Oisin Hanrahan and Umang Dua first realized they were onto something while the two Harvard Business School students were sitting in their messy college-student-style apartment, wishing there were a fast, convenient way to find trustworthy, effective cleaners. Through forthcoming deliberations came their brainchild–Handybook. From its founding in 2012 to the present day, the company, now dubbed Handy, has continued to grow, consistently spreading the reach of its services across the country.
Handy’s services can be accessed through its app or its website, handy.com. The company offers a plethora of services, ranging from plain housekeeping to plumbing, technology installation, painting, yard work, etc. These services are made available through Handy’s platform, connecting independent contractors with busy customers who either don’t have the time to perform their household chores, or don’t harbor the skillset. This post will delve into the growth of the company, provide a deeper look into the safety aspect, with a brief look at the professional side.
A quick summary to jog your memory:
WHO: Oisin Hanrahan (Co-founder, CEO) & Umang Dua (Co-founder, COO); almost 700 in-office employees.
WHAT: A two-sided technology platform connecting customers with top-rated, independent service professionals to perform a variety of household tasks
WHERE: Founded in Cambridge, MA. Now headquartered in NYC, creating matches in the US, UK, and Canada
WHEN: Founded June 2012
WHY: Provide a new solution to an age-old issue: tracking down reliable, honest, effective workers to perform household services
HOW: Running a clean, easy-to-understand website and app with a 60-second booking process that matches customers with the best professionals to fulfill their needs
One of the first things I discovered when diving into various articles about Handy was that the company had expanded beyond the US to the United Kingdom and Canada. I was curious about the route they took to succeed in this, so I looked deeper. As mentioned in class, Handy has made two acquisitions thus far. First was Exec.
Exec was a San Francisco-based company that offered many of the same services as Handy. The company ran as a platform connecting individuals with house-cleaning services and personal assistants. However, Exec found difficulty in trying to scale its “Errands” offering and was also forced to shut down its personal assistant service. Exec had been serving the four largest cities in California — San Francisco, San Diego, Los Angeles and San Jose. Handy beat out a few other competitors for Exec, reportedly being able to offer the most potential synergies in return for an equity deal valued below $10M. The Exec founders were able to stay on as advisory counsel, providing strategic recommendations while the companies worked to join forces. This first acquisition helped Handy gain more market share in cities where their presence wasn’t as strong.
Handy’s second attempt at growth-through-others is evidenced through their acquisition of London-based Mopp. Mopp was one of a few on-demand cleaning services in the UK, challenged by both Hassle and Housekeep. The move was seen as a way for Mopp and Handy to team up to become the premier international on-demand home services platform. Not only did London customers get to keep their Mopp cleaners, they also gained access to Handy’s professionals. It was a strategic and thought-out decision that has proved fruitful; the “London House Cleaning” portion of Handy’s website boasts a 4.5 star rating from 465,000 reviews. There are over 8,000 active professionals working through Handy in London now, providing reliable and effective service in all the same jobs as Handy US.
Handy’s expansion into Canada has not been on the same scale, but they’ve been able to establish themselves in Vancouver in Toronto. Overall, their ~50,000 ratings are incredibly high and they have almost 2,000 active professionals between the two locations. If they were to make another acquisition in the area, they’d probably have better ease acclimating to the market.
Handy wants to be the biggest service provider in whatever area they’re operating in, so it makes sense for them to have made acquisitions in those two countries. However, they haven’t been trying to pursue massive geographical expansion elsewhere. The reasoning behind this has to do with the company’s goals. Oisin explains that Handy wanted to pursue such aggressive growth around cities for the “sake of customer experience.” They wanted to solve the issue of supply and demand by taking advantage of two-sided network effects. So, once the company was able to reach two more countries, they decided they didn’t need to focus on geographical growth. Oisin didn’t approve of “scaling for the sake of scale” so instead turned to internal development. The company decided to continue growing their available services and further developing their app. For now, it doesn’t seem as though they have any intention of changing their plans, but I don’t doubt they would like to continue to expand eventually.
As touched upon in my presentation, a particular issue seen in the past with platforms connecting strangers is, unfortunately, safety. Handy’s premise is to enable busy people to book friendly workers to help them in completing household chores. However, there is the danger that those workers aren’t as friendly as they seem, or the hosts aren’t as hospitable as they may let on. Handy has ways to protect those using their platform. They have a service provider that will mask your telephone number when calling or exchanging texts with a customer or pro, using a number provided by Handy. Further, every professional is vetted and background checked by a third-party service. The screening process is extensive and detailed below. The platform also includes Uber-style customer ratings and reviews for each professional.
On the flip side, every customer has to read and agree to a very specific set of terms and agreements, promising to treat each and every professional with respect and providing a safe and appropriate work environment. If they fail to do so, customers run the risk of being permanently removed from the site.
Even with all of these precautions, Handy realizes that not all will always be well. That is why they created the Handy Happiness Guarantee. This guarantee details the fact that if a customer is ever dissatisfied with their service, a new professional will be provided to them at no cost. Further, if there is any damage done to a person’s property during a professional’s visit, customers are eligible for a monetary return. All Handy visits are well-insured, so, assuming necessary qualifications are met, Handy works hard to satisfy customers. The company has a huge emphasis on the customer and dedicates itself to creating as valuable an experience as they can.
As a brief follow up to Handy’s emphasis on the customer, it is necessary to consider the professional. At Handy, independent contractors are matched with customers in their area. Many professionals find it incredibly helpful because they don’t have to waste the time going out to find people who need their services–people are there at their fingertips. Further, Handy appeals to workers because it can be just a part time job. Of course, people can work more, but it’s appealing to many parents trying to make some extra money, or college students who don’t necessarily have a lot of free time.
Housecleaning: Up to $22
Handyman Services: Up to $45
Potential: Up to $1,000 a week
One of Handy’s downfalls, however, is that some contractors don’t like their rates compared to the ones that people at TaskRabbit, a competitor, are making. At TaskRabbit, “Taskers” can make their own wages, even charging over $100 an hour. This is good for contractors, but it’s tough on customers. Handy prides itself on taking what was once a luxury service and transforming it into a much more accessible commodity.
Still, in further research, some professionals aren’t too happy with the (sometimes up to 70%) cut that Handy takes from the jobs. The company likes to defend this by explaining that with the amount of money they’re retaining from each job, the professionals are still getting decent wages and the discrepancy between Handy’s cut and the pros’ cut both allows the company to expand, using that money, and offer deep price cuts (at least comparatively) to persuade customers to pursue savings through longer, more frequent plans.
Overall, Handy has been successful in growing both externally and internally, as well as providing reliable services to customers-in-need. However, no company is perfect, and there are a few questions I have for the company that I’ll add in the comments.
Thanks for reading!