To help landlords lure tenants, this company will tend to their every need
Hello Alfred will keep your fridge stocked, plants watered and apartment clean. Now it’s signing deals to bring its butler service to apartment buildings across the country
By next winter co-living, microhousing operator Ollie plans to have five properties up and running in the New York area. And every one of its more than 800 residents will have access to a personal assistant known as an Alfred. Same goes for approximately 30,000 other denizens of buildings in New York, San Francisco and Boston, as home-management service Hello Alfred, named after Batman’s beloved butler, marks the next phase in its development.
The company, which has pioneered an automated yet intimate on-demand concierge service, was slated to announce May 22 that it has signed partnership deals with 11 residential developers, some with a national footprint, and expects to be in 75 buildings across three markets over the next 12 months. Building operators are offering the subscription service to residents on a complimentary basis, potentially bringing millions of dollars in monthly revenue to the three-year-old startup.
The deals illustrate the powerhouse potential of the Flatiron District–based company, which launched in 2014 and gradually rolled out its service to individual customers. All the while the founders were talking to landlords: The company had worked its way into 18 properties before these latest deals at the same time as it was refining the service and getting the kinks out of its operation.
“Our consumer business has acted as R&D for us,” said Chief Executive Marcela Sapone, 31, who co-founded the company with her Harvard Business School classmate Jessica Beck, 31, the chief operating officer. “Buildings have been built into the strategy since the first pitch deck.” The company’s message to the market is: “We are an operating system for buildings,” Sapone added.
To support its growth, Hello Alfred just raised $11 million in new financing, bringing its total backing to $23.5 million. The founders declined to reveal the company’s sales figures, but the potential influx of subscribers resulting from the new partnerships portends a tenfold increase in total revenue.
The company has prospered partly by being a good judge of millennials’ tastes. Hello Alfred’s target users, who often put in long hours at work, are more than happy to pay $279 a month for the company’s basic service: In addition to a weekly cleaning by an outside vendor, an Alfred, also known as a client manager, will come in once a week and do minimal chores. Those include putting away laundry and groceries, dropping off dry cleaning and checking on what’s been used up in the fridge.
Over time Alfreds learn to anticipate their clients’ grocery needs and can automate their shopping lists and place orders directly with FreshDirect or Whole Foods Market. They can also arrange for additional services, which are not included in the basic fee but which Hello Alfred offers without charging a premium price. By providing dry cleaners, home-repair services and the like with customers in bulk, the company can negotiate discounts of 10% to 20% and then turn a profit on the transactions without marking them up.
“We are reinventing how tech and commerce can bring retail into your home, which is where it wants to be,” Sapone said. “And we can get efficiencies that are very difficult to get as a single consumer.”
In a building that has adopted the service, an Alfred can make multiple stops at a client’s apartment during the week rather than just one. According to Sapone, users in these buildings spend more through the platform than individual users, though how much more is proprietary information. Across the company, members are spending an average of $345 a month on everything from furniture assembly to plant delivery and maintenance. She says that’s triple what an Amazon Prime member spends.
Another key to the company’s growth has been its practice of classifying Alfreds as employees, rather than as independent contractors, which tends to be the standard arrangement for most workers at on-demand services. The employee model aligns with the company’s ethical values, Sapone said. But its benefits and wages, which start at $16 an hour and go up to $30, have resulted in low rates of churn and a good number of workers who stay with the company and develop close relationships with clients.
“I don’t distinguish clients by their apartment number,” said Andrea Zamparini, a client manager at a building in Long Island City. “I distinguish them by their name.” A Hunter College graduate and part-time singer-songwriter, Zamparini, 23, has been working for Hello Alfred for nearly two years and earns $22 an hour, double the current state minimum wage.
Hello Alfred has even stopped using some companies that rely on independent contractors, such as delivery service Instacart and home-services giant Handy, because Sapone and Beck found the quality inconsistent. They’ve turned instead to local, bonded service providers that are able to send the same person every week.
One close observer of Hello Alfred’s rise says the company’s expansion will bring a new challenge: catering to a wider range of customers.
“They need to make sure that the design of the customer experience is handled really carefully,” said New York University professor Arun Sundararajan, who studies the sharing economy. “Part of the promise is that [the Alfred] will anticipate [one’s] needs and fulfill them. Getting a sense for how to do that across a diverse group of people is going to be central to their success.”
The residential developers who have signed on to the business are already convinced that Hello Alfred can help their properties stand out. Christopher Bledsoe, co-founder and CEO of Ollie, thinks of it as a necessary addition to properties that are designed around making life easier for tenants.
“Alfred has a platform that hits hard on every component of on-demand living,” he said, referring to the range of services the company can provide. Bledsoe also thinks that Hello Alfred’s workers being employees “brings a greater level of accountability.”
For BEB Capital, which owns a 60-unit rental building in Bayside, Queens, the hope is that Hello Alfred will make the building’s millennial tenants feel they are getting more than just lower rent by living an hour’s bus-and-subway ride from Midtown.
“Everyone in our industry is working on how to differentiate themselves and minimize downtime between tenants,” said BEB Capital CEO Lee Brodsky. “We feel that Alfred does that for us.”
But it’s not just developers focused on millennials who are partnering with the company. The builders of Vitre, a 48-unit condominium on East 96th Street, will be offering the service when construction finishes in summer 2018. The one- to three-bedroom apartments are considered “affordable luxury” condos, priced between $900,000 and $4 million, and aimed at young families. Hello Alfred is a way to add a sense of luxury at a reasonable cost.
“It’s a concierge service without having to have a concierge,” said Michael Belkin, a partner at Wonder Works Development Group, one of the building’s developers. “If we can keep common charges down—which is what residents want—while being able to offer all these amenities, that’s a win-win.”
Correction: Eighteen buildings were offering Hello Alfred as of May 21. Seventy-five buildings plan to feature the service nationwide as of May 22. Those facts were misstated in an earlier version of this article.
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