Ever wish you had your own butler who would pick up your groceries, reschedule your appointments and track down an Amazon package? A Harvard Business School startup Hello Alfred does exactly that. In the growing on-demand service economy, Alfred offers users a one-stop mobile solution to set up weekly chores or instantaneous task requests that is then delivered by your friendly neighbor acting as your personal butler. Within a year of launch, Alfred has made “18,000 runs for its customers, including dry cleaning 57,600 shirts, delivering 3,326 pounds of dog food and placing 1,280 flower arrangements” in Boston and New York. (1) (2)
Alfred’s Promise to Customers
Alfred’s business and operating model supports a simple but powerful customer value proposition: with our lifestyles becoming ever more hectic, it promises a personalized service to seamlessly fulfill your “basic” needs. A two-tier subscription model offers a $32 per week “basic” and a $59 per week “service” options that allow users to setup weekly chores. These chores are then run once or twice a week by carefully vetted community members, freeing up valuable post-work and leisure time for users.
Unlike other on-demand companies, Alfred aggregates existing single-task solutions such as Handy, Shyp and Instacart, and creates value for its users through a simplified one-stop mobile solution. A select set of chores including laundry, groceries, basic repairs, cleaning and mail drop off allow users to pick from a simple menu list and butlers to anticipate the range of tasks at hand. The platform in turn captures a portion of the value generated from time-savings and ease-of-use through its subscription pricing model. The flat fee structure generates upfront payments from customers which the startup then invests in its butlers and supporting technology.
How Alfred aligns its business and operational models
Automated on-demand technology
Alfred operates a simple mobile application for users to enter the type of tasks with few clicks. For instantaneous requests, users can also send a text directly to the butler. In both instances, a seamless technology allows users to communicate requests and butlers to coordinate pick-up/drop-offs without any physical interaction after a first in-person “consultation”.
The app stores previous orders from users, allowing butlers to forecast demand and plan daily runs and users to repeat requests using a single click and no incremental payments each time. This operational technology facilitates Alfred’s promise of freeing time for end users.
Alfred’s operations rely on hiring members from the local community as full time employees and have included stay-at-home parents and recent retirees. In contrast to Uber and Lyft which hires freelancers as part-time contractors, Alfred’s service personnel are on W-2 contracts with full-time time pay and benefits.3 While it imposes 20% higher salary expenses, this operational choice aligns Alfred with its community-centric business model where butlers are well-incentivized to provide quality service. 3
Culture of trust
Trust is a core component of Alfred’s business model. To provide these services, Alfred identifies, rigorously screens through background checks and interviews (for three hours) locals in neighborhood communities. Only 3% of applicants are accepted. 4 This focus on trust generates a competitive advantage for Alfred as it pairs the same butler every week with an user and allow for a personal trustworthy relationship to build up. Users are comfortable in letting strangers access their homes knowing butlers are vetted employees and butlers have a sense of ownership in working for their neighbors.
Alfred combines online and offline engagement to better understand users’ weekly needs. Users can avail a “set it and forget it” option on their apps and rely on Alfred to customize their delivery needs. 5 The longer a user stays on the system, Alfred’s proprietary app analyzes history of previous orders while the same butler learns individual preferences (e.g. amount of starch for dry cleaning or type of coffee). 6
Having raised over $10.5m in series A funding, the platform is looking to expand to LA and San Francisco. 2 However, it is still unclear whether Alfred is a real winner. Its business model faces operational risk in scaling the supply side, specifically in finding numerous trustworthy butlers in new neighborhoods and cities. Higher expenses associated with a full-time employee model also requires Alfred to grow to a large critical base of subscribers before it can turn profitable.
In the meantime, users seem to be in the good hands of Alfred:
 Company Website: https://www.helloalfred.com/
 TechCrunch http://techcrunch.com/2015/04/14/alfred-series-a/
 Wall Street Journal http://www.wsj.com/articles/startups-scramble-to-define-employee-1438228860