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Hanrahan will be discussing the on-demand revolution in a fireside chat at Vator Splash Spring
Editor's Note: Our annual Vator Splash Spring 2016 conference is around the corner on May 12, 2016 at the historic Scottish Rite Center in Oakland. Speakers include Nigel Eccles (CEO & Co-founder, FanDuel), Andy Dunn (Founder & CEO, Bonobos), Mitch Kapor (Founder, Kapor Center for Social Impact); Founders of NextDoor, Handy, TubeMogul; Investors from Khosla Ventures, Javelin Venture Partners, Kapor Capital, Greylock, DFJ, IDG, IVP and more. Join us! REGISTER HERE.
What if you could press a button and get any service delivered to your home?
That’s the question every “on-demand” company seeks to answer these days. From Uber and Lyft (rides on demand) to DoorDash and Instacart (lunch and groceries on demand), the simple idea that you should be able to press a button and receive a service has inspired countless businesses across the technology sector.
One of the more successful companies is Handy, a platform for on-demand home cleaning and handyman services. The company, which last November closed a $50 million Series C round of funding led by Fidelity Management, has outlasted competitors (namely Homejoy) and continues to wrestle with other similar services (including the more all-purpose TaskRabbit).
In total, the company has raised over $110 million.
Next month, we’re excited to have Handy CEO Oisin Hanrahan join us for a fireside chat at Vator Splash Spring 2016 in a discussion of the on-demand revolution. Ahead of that conversation, I spoke with Hanrahan over the phone to learn a bit more about Handy.
Dropping out to start up
Hanrahan hails from Dublin, where he studied economics at Trinity College before pursuing real estate development work in Hungary, which is how he came to find how difficult it was to hire consistently quality handymen. Before creating Handy, however, he founded MiCandidate (provider of poltical content to media companies in Europe) and The Undergraduate Awards (international awards foundation for students).
At Harvard Business School, Hanrahan (above right) and his classmate Umang Dua (above left) returned to the idea of changing how people buy services. It wasn’t just about providing transparency into pricing and availability for service, but also about helping handymen find new leads and sell new services.
“I always worked on entrepreneurial ideas,” said Hanrahan, “but there are moments in time when it makes sense to push forward with an idea.”
They knew they had something with Handy when they saw early customer traction and raised capital. Plus, Hanrahan said he was surrounded by people he wanted to work with. (In addition to Umang Dua, Hanrahan was also joined by co-founders Weina Scott and Ignacio Leonhardt.) It was that rare combination that just felt right, and led to his dropping out of business school to pursue Handy full-time.
Today, Handy provides services for cleaning, handymen, plumbing, electrical, moving, painting, and furniture assembly across 28 cities in the U.S., Canada, and the U.K. The platform connects consumers to over 50,000 contractors and it processes over 100,000 transactions monthly. To date, the app has handled over two million bookings.
And Hanrahan, with over 125 people now working at Handy, says he's still getting started.
Independent contractors or employees?
The rise of on-demand companies has fueled a new conversation around the future of work, as growing companies like Uber, Instacart, and Handy increasingly provide spot jobs to individuals willing to work on a freelance basis.
On one end of the spectrum, labor advocates fret that these companies could use their resources to exploit workers and puff up profitability. On the other end of the spectrum, the companies themselves say they offer a new generation of workers decent wages and flexible schedules.
Handy says its cleaners make up to $22 per hour, while handymen make up to $45 per hour. Top professionals on the platform (those likely taking a crack at using it full time) can make more than $1000 per week, according to the company.
“We didn’t think of 1099 or W2,” said Hanrahan, who says the company’s prime motive all along was delivering the best possible experience to both customers and professionals (the term for Handy’s cleaners and handymen). Customers want the “incredible convenience” of ordering services at the press of a button, he said, while professionals want “incredible flexibility.” Hence, the independent contractor model.
Of course, there are some nuances. Hanrahan admitted that employing workers as independent contractors may be the best solution that exists today, but it’s not a “perfect solution.”
“We want to get to a world where we can give folks access to benefits and training, but not in the 1099 world,” he explained.
To that end, Hanrahan says he and his company have actively sought to be a part of the ongoing dialogue around workers in Washington and on the state level. Given the kinds of questions being posed (What does it mean to offer people work in the on-demand economy? What does it mean for the broader economy? How do we best create policy for platforms to serve people?), it’s not likely change will come quickly.
Still, it’s interesting to think that there may be a new model of working outside the independent contractor and full-time employee dichotomy.
On-demand is all about density
When I asked if Handy had any immediate plans for expanding since it’s fresh off a $50 million round of funding, Hanrahan said the company is keenly focused on its existing markets: the U.S., Canada, and the U.K.
He wants to make sure Handy delivers the best customer experience before adding new regions or verticals. He insisted that the strategy makes sense because “it’s not a great customer experience when you can’t serve a specific time. Density is really, really important.”
Spoken like a true on-demand guru. After all, if your goal is to deliver service to every home on demand, then you have to make sure you can quickly and efficiently do so in your core markets. If you can’t, then there’s no sense in expanding to other locations where you’ll run into the same problems.
Though he wouldn’t comment specifically on Homejoy, a former competitor to Handy that shut down last summer, Hanrahan did stress how important it was to think about growing this kind of business "zip code by zip code."
“Bookings drive professionals drives availability,” he said, illustrating how the success of one aspect of the business is directly related to another. Rather than add more markets, Handy is determined to focus on bolstering its own efficiency on the hyperlocal level.
Additionally, the company says mobile is a major part of its strategy.
“Mobile is huge for us. We’re seeing this wave of people moving to a world where people buy services on mobile,” said Hanrahan, citing Uber, Lyft, Instacart, Airbnb, and Hotel Tonight as great examples of this movement. And it’s not just things, but experiences too.
With that in mind, Handy continues to invest in moving its customers to mobile, and so far its efforts appear to be paying off, with more and more customers gravitating to the mobile app. And Hanrahan says that transition also results in an impact on customer satisfaction.
Out of curiosity, I asked him what else he found exciting in the technology sector. Outside the Handy wheelhouse, Hanrahan sees “huge changes” coming to the virtual reality space.
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