How MaidThis CEO Neel Parekh grew MaidThis to $3M revenue and 600 customers in 2024.

hey folks my guest today is neil parrak he is building a tool called made this which is a cleaning franchise for vacation rentals neil you ready to take us to the top i'm stoked let's do nathan are you running one of these franchises or are you the creator of the brand and you sell franchisees both so i am the creator of the brand i started this in 2013 i was working in uh tech venture capital for a few years before doing this kind of as a side hustle uh so now i am running two corporate locations for this and we have two franchises as well so we just started the franchise operations a few months ago very cool okay let's break into the business model right so what are you selling cleaning services for vacation rental so there is kind of a gap in the market where a lot of short-term rentals have popped up airbnbs vrbo's things like that and they need a proper cleaning service which could use a lot of tech right uh typically a lot of cleaners are not very tech savvy but these vacation rentals have quick turnovers you know they need someone to be able to sync with their calendars to automatically see when guests are checking out to be able to report low supplies damages things like that so we kind of help be the middleman between usually the low-tech cleaners uh as well as the hosts kind of automate the entire process for that it's a marketplace model here exactly all right tell me about taking me back to day one your first your first host that you connected to your first you know cleaners yep so uh it is what i'd call like a local marketplace model right because we are a localized business and uh this one part i want to clarify with vacation rentals airbnbs any local model reviews are so king right you can't just do like um uh there's the biggest competitor is called handy where it's just like an uber type service for cleaning it can't what we found is it can't really be like that for um air bees vacation rentals that's why we're doing the franchise model which is much more localized for that uh your question nathan the first airbnb host i connected you know we started doing just residential cleaning uh because that's that's what i knew i found out about this kind of on reddit just as an idea and i'm like hey this guy's doing cleaning i'll just do the same thing and this is like a side hustle while i was working in vc um so the first guy called me and said hey do you guys do vacation rental cleaning by the way there are people laughing listen because there's a lot of vc's that listen analysts they're listening going wait a second i thought side hustle was supposed to be like launching my own like software company your side hustles double down on this reddit thread i'm gonna go clean some houses here it's the most ridiculous thing if you think about it like from tech vc to cleaning company that's exactly what i did uh i i i just go on that nathan i mainly did it because i wanted to eventually leave and travel right and i wanted some sort of side hustle to do then it ended up becoming cleaning i guess it could have been anything but i'm very happy was a local business um but yeah it is kind of ridiculous when you say it out loud how much was that first job would you get paid i think like a hundred bucks we were undercharging like crazy it was like barely anything i was just stoked that we actually got something right um yeah so someone called said hey we need uh cleaner for your case rentals i said we don't do that and then i looked into it more no one else is doing it high high volume right you know people are staying for three four days at a time so i realized how much more profitable was than a regular residential so just started to curate it from there so so now let's scale up to today let's look at last month's cohort data right so in july how many houses did your marketplace help get cleaned uh probably about 600. wow all in la la sf so that's where the corporate locations even more if you count the franchise locations okay interesting and and how many cleaners did you give work to how many did it take to clean the 600 sure probably about 20 to 25. okay interesting and are those 25 cleaners are they on your payroll as fixed expenses or are they hired as needed based off the marketplace demand good question uh as needed so they are independent contractors many of them have their own clients however our service does like a pretty heavy vetting process five steps to interview them in person everything to make sure they're fully vetted and they're reliable because airbnb hosts need reliability above everything so they've had their honor system we know them and then we refer them out work imagine with clients make sure things are smooth and what is the average like cleaning a job costs the homeowner sure anywhere between 125 to like 150 i'd say on average some like four bedrooms in la are going to be like 300. right if it's a mansion some studios might be less but let's say around 140 would probably be about the average so can i take like 140 150 times the 600 homes and that's about what ninety thousand dollars in like marketplace revenue last month yeah and look there's uh fluctuations right because many homes are going to be cleaned um more more often right some are going to clean a lot less um so at least that amount is what you'd be looking at well i guess it could have it was probably way higher than that if you had 600 homes but they booked for two weekends in july that's you just doubled your numbers what was it exactly what was actual marketplace volume last month uh you know it'd probably be it'd probably be north of 100 um the reason is right now would be a slightly i'm slightly slower with travel and everything i mean oftentimes people are staying for longer stays not as much weekend hopping it just depends on the season sometimes they're crazy busy doing so many turns some hosts are only there like they're gone for summer and then they're back right so uh you're probably looking right now north of 100. and if we look at the economics on 100 100 cleaning job breakdown how it works how much does the cleaner get sure so it does depend on the cleaner but you're looking at uh roughly 50 to 55 maybe up to 60 percent uh if we're outsourcing to a company it could be even more but like let's say fifty to sixty percent is typically what you're pushing out to the cleaner um marketing costs are um nathan as you know at the beginning you're doing a lot of marketing afterwards it's mostly word of mouth referral so we spend maybe i'd say five to ten percent on let's say five percent of revenue and marketing per month yep um then we have some overhead expenses um so overhead expenses probably 10 to 15 uh other large expense i could think about would be um credit card transaction fees where which are painted above but that takes off three percent immediately uh then other minor software expenses here and there just you know zapier things like that just to connect everything active campaign um things like that so that'll add uh some fixed amount as well let's call it 50 to 60 cleaner than like another 30-ish all your costs so basically profit is called 20 bucks for 100 job roughly yes that's that's pretty good math yep okay cool so i mean could i say sorry back in and say in july you guys did about twenty thousand bucks and sort of you know profit or gross revenue at least and then multiply times a hundred it's like what a quarter million dollar run rate something like that uh yeah yeah exactly i mean we count the revenue as the top line right because we we take all of that in uh so 20 would be probably profit net profit is kind of what you're looking at okay cool yeah yes sorry that's obviously even better you're north of a million dollar run right then and uh and you're profitable which is great now are you bootstrapped as well or did you raise capital yeah bootstrap bootstrap from a1 and the great part about the business model is like it is pretty lean right you get a job you do the marketing at the beginning but it's highly recurring revenues especially when you get that client in you keep them happy you don't have to keep spending money and marketing to sell someone over and over and over uh so we're bootstrapped since day one um have never raised capital and just growing from there yeah and hopefully there's low turnover on your cleaners if you paid out about fifty thousand dollars to them last month fifty 50 of the 100 grand total revenue i mean i think on average across 22 cleaners that's like almost 3 000 a month for each of them that's that's sustainable right exactly yeah a quick bath and look many of them have other jobs other clients that they take care of you know the beauty of working with us is we give them the clients who let them know when that turnovers are they could fill in their slots with anything they want after that as well so i always get asked and you're the perfect person asks you came from bc how to value a marketplace let's say you are going to go out and raise whoever right which vc firm were you with it's called anderson in los angeles let's see we're going to go raise from kane anderson now how do they value the marketplace model so we would be valued at a local service model right because it is local service so let's talk about marketplaces though a marketplace would be valued simply based off of comps because it's so tough to value it based off of any actual metrics especially what's going on right now...