In the past few years, the startup world ballooned with numerous startups and an equal share of venture capitalists. During the time, several promising startups including Handy launched and went on to dominate various markets within the country with some establishing regional presence. But then, the venture capitalists started clenching their resource fists by holding back on expansionary investments and concentrating on current profitability. Unlike most bubbles, the venture capitalist didn’t blast but contracted unexpectedly. In effect, the capital-reliant startups are not only shrinking, but some are closing up shop, the few that remain have also been forced to adopt rush moves.
Handy’s approach to the situation
Just like any other startup, Handy (https://www.handy.com/) was at first bent on acquiring maximum funds from venture capitalists that they aimed at spending in fast expansionary moves meant to strangle competition. Within the first four years of operation, the company had managed to raise over $110 million that they used to establish a local presence in over 28 markets across the United States. But when investors started questioning the company’s future profitability in relation to its accelerated expansion, the founding partners had to make critical survival decisions.
Hanrahan, one of the co-founders mentions that the fall of Homejoy, their biggest competitor, cast shadows of doubt on the sustainability of the industry on investors who questioned their cautionary strategies. In normal circumstances, Handy would have ventured out steadily to capture the new market, but the lack of funds and an uncertain future held the company back. With the financial advice of its current investors, the founding partners decided to hold back on any expansionary moves and concentrate on profitability.
In effect, the Handy resulted to improving service delivery in their 28 market dominations to maximize profitability and solidify their presence as opposed to maintaining a loose grip over a full yet unstable market. This fact also gives Handy time to accumulate enough funds that they can use to support their expansion while they await the startup funding freeze to relax.