“Critical Mass” is a key concept, driving start-ups to increase their growth as quickly as possible, at first. They must show their capital funding sources, that they have the mettle, client base and market to run a profitable business. Now, Handy Inc. has advanced to the next phase of “profitability;” it has used automation to trim costs.
“When is Startup Phase Done?”
Typically, each startup must pass through a number of different phases to reach full maturity. The Handy Inc. on-demand home cleaning service has survived each stage, while its competitors – Exec, HomeJoy and Mopp – have fallen by the wayside. Actually, Handy Inc. acquired Exec and Mopp.
In November 2015, Handy Inc. completed its “$50 million Series C venture capital funding.” During this funding, the capital sources suggested that further stages might not be available. The Handy Inc. CEOs needed to emphasize “profitability” immediately.
For some firms, this is a signal that the startup phase is done. Mature businesses must have enough cash flow to fund their activities internally.
“Cutting Costs Using Bots”
For the home cleaning industry, the customer support department is very important. One mistake can ruin your reputation.
Most consumers want to talk to a live operator, but this can be very expensive. After training their live customer service representatives, the CEOs of Handy realized that they needed to cut costs.
Finally, Handy.com. CEO Oisin Hanrahan concluded that “replacing people with software systems is the kind of decision that’s difficult emotionally but a no-brainer as a matter of business rationale.” This is one of the steps to becoming a mature business.
Now, that the bottom line is the top priority for Handy Inc., the “tough decisions” are becoming more frequent. Handy has survived so far, now they want to thrive!