- The CEO and co-founder of Homejoy discusses scaling a startup
- Three prerequisites to scaling a startup: product market fit, opportunity, and timing
- Three types of growth: sticky growth, viral growth, and paid growth
- Importance of tools and automation in scaling a product
- Example of the negative impact of building their own phone system at Homejoy

- Building tools and gaining efficiencies is important for scaling a product
- As a CEO or founder, maintaining a quality obsession with the product is crucial
- Spending time analyzing metrics and reading customer reviews helps identify areas for improvement
- Hiring A-plus players and being involved in the recruiting process is essential
- Communication mechanisms need to change as the team grows
- Mission and core values are important for aligning the team and making hiring decisions
- Managing people is necessary for building the company

- It is important to respect and support employees in their personal and professional growth
- Sometimes, difficult decisions need to be made when employees do not scale with a fast-growing startup
- Creating a support system of other CEOs and founders is crucial for managing stress and getting feedback
- Bad things will always happen, but it is important to get over them and stay relaxed
- Managing time is essential, and setting aside dedicated time for thinking and problem-solving is necessary
- Scaling a startup is like driving a junkyard car at high speeds and fixing it along the way, but it can be a fun and rewarding journey with impact and personal growth.

The CEO and co-founder of Homejoy discusses the prerequisites and types of growth for scaling a startup. They emphasize the importance of tools, automation, and maintaining a quality obsession with the product. Hiring A-plus players, changing communication mechanisms, and managing people are essential. It is important to respect and support employees, make difficult decisions when necessary, and create a support system. Managing time and problem-solving are crucial. Scaling a startup is like driving a junkyard car at high speeds, but it can be a rewarding journey with impact and personal growth.

Adora Cheung speaks at Y Combinator Female Founders Conference 2015.

Adora Cheung is the CEO & co-founder of Homejoy, the leading online platform for home services. She previously led product for some of the top social applications at Slide. And before that, she was a PhD candidate in economics at the University of Rochester before coming to her senses and moving to San Francisco to pursue startup opportunities.

So as Kat said, I am the CEO and co-founder of Homejoy.

So Homejoy is the get help button for every home.

And as Kat said, we connect people with home service professionals in the most easiest and convenient manner.

So we've launched 0 to 30 markets in under 6 months when we started.

So we've been around for 2 and a half years.

We launched from 0 to 30 markets in under 6 months.

We went from 0 to 200 employees in just about under a year, and attached on 5 different offices all over the world, and have been serving over hundreds and hundreds of thousands of homes.

So we've been growing into our own lately, and so I was asked today to talk about how to scale your startup.

So last year I talked a little bit about how Aaron and I, my co-founder, went through the long, complicated journey of getting to product market fit for Homejoy.

And so I'm here today to tell you that after that it's so easy.

Actually when Tracy was up here I was watching a live stream and there was it was really dark.

She was like hidden in the dark and I thought that's awesome because then you won't see my gray hairs that I've grown in the past few years, the past couple of years.

So the agenda for today is I want to talk about scaling your product, scaling your organization, and scaling and managing yourself.

And hopefully I can get through all of those and just give you tidbits on those 3 topics.

But before I go into that, I do want to kind of, There's an order of operations issue here, which is you don't need to scale anything until you meet some prerequisites.

First is you don't need to scale anything until you've found product market fit.

And these 3 prerequisites, by the way, are usually like the first 3 slides when you pitch your seed or series A.

And so you should really know this pretty well.

Do people actually want the product you've built or the service you've built?

So for Homejoy, we started off as potential customers because we found that booking a cleaning service was just a very long, opaque and annoying process, And we knew we could probably tackle that and fix that.

On the flip side, as we became cleaners, and we became cleaners, independent cleaners, and I also worked at a cleaning company.

And what we found is, as an independent gray market cleaner, it's very hard to get your own business, to build your book of business.

And it's very hard to get people to trust you.

And when we worked at a cleaning company itself, we saw that they couldn't scale very well.

They couldn't grow their company past a certain number of customers and a certain number of cleaners.

And that's because they are very cost heavy and they run very inefficient processes.

And part of that is they never knew how to leverage technology, software, to make things more efficient or make things efficient in general.

And we knew as engineers, if we did that, we could take the market as well as potentially expand the market because we're just easier to use.

The other prerequisite before scaling your startup is what I call opportunity.

For home services, for Homejoy, for home services, the opportunity is in the hundreds of billions of dollars.

And everyone, there's actually not 1 set number because it's just so large.

But everyone believes that, you know, it's a big, pretty big opportunity.

So for your own startup and your own product, you have to believe that it is a huge opportunity.

But why is it that building your business today is the right time to do it.

And so for Homejoy, there are kind of 3 trends going on to this day that make it the right time, the perfect time to build it.

Every man, every woman, every child has access to the internet.

People are moving their traditional offline behaviors to the online world.

2 is people are just getting more comfortable outsourcing their lives.

It's the concept of ease and convenience, trading time for money.

And 3 is the freelance economy and flexible work has become more and more popular.

They want to work whenever the hell they want to work and where they want to work.

And so you have Uber for drivers, Airbnb for hosts, and Homejoy for home service providers.

And if you check those 3 boxes, you're good to go and ready to scale out.

So I might regret asking this question, but how many people here are ready to do that?

So when you're ready to do that, replay this video, because I think they're recording it.

So let's dive right in into scaling your product.

So a lot of people come to me and say, hey, to grow, I want to launch new markets.

Because people have figured out that we we know how to launch markets and by launching markets mean new new geographic areas and new cities and Basically when I ask them is like why do you want to launch a new market?

That's that's not the way to grow because basically you can go launch your product in a new market, and you'll get a lot of latent demand, like you'll launch with PR and people will come, but if you don't have another growth strategy, that strategy just dies after some time and you'll just be stalled in that market.

So instead, you should really focus on 3 types of growth.

And so that is you build a good experience, you build a good enough product that people keep wanting to use you over and over again.

And so you drive growth by driving activity up.

Also, the best case scenario is that they actually pay you over and over and over again, and so you drive revenue growth.

The second type of growth is viral growth.

This is when not only did you deliver a good experience, deliver a great experience, a wow experience, and everybody wants to tell their family and friends and blab about you on and on and on.

And so that's kind of, that's what we call the word of mouth acquisition in the sense that, you know, you don't pay anything for that, And that's the best kind of growth, like I said.

And so if you can get to the point where every user on average is recommending your service to another person, and they actually use it and buy it, you're set for life.

But that can be a really good growth strategy.

So 1 mechanism for this is what people call referral programs.

That is when you incentivize somebody like $10 to get another person to use the service or use the product.

And the third type of growth, and the type of growth that you need to be most cautious about, is called paid growth.

And that's when you obviously start paying for ads, billboards, or you build out a sales team or whatnot.

And that kind of growth can make you and it can also break you and kill you.

And so the reason you need to be careful of that is because if you buy users and they don't pay back over a certain amount of time, you're going to run out of money.

So a really quick, simple example is, you know, if you pay 100 bucks for a user, and that user only pays you $19 over like the next, you know, year or 2 or 3 years, you're out of, you're out of, you know, you're going to get out of, you're going to be bankrupt pretty soon, right?

And so you need to watch out for those things.

And kind of that payback period is dependent on your risk aversion and how much capital you've raised at that point.

So anyway, I went through how to scale, I went through growth strategies.

So next on my list of scaling your product is tools and automation.

So as you hire people and as you grow your product, you're going to find that things are you need to streamline things better.

And you need to build tools to automate things that are being, you know, that you have humans repeating over and over and over again.

They shouldn't do tasks that are just mindless.

Observe what all your people are doing and seeing what kind of tools you have to create out of that.

At best, you should actually, instead of building it yourself, is to outsource, use third party tools.

So at Homejoy, we kind of did something funny and time-consuming, which is back 2 years ago we decided we were going to build our own phone system because we thought that was cool.

So we were going to build our phone system for our call center.

By the way, there's many types of phone systems out there.

We basically got more complaints from our customer service reps and bug reports on that phone system than we did from actual customers calling the call center.

And so that's just an example of, whoops, we shouldn't have done that.

And most recently, we actually moved over to another tool that actually someone else built and is specializing in building.

And now our customer service reps are much, much happier.

You've got to build them, and you've got to just figure out where it is you can gain efficiencies by building them.

And another point on scaling your product is, you know, over time as a CEO or a founder of your company, you're gonna get pulled in many different directions.

And you're gonna have less and less time to actually work on the product.

But the quality of obsessiveness about your product must remain, because you're the founder.

And so you're going to be best equipped to make some of the big decisions for the company and for the product.

And so that doesn't mean you have to sit there for hours and hours a day working on this, but it means like I said just spending quality time with it.

So an example is I spend the first couple hours of the day from 7 o'clock to 9 o'clock in the morning just looking at metrics, looking at revenue numbers, customer numbers, retention numbers, and stuff like that.

And I also actually read every single review that comes to the system from the previous day.

And these are reviews from not just customers, but also home service professionals.

And I can develop patterns over time of what needs to be improved and what direction to give people.

I actually send myself every review through email.

And so I just read it over the course of the couple hours.

I used to actually send it through text messages, except for AT&T kind of broke when I sent them 100,000 text messages in 1 day.

So those are some tidbits on scaling your product.

Next, scaling your organization, your team.

All right, as a founder, you do every single bit and piece of the process when you start.

And for us, we actually were doing the cleanings as well.

Over time, you're not going to have enough time to actually do that all yourself.

And you're going to think that you're the best at every single 1 of these bits and pieces, but get over it.

You can find other people who are going to be actually better than you and specialize in these pieces.

And so what's really important, though, is that the team that you put on the field, the people that you put on the field to go for bat for you, are A-plus players.

But to get A-plus players, you have to be very obsessive about recruiting.

And you have to treat recruiting as if it was a product.

So the candidates are your customers or your consumers.

The experience that they have is like the user experience, the product experience.

And you have to insert yourself where possible.

And so whether it's getting dinners and drinks with all the promising candidates to come through the pipeline, it might hurt your liver a little bit, but you might gain a little bit of weight, but I promise you, you can lose it.

But you'll have hired people, so you have time to lose it.

And you know, I think you have to be involved in the process as a founder and as a CEO, because you represent the company, and you represent the vision that they are passionate about or they are going to get passionate about.

And just do what it, and literally just do what it takes.

I literally went, I literally bought a ticket and went to someone's hometown a couple months, or 3 or 4 months ago and showed up to, you know, showed up and had dinner with a candidate because I wanted her that bad.

And so it might be a little bit weird, but it shows that my commitment to having her on my team.

I think, you know, you shouldn't, yes, people should want to really work for your company and they should really believe in your vision, but do not underestimate the power of you showing up and of you being present and of them, they want to feel committed, that you're committed to them, they want to feel loved, they're also a human being.

Another thing about scaling your team is communication.

So communication mechanisms need to change over time.

That is, how you communicate with 2 people in the company when it goes to 50, when it goes to 200, is completely different.

And so you need to just start over almost every single time in your different stages of growth.

And those periods where you're transitioning are the most painful periods, because those are the periods where things are not as transparent and everybody thinks the world is ending, But if you can get through it, you can strive and get through it, you're good to go.

And so some of these mechanisms are, for example, holding all-hands meetings once a week or every 2 weeks.

For us, that started to fall apart, actually, when we opened new offices, because you can't force the guys in Germany to get up at 3 o'clock in the morning to attend your California all-hands meeting.

So 1 solution to that was I built an internal tool, which anybody could post announcements to.

We even have everybody's picture and bio on there so that everyone knows who everyone is throughout the org.

And so it's just these sorts of tools that you need to create over time to allow communication to flow from person to person.

And with communication also, what's important is mission and core values.

Everyone in your company, by the way, I used to roll my eyes when people talked about mission and core values, but I actually believe in it now.

So the mission, everyone in your company should know the mission, word for word.

It's a problem if people don't, because then you're not all moving in the same boat, right?

And people are not, when they're making decisions, they're not making decisions based off of what everyone else believes in.

Now, when I say core values, I mean core values represents the way you work, the way the company is.

And so a lot of companies have core values are like honesty, responsibility, innovation, blah, blah, blah, blah.

I don't know what company wants to be dishonest, irresponsible, not innovative, but I think core values need to be unique to the company.

And it's actually a good hiring template, a hiring framework, because at some point you're not going to be able to hire or interview every single person.

So if other people know what you're looking for, and what the framework of the core values, then they can hire well for you in your replacement.

So some of the core values of Homejoy, we have 6 core values.

I won't go through all of them because I'm about out of time.

So our first core value at Homejoy is nobody is above any job.

That doesn't mean I'm looking for egoless people.

Those type of people don't exist in the world.

What I'm looking for is people who respect other people no matter what job that they're doing.

And that's very important for us because whether you are a contractor who is cleaning homes to an engineer who is designing the app to help people clean their homes, we need to have the same respect and same understanding of who we are.

And so an example of this when you show up is everybody, every employee at Homejoy, when they show up in the first few weeks, they have to actually clean at home.

And that's a representation of the core value.

And that's also a way for people to actually understand the product that we're building.

Another core value we have is temporary brokenness is much better, by far much better, than permanent paralysis.

What I mean by that is that we need to make decisions fast.

You can't have people idling around debating about and hypothesizing about 50 different things.

I'd rather people just make a decision, go, fail, make a mistake, and fix it, and admit to the mistake, do a postmortem, and then just make a better decision.

And you'll get to your end goal much faster that way.

And the third core value, before I move on, is risk local maxima to achieve global maxima.

What I mean by that is we want to be a billion dollar plus, multi-billion dollar plus company.

And to do that, you need to make leaps in what you're building.

You can't just be iterating little by little and hoping for 1% or 2% improvement.

You need to take the risks to get the 50%, 100%, 200% improvements.

And so everybody at Homejoy knows that, you know, it's okay to make these big decisions Because that is 1 of our core values and that's how we live.

So last thing about scaling your team is managing people.

So no founder gets up in the beginning of the day and says, instead of working on my awesome product that I've obsessed over for months and months and months and have this big vision for, I'd rather just go talk to these 10 people that report to me and deal with all their issues.

That's the last thing I think of when I get up.

And The reason for that is that you ain't going to build the company by yourself.

People come to work for you because they believe in your mission.

They make probably suboptimal decisions for their personal life to work at your company.

And so you need to respect that and you need to help them grow and help grow their careers.

Now there does come a time where people don't scale, especially with a fast-growing startup.

And so those are uncomfortable moments, because you need to make a decision of whether to rip the band-aid off and have someone just has to leave the company, because it's just not working out.

And it's really hard if that person is a friend of yours or was an early employee and contributed a lot to what the company is today.

But if you're managing and you're coaching correctly, those kind of conversations don't come out of the blue.

They evolve over time, And the decision feels right by the end of the discussion.

So anyway, those are my tidbits for scaling your organization.

And the last thing I want to talk about is scaling yourself or managing yourself.

So founding a company can be very, or actually being CEO of a company is actually a very lonely job sometimes.

And so you need to create your own support system Because if you don't create your support system, you're going to think you work at the most dysfunctional company in the world, and it's going to all fall apart every day, tomorrow, in the next 5 seconds.

And if you have your support system of other CEOs and other founders, you realize that maybe you have a specific issue with a specific person or specific employee, but actually if you abstract it out, it's not a unique issue at all.

And so getting feedback from other founders and other CEOs is very important.

You need to find, you don't need like 20 people, You just need 2 or 3 people, even just 1 person, to just go to and get advice from.

And also to give advice to them as well if they need it.

So on any given day, and I've counted this sometimes, but, like, 2 really shitty things are going to happen and 2 really great things are going to happen, and they don't all come in, you know, it all averages out to 2 and 2 every single day.

But Like, you should just assume 2 things are going to happen every day.

And when it happens, you're like, okay, well, that was the first 1 or that's the second 1.

And then, you know, just think, stuff like this happens, you just do a Figure out why it happened, get over it, and move on.

And you'll be like the most relaxed CEO ever.

Some people call it emotionalist, being emotionalist.

But I like to call being and staying sane.

So I think that when bad things happen, just know that bad things will always happen.

And don't get overly stressed about anything, anything at all.

And lastly on this topic is managing your time.

So as you hire people and as you grow, people are going to want to pull you into all sorts of meetings.

At some point, you're going to be stacked with meetings from like 7 AM to midnight, and it's going to be pretty ridiculous.

And your goal is to start stripping away those meetings.

And the best thing to do is actually tell people, from this time period, I am not going to take any meetings.

This is my time period to think for myself, to have my own space, think about all the problems in the business.

Because if you don't take that time every single day, you'll just wind up, you know, in a world of hurt, basically.

And So, like I said before, everyone in the company at Homejoy knows that from 7 a.m.

I only think about metrics, about problems of the company in my own personal space.

So, those are the 3 topics that I wanted to go over.

Tracy had, like, the best metaphor with the beaver thing, But I like really odd metaphors, so I'm going to shoot for this 1.

So I think scaling a startup is like being in a really awkward car race, where when you start at the start line, You don't get a nice car.

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Adora Cheung Speaks at Female Founders Conference 2015