A ubiquitous unicorn may be an irony, but billion dollar valuations for technology startups had increasingly become common for Silicon Valley: For those CEO’s, breaking into new markets and raising capital is to feed fuel into an insatiable fire. For Handy CEO Oisin Hanrahan though, the more difficult approach in reducing costs, and long term developments in strategy and product, seems to have paid off.
With venture capital funding plummeting 11% at the start of 2016, many start up companies were found too far past a moment of pause to ask themselves how to fuel growth with anything other than new funding. “Do you have a reasonable plan to grow to profitability without too much cash?”, and what that plan is, is one that Hanrahan and co-founder Umang Dua may not have agreed on in 2014. Along the advent of companies like Uber, Handy hoped to be your go-to business for on-demand cleaning, and the company had entered a crossroad: should they expand past its 28 markets, or move to cut costs and improve its on-boarding process for new cleaners?
If competitor HomeJoy had asked that difficult question earlier, they may not have dropped out of the services market in late 2015. By moving call centers to contract companies, increasing the use of bots for customer queries, and allowing new cleaners to on-board through their website, Handy.com had cut costs- but not without difficulty, as recruiters left the business with the slow advent of online onboarding, and the company was castigated by complaints.
Beginning to settle its teething issues, Handy is under way to thrive in the post-unicorn era of over-extolled startups. Seeing increased customer density in their markets, and slimming down their expenditures, the company expects to make it into profitability in the second half of 2017.