Adora Cheung Speaks at Female Founders Conference 2015

Hey everyone, thanks Cat. So as Cat said, I am the CEO and co-founder of Homejoy. Um, woo, yeah, okay, this is going to be easy. Um, so Homejoy is the get help button for every home, and Cat said we connect people with home service professionals in the most easiest and convenient manner.

Um, so a little bit about Homejoy's growth. Uh, so we've launched zero to 30 markets in under six months, um, when we started. So we've been around for two and a half years. Um, we launched from zero to 30 markets in under six months. We went from zero to 200 employees in just about under a year, and, um, attached on five 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. Um, so last year I talked a little bit about uh how Aon and I, my co-founder, uh, went through the long complicated journey of getting to product market fit for Homejoy and it was, um, it was a really tough time. And so I'm here today to tell you that after that it's so easy. Just kidding, it's 10 times harder.

Um, actually when Tracy was up here I was watching a live stream and there was, uh, it was very 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 couple of years. Um, Tracy's talk was awesome, right? That was the best.

Yeah, so um, so I really, the agenda for today is I want to talk about scaling your organ, uh, scaling your product, scaling your organization, and scaling and managing yourself. Um, and hopefully I can get through all of those and just give you tip bits on those three topics. But before I go into that, I do want to kind of, um, there's an order of operations issue here, which is you don't need to scale anything until you meet some prerequisites. And so, and there are three of them.

Um, first is you don't need to scale anything until you found product market fit. And so I'll use Homejoy as an example. Um, and these three prits, by the way, are usually like the first three slides when you pitch your seed or series A. Um, and so you should really know this pretty well.

So, product market fit. Do people actually want the product you've built or the service you've built? Do they, do they want it and do they need it? 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, we became independent cleaners and also worked at a cleaning company. What we found is as an independent Gra market cleaner it's very hard to get your own business. Um, to build your book of business, you have to hustle a lot. 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 a, um, they're very cost heavy and they run very inefficient processes. And part of that is they never knew how to leverage technology or software to make things more efficient or make things efficient in general.

And we knew as engineers we could, uh, we could, if we did that, we could take the market as well as, uh, potentially expand the market because we're just easier to use. So, checkbox—product market fit. The other prerequisite before, uh, scaling your startup is, um, uh, is what I call, um, uh, opportunity.

So how big is the opportunity? You know, for home services, for Homejoy, for home services, the opportunity is in the hundreds of billions of dollars. And everyone, there's not actually not one 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. And third is, is the timing right? Um, some people are too early, some people are too late, um, but why is it that building your business today is the right time to do it?

And so for Homejoy there are kind of three trends going on to this day that make it the right time, the perfect time to build it. One is, uh, technology is pervasive. Every man, every woman, every child has access to the internet. People are moving their traditional offline behaviors to the online world.

Two is people are just getting more comfortable outsourcing their lives. Um, it's the concept of easing convenience, trading time for money. And three is the freelance economy and flexible work has become more and more popular. People don't want a boss; they want to work whenever the hell they want to work and where they want to work.

And so you have, you know, Uber for drivers, Airbnb for hosts, and Homejoy for home service providers. And so those are the three checkboxes, and if you've checked those three 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? I now regret asking the question. So when you're ready to do that, replay this video because I think they're recording it.

Um, okay, so let's dive right in into, uh, scaling your product. So a lot of people come to me and say, "Hey, um, to grow I want to launch new markets," um, because people have figured out that we, uh, we know how to launch markets. And by launching markets I mean new geographic areas and new cities. And basically when I asked them, it’s like, "Why do you want to launch a new market?" That's not the way to grow, because basically you can go and 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, you'll just be stalled in that market. So instead you should really focus on three types of growth. One is sticky growth, and so that is you build a good experience to 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. Um, 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, uh, viral growth. And this is the best type of growth. This is when not only did you deliver a good experience, you delivered 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 word of mouth acquisition in 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. You don't have to do anything else. Well, you do, but you don't have to. That can be a really good growth strategy.

So one mechanism for this is what people call referral programs. That is when you, you know, incentivize somebody like 10 bucks 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, you know, obviously start paying for ads, billboards, or you build out the sales team or whatnot.

And that kind of growth can make you and it can also break you and kill you—not literally but kill your startup. 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 a hundred bucks for a user and that user only pays you $19 over like the next, you know, year or two or three years, you're out of, you're out of, you know, you're going to get out—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, how much capital you've raised at that point.

So anyway, I went through, um, uh, how how to scale and 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, um, automate things that are being, you know, that you have humans repeating over and over and over again.

Humans should do complex tasks. They should do tasks that, um, are just mindless. And so what you need to do is observe, observe what all, all your people are doing and see what kind of tools you have to create out of that. At best, you should actually, instead of building yourself, is to outsource, use third-party tools.

So at Homejoy, we kind of did something funny and time-consuming, which is back two years ago we decided we want to—we were going to build our own phone system. Because we thought that was cool. And 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, but we're like, "We're engineers, we can do this, this will be easy!" 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, um, moved over to another tool that actually, you know, someone else built and, um, now our customer service reps are much, much happier.

Um, so anyway, that's tools. You got to build them and you got to just figure out where it is you can gain efficiencies by building them. Um, and another point on scaling your product is, you know, over time, as a CEO or founder of your company, you're going to get pulled in many different directions and you're going to 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, you had the initial vision, 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 of the day, um, uh, 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 7:00 to 9:00 in the morning just looking at metrics, looking at, you know, revenue numbers, customer numbers, retention numbers and stuff like that. And I also actually read every single review that comes through the system from the previous day. And so I know exactly, and these are reviews from not just customers but also home service professionals. And so I know, like, what's going on and I know, and I can develop patterns over time of what needs to be improved and what direction to give people.

Um, I actually get, I actually, uh, send myself every review through email. Um, and so it's just, I just read it over the course of the couple hours. I used to actually send it through text messages, um, except for AT&T kind of broke when I sent them 100,000 text messages in one day. And, um, so I don't do that anymore.

Um, okay, so that's scaling. So those, those are some tidbits on scaling your product. Next, scaling your organization, your team. Alright, as a founder you do every single bit and piece of the process. Um, when you start, you are the first coder, you’re the first customer service agent, you do all the operations, you just do everything.

And for us, we actually were doing the cleanings as well. Over time, you know, 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 one of these bits and pieces. But get over it, you're not. 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+ players. And you probably hear this all the time. But to get A+ 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, are 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, you know, getting dinners and drinks with all the promising candidates that come through the pipeline, it might hurt your liver a little bit, but it's—you might gain a little bit of weight, but I promise you you can lose it.

And, uh, you can, uh, but you have hired people so you have time to lose it. You have time to go to the gym. Um, and you know, I think you have to be involved in the process as the founder and as a CEO, um, 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—literally just do whatever it takes. I literally went, I literally bought a ticket and went to someone's hometown, um, a couple months or three or four months ago and showed up to, you know, showed up and had dinner with a candidate because I wanted her that bad.

Um, and so it might be a little bit weird, but it shows that you know my commitment to having her on my team. Um, 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, so definitely focus on that. Um, and another thing about scaling your team is communication.

So communication mechanisms need to change over time. That is how you communicate with two 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 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, um, you're good to go. And so some of these mechanisms are, for example, holding all-hands meetings once, or you know, once every once a week or um every two weeks.

Um, 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. Um, so, you know, one solution to that was I built an internal tool which, um, I could—anybody could post announcements to, anybody could—we put project updates on there, we put our key metrics on there, we even have everybody's picture and bio on there so that everyone knows who everyone is throughout the org.

Um, 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. Um, and then the, uh, with communication also what's important is, is, uh, 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? So, and, and people are not—when they're making decisions they're not making decisions based off of what everyone else believes in. Core values. Now, when I say core values, I mean core values represents the way you work, the way, you know, the company is.

And so a lot of companies have core values are like honesty, responsibility, innovation, blah blah blah blah. Um, 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 needs—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 six core values. I won't go through all of them because I'm about out of time, but you know I do want to give examples.

So our first core value at Homejoy is nobody's above any job. That doesn't mean I'm looking for elitist 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.

Um, because whether you are a contractor who is cleaning homes to an engineer who's designing the app to help people clean the 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.

Um, and that's part of, and that's, 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.

This is a startup; we're moving very 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 P morom 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, uh, 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 like little by little and, you know, hoping for one or two percent improvement. You need to take the risks to make—to get the 50%, 200% improvements.

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

Alright, so last thing about scaling, um, 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 was obsessed over for months and months and months and have this big vision for, I rather just go talk to these 10 people that report to me and deal with all their issues." That's the last thing—it's the last thing I think of when I get up.

But suck it up, you got to do it. And the reason for that is that you ain't going to build the company by yourself. People want to come to work for you because they believe in your mission. They're just as passionate about you. 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 with, especially with a fast-growing startup. And so those are uncomfortable moments because you need to, you know, make a decision of whether to rip the band-aid off and, you know, have someone just has to leave the company because it's just not working out.

And it's really hard if you know 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, that kind of those kind of conversations don't come out of blue; they evolve over time and the decision feels right by the end of, you know, by the end of the discussion.

Um, 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, 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, next five seconds.

And if you have your support system of other CEOs and other founders, you realize that, you know, 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 you getting feedback from other founders and other CEOs is very important.

So you need to find—you don't need like 20 people; you just need two or three people, even just one person to just go to and get advice from, and also to give advice to them as well if they need it.

Um, the other thing is managing stress. So on any given day—and I've counted this sometimes—but like two really shitty things are going to happen, and two really great things are going to happen. And they don't all come in, you know, it all averages out to two and two every single day, but like you should just assume two things are going to happen every day. And when it happens you're like, “Okay, well that was the first one or that's the second one.”

Um, and then, you know, just think stuff like this happens. You just do 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 it being and staying sane.

So I think that, I think that when bad things happen, just know that it always—bad things will always happen. And then you just need to get over it and don't get overly stressed about anything, anything at all. There's a solution for everything.

Um, and lastly, um, on this topic is managing your time. Um, so as you hire people and as you grow, people are going to want to pull you into all sorts of meetings. You know, 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, um, to have my own space, think about all the problems in the business. Because if you don't take that time every single day, um, you'll just wind up, you know, in a world of hurt basically.

And so, um, so like I said before, everyone in the company at Homejoy knows that from 7 AM to 9 AM I don't take meetings. I only think about metrics, about problems of the company, my own personal space. And, um, sometimes I send out emails, um, but that's besides the point.

Okay, so those are the three topics that I wanted to go over. Um, hopefully that was helpful. I do want to end, I have this, um, Tracy had like the best metaphor with the beaver thing, but I like really odd metaphors so I'm going to shoot for this one.

Um, so I think scaling a startup is like being in a really awkward car race where, you know, when you—when, when you start at the start line, you don't—you don't get a nice car. You get the crappiest car you could possibly—someone could possibly find from the junkyard, and it barely turns on. But now you are asked to drive it at 200 miles per hour, along the way fix it, and along the way replace all the parts so that by the time you end the race, like you suddenly have a Tesla.

Um, yeah, so so, so that's what scaling a startup feels like. Um, so I'll end this. This, uh, building and running a startup is a very long journey. It's a very daunting journey, but it's, it's actually quite a lot of fun if you let it be.

Along the way, you know, you got lots of headaches and battles—battles that you'll win, battles you'll lose. But you start collecting memories and, uh, all the people that come work for your startup, you get to help build their careers. You get to work with great people; you get to make people happy; you get to see your vision come to fruition; and you get to make lots of impact.

Um, and I think, uh, despite everything I've said, it is a, uh, very awesome journey, and I hope that you all take it as well. Good luck!