Came across this story today about 2 harrrravvvvaaaaard students creating yet another company thats cleans your dirty penthouse and does chores like laundry and shopping, yes those things so many of us in this new economy don't want to do and would rather pay someone hundreds a dollars a month to do...how many of these sites exist, too many to even count... I thought the only reason why these services exist in todays economy is because of the play money everyone has these days, thanks to historical wall street gains and all this free money the fed has pumped into the economy VCs are going bonkers and lending anyone and everyone money just to get in on a company they believe is going IPO in the next 3 or 4 years...but little do they know that most of these companies will disappear overnight once the recession comes and the stock market corrects, these are such niche based businesses that when a family or individual needs to cut back the first thing they will let go is their service maid or in this case, Alfred..... with just one simple recession these start ups will disappear just as quick as they popped up, this service costs $99 a month, but the question is if they are paying their employees $18 an hour + benefits how do they make money? How is it possible to make money when their employees are making $18 an hour.... seems like a good starting hourly pay since minimum wage is still under $9 an hour ...but think about it, healthcare for each worker, what about insurances, workman comp, liability insurance, unemployment insurance, what kind of margins could they possibly be running on to keep this business afloat, not adding up, this company will NOT exist in the next economic downturn...aside from that it seems like 1999 all over again, the company is run by 20 somethings that have probably never heard of the dot com bubble or that other company webvan or kozmo.... 2 Harvard students were sick of their dirty apartments, so they built a company that will do your chores for you MAYA KOSOFF JUN. 17, 2015, 3:25 PM 98,234 Marcela Sapone and Jessica Beck met at Harvard Business School, fresh out of stints in the finance world. "I was working really long hours and coming back to an apartment that was a total mess," Sapone tells Business Insider. Beck and Sapone knew how grueling working crazy hours could be, and what kind of toll it could take. "Jess is a super, super messy person, and would never invite me over to her apartment, and when I finally went over there I had known her for eight months; she had a laundry pile the size of her kitchen table," Sapone says. "I was like, this is nuts. It was really hard to live our lifestyles without help." Beck and Sapone hired someone off of Craigslist to come do their laundry and buy their groceries weekly, and the two split the cost. The woman they hired, Jenny, came to their apartments to take care of errands that would otherwise pile up. This was the earliest iteration of what would eventually become their company, Alfred. "It was a little bit of an accident: We built the product for ourselves, and over time people in our apartment building said 'Hey, can I get in on that?'" Sapone says. Today, Alfred is a startup that hires employees — Alfred Client Managers, or just "Alfreds" — to run weekly errands: things like buying your groceries, sorting your mail, dropping off packages, and taking care of your laundry for you. You pay $99 a month for the service, plus the cost of things like your groceries. Alfred has raised $12.5 million from investors including Spark Capital, New Enterprise Associates, SherpaCapital, and CrunchFund. But when Beck and Sapone were still in Boston, they weren't sure Alfred was a company that even needed venture capital funding. "We really thought about it as a smaller business," Sapone, who is CEO of Alfred, said. "We created a bunch of postcards with different prices and different bundles of services, and we put them under the doors in all these different neighborhoods in Boston, and we got our first 10 customers that way." Alfred's specialty early on — and what made it different from delivery services and other courier systems — was that it was optimized for standard routes. "It's kind of like a milkman run where you have one person who's going to do the errands for everyone at the same time and go on these standard routes, just like a milkman would visit a neighborhood and would pick up and take away the milk bottles from every door," Sapone says. Sapone and Beck were still in business school while they built their company, and it wasn't easy. But any time the founders went to their customers and told them they were considering pumping the brakes on the company to focus on school, their customers would freak out and offer to pay more and more money to keep Alfred's services afloat. "This happened from the point where people were paying $25 a week all the way up to $90 a week for the service that we have today," Sapone says. "People were paying $400 for Alfred's service in Boston when we first started." "The entire world reaches out to you when you win" Alfred launched in Boston in May 2013. In September 2014, Sapone and Beck left Harvard and Boston and flew out to San Francisco to take part in TechCrunch Disrupt's Startup Battlefield competition. "Getting into Disrupt was kind of a surprise. The only thing we were trying to optimize for was not to look silly. We had kind of applied on a lark. We did a lot of our prep work the weekend before," Sapone says. "But you have to remember, we had a year's worth of data running the business, so the one thing we had going for us was we had a ton of conviction. The entire Disrupt speech was written on Post-it notes and I practiced it over and over and over again until I could do it until it didn't matter how many people were in the room." At the end of the competition, Alfred won Disrupt. "I've been to the New York Disrupt, and it's small. San Fran's Disrupt is pretty intimidating. I've honestly never received more emails or text messages — the entire world reaches out to you when you win," Sapone says. "And it allowed us to get a ton of customers. We went from being a really small operation in Boston to, suddenly, we had 10,000 signups." Hello AlfredA standard handwritten note from an Alfred to a customer. Immediately after Disrupt, Sapone and Beck decided to launch Alfred in New York and to move their company there. In November 2014, armed with $2 million in seed funding from CrunchFund, SV Angel, and Spark Capital, Alfred launched in New York. "When I spent time with Jessica and Marcela, I was immediately taken by a few things. First of all, they're an amazing team. Individually, they're great. Together, they're unstoppable. They're super passionate about what they're doing," Bijan Sabet, a general partner at Spark Capital, told Business Insider. "Even before they raised any money from VCs — our round was before they won Disrupt — they had bootstrapped the company themselves; they had put flyers out. They had really made it happen. Basically, they were profitable even before they had raised any venture capital. Not only had they shown great metrics — like customers loved it and all that stuff — but their obsession to detail was extraordinary." The founders avoided initially launching in San Francisco because "New York has a higher population density and a higher availability and accessibility of the kind of vendors we want to use," Sapone says. "SF is an anomaly — it has the most on-demand services out there. And if our desire was to link all of those together, we'd want to first learn how to do that in a place where people are not used to on-demand services. The value proposition is higher when you're like, no, I can't get on-demand groceries." CONTINUED
Ditching the 1099 model The Alfreds — named for the butler of Bruce Wayne/Batman — are all employees of the company and not 1099 contractors. The 1099 contractor model is favored by on-demand companies like Uber, Lyft, and Postmates. However, on Wednesday, a judge in California ruled that Uber's drivers were actually employees and had been misclassified as independent contractors — a move that could have serious implications for its business model and for other companies relying on the same independent-contractor model. "We believe that if we treat the Alfred as a primary customer and give them all the tools to make good decisions on behalf of our customers, then our end users are going to be happy," Sapone says. "They're literally inside people's homes. We're trusting them at a very high and deep level. As a result, we wanted to make sure we trained them, and that we were able to do background and credit check them on a repetitive basis, that we were giving them instructions on how to do their jobs well." Most of the 86 Alfreds — Sapone estimates about 70% of them — are stay-at-home moms, though Sapone tells us that a bunch of creatives — artists, writers, and actors — also work for the company. Alfred's first acquisition Last month, Alfred purchased parts of on-demand courier service WunWun — including the company's technology and parts of the team — in a fire sale. "We looked at WunWun for a couple reasons: They were one of the first on-demand companies in New York, and they have a very strong user base in New York — a user base that has a very high demographic and discretionary spend. They have a high level of frequency and repeats," Sapone told us. "And their technology is really interesting to us. It's basically a dispatching system, which is very similar to ours. While they do on demand, they group orders and optimize routes, which is what we do. We just happen to not do things on demand — we create standardized routes." [/paste:font] WunWun also handles really complex orders well, Sapone says. For instance, you could say, "I'd like you to pick up a frame for a painting I have, and then put the painting inside of it, and then drop it off over here." "That's not a 'Hey, can you pick me up some Indian food' type request," Sapone says. Heading west Today, Alfred has 19 employees and is growing. Sapone tells us that the company has its sights set on launching in San Francisco, Los Angeles, and Washington, DC, next. Right now, though, Alfred is focused on New York and on finding new channels for acquiring more customers. Sapone says that Alfred customers' average monthly spend in 2014 was roughly $350 per member, or about $4200 a year, and has been growing rapidly. In comparison, Amazon Prime subscribers spend about $1500 a year. Read more: http://www.businessinsider.com/alfr...tartup-to-do-your-chores-2015-6#ixzz3dWivbmBo
Sounds like a little jealousy. If you can't beat em, join em. Why not come up with your own "stupid" startup and get your millions of dumb VC money, if it's that easy. hint: its not, for those of us who have done the startup thing, but absent the fund raising part it is a lot of fun.
S2007S- you have been ultra bearish since the bottom in 2008. You've missed a relentless walk up and the free and easy money for almost 3/4 of a decade!!! By the time a bear market rolls around everyone will be so rich they couldn't care less. Give it a rest already.
I have been following this start up since I first started reading about them in June, another startup just like the rest of them offering a service that only people would pay during times when wall street is at historical highs and all generation Xers and generation Yers feel that they are just too good to fold their own laundry or pick up a gallon of milk for themselves, now these lame startups have been around for quite sometime, there are many copy cats out there, this is nothing new.....now the service costs $25 a week, I don't know about additional charges, but I do know that the employees that work for alfred are not contractors, they are employees who get paid between $18-$30 an hour, not for nothing but that is serious cash considering minimum wage is still under $10 an hour, $30 an hour X 40 hour work week is $1200 a week, $1200 a week!!!!!! thats $62,400 a year if you are making $30 an hour, I know people who work in IT, I know carpenters and people who work as nurses with licenses that don't get paid $62,400 a year....I don't know how a company that charges $25 a week for a personal butler pays their employees $18-$30 an hour, something doesn't seem right and like I said earlier the only reason this service and company exists is because of the historical highs on wall street and the QE that has spilled trillions of dollars into this economy, once the recession comes and the market is off 30%+ all these generation Xers and Yers paying for this service will drop it immediately, these companies that are new to the scene have never existed in a downward economy, most of these new startups have only been around the last 4-6 years...will be interesting to see them last through a deep recession, if you go back in time, there was a company called Kozmo, they promised a similar service minus the a few things here and there that this company offers and they disappeared right after the dot com bubble bursted...once the startup bubble bursts the same thing will happen to many of these overvalued startups.... Hello, Alfred: Your own personal butler for $25 By Lauren Lyster1 hour ago Hello Alfred (that’s Alfred as in Batman’s butler). The company currently offers its service in New York City and Boston for $25 a week. “Imagine coming home and everything is done for you; we’re just taking all the cognitive load off of your plate," describes co-founder and CEO Marcela Sapone. Sapone and co-founder Jessica Beck hatched the idea while they were students at Harvard Business School in 2013. “We were taking a break from very hectic careers in finance and consulting and we were laughing about the fact we used to buy new shirts every week because we never had time to go to the dry cleaners. It was always closed when we got off work." They went on to start a business that solved a problem in their own lives. In 2014, they won the TechCrunch Disrupt startup competition in San Francisco. Now, they say there are 100 Hello Alfred butlers working in a few thousand households in New York and Boston. The company has more than $12 million dollars in venture capital funding and plans to expand to other major cities including Los Angeles, San Francisco and Washington D.C. Here’s how it works as a customer (Note: Hello Alfred let us try out the service for no charge for one week; we paid for all of our services). You get instructions and the basic supplies including laundry and dry cleaning bags during a welcome meeting. You tell the Alfred butler how you like your apartment and where things go, and moving forward, you enter all your instructions in an app. The regular menu of services also includes buying groceries, setting up home cleaning, picking up prescriptions, and mailing packages. “Off-the-menu” services are available for a fee. You leave your payment information and a set of your keys with the company. Sapone says there’s insurance for when things go wrong. For me, the one snafu was a package that wasn’t mailed in the time frame I requested. The company apologized and credited me $10 on the $55 postage. As for the hiring process, Sapone says the butlers are carefully screened with the company accepting only 3% of the applicants. She says reports many are stay-at-home moms or people in creative fields, like Tyler, who is an actor. The Alfreds are paid $18 to $30 an hour, and they are employees. Get the Latest Market Data and News with the Yahoo Finance App "We first started with contractors, because it was easy," Sapone tells us. It removed all the administrative burden. It was cheaper. We could hire and fire at whim. [But] we realized the quality of our service came down to the people who were going to be in your home. They are our product. If we’re going to invest time and training, that’s an employee relationship we want." Sapone said they adjusted their business model to make it work, saying that “you have to plan things a little bit better; you can’t just do things on demand" -- meaning expansion will happen only when and where there’s a concentration of enough clients to make the process efficient. Sapone says they’re putting the brakes on their own growth, to help reach the finish line: "The end goal is to be a brand inside the home that you trust to help get things done. We want to be the operating system for your home."
Speaking of these start ups that are given tens of millions of dollars this one just closed its doors, homejoy They just closed their doors recently and others will fall the same way as the economy weakens and more and more people realize that these tasks can actually be done by the same people who put them in business. That extra $100-$200 a month will come in handy when you realize that you could actually do these tasks yourself for 5 cents on the dollar... On the heels of Homejoy’s failure, the fundamental “on-demand marketplace” model has come into question by investors, the media and even consumers. That questioning is very relevant, as there has been an overload of VC money that has been injected in the on-demand service platform space over the past few years ($4 billion-plus in 2014). http://techcrunch.com/2015/07/31/why-homejoy-failed-and-the-future-of-the-on-demand-economy/
hopefully that company still exists during the great next recession, the first thing people let go during downtimes are services like this, the only reason why this company exists is because of the trillions of dollars running through the system thanks to BUBBLE ben bernanke and friends....
Well, yeah-- but it doesn't mean its not a great idea. They don't operate where I live yet, but I will be the first to sign up---- cheap personal assistants-- what could be better??
Im still questioning how they pay their employees $18-$30 ++ benefits.... something doesn't add up in those equations....To get paid $18-$30 + benefits is quite something, they must be using up all that cash they are getting from venture capitalists.....they raised $125,000,000, really? As you see some venture capitalists were concerned about investing in their company due to costs....this company will not last once the next recession comes. Im saying that loud and clear. Marcela Sapone, CEO of New York-based Alfred Club, which goes by Hello Alfred, estimates her household-task company pays at least 20% more on labor costs than when the company had contractors in its early days. Silicon Valley venture capitalists were reluctant to invest in her company over concerns about costs and whether Hello Alfred could expand quickly into new geographic markets without contractors, she said. “They thought we were silly,” she said, adding that Alfred ended up raising about $13 million from East Coast investors. For its part, Munchery has raised about $125 million, including from Bay Area-based firms.