Home-Assistant Startup Alfred Launches, Paying—Gasp!—Real Wages
What do you do for an encore after your big public debut is widely mocked in the press? For local home-service startup Alfred, the answer is apparently to keep plugging along with your launch plans.
A sense of humor helps, too.
After all, Alfred is a subscription service that lets people pay $99 month to have an assistant handle domestic chores every week, including dry cleaning, grocery orders, and package delivery. It was founded by Harvard Business School students. And it shares a name with Batman alter-ego Bruce Wayne’s trusted butler.
That pitch helped Alfred win TechCrunch’s Disrupt competition earlier this year, a high-profile nod from Silicon Valley luminaries. But it also inspired criticisms of the superheated and sometimes frivolous technology entrepreneurship scene.
Thus, the headline from Slate blaring that “Silicon Valley Has Officially Run Out of Ideas.” Valleywag, as is its obligation, penned a wickedly hilarious takedown, huffing that Alfred’s existence proved that overpaid techies apparently believe “precious mental energy should only be expended to make more delivery apps.”
“It’s like, so wrong. If you listen to our customers, they’re the opposite of that,” CEO and co-founder Marcela Sapone says. “But at some point, you’re like, `OK, it’s pretty funny.’”
The company’s target market, identified in its competition pitch as people making more than $75,000 per year, does include “young professionals,” Sapone says. But it’s also intended to help working families, particularly those with both parents in the workforce.
And the assistants—the company calls them “Alfreds”—are working decent, real jobs.
“Our goal with the pricing was to make it as acceptable as possible while also essentially putting a stake in the ground and saying it’s important to us to have a sustainable business. And that’s partially why we’re able to provide Alfreds with a healthy wage.”
This is a key distinction, as many digital startups offering on-demand services to consumers rely on a workforce of “independent contractors” who don’t technically work for the app provider themselves.
That’s a great way for a young, fast-growing company to save huge amounts of money on taxes, benefits, and pay, of course. It’s also an increasingly controversial tactic: car-service startup Uber, backed by more than $1 billion in private investment capital, is being sued by drivers who say they actually should be considered full-fledged employees.
Alfred isn’t interested in that low-cost model, Sapone says. Assistants hired by Alfred—after undergoing what the company says are rigorous background, criminal, and credit checks—will be employees of the startup, making $18-$22 an hour working daytime shifts on weekdays, and eligible for benefits if they work full-time hours. In its job ad, Alfred says applicants should have a bachelor’s degree to be considered for the job.
“What we’re selling is not faster, quicker, cheaper. It’s the highest quality, consistently,” Sapone says. “We felt pretty passionately that we wanted to provide jobs at a good wage and give them the option to be part-time or full-time. And if you’re full-time, we will provide benefits as well.”
It’s also a good safety strategy by Alfred, since its assistants get a key to their customers’ homes in order to perform all of those tasks.
So, who are these college graduates signing up to be someone else’s at-home concierge? Sapone points out that, in a country with about 9 million people still unemployed as the economy slogs its way back to life, there are plenty of people who need extra work.
“There are people who are really well-educated who really never got to puruse their career. Think about stay-at-home parents—there are a lot of really talented people who are underemployed or want alternative employment,” she says.
Alfred has been testing its service for some time, and is now accepting customer sign-ups in Boston and Manhattan.
The startup is controlling the number of people who can open accounts by having would-be customers request an invitation on its website—Sapone says that’s because Alfred needs to make sure it has enough assistants in place in a neighborhood before it can offer the service.
The company, which has its operations spread across both cities at the moment, is backed by $2 million in investment cash. The money comes from lead investor Spark Capital, along with SV Angel and CrunchFund. Spark’s Bijan Sabet, who invested in companies including Twitter, Tumblr, and Foursquare, led the venture fund’s investment.
So yeah, some of those mock-worthy, rich young tech dudes will surely be among Alfred’s customers. But if the nearly 100 assistants that Alfred has signed up can get a decent job out of that dude’s $99 a month, you’ve got something more interesting on your hands.
“We’re trying to break the rules. We’re trying to make the Internet better and make this new economy better,” Sapone says. “Someone has to do it.”