ADORA CHEUNG: Sure. So Homejoy is a platform that connects people with home service providers. And we started with professional house cleaners. So in 60 seconds you just go to Homejoy.com, you tell us a little bit about your place, date and time for us to show up, and we send someone who's background-checked.

0:54 We've interviewed them in person, tested that they know how to clean in person, as well as they're insured and bonded. And they'll show up at the date and time you wanted them to show up. It's meant to be quick and convenient and very simple to use. MALE SPEAKER: That's awesome. And it seems like your target demographic are people who can't seem to keep the rooms clean, like myself and my housemates. And it seems that you've had incredible success expanding from San Francisco.

1:21 And where else have you gone? You guys moved internationally recently, so why don't you tell us a little bit about that. ADORA CHEUNG: Yeah. So we're in over 30 markets now. If you think of the top X number of cities in the US, we're most likely there. So our top markets are San Francisco, New York City, Los Angeles, Miami, and so on, so forth. And internationally, we are in London, and we just recently launched Berlin as well.

1:43 MALE SPEAKER: That's awesome. That's awesome. So take me through. How long has Homejoy been around now? ADORA CHEUNG: So Homejoy has been around for just under two years. We started in July of 2012, and basically that's the month where my brother, my co-founder, Aaron, he approached me with a problem he had, which was I'm trying to find a house cleaner, and I can't find one. My place is a mess. So let's try to fix this problem.

2:10 MALE SPEAKER: That's awesome. So take us through after you had the idea, you identified the pain point, what was day one like, when you launched? ADORA CHEUNG: So day one was essentially doing research and doing a lot of what improvements can we make to the industry? And at that time, we knew that it was a very old-school industry. There was not much technology that was being used to make-- A lot of things that were back then inefficient are now efficient, because Homejoy exists.

2:41 And so in the marketplace or on a platform, you have supply and demand. You need the customers, who actually need the cleanings, and you need the professional cleaners, to do the actual cleanings. And so for us, that chicken and egg problem is typically very hard to solve, but we figured we could just do the housecleaning ourselves. So one day one, we just said we are the house cleaners. MALE SPEAKER: You and your brother. ADORA CHEUNG: Me and my brother were house cleaners.

3:08 MALE SPEAKER: You were really going around house to house. ADORA CHEUNG: Yes. And we would just need to find customers. And so we went around find-- MALE SPEAKER: Why didn't you call me on day one? ADORA CHEUNG: I wish I knew you existed. MALE SPEAKER: Oh, my god. I would have been your best-- ADORA CHEUNG: I should have just showed up to Google and-- MALE SPEAKER: That's right. I would have hired you on the spot, Adora, I'm telling you.

3:26 ADORA CHEUNG: Coincidentally, we actually were starting in Mountain View, so you're actually close by. MALE SPEAKER: Yeah. I take even more offense to that, the fact that you didn't contact right away. ADORA CHEUNG: Good thing you're a customer now. MALE SPEAKER: That's right. That's right. ADORA CHEUNG: So yeah. The first day was all about let's quickly put up-- Within a weekend, we put up a website, and on the website so you could book a cleaning. It was very simple.

3:50 And then we went out and tried to find actual customers come to our website and actually book a cleaning. And it was very difficult. It took us some time. We did a lot of just running around. At the time it was summer, July, and there are a lot of fairs in Mountain View. And so we would literally run around with flyers, following people and trying to get them to book cleanings. And that wasn't initially very successful.

4:14 But there was one day it was very, very hot. There was a fair out on Castro Street, which was close by my brother's apartments, which was our office, too, as well. And we took water bottles. We iced a bunch of water bottles, took them out, and gave them to people, because they were hot and they needed water. And then we convinced them, essentially almost guilt-tripped them into booking a cleaning. And that's how we got our first customers was handing out water bottles.

4:46 So we booked those cleanings, then we went to go clean it ourselves. And what we learned almost immediately was cleaning is very hard, and we weren't good cleaners. And so at that point we essentially decided to learn how to go clean. And we first bought books online to learn how to clean. MALE SPEAKER: Really. Like what? Like "Housecleaning for Dummies," or what kind of book did you read? ADORA CHEUNG: It's like "Housecleaning by Martha Stewart." MALE SPEAKER: Oh, wow!

5:15 ADORA CHEUNG: And those weren't very helpful. And so we decided actually the best thing is probably to just join a cleaning company, because they are actual professional cleaners, and learn that way. So that's what we did. So I joined a cleaning company in San Francisco and learned how to clean. But on top of that, what I got the most out of it was I learned how a cleaning company actually works today, or before Homejoy existed.

5:48 There are a number of things, but just to give you a couple examples, for whatever reason, you couldn't book a cleaning online. That seems very basic today. So we solved that problem. 10 years ago booking a cleaning online might not have worked, because there was a lot of trust issues and things like that. But today, with the existence of people trusting to buy products that'll show up at your door, they'll buy services. And a person will actually show up at the door and do the work.

6:21 So on the demand side was we could do things better that way. But maybe more interesting was on the supply side of stuff, which is the operations of the cleaning company. In a cleaning company that has 14 cleaners-- I was the 14th cleaner at this company. And every single day I would show up, they'd give me a stack of papers with my customers for the day, and I would go drive out. Then those stack of papers were basically where the customer was, specific notes for the job, and so on and so forth.

6:55 It would be four or five clients a day. I would drive out to all the houses, and then I would drive back at the end of the day and give back a stack of papers. And every single day was like this. But if you think of this day and age-- MALE SPEAKER: It's exhausting. ADORA CHEUNG: It's exhausting. By the way, it took me an hour to get to work. And then another half an hour to go drive to the first place.

7:13 And then all that transportation time adds up to a couple hours where I'm not even doing any work or going from job to job. But this is an age-- You have a mobile phone, you can just-- Why can't we be in a world where as a cleaner I wake up, I pull out my phone, I see all the job notes, I see the first job I need to go to, and I go straight there and then just come back home and then wake up again and do it all over again.

7:36 I could have had an additional job or two for the day, essentially. MALE SPEAKER: Yeah. Of course. ADORA CHEUNG: And then internally, there were things like the scheduler system. What I would see was this painful cadence of every day, they would take 14 of us, look at all the clients, and painfully schedule in the best way for everybody to work those jobs for the day. And as an engineer, the first thing you would think is I could do this in under a second every single day, without anybody, sitting at a computer by just creating software for it.

8:11 So these were kind of the things that it seems obvious today, but the industry was that old. MALE SPEAKER: Adora, I love what you just said about trying to figure out pain points that competitors may have that you can optimize by essentially going to work for the opposition. Would you recommend that people do that to identify the pain points of other competitors within their industry if they're not going into cleaning, per se? ADORA CHEUNG: Yes. Yes and no.

8:40 I think in a marketplace or any business thing you go into, you always need to understand who your customers are. And for us at Homejoy, we have two customers. We have the actual client who's getting the actual cleaning. And to get that experience is very easy, because you just go to the platform, and you sign up, and you get the cleaning. Our other customers are actually the cleaning professional themselves. And they're here to get the work opportunities and to do the work, and that's why the platform can exist.

9:11 And because we're building so many tools for them, it's very important for us to understand the context of which they are working. And so it was very important, one, for me to actually do it myself as a founder, but also it's very important for all employees, from the engineers to customer service reps who work at Homejoy, to have that context as well. And so one of the things that you must do within the first month you're at Homejoy is actually go do a cleaning yourself.

9:37 And you go with other employees. And it helps, as an example, for the customer service, then you talk to clients a lot. And so by doing the cleaning themselves, they have context to why we book a certain number of hours or why, maybe, a cleaning professional did a certain thing or used a certain solution. Down to even the engineers. They're the ones actually building the tools for the cleaning professionals. And so knowing how the cleaning works and how what a cleaner does helps them design things better and helps them make better decisions at the end of the day.

10:12 MALE SPEAKER: Do you think entrepreneurs nowadays aren't the end users of their own products, that they're just trying to put things out there that they wouldn't use themselves? It sounds like you're tying the loop with your team and everything you're doing. Do you feel like that's the case for others? ADORA CHEUNG: I think those kind of products tend to fail. And in fact, before Homejoy, we had spent three years working on those type of products, the products that we wouldn't use, but we thought other people would.

10:37 MALE SPEAKER: What were some of those ideas? ADORA CHEUNG: We became entrepreneurs because our mission has always been to make people happier. And so Homejoy's mission is to make homes happier. And so some other ideas kind of follow that ethos. And so the first idea was a company called Pathjoy. And it was connecting people with therapists and life coaches because our first thought was who makes people happy? Oh, it must be these people. And so I don't doubt that they do make people happier, but we're not the type of people who use life coaches and therapists.

11:12 And so we just didn't understand the ins and outs and the intricacies to build up a good enough product for that. And so I think for three years we essentially went down this route of not doing that, and Homejoy was the very first idea, actually, where it was a problem one of us had and where we want to go solve it. MALE SPEAKER: I see. So Adora, you've done an amazing job of being in over 30 markets.

11:37 And it's not exactly the type of startup where you just expand online and hope to get users. You are literally on the ground hiring and bringing in customers. How do you do that? What specific things have you thought about to distribute it to different cities? ADORA CHEUNG: Our plan had always been to go into these 30 cities as quickly as possible. And it ended up being it took us six months. And so in order to do this, you can't change up your plan from city to city.

12:06 It has to be very consistent. So we basically had a playbook for demand and a playbook for the supply. How to acquire customers and how to acquire cleaning professionals. So on the demand side, what we did was for every city we went to, we just threw a bunch of-- We raised a little bit of money by this point, so we're able to do paid marketing, essentially. And so we just did a bunch of paid marketing stuff, including AdWords and things like that, but what turned out to be the kicker for almost all the markets was Groupon.

12:45 Typically for local services, Groupon is not the best way to acquire customers, because there are typically deal-seekers and things like that. But for us, we knew that if we could acquire an X number of customers in a market and we did a very good job, we could rely on them to talk about us. And then that would help spread it virally. And so that's what we did. So for every market, we acquired through Groupon. If it was not Groupon, it was something that was like Groupon.

13:17 And there were some cities, like New York City, where it happened very quickly. In New York City, after the first 10 days, we maybe acquired 100 customers, and those 100 customers became 300, and so on and so forth. And then maybe some other cities where it wasn't as dense and it was slower to pick up. A couple of cities in Texas, for example. In the suburbs it's a little bit harder. It took a couple months before it was.

13:45 You're acquiring users, and so there's just this linear growth path, and then all of a sudden there's this hockey-stick kink. And that's the inflection point that we're always looking for. So that's what we did on the demand side of stuff. And then on the supply side, it was actually even more straightforward. We basically opened up a Google Doc and started writing down the things we did to start San Francisco. And then we handed it over to-- MALE SPEAKER: What was on that list?

14:12 ADORA CHEUNG: On that list was essentially there's a pipeline of how we bring on cleaning professionals. So you post a Craigslist ad, and then you phone screen, then from the phone screen they get interviewed in person, and then from there we do a background check. And from there you do a test clean. And from there you get the first job. That first job is spot-checked. And then-- MALE SPEAKER: So you laid out the whole process. ADORA CHEUNG: Yeah.

14:35 There was a process. If you think about it as a car assembly line, you want to try to optimize each one of those steps. MALE SPEAKER: And it all started with Craigslist. ADORA CHEUNG: And it all started with Craigslist. MALE SPEAKER: That's so funny. I think you're the third entrepreneur during this interview series who's mentioned that Craigslist has been their start in terms of getting at least a user base or a clientele, in your case, the people who acquire the services.

14:53 ADORA CHEUNG: Yeah. When you're trying to acquire anything, you want to look for avenues that have huge distribution already. And so Groupon, for example, has huge email distribution. And Craigslist, of course, has lots of eyeballs. In our case is job seekers, which was very good. So we wrote down all the steps of how we did San Francisco, then we essentially gave it to another person we call a city launcher. And the city launcher's main responsibility is to go in city, find the city manager, hire the city manager, hire the first dozen cleaning professionals in the area, with that city manager teach them all the systems that we have in place.

15:31 And then once everything's rolling, they just exit the city and go to the next city and do it over and over again. And the great thing was while the framework was very much consistent from city to city, the launchers would be able to figure out things do even more efficiently, or even better. And then they would update that playbook. And now the playbook is really solid. So when we launched London and Berlin recently, it was pretty straightforward and resulted in us being able to actually grow even faster than we were able to grow the North American markets.

16:06 MALE SPEAKER: That's great. So you do get same person who's going to, let's say, Chicago and New York to launch Homejoy is going to Berlin and London? Is this launcher position somebody you send out there and bring back? ADORA CHEUNG: Yes. Yeah. The cadence was basically every four weeks they'd be in a new city. Every four to six weeks they'd be in a new city. As we've talked about before, it sounds like a pretty sweet gig.

16:25 Because you just traveling to all these great cities and meeting new people. MALE SPEAKER: That sounds awesome. So what did it take for you to say hey, we need a launcher as opposed to-- I feel like so many developers and entrepreneurs passively try to put their product out there and say we're going to hope it catches on in these different cities. We're going to hope that cleaners come on our site and provide the services in different cities?

16:44 Why did you decide to take a more active approach, and how do you decide on that launcher strategy? ADORA CHEUNG: More and more active approach in-- MALE SPEAKER: It sounds like you got an entire pipeline. You went after the Craigslist, you determined you were going to have interviews with all these cleaners. And it sounds like you replicated that process in every city you went through. How did you determine that you had to have a process instead of just trying for organic growth?

17:07 ADORA CHEUNG: I was thinking in six or seven months from now, I want to be in all these markets. How am I going to do this fast and in a way that's going to be organized? It turns out it's not completely organized. But in my head I was thinking through the steps. I think it's a very logical next step to say OK, if you want is really fast, then you just have to repeat something over and over again.

17:31 That's how you're going to do it. It's the idea of just focusing on one thing and just doing it very well. And so that's what we did. And that's how we decided just not to change it up. MALE SPEAKER: And somebody who comes on to be a launcher, they also start the process of Homejoy the same way? They clean the house before they come on? ADORA CHEUNG: Launchers have to clean the most houses ever. It's not that when they start, they have to learn how to clean.

17:56 MALE SPEAKER: So maybe it's not the sweetest gig. Maybe the traveling-- ADORA CHEUNG: Yes. It's a lot of great traveling, but you are cleaning a lot. MALE SPEAKER: I think the idea of having full understanding of your product and trying is something you guys really hit home. It sounds like whenever somebody signed up in the early days, they'd sit next to the customer service reps to hear what's going on. Can you talk about that? How did you decide that was the way you should go?

18:19 ADORA CHEUNG: I think it's mostly learning by doing. What we found is the people that spent the most time with the cleaning professionals or spent the most time just really focusing and learning on a specific thing is the ones that were more successful, the ones that were able to do more. And yeah, so when an employee starts at Homejoy, not only do they clean, but they spend a few hours with the customer service reps, they actually start taking phone calls or answering tickets.

18:49 If they're not an engineer, they sit with the engineering team. They don't watch them code-- that's kind of boring-- but they go through kind of how the engineers deploy things and what are they working on terms of designing things and stuff like that. Yeah, I think everyone understands in the company what everyone else does, and that way you trust that they're always working on the best thing possible, and therefore you can just focus on your thing and not have to worry that something else might not be going right.

19:19 MALE SPEAKER: So now you built out a team, you're in over 30 markets, you're in the US and international. Why you take us through? It sounds like on paper just a very glamorous journey, but why don't you take us through some of the battle scars. What are some mistakes you made? What are some things you want to avoid so perhaps people in the audience could avoid those pitfalls and work through like you did? ADORA CHEUNG: I think as you grow, growing seems glamorous, but it's actually very much hard work, and so you have to commit to doing the cleanings.

19:54 For example, when cleaning professionals didn't show up for jobs, employees actually went and go do them. And so it's like a commitment to that kind of hard work that has to happen. And I think at a large company, if you don't have those type of people, then it's very hard. And so you sort of need to hire for this kind of, what's the right word? You have to create sort of like a stereotype, almost-- who is the right Homejoy employee?

20:27 And then hire for that. Other things are-- For us, growing very quickly meant that we have to keep the quality up. Or else, in local services, like I said before, at the end of the day, you can throw lots of money at acquiring customers, but that's not going to really work in the long run. If you're not doing a good job on all the cleanings, you have a leaky bucket. No one's going to come back. And then all the paid marketing's all for naught.

20:54 And so as you grow really fast, you also have to think about how am I going to scale quality as well? Or how am I going to keep the quality at a certain bar? And not grow faster than that. And I think some of the early mistakes that we made, or I made, was going a little bit too fast and getting ahead of the quality. And then having to come backward a little bit and fixing those things and fine-tuning things and then going forth.

21:24 MALE SPEAKER: Awesome. So with that, I want to give you a chance to talk about any last piece of advice, you have somebody who may be in your shoes two years ago just trying to get their product out there. And then we're going to open it up to you guys to ask questions to Adora. ADORA CHEUNG: I think actually my biggest piece of advice is, one, if you have a product, I frequently see people just hold back and not launch it.

21:48 And I know that there's like so many blog posters that just says launch it, launch it, launch it. But when it's your baby, it's hard to launch something when you don't think it's perfect. But you should just do it. And that's what we did. We launched something that was clearly not perfect. You just learn so much more from customer feedback than you ever will with thinking the problem through by yourself. And then second is don't be afraid to expand.

22:14 I think there's a lot of focus these days-- Yes, you should get the product right, and you should be able delivering great experiences, but it shouldn't have to be super-perfect before you start expanding. If your goal, if your dream is to be a huge billion or multi-billion-dollar company, you can't just be in San Francisco, for example. You have to be everywhere. And the customer that lives in San Francisco is much different from the customer that lives in Dallas, Texas, Chicago, Illinois, these other places.

22:46 And so you have to get to those people as fast as possible. And so it's always think a few steps ahead. But again, not to go too fast where you fall over. MALE SPEAKER: Of course. So we're going to open up the audience for questions.

23:18 Just project. AUDIENCE: MALE SPEAKER: Sure. So the question is how do we decide on the markets? So in the US it was pretty straightforward. People would come to our site and hear about us. And then they would type in their address, and then we'd say oops, sorry, we're not in the area yet.

23:52 Please check back again. And so we are able to see demand that way, from essentially collecting ZIP codes. In terms of international, London, Berlin, London is the biggest city in Europe. There's 12 million people there, and it's very dense. And we felt like it would be almost exactly like New York City, which is the case. Which we found to be the case. In terms of Berlin, it's also a big city. Has 3.4 million people there.

24:25 A lot of people get the technology thing, and so there wasn't that barrier or that obstacle to jump as well. And we opened up an office there, and there's a good entrepreneurial community there as well, and so it's good for hiring talent. And so all these factors combined, we decide to land in Berlin.

24:56 AUDIENCE: So when you're I'm assuming the fact that they don't have to go? ADORA CHEUNG: So the question is what's the advantage for a cleaning professional to work on Homejoy versus another company?

25:27 I think there's two big ones. One is flexible work. In this day and age, the rising trend is people love to just work whenever they want. Actually I think most people would love to just work whenever they want. But there's an increasing trend of people working as independent contractors. And so that's the type of workers we attract is people who, for whatever reason-- We have a lot of, for example, moms on our platform that work as professional cleaners.

25:58 And they can work from 9 o'clock to 2 o'clock and then go pick up their kid for three hours, feed them dinner, and then maybe work another gig afterwards. And so you can't really find a good job that allows that slot in the middle of the day, and so that's we allow. And then there are people who-- Housecleaning involves traveling around a lot. The flexibility is also in the geographical sense. For example, some people don't like to cross bridges.

26:27 Some people only want to work in a very specific area, down to the street. And we allow for that as well. And so we have been able to build up systems where every contractor, every professional cleaner on the platform tells us exactly when they want to work and exactly where they want to work, and schedule around that. So it's very complicated. You can imagine the algorithms involved in taking everybody's variations, but it's certainly possible. And then the second thing, which we're getting better at and which we are very focused and passionate about, is building a community amongst the professional cleaner community.

27:05 Amongst the professional cleaner base that we have on Homejoy. And so there are additional benefits to working on our platform besides just getting work. And so we are very focused on helping the professional cleaners do well and making sure they have a good life and things like that. We don't publicize those things too much, but it's certainly something we do in the background. MALE SPEAKER: Awesome.

27:35 We have a question over here. AUDIENCE: must have been a lot of key what did you learn in the process be successful? ADORA CHEUNG: Good question. So the question is what did I learn in terms of hiring the key managerial roles as we grew over time?

28:12 There are some roles that we repeated in each market. For example, the manager. And so we developed profiles of who the best people were in terms of launching. So, for example, the city launcher, the best profile we found was actually consultants. Like McKinsey consultants. Because they traveled around a lot, and they were very good at just thinking on their feet and dealing with random issues. And very analytical. We're a very data-driven company, and so that helped a lot.

28:39 In terms of the city manager, these are the people that they're part of the recruiting process and they bring on the professional cleaners, and they're the ones interviewing. And so we felt the best people for that role were the people who ran housekeeping at a huge hotel. And so in every city, we would find the top three hotels in the city and try to convince the director of housekeeping to leave and come join us. And we're pretty successful doing that, which was great.

29:09 And it helped us. It meant that we learned how clean ourselves, but these were the true experts in cleaning and determining who the best cleaners were. I think the things I've learned over time is as we grew from zero cleaners to 100 cleaning professionals to 1,000 compressions to 2,000 and so on and so forth, the operating model changed as well. And so different types of people work in different environments.

29:43 So it's sort of from zero to 100, that's sort of a typical large cleaning company, but from 100 to 1,000, you're trying to think of not how to manage each individual person, you're thinking about how do I automate some of these things so that we can manage 1,000 people at once? And as we grow even larger to tens of thousands of people, we'll have to take that into account as well. MALE SPEAKER: OK. So with that, I just want to thank Adora for her time.

30:13 Thank you so much for joining us. ADORA CHEUNG: Thank you. MALE SPEAKER: Enjoyed having you. ADORA CHEUNG: Yes. Thank you very much. Thank you for having me. MALE SPEAKER: Thanks, guys.