Handy and the Hard Road to Profits for Start-Ups

The venture capital slowdown of 2016 has forced some startups to make difficult decisions. Faced with the prospect that there may be no more rounds of VC down the road, these companies have been walking the line between growth and profibility. One such company that has navigated these new conditions successfully is Handy, a New York-based on-demand homecleaning service. Handy cashed in on the “Uber for X” craze in the 2010s, but as VCs began to express reservation about the viability of funding businesses in the market, their strategy had to change in order to ensure their survival.

CEO Oisin Hanrahan and co-founder Umang Dua had had a disagreement about instituting a completely online signup process for professional cleaners who found clients through the Handy.com app. Hanrahan was in favor of making the move to a completely online process, while Dua thought that their total applicants would take a big hit. However, faced with the prospects of no more funding, the two had no choice but to go with the money-saving move, which proved to be a disappointment in the two original test markets.

That episode was just one example of the hard choices that the Handy team had to make to get to profits quick, but those choices always come with a risk. Deciding against expanding into new markets was an enormous gamble for the company, since they had no defense against a competitor swooping in and taking over those other markets for good. However, so far, the gamble has paid off. By honing in on their current markets, they have maintained positive margins in all markets, and are on track to make a profit next year. Visit https://www.handy.com/services for more information.

 

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