Handy Inc. is a New York-based cleaning company which was founded by Oisin Hanrahan (now CEO) and Umang Dua (now Chief Operating Officer) in 2012. The two were classmates at Harvard Business School and that’s where they came together and came up with the brilliant idea to start a cleaning company. Their idea was to have an app (https://www.handy.com/services) through which people could request for domestic cleaners (pros). They started off well as they got funding from venture capitalists and were able to establish themselves in 28 markets. However, it got to a point where funding became very scarce and they had to cut their costs.
The company struggled with a lot of problems typical of any startup. They received numerous customer complaints about their substandard services and lack of consistency in their services. The demand for the service also far outstripped the supply of pros and there were therefore numerous last-minute cancellations due to lack of cleaners. Their customer service lines were swamped with calls from disgruntled customers and therefore their administrative costs skyrocketed.
The Self-Serve Onboard Program
In a bid to cut costs, Hanrahan suggested a self-serve onboard program. This would help them reduce their spending on the customer service department. It was not an easy decision as they had to lay off many members of staff but it was necessary as they did not have the funds to sustain them. The first few months of implementing this did not go too well for the company as they had numerous employees resigning for fear of losing their jobs. Furthermore, the self-serve onboard program was not as profitable as the co-founders had anticipated.
However, the company eventually stabilized and is now making profits in all its markets. Handy Inc.’s growth is now 50% organic and through referrals. Hanrahan and Dua still plan to seek additional funding to expand their business but they will be doing it from a position of strength. The co-founders are proud of the decision they made. It was a risky decision but it paid off in the end.