Beginning a start up is the most difficult thing an entrepreneur can do. Sure, coming up with a big idea may be difficult, but getting that idea off the ground is daunting. Start up capital can be hard to come up with but there are always venture capitalists who will invest in a big idea. Even that part isn’t impossible.
Oisin Hanrahan and Umang Dua first met as classmates at Harvard and soon discovered that hemorrhaging money that isn’t yours can turn your stomach into knots. They are the founders of Handy.com, an on-demand house cleaning business that drummed up quite a bit of capital in the early stages of its inception. The problem: money was bleeding the company like a stuck hog. Dua had a plan for rolling out nationwide by hiring thousands of housekeepers and for months that plan seemed like it was a failure.
Initially, Handy used customer service reps that they hired at their headquarters in New York City to answer the phones for this massive hiring. A potential cleaner would go through the vetting process through a series of live phone calls answered by humans. The cost of labor for the reps was making the company lose money rapidly. At the same time their investors stopped investing and the pair knew they had to do something. So they created an automated hiring process using chatbots, not humans. Sounds good? Yes and no. This meant they had to layoff hundreds of employees but they had no choice.
By decreasing their payroll costs and outsourcing some work to call centers, Handy was able to save literally millions of dollars. Umand and Oisin didn’t take lightly the fact that they were taking jobs away from their employees but they took it as a lesson learned. They have since been able to expand their business, albeit at a slower pace, and stop hemorrhaging so much cash. They have learned a valuable lesson in the start-up phase: sometimes faster is not fasster at all.