Handy Home cleaning was founded in 2012 by Oisin Hanrahan and Umang Dua, both Harvard Business School Graduates. Handy specializes in providing home cleaning services and handyman services at affordable prices. Handy is based on a similar business model as Uber, the popular transportation service. Handy screens and retains the services of subcontractors to do the work. The subcontractors can then gain access to jobs via a mobile app.
Handy took off with a boom. They have raised over $110 million in capital. Handy has been spending money aggressively to continue to rapidly grow the company and expand into new territories. However, the investors are starting to want a return on their money and are pressuring Handy to focus on profit making. The flow of venture capital money is beginning to slow into startups that show a lot of growth but little profit.
Handy is forced to change its primary focus from growth to profit making to satisfy its investors and ensure the infusion of future capital. This change puts Handy in a dilemma. If Handy doesn’t enter a new market and capture its customers, some other startup company will. On the other hand, if Handy concentrates on profit making it must be willing to sacrifice future territories in favor of expanding the customer base in its existing markets. See, https://www.handy.com/services.
Handy implemented some changes to increase its profitability. Handy switched to entirely online hiring of its contractors to save millions of dollars per year in expenses related to hiring contractors in person. The problem with the online hiring process was that many of these contractors lacked the skills to get through the online hiring process without human assistance. The result was that recruitment of contractors dropped 40 percent. Handy is working through these problems. Handy has discovered that its business model works better as it increases its customer density in existing territories thereby increasing its profits.