As an (tn-demand company,2 Q had entered a space bursting with startups and with venture capital firms (VCs) eager to invest in them since the launch of the on-demand car service Uber in 21]]9. VC investment in (tn-demand startups topped $4.12 billion in 2014. having increased 514% over the previous year.3 (See Exhibit 1 for funding and valuation infomation for select on-demand service providers.) Most (tn-demand companies used independent contractors (called \"matters" in reference to tax form 1099, which contractors had to le annually) and so had Q, at rst. But it soon chose a different path. Now Q hired its employees, paid and trained them more than the industry standard, o'ered them stable schedules, and provided opportunities for success and growth. Teran did not want to compromise that way of doing business as Q grew. Company Background Q's founders. Dan Teran and Sarnan Rahmanian. met at Prehype. a venture development firm. and found that they shared a fascination with design and how it could he used to create great experiences. Teran had worked in many startups and as a community organizer in Baltimore. Maryland and Rahmanian had been successful in advertising. The two also shared their dissatisfaction with the maintenance services in their housing comps.' Ralunanian was on the board of his coop and in charge of dealing with the maintenance company. \"The service was terrible." he explained. There was no transparency. There was a clear contract of the tasks that were supposed to be done on a daily basis but you couldn't ensure or enforce that the cleaner vacuumed the hallways and did everything that he was supposed to do on a day-today basis. Communication was also tough. The maintenance company was still operating in an analogue world. I had to leave voicemails. 1 had to fax documents to get work approved. It dawned on Teran and Rahmanian that. merging their interests in design and technology. they could develop a fully transparent way to manage a physical space. including cleaning and maintenance. They envisioned a wall-mounted iPad with a customized dashboard that would list all the tasks to be done and show customers when each task had been taken care of. The opportunity was big. The $5l billion janitorial service industry was highly fragmented. 0f the nearly 860,000 janitorial services in the United States. employing I.8 million people, 96% had fewer than five employees. Ofce-cleaning services accounted for 32% of the industry's revenue (see Exhibit 1). The top three companies took in 10% of the revenue. The biggest player, ABM Industries. served commercial buildings and residential complexes and offered janitorial services. parking. facility solutions, building solutions, security, and other services. Janitorial services accounted for more than 50% of its $2.? billion revenue. To improve service, it had recently introduced a digital quality-assurance program that gave customers access to cleaning schedules and work-order status. Two other well-known players were Jani-King International, a commercial cleaning company with more than 10,000 [1.8. franchises and mvenue of $662.3 million, and ServieeMasterClean, with more than 4,000 franchises and revenue of $329.9 million} Teran and Rahmanian initially approached co-op boards with their startup idea but quickly found ofce managers a better target customer. \"Office managers have decisionumaking authority," Teran pointed out. \"They want less confusion. fewer logistics and vendors to worry about We pitched our idea to 25 or 30 office managers and 15 or 20 of them signed up on the spot for service before we had built anything. That was convincing enough for us to build the software and the supply back end." Q's Service Offering In April 2014. Managed by Q launched in New York. with Teran as CEO and Rahmanian as Chief Product Ofcer. They conceived Q as an ofce cleaning company that also provided maintenance and ofcesupplies services, but focused their sales pitch on cleaning. The plan was that once customers got a taste of Q's high-quality cleaning service. they would come back to Q for its other services. Target customers were companies that occupied 600040.000 square feet of space in Class B and C commercial buildings .5 Such companies typically had 50- 150 employees in each location. Q's services included cleaning offices. conference rooms. workstations. and kitchens; detailing floors; and taking out the trash and recycling. The company charged $25t'hour per cleaner. with a two-hour minimum. Maintenance services ranged from relatively simple tasks like changing light bulbs. assembling furniture. and packing and unpacking boxes to jobs like painting, carpentry. and light plumbing and electrical work. Q charged from $40 to SBOJ'hour. depending on the complexity of the job. with a two-hour minimum. For its office-supplies service, Q automatically relled a company's supply of trash bags. paper towels. soap. copy paper. pens and pencils. and printer cartridges. An ofce manager received a monthly invoice from Q that could include four line items: cleaning (based on number of hours), maintenance work. cleaning supplies {a monthly subscription to cover the cost of supplies used], and ofce supplies. \fManaged by Q Zeynep Ton and Gate Reavfs The original thesis is. If our people are so amazing and our technology is so amazing, eventually o'ice managers will turn to usfor everything. So we'll eectiveiy aggregate the demand for all of the goods. services. and technology that's required to run the o'ice, And that's the he! we're making. Dan Teran . cofounder and CEO. Managed by Q i've never worked for a company like this. You're going to have to kick me out of Q because i'm never leaving. 011 my day o.' i wear my Qjaclret. Allen Erickson. cleaning operator. Managed by Q It was the end of July 2015 and Dan Teran had reason to be pleased with his l-monthold on- demand office cleaning and maintenance company. Managed by Qknown affectionately just as \"Q." The startup was named after Q. the R&D wizard in the James Bond movies who made sure Bond was tted out with whatever gadgets he might need.' and it was the rm's ultimate goal to provide its customers not only with clean floors and windows but with whatever they might need in managing their physical space. Q had recently raised $15 million in a Series A round and had expanded from New York to Chicago and San Francisco. with high customer satisfaction in all three markets. As CEO, Teran had no doubt that he wanted Q to keep growingthe question was how. Should it focus on acquiring more customers in its existing markets and increasing revenue from each customer by offering more services? Or should it keep expanding into new markets? Welcome to Q's Information Session a. Evaluate people as you go: I. Are They professional? I. Are They asking good questions? ii. Are they smiling? Iv. Are they engaged? v. Are they appropriately dressed? 1. Make sure to focus on the "Why Become an Operator" and "What Happens Next" slides 2. Hold ORA al the end of the session One-on-One Interviews 1. Transition to one-on-one interviews with cleaner candidates 4. If you have maintenance candidates in the session, alert a member of the maintenance team to meet with handyman women candidates J. Transitioning to one-on-ones after the presentation a. Interview people in the order they signed into the session D. Make sure candidates bring all of their belongings with them C. Let all others know that they will be called when there time is up and in the meantime, they should have enough water and know where the bathrooms are. d. Make sure that the wailing candidates cannot hear the interview questions (e.g. put them in a separate room or play music in the room they're in). 0. Open OnboardiO for the candidate before you start with them. f. Take notes as you go in OiQ 1. Conducting the Interview. a. We're going to spend 10-15 minutes to get to know you a bit more about you. Do you have your resume? May 24, 2016 20