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Lead generation is IMO white-hot, maybe not for VCs but certainly to the stakeholders involved. Lots, and lots of legacy businesses yearning for new methods of
by potatolicious 11y ago
Lead generation is IMO white-hot, maybe not for VCs but certainly to the stakeholders involved. Lots, and lots of legacy businesses yearning for new methods of leadgen, and lots of money involved for someone able to solve it.
The problem was precisely that Homejoy was a leadgen product but attempted to extract a cut of the action for the rest of time, rather than one-time as most leadgen goes.
saalweachter is right - the big question is what value Homejoy provides. In this case it's clear that Homejoy offers (to the cleaner and the customer) a substantial one time value, and then provides little to no value for subsequent engagements. Because the product doesn't offer any value into the future, both participants were incentivized (and IMO well justified) in cutting them out of the deal.
- saalweachter 11y agoIt's worse than that, IMO: Homejoy was effectively a leadgen middle-man. Homejoy was itself relying on other lead generators, namely Groupon. I think if they had been doing better lead generation themselves they might have had a better chance of getting more rounds of investment. When you aren't doing good lead generation and aren't providing good value to your customers/contractors, what is really left to invest in? This doesn't change what you said; they may still have had a viable business if they had been structured for a one-time transaction.