TidyChoice

By Joseph Zhang and Andrew Yang

When most people think of groundbreaking startups, they think of revolutionary companies like Amazon and Google that have created massive new industries, changing the world. However, Colin Weston took a different approach with TidyChoice, a company that matches domestic service providers like housekeepers to customers, to try to see what he could do with traditional institutions like domestic services, bringing them to the digital age.

Colin spent much of his early working life around commerce, starting out as a Chartered Accountant at PricewaterhouseCoopers, then moving into banking at large firms like JP Morgan and BNP Paribas. He later moved into corporate finance advisory, focusing on mergers and acquisitions at Duff and Phelps. Even though he had worked many different jobs at many different companies, the common denominator was always numbers and finance, not building a business, which both hurt him and helped him in the long run.

He was first brought into the industry after his friend Ana Andres had tried and failed to create a solution. Ana would later become the co-founder of TidyChoice, which proved to be a godsend for the company. He and Ana both benefitted from their relationship, where he provided the business know-how and she brought the technical background. Ana had a Ph.D. in software engineering and had done product development at companies such as Accenture for 10 years, so she had experience in the tech field while he had built his strengths from his finance background.

They began to wonder if they could take the same problem and solve it properly and successfully. They had closely studied big-names that were already in the industry, like Homejoy and Helpling and tried to identify and learn from their successes and mistakes. From this, they decided to go after a pure marketplace approach, which had seen great success in other fields. Like Amazon and Airbnb, TidyChoice was designed as a middleman that would connect the product to the customer, making it easier for the customer to find the goods they wanted.

First, they conducted market research to see how people would react to their product, and from that, gained a clear idea of how they were going to approach the market and how the product would work. It was clear that a large number of competitors, many of which had received over $100 million in funding, would be a significant obstacle that they would need to overcome, but they believed that they could provide something new with their unique approach.

Unlike most other startups, TidyChoice was completely self-funded, and still to this day has not taken in any external funding. Colin attributes his company’s healthy growth to this, as he has noticed many VC funded startups aggressively advertising and giving away their service in a desire to rapidly expand and satisfy their investors, which had led to the death of Homejoy.  (Learn more about the downsides of scaling too fast here) He compared his company’s growth to that of the tortoise in the famous story of the tortoise and hare: a slower approach that he hopes will eventually prevail. They did not intend to grow slowly– it was more of a consequence of his goal to stay cash flow neutral/positive at all times. He did not want to take out loans and introduce risk when what he was already doing was working.

After starting, Colin began to quickly learn a lot of different parts about running a startup. Building a new company was a new experience for him, so he was doing many things for the first time. He recalled that he used to be shocked by the difference in attitude, as he was sometimes yelled at for things going wrong, which was much different from the more professional business relationship with his clients that he was used to.

Their new life was also rather unglamorous when compared to their past, where they were surrounded by large organizations and had a support network built around them. Now, they were working at their kitchen tables, learning things that they never had much experience with like marketing and worrying about if their vision would take off. For most people, that would be a huge downgrade, but Colin was driven to see his company succeed.

He attributes much of their success to his co-founder, who could code entire platforms from scratch because of her tech background. Ana, who had worked at Accenture for over 10 years, was busy building the platform, which she programmed about 98% of. The rest of their software work was done in-house by their team of 5 developers, unlike many companies, who outsourced their work. (Learn more about outsourcing your work in our interview with Gigster here)

Because the technical side was taken care of, Colin could focus on the business side. His prior experience and understanding of the business world was unusual in an industry dominated by tech graduates fresh out of college. His expertise in the field allowed him to cruise through the financial parts with ease and use his time to focus on other important areas like marketing.

As the first few months came and went, growth proved to be slower than they hoped and he began to wonder if the product was good enough. Soon though, things turned around. As customer inflow increased, everything began to click into place, and they could finally say that their approach worked. It was more difficult than they had hoped because as an online website, some form of advertising is necessary, but their limited budget meant they had to wait a long time to gain momentum. Once momentum picked up, they were then able to collect feedback and improve the service.

The unique nature of the industry also requires a sense of trust, as people tend to be much more protective of who comes into their house, especially if they aren’t present. This has made it especially difficult for his company to scale, since they have to spend lots of effort in vetting the services listed on his website to ensure customer satisfaction and reduce risks.

Despite this, he believes that his company has been popular with service providers because of the way they approach the business. Unlike many of their competitors, TidyChoice allows cleaners to pick their own rates, times and areas, without taking a percentage of their earnings or requiring a sign-up fee. TidyChoice makes money by charging a small commission that they add to the cost of the service, and a “finders fee” that cleaners pay once per regular customer to offset the cost of marketing their service. In addition, they have focused on a balanced approach to complaints, understanding that their service providers are professionals that do their work for a living, which he believes benefits both the worker and customer.

One of the largest problems with many companies in their sector is the leakage from people leaving the network and going directly to the consumer, damaging the company that helped cultivate the relationship. Colin believes that the flexibility in pricing that TidyChoice gives to both sides prevents unnecessary losses and helps keep retention rates high. Customer retention is crucial to his business, since they make money from people who come back to purchase services from their website, an example of the 80/20 rule – a few people contribute to the vast majority of the market.

Efficiency has been a key theme throughout the business. They have a small number of employees behind the scenes relative to their size, allowing them to keep costs low. Their relatively small budget for marketing meant that they had to be creative and efficient with their approach. They focused on individual postcodes in London, and would match their weekly marketing spending with the hours available they had in that area. They didn’t see a need to market in places where they didn’t have a presence, so they simply didn’t.

Looking back, he believes that the hardest thing that he had to deal with was the anxiety that came with leaving a well-paying stable job for a much more unstable one which may not have even worked. Even though both founders were familiar with stress from their work in the corporate world, creating a business from scratch and waiting to see if the business model was going to work proved to be a huge emotional obstacle.

To cope with all the stress, Colin said that he would always try to stay optimistic, and to try new things, not getting caught up on the failures. Even then, there were times where he considered quitting and going back to a “normal” job if they didn’t make it to a certain goal, but he didn’t let that stop him. Instead, he used his fear of not having a job as a motivation to move forward.

Colin sees a bright future for TidyChoice. He currently has a target to double the cleaning and housekeeping traffic within 12 months and also expand into the childcare sector. He also wants to look outward to other European cities within the next few years, where he sees a huge opportunity. He has even been approached by tutoring services and people in other nations that have seen the potential and want to use the platform.

Entrepreneur Advice

“I think you need to do something you enjoy and are good at, to do well at, and not everyone is cut out for it. I think if you’re starting out, then you have to accept that you’re going to have to get your hands dirty and learn lots of things and what really separates people is how quickly you can do that and how effectively you can learn those things.”

If you want to learn more about TidyChoice, see their website here. To see our interview with Parsec click here. If you’re interested in the most recent business secrets, check out our Business Knowledge page.