What Kind of Shape is the On-Demand Economy In?

On-Demand Economy

In this post I explore the current state of the On-Demand economy, Homejoy’s recent shutdown and what the future holds for the fastest growing startups in the space. Scroll to the bottom for further reading, as I have aggregated 7+ articles on the subject and 3+ of the fastest growing On-Demand startups. 

Gig Economy. Sharing Economy. On-Demand Economy. Collaborative Economy.

Call it what you want.

Some of the fastest growing companies in the world fulfill consumer demand via the immediate provisioning of goods and services.

On-Demand Startups

And as of late, none of them have been able to escape negative headlines:

Now that the On-Demand economy has secured its place in the conversation surrounding the U.S. Presidential Election, we thought the time was right to take a deeper dive into one of the most visible sectors of the startup economy.

Why has the On-Demand Economy been under fire lately?

Today’s On-Demand Economy

Gig economy

When Uber, Airbnb, and Instacart first arrived on the scene, much of the discussion revolved around the innovation they unlocked. The sudden ability to be transported anywhere immediately, find a place to sleep cheaply, and have groceries delivered quickly was amazing.

It still is.

But, now that the On-Demand Economy has transformed much of the modern workforce, today’s conversation has shifted away from its technological innovations to the classifications of its workers.

“Should they be classified as employees or contractors? Do on-demand workers have sufficient work-place protections? Aren’t businesses more efficient? Are freelancers able to build toward a fruitful career? Don’t they have more flexibility? Do they have reasonable job security? Are they indentured servants? Are they paid enough?”

These are just a few of the arguments swirling around On-Demand startups. An argument that was recently re-ignited with the collapse of Homejoy.

What Happened to Homejoy?

Homejoy shutdown

On June 6th, 2013, Paul Graham tweeted out this picture of Homejoy’s staggering growth.

At the time, it was “the fastest growing company of those [Y Combinator] funded.”

2 short years later, Adora Cheung penned a blog post announcing that her startup would be closing its doors on July 31st 2015.

From one of the earliest entrants into the On-Demand Economy to a dead unicorn in just a couple of years.

Homejoy, what happened?

Over the past 6 months, Mattermark observed a steady decline in Homejoy’s Growth Score, but we were as surprised as anyone when they announced they would be halting operations.

Now that the dust has settled, what was responsible for Homejoy’s demise?


It’s been reported that a number of negative factors contributed to the failure of Homejoy:

  • Difficult customer acquisition/retention
  • Slowed revenue growth
  • Strained fundraising (caused by a recent employee classification ruling).
  • Increasing customer dissatisfaction (in response to pricing increases and service issues).
On-Demand Startups

Each of these issues, in isolation, can be enough to topple a startup. In Homejoy’s case, they faced all at once. On top of that, they were unable to raise enough funding at a price that made sense for the founders or the company.

If a startup on the growth trajectory Homejoy was once on can fail so quickly, it begs to question: What startups can keep pushing the On-Demand Economy forward?

4 Fast Growing On-Demand Startups

As long as On-Demand startups are mired in lawsuits for classifying their workers as contractors rather employees (many are racing to reclassify their couriers as employees) they will face an increasingly bleak fundraising environment. Long runways will shrink, robbing them of the time they needed to outgrow issues similar to the ones Homejoy faced.

Here are four On-Demand startups that appear to be safe from a sudden shutdown, as they’ve experience considerable growth in their Mattermark Growth Score over the past 6 months:

  1. Eaze — Revolutionizing medical marijuana delivery. (Growth Score last 6 Mo: +100%)
  2. LuxeValet — operates a valet parking service which allows users to demand valets and have their cars parked in secured lots. (Growth Score last 6 Mo: +64%)
  3. Doormint — is a mobile platform for on-demand home based consumer utility services. (Growth Score last 6 Mo: +52%)
  4. DoorDash — is an on-demand delivery service that connects customers with local businesses. The marketplace allows people to purchase meals and other goods from local merchants and have them delivered in less than 45 minutes. (Growth Score last 6 Mo: +43%)

Find More On-Demand Startups

To see all the On-Demand startups in our database or build your own searches and alerts, sign up for a free 14-day trial of Mattermark Professional.

Further Reading on the On-Demand Economy

  1. The Gig Economy by Fred Wilson of Union Square Ventures
  2. Hillary Clinton Transcript: Building the ‘Growth and Fairness Economy’
  3. What The On-Demand Worker Debate Really Means by Mahesh Vellanki of Redpoint Ventures
  4. The Demons of On-Demand by Sarah Perez of TechCrunch
  5. 10 Things I Learned At the On-Demand Conference by Martin Mignot of Index Ventures
  6. The On-Demand Stack by Semil Shah of Bullpen Capital
  7. Homejoy Shuts Down After Battling Worker Classification Lawsuits by Carmel DeAmicis of re/code
  8. Homejoy says goodbye, and thank you by Adora Cheung of Homejoy
  9. Shyp to Is The Latest On-Demand Company To Reclassify Workers as Employees

Photo Credits: Silicon Valley Business Journal, Unsplash, Twitter, Mattermark

The Key to Fitness for Startups: Advice, Best Practices, & Tools

fitness startups

Exercise is one of the most important, least utilized, tools in every founder’s toolkit.

Think about it. You already know how important it is for your happiness and overall health. But, some of the biggest benefits are ones that can help you and your team to level up at work.

Regular exercise is attributed with improving concentration, sharpening memory, speeding up learning, enhancing creativity, and lowering stress.

Paul Graham, of Y Combinator, probably understands this more than most. He makes a point to all founders entering YC that exercise is as key to a startup’s success as building product and talking to users.

“If you’re ever unsure if you should be doing what you’re doing during YC, ask yourself this question: ‘Am I building our product? Am I talking to users? Am I exercising?’. If you’re not doing one of these things, you’re doing the wrong thing.” — Paul Graham

Forget regular exercise.

Many of us who work at startups don’t even make an effort to get up from our chairs more than a handful of times throughout the day. Fortunately, it was reported that walking for just 2 minutes for every hour of sitting can reduce the risk of premature death by up to 33%.

If that’s all it takes, let’s investigate a few habits and startups/tools your team can use to keep their hearts humming and brains firing during the workday.

Fitness Startups to Investigate

  1. Fitbit — offers compact, wireless, wearable sensors that track a person’s daily activities in order to promote a healthy lifestyle (Growth Score: 2089).
  2. ClassPass — is an alternative to a gym membership that lets you go to the best boutique fitness studios in your city (Growth Score: 2266).
  3. Strava — is the online network connecting the global community of athletes (Growth Score: 657).
  4. Greatist — is the next-gen health media company for healthy-minded millennials (Growth Score: 410).

At Mattermark, Fitbit has completely transformed our lifestyles at work (more on that in a minute). ClassPass is a great option for active people on the team who grew bored of their old routine and want to mix things up with other people in the office.

Do you have any runners or bikers in your office? Strava is for those who want to record their running/biking routes and compete with c0-workers. Rounding out the group is Greatist. It won’t get people out of their seats, but it will inspire them to think of cleaner ways to eat and fun ways to get their blood pumping.


If you don’t want to make an investment in wearables or ClassPass memberships, share some quick, but important, fitness tips in one of your Slack channels:

  1. Walk, don’t sit for all 1:1s and stand-ups.
  2. Drink lots of water (so you have no choice but to stand and walk to the bathroom often).
  3. Walk to lunch, don’t order it.
  4. Use a standing desk if possible.
  5. Find a blow-off-steam buddy to walk with when you need a break.

We mentioned before that Fitbit has transformed our lifestyle at Mattermark.

Fitness at Mattermark

The Mattermark team isn’t much different from all the other teams shipping product in SF.

We’re encouraged to relax and enjoy ourselves on weekends, but we’re all hands on deck, sitting for hours at our computers during the week.

That changed a few months ago when we introduced Fitbits into our office.


Now, on every employee’s first day, she is greeted with a Fitbit sitting atop her desk. Not so surprisingly, introductions of fitness trackers to the office led to an uptick in competition.

startup wellness

This July, we’re competing on steps. Every day you’ll see people offering to get coffee for the team, walking outside for 1:1 meetings, and taking mid-afternoon breaks to catch a second wind.

How do you stay healthy and sharp during the week?

We’d love to hear what you and your team do to keep moving on work days. Ping us on Twitter @Mattermark so we can chat!

Mattermark Daily – Thursday, July 23rd, 2015

From the Investors

Woodside Capital Partners releases an extensive 64 page report that covers 2015 technology trends, a software industry M&A overview, a hardware industry M&A overview, and stock market performance metrics in “Global Technology M&A Trends and Analysis – 1H 2015

Screen Shot 2015-07-23 at 3.45.51 PM

Bruce Booth of Atlas Venture notes, ‘the last five quarters are amongst the largest record-setting quarters in ten years’ and describes four things the current market is not in “The Venture Funding Boom in Biotech: A Few Things It’s Not

Erik Rannala of Mucker Capital declares, ‘VCs are hardly on the demise’ and provides four reasons why in “Venture Capital Is Dead. Long Live Venture Capital.

Semil Shah of Haystack Fund expands on five changes he thinks founders and current investors can expect in the on-demand sector in “Aftershocks from the On-Demand Fault Lines

Paige Craig of Arena Ventures shares his tactical critique of Airbnb’s seed round and the key lessons he learned in “Airbnb, My $1 Billion Lesson

Chris Quintero of Bolt details a list of ‘non-obvious’ product categories that Bolt wants to find and fund in “Hardware Startups We’d Like to Fund

Jonathon Triest and Brett deMarrais of Ludlow Ventures carpool to work every day and decided to record their calls with entrepreneurs and VCs as a new video series called “Carpool.vc

From the Operators

Sam DeBrule of Mattermark analyzes the fastest growing startups that raised rounds of $500k or more on AngelList in “Top 10 AngelList Funded Startups, Ranked by the Growth Score

Jitha Thathachari of Rouse Digital outlines four ways in which multi-sided platforms like Uber, LinkedIn and Square solved their chicken and egg problems, and what we can learn from them in “How Uber solved its chicken and egg problem (and you can too!)

Geoff McQueen of AffinityLive warns SaaS founders about the fundraising ‘Death Zone’ for SaaS startups between $50K – $200K in MRR in “The SaaS Fundraising Death Zone

Francesco Paolini of TransferWise concludes that calculating the valuation of a company ‘all depends on assumptions’ and offers a common valuation framework in “Valuation of a Start-up: How Deep Do We Choose to See Into the Future?

Rob Leathern of Optimal reflects on the trouble he went through in securing an add-on round from his seed investors and the two lessons he learned in “When an Investment Disappears

General & Administrative

This section digs deeper into the challenges and lessons learned in facilities, finance, human resources, and more.

Camille Ricketts of First Round Review features Kevin Scott of LinkedIn who boils down his experiences to offer four pieces of wisdom for engineering leaders to live by in “How I Structured Engineering Teams at LinkedIn and AdMob for Success

Nat Disston of EquityZen educates startup employees on the complexities of equity compensation they should have figured out before leaving a startup in “So You’re Leaving Your Startup Job…

John Fazzolari of Revivn announces the new location of the Revivn headquarters and their consolidation of a warehouse and corporate office in “Revivn Moves to Brooklyn

Gregory Mazurek of Gilt tells the history of the whiteboard and his thoughts on the impact of whiteboards on the interview process in “Stop Whiteboarding

In The News

Carmel DeAmicis of re/code dives into the data that reports ‘there have been over 100 rounds over $100 million’, in 2015, totaling $16 billion in funding in “2015 Is the Year of the Mega Fundraising Round

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