Hello Alfred: Giving you the luxury of time
Imagine a world where you never have to do your chores again…that’s the world that Hello Alfred is hoping to create.
Business model
Hello Alfred provides a 
way to manage your weekly errands without doing them individually. Hello Alfred connects users of their app with “Alfreds” who will take care of users’ to-do lists through an integrated service platform. Hello Alfred will take care of everything from buying groceries and dry cleaning to tailoring or sending a card to your mother. More than 4000 households in Boston and New York currently use the service and the company plans to expand to San Francisco, Washington D.C. and Chicago soon.
Hello Alfred hopes to create value by giving you back the time you are currently dedicating to daily chores. The company captures this value through the use of a subscription model for its services, offering two tiers whereby the Alfred visits either once a week ($32/week) or twice a week ($59/week).
Operating model
In order for Hello Alfred’s business model to succeed, the service must be convenient, efficient and personalized. But most importantly, a large degree of trust is required between the user and the service. Hello Alfred largely achieves these objectives through its operating model:
T
rust
Each “Alfred” is either a full- or part-time W2 employee who is carefully screened through several background checks (identity, criminal and credit), references and rigorous in-person interviews. To quantify this, only 3% of all applicants are eventually hired as an Alfred. This is in contrast to the model employed by many other on-demand service businesses which use contractors to provide their services. The use of employees here is a key element to engendering trust in users of Alfred given the personal nature of the service.
Creating a genuine relationship
Before the first visit, users are introduced to their own personal Alfred via email (or in-person). The fact that each user is allocated a dedicated Alfred who will be responsible for their chores works to both foster trust and also ensure that personalization of the service can be achieved easily.
Automation
When a user first subscribes to the service, Alfred will do a walk-through of the user’s home to learn the user’s preferences and routines so that the dedicated Alfred can begin personalizing the service from the very beginning. In this way, the user does not have to expend effort on describing how they like things done – it just happens automatically. This automation also flows through to the app where users enter their preferences (e.g. regarding how they like their shirts starched) on their first use and never have to think about it again if they want to.
Culture of decentralization
Hello Alfred provides their employees with a lot of responsibility and trusts them to make good decisions for their customers. This freedom enables their employees to fill the entrepreneurial gap to not only fulfill but also anticipate customer needs. An example of this in action can be seen in the fact that Alfreds will often leave personalised notes for their clients at the end of their shift.
Conclusion
As can be seen from the above discussion, the Hello Alfred operating model is by and large well-aligned with their operating model. There are some aspects in which I would argue that it is not aligned, such as the lack of control over output, which is introduced by their reliance on third-party on-demand services (this has potential impacts on the quality and efficiency of the service). However, overall I would say Alfred is a winner as far as business and operating model alignment is concerned.
Sources:
http://www.cbsnews.com/news/hello-alfred-butler-app-runs-errands-americans-increasingly-busy-lives/
http://www.fastcompany.com/3038635/my-week-with-alfred-a-25-personal-butler
http://techcrunch.com/2014/09/09/alfred-club-because-automatic-is-better-than-on-demand/
http://valleywag.gawker.com/startup-selling-a-butler-for-99-month-wins-techcrunch-1633472369
http://observer.com/2015/05/wunwun-is-about-to-sell-but-not-necessarily-to-alfred-club/
Cool post. I know the founders well and they have built a very cool model. It’s still a bit of a challenge to scale and I really hope it succeeds where many others did not… the lack of control over the output is a good point, and may be one of the greatest risk factors.
Marco, thanks for the comment. I completely agree that scaling is going to be a massive issue for Hello Alfred. At this stage, it appears that their ability to scale is directly correlated to their ability to hire more employees. They are probably already doing this in some form but it seems to me that they need to find a way to leverage (or improve) their technology to optimize the back-end of their process so that adding new customers does not necessarily require adding an equal (or almost equal) number of new employees. I believe they are already looking into things such as finding standardized routes for doing tasks but I think they also need to look at ways to optimally allocate tasks between the different Alfreds or alternatively have dedicated teams that just do certain tasks in order to improve productivity.
Great stuff! I heard about this company recently and their model does seem intriguing. Do you have any insight into what type of rules/regulations the company has in place around the type of jobs Alfreds are allowed to perform for their clients? Can they cook for you? Can they help clean-up and do dishes after a dinner party? Can they baby sit? Can they walk dogs? There seems to be a never-ending list of tasks that people would want to pay Alfred to do rather than do themselves.. this scenario seems like it could mean unlimited opportunity for Hello Alfred.. on the other hand, perhaps setting/maintaining strict rules/a core focus might be an ongoing challenge for the company to deal with.. maybe a bit of both?
Thanks for the comment Marcus. I believe the scope of tasks which an Alfred can do for their client is fairly open-ended but the general premise is that they are like the invisible butler so tasks such as cooking for you or baby sitting is not necessarily something Alfred would do directly for you. However, you can ask your Alfred to arrange these services for you – e.g. they can call around and find a babysitter or dog walker for you. I think part of the core value proposition of this company is that it does offer a ‘one stop’ solution and so I think maintaining a certain level of flexibility in the services they are able to offer is necessary. However, I do agree with you that this lack of focus may become a somewhat of a challenge for them. I think the way that they have decided to approach this problem is by saying that their core competency is not necessarily offering these services themselves but in organising it for you and so in this way I think this lack of focus problem becomes somewhat less pressing.