Eeva Marja Lee’s day begins with shopping for groceries, picking up laundry, and dropping off dry cleaning. But these are not her own domestic obligations, they are her clients’. Lee works for Hello Alfred, a New York City-based home service startup that recently raised a $40M Series B financing led by DivcoWest, Invesco, and others.
With an army of professionals like Lee, Hello Alfred has made it its business to clear busy people’s calendars by taking chores off their schedule. It brings home managers, called Alfreds, to the middle-class who will do everything your home requires except babysitting, petcare and moving cars.
The company was launched by Marcela Sapone and Jessica Beck after they won the TechCrunch’s Startup Battlefield at Disrupt in 2014.
Hello Alfred – the consummate home handler
The founders met at Harvard Business School, where they had arrived after stints at McKinsey & Co. While studying together, they decided to split the cost of a home manager to handle their daily chores.
“We found a woman through Craigslist to visit once a week, bring our groceries, pick up and drop off our dry cleaning, and keep our homes tidy,” the founders told Techweek in an email interview. “When our neighbors learned about it, they asked if they could participate as well. It became clear that we all needed help in order to focus our time and energy on doing the things that were important to us.”
Soon, this quick-fix transitioned into a business idea.
To better understand their potential customers, the founders then looked for requests for recurring help on Craigslist and TaskRabbit and “found 35,000 recurring requests for help every month.” It was after that they set up an account on Craigslist and started running errands for customers. This initial experience taught them that offering a package of services was better than being focused on a single task like cleaning or shopping which other startups were already providing.
“We positioned Hello Alfred,” the founders say, “as an aggregated service platform that gave customers one neck to choke—if they didn’t like what they were getting, we were responsible for fixing it.” But there was one hindrance in the founders’ dream.
Not Midas or Medusa, but a human touch
How would they get the people to open the door or trust them with their keys?
By painfully and slowly building trust. Sapone and Beck were the first Alfreds, the professionals who picked the dry cleaning and emptied the trash of their New York clients homes. However, the desire to win customers’ trust, the founders say, was the reason why they “decided to hire Alfred Home Managers as full W-2 employees, rather than using 1099 freelance contractors” and encouraged them to take ownership of their tasks in each home.
Initially, Hello Alfred relied on referrals to gain consumers. However, the founders attribute retention to “the fact that the same Alfred would provide service, week after week, [helping] build trust with the customers.”
Building that personal connection has been a big part of Hello Alfred’s strategy. This has stuck even as the startup pivoted from being a direct-to-consumer service to a business-to-business enterprise in 2017. “This not only doubled our pipeline of development clients,” the founders say, “it enabled us to scale and grow our footprint in a steady and sustainable way.”
Despite competitors like TaskRabbit, Handy, HouseCall, the startup has grown speedily, spreading from New York to numerous cities in the US and has plans to be available in 100,000+ residential units by the end of 2018. It has, the founders say, partnered with property owners such as Related Rentals, Hines, Invesco, RXR, and Jamestown among others. The model is similar to startups like Ollie where residents don’t pay any additional prices for the services but the costs are included in their monthly rent.
But Hello Alfred isn’t stopping there. Now that it has its customers’ trust and their keys, the founders say that the startup wants to take housekeeping further in the $400Bn home services market. With the help of its professionally trained Alfreds, the startup uses its human touch to not just tidy up the place but ensure that nothing–neither your groceries to toothpaste–runs out. In other words, its Alfreds create a home that, from the resident’s perspective, replenishes itself.
It has also created a platform which the founders call “In-Home Commerce”: a marketplace so that residents can purchase products from local brands and retailers, sell unwanted clothing or even make donations to a charity. It has also announced a partnership with August’s smart lock technology for each home they service. If residents choose to replace their old-fashioned keys with the smart lock technology, Hello Alfred will install it for them.
The startup has consistently popularized its human element, that its Alfreds develop a relationship with the residents and look after them. For instance, the startup’s blog discusses how anyone who spends time in another’s house is bound to familiarize themselves with a few things. “Maybe you’re seeing someone new and aren’t spending as much time in your apartment anymore…Hello Alfred picks up on those details and “does something about it.” This is perhaps why the founders think of “Alfreds as detectives, who use their attention to detail and intuition to surprise and delight their customers and learn to anticipate their needs.” One way Hello Alfred does it, the blog explains, is by small gestures like “leaving handwritten notes” or “removing the plastic from the dry cleaning before placing it in the closet”.
While the startup claims that each employee is chosen after thorough background checks, reservations among clients can be common. However, of all the reviews on Yelp, some have praised the service while others have called out their assigned Alfred’s inefficiencies. But so far, there hasn’t been a complaint of breach of trust or privacy. In fact, Alfred’s business has been growing. It has been operationally profitable since its launch and has, according to Crunchbase, raised $52.5M to date.
A big reason for this success is one most others ignore: “We treat the Alfreds as a our primary customers,” the founders say, “providing them with the tools and capabilities to help them keep the customers happy”.