New York-based Handybook, which allows users to book pre-approved home service providers through a mobile app or website, is dropping the “book” from its name, rebranding as Handy to avoid confusion with — well — books. The company’s chief executive Oisin Hanrahan says the startup, which raised $30 million in June, has grown by nearly ten times in the past nine months, and believes the move will help the company develop the type of brand that has propelled Uber and Airbnb into multi-billion-dollar companies.
Handy competes with a group of on-demand services that have attracted a torrent of investments over the past year. HomeJoy raised $38 million last December, and a host of other adjacent startups have drawn comparable amounts. The race has been accelerated, in part, by the astronomical success of Uber and Airbnb in finding massive new markets by bringing traditionally offline services online.
But the onslaught of criticism against Uber and Airbnb in recent months underscores the risk that faces these companies as they more from a small startup to an mainstream businesses. Without the traditional controls over their employees, these “platforms” face challenge in balancing a desire to sustain a strong brand without reverting to more traditional management structures (e.g. franchises.)
I caught up with CEO Oisin Hanrahan to talk about the role that Uber and Airbnb have played in convincing users to trust mobile marketplaces, and the delicate process of building strong brand while mitigating the risk implicit in a platform.
Uber and Airbnb have undoubtedly help drive the growth of on-demand services from an investor perspective. Can you talk about the impact that both companies have had on consumers’ willingness to trust these offline services.
Both companies have helped to break down a trust barrier for consumers where for the first generation, they feel okay booking services on web and on mobile. This has been a watershed moment for the entire sector.
If you think about it, the first category of services people meaningful bought on the web was airfares. They were buying airfares online, but they were really buying tickets from widely know legacy business like American Airlines. There was always confidence in the consumer that you were buying a product that you understood and was backed by giant carrier.
Now you’re seeing services bought where there is brand behind it except for the brand thats hosting the platform. On Airbnb or Uber or Handy, the individuals do not have a compelling identity — its the platform that is providing the comforts of the brand. When a service provider comes to the door or a driver pulls up in a cab, its Uber and Handy — not the driver — that’s driving that interactions.
But in the process of building a trusted brand, how does a platform ensure consistency without sacrificing the openness that allows for such rapid growth?
It’s a huge challenge. We’re always thinking about our ability to influence the behavior of the service pros on our platform. We want to tighten that feedback loop so that the quality of the service is consistent across the website or mobile app. But the alternative before was a much less tightly regulated notice board or listing product like Craiglist, and that product has transaction issues in it because you cannot actually complete the purchase. There are benefits in these new models that allow our platform to grow so fast that outweigh some of the costs of doing business on a platform.
Sure, but as a listings site Craigslist does not really present itself as service brand. At what point does the desire to ensure a quality experience lead the company to have a more traditional relationship with the service providers?
I don’t think we have to go to a place where we have to have a more traditional relationship. The value that the service pros attribute to the platform — the flexibility in terms of scheduling and earnings — is a very meaningful part of the value they see in the platform. Because of that, we can set ground rules for how we want people to engage with the platform. That system scales as well as any other system that’s been used to deliver services.
Airbnb has ramped up its marketing efforts, and even hired its first agency. Any plan to up the advertising spending in conjunction with the rebrand?
Right now, were focused on increasing the operational excellence across the team. That’s more where we’re focused, more than marketing spend. We don’t need to drive lots more dollars into marketing. We need to build the infrastructure and operations need to support future growth.
Groupon and LivingSocial both made a mess of things when they pushed into international markets early on in their development. Any plans to expand into other countries?
We have Revolution as an investor, which means we’ve talked at length about this with Steve Case, an investor in LivingSocial, and Ted Leonsis, the chairman of Groupon. We’re taking a lot of their advice about how to expand into international. They both tell us the same thing: focus on winning key cities. And that’s what we’re going to do.
Steven Jacobs is Street Fight’s deputy editor.