Launched in 2014, before the Uber revolution really took off in Australia, UrbanYou recently celebrated an important milestone, turning over one million dollars in revenue, just six months after securing seed funding of $500,000 for expansion of the business.
Recently, I spoke to co-founder Noga Edelstein, who’s infectious enthusiasm for the business left in me in no doubt – the future looks bright for UrbanYou and the two Aussie mums behind it.
“Elke and I met working at Yahoo! We were both from the executive team. I use to be the General Counsel and Elke was the Head of Communications,” Noga told Australian Women Online.
“We were both working mums and had that common experience of needing to get stuff down around the house and having to take days off work and hoping a trades-person would show up and they never did. So we came up with the idea of outsourcing.”
“We looked around to solve this problem of trying to find reliable household help and it was before on-demand was really starting to take off. Uber hadn’t really come to Australia in a big way yet and it was all very new, but we really liked the idea of being being able to click a button and get a trusted person on demand.”
As on-demand services performed by independent providers who are not employees, was still a new concept in Australia in 2014, Noga said initially, she and Elke, working from home, had to educate consumers about how it works.
“When Uber took off it really helped to accelerate our business,” said Noga. “People got use to pressing a button and having someone come to their door for anything, on-demand. We’ve hit the million dollars in revenue milestone which is amazing for us and I think it just really shows the potential of this opportunity.”
“There’s a stat floating around that on-demand is estimated to have something like 465 billion dollars in potential market. In 2015 IBISWorld said it was the first year consumers in Australia were spending more on services than they are on retail goods. The potential growth of outsourcing is just really phenomenal.”
What Types of Services Do UrbanYou Provide?
UrbanYou currently offers home cleaning, spring cleaning, end of lease cleaning, carpet cleaning and gardening services.
End of Lease Cleaning is proving to be one of the most popular services on the platform and Noga explains why:
“We get a lot of these types of requests last minute because those are the kinds of services where people think they’re going to do it themselves. Then it gets to be a day or two before and they realise ‘I’m never going to get this done’ and then added to that, is the time it takes to find a reputable company to come and do that work for you,” she said.
“When they come to our site, we can service a request within four hours of availability, so they can literally come on the night before for the next day and have someone to turn up on time and do a great job for them.”
But is it Safe for Your Customers?
Noga and Elke can have confidence in the cleaners and gardeners on their platform because they thoroughly pre-screen all their service providers.
“One of the differences with on-demand versus a taxi driver is that the taxi driver isn’t entering your house,” said Noga. “Whereas with a cleaner we want you to find someone you can trust and come back and subscribe to a regular service and I think that’s where Elke and I have had a big advantage, understanding the personal nature of these services.”
“While the technology is a great enabler to make it streamlined and easier to happen, at the end of the day, it’s about finding a trusted person that you feel secure enough to let into your home and so the screening is critical.”
“We have a number of checks that we do. They have to have insurance, they have to have a police check, we check their references,” Noga explains. “That’s the safety aspect and then there’s the quality of service they provide. They are rated after every service they do and only the providers that maintain a four and five star rating remain on the platform.”
Noga added, “There is a record, you booked it through a smartphone app, there is somebody who knows exactly where you are at all points in time and which providers come to your house. Whereas if you just book somebody off the internet, nobody knows who has come to your house and what’s going on, so I think there is that added safety aspect when you book through this kind of service.”
As a Business Owner it’s Really Important to Do Your ResearchWhen you are trying to raise seed funding to expand a business, doing your research is really important says Noga. “You need to know your business and your industry.”
“For us, we wanted to do it on our own for as long as we could while we were perfecting the model – we wanted to really have that market fit and really know what we were doing, before we got an investor on board”
You also have to find the ‘right investor’.
“Obviously money is critical to grow a business, but we also wanted to have expertise that could really facilitate that growth. We were very lucky to secure funding from Grand Prix Capital who also invest in home services market place Oneflare and some other consumer marketplaces, so they really understand how to fuel the growth in these types of businesses. So for us, it was really critical to get that expertise as well.”
Finding a Balance Between Work and Home
Noga says as a mum, trying to find that balance between the business and the home can be challenging. “You go through phases where it’s not always going great in both.”
When I mention how enthusiastic and passionate she sounds over the phone, Noga says “It’s been an exciting week. We’ve just launched the new platform. If we were still in the drudgery of getting it out, I would have sounded very different. I think with any business the highs are very high and the lows are very low.”
As any business owner will tell you, starting and growing a business when you have children depending on you, can also put quite a strain on the household budget. I asked Noga what was it like taking a massive pay cut after earning such a high salary at tech giant Yahoo!
“I actually took more than a pay cut, I didn’t take any pay for the first two years and I couldn’t have done it without his support,” she said referring to her partner.
“I think for anybody starting a business in a family situation, you really need to have somebody to be earning a decent salary at the same time, or it becomes very difficult. Elke and I went from very highly paid corporate roles to very low pay. But we love what we’re doing, we’re very passionate about it and the opportunity obviously makes it all worth while… We hope.”
“We work very long hours and if you didn’t love it, you wouldn’t make it I think.”
Is Running a Business Really Better Than Working for Someone Else?
Noga says that after more than two years, it would be very difficult for her to go back to working for another company.
“Obviously, you do think about that and what would happen if you needed to go back to a regular job. But I think it’s about the opportunity at the end of the day,” she said.
“I loved working at Yahoo! It was a very innovative environment and I have a lot more skills now than I did back then. It would be hard to answer to someone else, but given the right environment and the right opportunity, it would be just as exciting I think.”
Based in Bondi Junction in Sydney, UrbanYou’s services are currently available only to residents in the Sydney Metropolitan Area. However, the company has plans to expand to other capitals in the second half of 2016. “We’re growing fast so we’re all working full-time and looking to expand.”
For more information about UrbanYou visit the website www.urbanyou.com.au