 I'm excited to be here. Thanks for traveling all the way. I'm really excited for this one. Helsinki, huh? Yeah. Second time. First time was on the way to Russia 10 years ago. So, yeah, in the next 20 minutes or so, we're going to discuss the kind of two sides that the founder and CEO has to tackle every day. Growth, profitability, which do you choose? Sometimes they rule each other out. Sometimes they don't. And, yeah, we're planning to really share some examples that you'll learn throughout building handy, do's and don'ts, and really looking forward to learning. But to kick off the conversation, you want to share with the audience with a couple sentences what handy is all about. Sure. So, we started handy six years ago with the view that the way people buy and sell services is broken. So, you think about every service you need inside your home from a handyman to a plumber to a cleaner or electrician, a carpenter, and it's not a great buying experience. You typically go online or you look for referral from family members or friends, and you go through this really clunky, messy buying process where you try and negotiate the scope of the work, the price. Is the person going to show up? Are they going to do a good job? Are they just going to take your money and run? And it's a really messy process that we thought we could fix. So, we started handy to really make it so that it's not just easy for you to buy services, but if you think about that logically, if it's tricky for you to buy them, the person on the other side, so that plumber or that electrician or that carpenter, they're having the same bad experience trying to sell services. So, we started handy to solve that problem, and over the last six years we've built out a platform that's gone a really long way into that transactional services world. Right. And what's rough with this size? How many people are getting their jobs through handy today? So, over the last six years, we've served millions and millions of transactions. We've served them across most of the United States, the UK, Canada. We've onboarded tens of thousands of professionals that have worked on the platform, and we've been fortunate to have many, many customers work with us for a really long time. Brilliant. Then obviously, this is a marketplace with fairly high competition, other providers as well. So, I understood that you opted for fast growth at start. So, the way I look at it is there's kind of four phases of start-ups, and it's different depending on whether you believe it's a winner-takes-all market or whether you believe that it's truly a very, very large opportunity. But the first phase is what we call, does anyone care? Does anyone give a shit? And you'd call it product-market fit, or you'd call it lots of other things, but that's when you throw up a website or you go out and you first try and market to customers, and people either respond or they don't respond. And the same is true of your supply side. So, for us, it was we put up some ads and said, hey, do you want to work as a cleaner or handyman? And we got thousands and thousands of applications. So, we thought, hey, you know what? Customers really want to buy the service. Pros really want to sell services in this transactional way. We've probably got something where two sides of the market are going to care. So, that was kind of your, you were like, okay, this is, there's something in this. Yeah, that was like, hey, there's probably something here. Customers care and pros care. And what you found, or what we found immediately after that was once you raise a little bit of capital, other people also realize there's probably a market there and it becomes hyper competitive very quickly. And that's where every other venture-backed company appears and they all seem to be doing pretty much exactly what you're doing. And I'm sure you're going through this right now. The food delivery space where it seems like there's, you know, dozens and dozens of food delivery companies. So, that was a world back in 2013 or 14 where there was exact mop, get-made, my-clean, hipster-made. It was like every company under the sun seemed to be trying to compete in the home services space. And I think if you believe that your category is a marketplace, marketplaces are typically better when they're bigger. And it doesn't mean they have to be bigger across lots of geographies. They got to be bigger in a way that matters for the customer or the pro. So our customers in New York care that we have more pros in New York. They don't care that we have more pros in Cleveland. It's a local marketplace. And we focused at that point on just getting bigger in every market we were in. So we took those verticals of cleaning and handyman and we said, across the 28 cities we were in, back in 2013 or 2014, we said, let's try and be the biggest company possible in those cities, in those categories. And the reason was it's because it delivered a better experience for your customer. It's not about being bigger just for ego. It's about being bigger because the experience for the customer is better when they've got more pros to choose from. It's about being bigger because the experience for the pro is better when they can get more work on the platform. And how much did you look at unit economics at that stage when you already knew you felt that there's something, but you just wanted to scale? So how much had you pricing and all that under your radar? We did not focus a lot on unit economics at that time. What we did was we looked at customer retention. So we looked at whether our customers were retaining. I'd break unit economics into two parts. One is whether your customers are coming back again and again and again and what it's costing you to get them. And the second part is whether you're making money on the average transaction. And that's a whole other set of work because you can deliver a great experience to your customer. You can do something in a way that you know in the future you can actually make money. So you look at all the things you're doing and you say, hey, I've only got whatever it was at the time, 20 or 30 engineers and 20 operations and product folks, and we said, what's the most important thing to focus on? Is it the customer experience or is it unit economics? And we decided at the time that it was the customer experience. It was how do we keep delivering a great experience and keep scaling? And we knew that in the future we could move to a more efficient payment provider. We knew that in the future we could move to a company that would provide background checks in a scalable way. We knew in the future there were so many different parts of the operational stack that we could make better. And that's what I look at as phase three. That's where you say, hey, you know what, we're either big enough or the market is consolidated enough. And then when you go from phase two, which has just become big and care about your customer a lot, phase three is let's figure out the unit economics. Let's figure out how the hell we actually make money here. And that was a whole pile of work that is what most startups don't get to. Most startups don't get to that phase where they've actually got product market fit. They've figured out how to scale and then they're getting to, okay, how do we truly figure out the operational part? And it's a different muscle, right? It's a totally different muscle to go from just grow to, okay, let's figure out how we reduce our cost per contact. Let's figure out how we increase the efficiency of our call center or our operation center. Let's figure out how we do things digitally instead of in a manual way. And that was a tough period at Handy. That was like when you're going through almost like you take your whole business and you turn it upside down and you say, hey, how can we do what we're doing today but how can we take out the cost lines and make the thing actually scalable? And when you were at the still fully growth mindset, what was the key KPI you were measuring yourself against in retention? Was that monthly retention or was it user acquisition? So I think there's two things in the growth mindset. The first one was how many new subs are we adding every week or day? So how many new first-time customers are we getting? The second thing was what's their retention look like over a 14-day period? It wasn't even 30, it was 14, 28. Right. And then there was a longer T90, which was 90 days. And those were the kind of things we were looking at because they were very early indicators of how many bookings the customer was going to make over the first year of their life. Right. And what was the process to discover that exactly those were the days? What was the process to discover it? I don't even remember how we discovered it. I think one day we were having many, many conversations on retention and somebody finally came into the room and said, hey, I've done a bunch of regression what correlates to customer satisfaction over the first year. And they said, look, in the earliest period, because what you're really trying to do is figure out what's the first day one, right? On the first day your customer orders. And we tried to correlate it with lots of things. So is it whether or not you give them a first-time discount? Is it whether they come through a certain channel? Is it whether they come through referral? And what we found was those things are kind of important, but the best indication is whether or not they have a second booking occur within the first 14 days. Right. And then you at some point decided to make the switch towards looking at profitability. Yep. What was the trigger? So the trigger to go from lap two to lap three where you go from just grow to let's focus on economics was really us saying, hey, you know what? I think we've gotten to a place where it doesn't make sense to compete anymore. So a number of people in the business, we either bought them so we bought exact, we bought mop, and Homejoy went out of business. So we were aggressively competing with Homejoy. At the time, we'd raised a comparable amount of capital. We'd both raised about $40 million a capital at that point. And we were competing head to head. And we knew probably six months before Homejoy went out of business that the market had changed because we noticed they were competing with us less on, you know, classifieds to get pros. They were competing with us less on Google Ads. They were competing with us less in the channel. And that was a good indication that, you know what? It's time to start thinking about how we actually move to phase three, which is how do you make money on an economic basis. Right. And did that change require also different kind of talent to your team? Yeah, it was a different sort of person. The growth at all costs, which it's never growth at all costs. But you're looking for a person who has that mindset as the phase two. And the phase three was someone who was a little more analytical, someone who was coming in and saying, hey, you know what? We need to go through every cost line. Someone who says, hey, I'm actually excited about figuring out cost per contact. And that's not the person who's, you know, trying to figure out how to just grow and figure out the next channel. Where did you start? Where were the first things you looked at? We took our biggest cost buckets and went after them. So customer service was a huge cost because we'd invested so much in bringing on customers. And I'm sure you've all seen this in so many different products you've looked at where you go through the sign up flow and it's amazing. But then you try and edit something in your account and it doesn't work. Or you try and like reschedule it or cancel it or change it. And those features just haven't been built yet because the company has focused so much on growth and making the customer happy. So we went after that as like the first area where we built out so many features, everything from rescheduling to changing your pro, to tipping your pro to, you know, you name it. It was like just a litany of features that we were building because we were doing so many of those things manually before. Yeah. And you're a VC Bank company, right? So how was this shift taken by your investors? Was it driven by them or would they want to have seen more growth? Look, I think when you've raised capital, a significant amount of capital, it becomes much more collaborative. So at that point we had, you know, significant board. We had myself, my co-founder on the board. We had an independent board member. So at that point, the annual planning, which effectively is where you're deciding, hey, this is what we're trying to do next year, it really does become quite collaborative and it becomes about saying, hey, do we want to go raise more capital? If so, how much capital are we going to raise? And is that going to be a path to more growth and future capital or is it going to be a path to sustainability? And I think universally at that point, we decided this is the next round of capital, which we raised in, I think, 15, 2015. That was the capital that was going to take us to a place where the business was sustainable. Right. And I also understood that you've started to have an offering for B2B as well, so it's not consumers only. How's that driving those profitability versus growth conversation? So I think when we hit that moment where we focused on unit economics, it probably took us a year and a half to two years to really figure it all out and get to a place where we'd done a lot of the work. And it was a very, very sustainable business at that point. And as we went through that, we started to look at other opportunities and we'd put all of our effort for the first five years of handy on this cleaning business. And there was this handyman business. The cleaning business grew like that, which was crazy because it's a subscription business. And this handyman business had kind of just grown in a more linear way, but we noticed that customers were just really, really happy with it. And there were things they were suggesting that made a lot of sense. So if you think about, you know, what we were doing, we were assembling furniture, we were putting in light fittings, we were mounting TVs on walls, people were going to stores, buying those products, coming to handy, and then scheduling a service. And it didn't make any sense. We were like, well, why don't we just integrate directly so that when you go to Wayfair, which is one of the largest sellers of furniture online, when you check out on Wayfair and you buy this table, why don't you just add handy assembly right there in the cart? In Walmart, right there in the store, why don't we make it so that you just buy a TV mounting service as well? And we did a couple of trials and it took off like crazy. We realized this is a great experience for the customer, a great experience for the professional because we have so much more data on what they're going to do in the home. We know exactly what the table is, we can take the instruction manual, we can preload it onto their phone, and it's just a great experience for everybody. And I think that's what you get to in the phase four, right? You get to, hey, you've got a core business, it's strong, the economics work, and now you've got the latitude, whether it's emotional latitude, where you've kind of given yourself the freedom to think about other things, or it's your board saying, hey, you know what, you can probably lift up now and think about what other opportunities are around you, or it's just your customers yelling at you, saying, hey, you know what, this works, why don't you go do this other thing, or your team. And I think that was that moment, probably a year and a half ago, we really started to look at retail, and the retail business has just been phenomenal. It's just been, you know, it's been catalyzed by what Amazon is doing, obviously they're changing retail forever, and we're out there really helping these other retailers figure out how to build an amazing end-to-end experience when they sell product and service together. You said it took like two years-ish to fix the unit economics or profitability part. So what were the new key metrics that you are now following, probably alongside the new users, that retention? I mean, it's all the things you'd expect. You're looking at everything that goes into making a booking happen, so whether it's a background check cost, whether it's the pro onboarding cost, whether it's, you know, what your refund rate is, claim rates, customer sat rates, so you take the whole booking unit economics and for each part of it, we're looking at what our cost per booking is. So what does it cost us in background checks for every booking that we do? What does it cost us in customer service cost for every booking we do? And then of course you're taking all of that, you're blending it together, and you're saying, okay, this is what the unit economics look like, this is where we're trying to take them, and are we okay if any one booking is off? Yeah, of course, it doesn't bother us. But on the average of, you know, a thousand bookings, we should be pretty close to our goal. And then reflecting back on the growth period of time, how did you kind of decide the rate on growth? Like it was probably, you know, you were burning cash, and it's always a bit like, you feel responsibility over it, of course. So where did you draw the line that this is kind of how much we can burn, for example? I think at any point in time, when you've raised capital, you're trying to get to a milestone. You're trying to focus on some future goal, and that future goal is either going to allow you to raise more capital, or it's going to be the business is sustainable. So at any point in time, we were focused on what's the goal we're trying to get to, whether it's a top-line metric, whether it's, you know, a series of retention metrics, whether it's a net revenue metric, whatever it is, there's some goal you're trying to get to. You're guessing how long it's going to take you to get there. So you're saying, hey, I think it might take me 12 months to get there, and then you're simply taking your cash, and you're dividing one by the other, and you're putting some cushion on it, and you're saying, that's my runway. Right, and what kind of talent do you have around you to help out in that? Who's going to your leadership team? Yeah, I mean, we've been very fortunate to have some folks at Handy that have been there right from the very beginning on the leadership team. You know, we've got a great head of the handyman business who came through. At one point, he was the GM of the New York business. We have another person who's our chief product officer, who was actually the GM of the San Francisco business, and we found that our best talent, some of our best talent today, people who really know the business, are people who've rotated through different functions. So they've gone through the GM role where they ran a P&L, and now they've taken on a more functional role. And I think that learning was one that served us really well. The idea that you can actually move people around in a kind of non-linear way, and it gives you so much better a bench of talent to really bounce these things off, because it's not a very specific skill set you're looking for a lot of the time. It's really a multifaceted way of thinking about all the problems you have in the business. And now retrospectively looking, is there anything you would have done differently in the growth phase that would have made it easier to switch to profitability? Oh, my God, all the things I would have done. I mean, it's really hard to say this is the thing, because you look back and you say, well, of course I wouldn't hire the customer service people in New York. Of course I'd put them in Florida or the Philippines to start with, but you know that operationally you don't have that latitude. You don't have the organizational maturity at the time to say, you know what we need to do? We need to stop hiring customer service people in New York, and instead let's hire them in Florida and let's figure out how to manage them remotely. You don't have that management muscle at the time. So, yeah, of course there's many things, but I don't know whether you actually have the ability to do them. And if you'd have to share one learning from throughout the kind of profitability or growth through profitability to the founders in the audience, what would that be? If you think about the whole journey of a startup, what you're trying to do, imagine you didn't have venture capital. So imagine a world which I know is crazy in this room, but imagine you just didn't have venture capital. You would bootstrap the business and you'd grow it pretty slowly. So to get to a reasonable scale without bank debt, without VC would probably take 20 years. That's a long time. You put in venture capital and you're trying to shrink that down to somewhere between five and seven years. So you're trying to shrink all the things that are going to happen over 20 years down into seven years, and you have some idea of all the unexpected things that are going to happen over 20 years, and now you have to do them in seven years or six years or whatever the math is, they're going to happen at like three plus times the rate, just on a raw mathematical scale. But then you factor in on top of that, you're going to make more mistakes because you're moving faster. So unexpected things are going to happen on the good and on the bad at a rate that's just way more than you're going to feel comfortable with. And the biggest advice I'd have would be to find a way to surround yourself with people, both personally and professionally, who are going to help you expect the unexpected. Agree. Thanks a lot, Ocean. We're going to continue the discussion of the studio afterwards, looking forward to hearing your questions. Then, thanks a lot. Thanks so much.