{"id":11370,"date":"2020-03-23T04:02:35","date_gmt":"2020-03-23T08:02:35","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/hello-alfred-automating-the-on-demand-economy\/"},"modified":"2020-03-23T15:02:27","modified_gmt":"2020-03-23T19:02:27","slug":"hello-alfred-automating-the-on-demand-economy","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/hello-alfred-automating-the-on-demand-economy\/","title":{"rendered":"Hello Alfred: automating the on-demand economy"},"content":{"rendered":"

A new value proposition: coordinating on-demand services<\/strong><\/p>\n

Hello Alfred was launched in 2014 by Marcela Sapone\u00a0and Jessica Beck (HBS 2015). The company provided to the customer a personal concierge called \u201cAlfred\u201d to coordinate a series of day-to-day chores in exchange of a monthly fee. Hello Alfred created a proprietary platform to deal with customer requests, generate logistics and route planning, and processing service orders with third-party vendors, like delivery, home cleaning and maintenance companies [1].<\/p>\n

The founders of Hello Alfred noticed an overload of different platforms and vendors which required many touch points for the customers. Vendors include TaskRabbit and Handy (home cleaning and maintenance), Instacart (grocery delivery), Drizzly (alcohol delivery) and Fancy Hands (personal assistants). Instead of offering the service itself, Hello Alfred levered the wide variety and specialization of vendors by using them as suppliers.<\/p>\n

\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Table 1. Service Providers 2014<\/strong><\/p>\n

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Hello Alfred aggregates the services, makes them easy to order and has \u201cAlfred\u201d as a single point of contact to coordinate satisfactory delivery. By packaging the right bundle of services, Hello Alfred convinced users to pay a monthly membership fee and to give the keys of their apartments to \u201cAlfred\u201d to manage all their in-home services.<\/p>\n

By July 2015 Hello Alfred operated in New York and Boston, and had completed more than 100,000 orders, including +80,000 shirts dry-cleaned, +1,800 flowers placed in homes, and 4,800 pounds of dog food delivered [2].<\/p>\n

Refining and scaling the business<\/strong><\/p>\n

By mid-2016, the founders of the company started to question how to best refine and scale the business model of Hello Alfred. They decided to shift from a customer-facing to a B-to-B-to-C business model [3]. The company focused on partnering directly with the landlords of buildings that cater to young professionals, partnerships include more than 20 of the largest property owners in the US. At the same time, Hello Alfred changed its revenue model. The company moved away from charging membership fees and instead they kept the difference between the wholesale prices negotiated with their vendors and the retail price they charged to the customer. In addition, Hello Alfred introduced a new offering that did not include the in-home management visits and services from a personal \u201cAlfred\u201d [4]. The refined business model provided the following benefits:<\/p>\n