Day 1 - Case Study - Aliada

KE1034
October 31,2017
A N G E L A Y. L E E A N D V A S I L I A K I L I B A R D A F U N S T O N
Aliada: An Online Platform Matching

Maids with Customers in Mexico
Rodolfo Corcuera felt awful when he heard her crying on the other end of the line. Frustrated
by his messy apartment, he had lost his temper without realizing the hardship she faced. “I’mso
sorry,” he said into his phone. “Why don’tyou tell me what’sgoing on? Why didn’tyou show up to
clean this week?” f t e voice of Aide, his maid, cracked as she explained that she was trying to juggle
life with three children while her husband was in the hospital. By the time she left the hospital
yesterday, it was quite late in the afternoon. Going to work would have meant having to return
home late at night, as it took her three hours one-way by bus to traverse traffic-ridden Mexico
City to his apartment. She had reasoned that she couldn’t take the risk, especially given the recent
increase in cartel kidnappings. It was a difficult decision. Housecleaning for Corcuera and his
neighbor twice a week was her only source of income, and she needed the money. As he listened,
the angst he had been feeling about hating his job at a law firm and wishing he knew what to do
with his life paled in comparison. He wished he could help her. Suddenly, he had an idea.
Two years later, Corcuera was the entrepreneur behind a successful startup that connected
maids with nearby clients through a web-based app called Aliada. f t e word means “aly” in
Spanish, reflecting Corcuera’s belief that the relationship between maids and their customers
should be equal.1 With funding from one of Mexico City’s newest venture capital firms, DILA
Capital, Aliada had grown to reach five hundred maids on its platform in April 2016. Corcuera and
DILA set aggressive growth goals for the rest of the year: f t e y projected Aliada’s revenue to grow
by 30 percent per month and estimated that to achieve this would require going beyond the twenty
maids per week the company had been recruiting to seventy maids per week. Corcuera wondered
how best to position his platform to attract new maids and customers to drive this growth.
©2017 by the Kellogg School of Management at Northwestern University. f t i s case was prepared by Professor
Angela
Y. Lee and Vasilia Kilibarda Funston. Cases are developed solely as the basis for class discussion. Cases are not
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Al i Ad A KE1034
Housekeeping in Mexico
In Mexico it was common for middle-class and wealthy families to have their homes cleaned
twice per week by a maid. People found maids mostly by asking friends for recommendations.
Sometimes they would go to one of the more traditional cleaning agencies. Cleaning agencies took
on average three days to confirm a booking and required customers to sign a written contract,
which included cancellation fees if the contract was cancelled, whereas referrals from friends
typically involved informal arrangements.
Domestic work was a poorly regulated and largely informal sector in which 90 percent of
workers did not have contracts. f t e sector was overwhelmingly composed of women. According
to Mexico’s National Institute of Statistics and Geography, 2.3 million people in Mexico were
domestic workers, 95 percent of whom were women and approximately 2 million of whom worked
as maids cleaning people’s homes.2 Domestic workers were often indigenous women who had
moved from rural areas to cities to findwork.3
In Mexico City, maids either lived with the family for whom they worked or spent several hours
per day commuting on public transportation to the homes of their urban customers.4 Sometimes
significant portions of their incomes were spent on transportation to reach distant customers, as
they struggled to find work near their homes and relied on word-of-mouth referrals from existing
customers for new business.
Maids who were not live-in housekeepers were typically paid an agreed rate per visit, rather
than paid by the hour, regardless of how clean or messy a home happened to be. f t e y were expected
to stay for however long it took to complete the cleaning, sometimes for the entire day. Working
conditions were challenging: Most maids earned less than 250 pesos (8 USD) 5 per day, and many
experienced discrimination or abuse.6 One study by Mexico’s National Board for Prevention of
Discrimination found that 14 percent of domestic workers had been beaten or sexually abused, or
knew another domestic worker who had been abused; 17 percent had been unfairly dismissed; and
another 17 percent had been falsely accused of stealing.7
fteft and residential crime were daily concerns for individuals living in Mexico City, as the
crime rate was high.8 Income inequality was also stark in Mexico, and stealing was a concern of
those hiring housekeepers. Maids from cleaning agencies and informal referrals alike were paid in
cash, and typically customers were home at the time of service to provide payment; otherwise they
would have to leave cash and provide their maid with a key to access the home. Customers worried
about letting strangers into their homes and struggled to find housekeepers who dependably
showed up for work in the absence of formal agreements and who possessed the specific skills their
household needed—from cooking to cleaning to ironing.
Founding Aliada
Corcuera saw an opportunity to marry the needs of working young professionals like himself
with the needs of maids like Aide. He told Aide that he wanted to create a platform to connect
her with customers closer to her home so that she could spend less time commuting and earn
2 Ke l l o g g Sc h o o l o f M An Ag e M e n t
KE1034 Al i Ad A
more. She laughed and told him he was crazy. But Corcuera was not joking. He sold his car to
pay amateur programmers from Guadalajara to develop a web-based platform, quit his job at an
international law firm, and offered his apartment on Airbnb to pay for rent and food. He asked
Aide if she would be the first to sign up as an aliada (what Corcuera would call the maids on his
platform). She agreed. Corcuera took out a few ads on Facebook to direct users to the beta version
of his platform. Within hours of running his first Facebook ad, he got a customer.
Shortly thereafter, Corcuera found two angel investors from his network of family and friends
who provided 100,000 USD of funding, allowing him to improve his platform and sustain one
year of operation.9
In August 2014 he officially launched the Aliada platform (see Figure 1), targeting young
couples and singles, with or without roommates, from the B (lower upper class), C+ (upper middle
class), and C (middle class) socioeconomic levels (see Exhibit 1) who lived in apartments or small
houses and were comfortable using technology.10 On the platform, customers entered their zip
code, day of the week they would like service, and frequency of service (one-time or recurring).
f t e n the platform would automatically match them with an aliada in their neighborhood.
Figure 1: Aliada Homepage
Source: Company archive.
In the early days, customers entered their credit card information online at the time of booking
and were charged after the service was completed. After several incidents in which customers’ credit
cards were rejected and the company ended up paying the aliadas because it was unable to collect
payment, Aliada began charging customers a deposit for the full estimated cost of the service at
the time of booking their first appointment. Once the credit card had been verified on the first
transaction, customers were charged after the service was completed for all future appointments.
Ke l l o g g Sc h o o l o f M An Ag e M e n t 3
Al i Ad A KE1034
Like Uber, Aliada accepted only debit or credit cards, no cash and no tips. f t e average duration
of a service booked on the Aliada platform was 3.8 hours and cost on average 24 USD. Going
through cleaning agencies would typically be 30 percent more expensive for the customer.11
At the conclusion of each service, the customer and the aliada would receive an e-mail in which
they could provide a 1–5 star rating and write comments about each other. f t e ratings and the
comments were sent back to the company. If an aliada rated a customer with 1 or 2 stars, she would
not be matched with that customer again, and vice versa. If a customer rated an aliada with 4 or
5 stars, the customer would automatically be scheduled with that aliada for future services, with
preference given to customers who requested recurring service instead of one-time service.
f t e aliadas were paid a fixed hourly rate as independent contractors, not as the company’s
employees. Aliada took a 25 percent commission from each service booked on its platform,12
compared to the 80 percent commission typically taken by cleaning agencies.13 By December
2014, Aliada had provided over 1,200 services, and its average service rating was 4.5 stars.14 What
inspired Corcuera most was that maids had gone from earning less than 250 pesos per day in the
informal economy to earning 450 pesos after tax per day through Aliada.15 In fact, Corcuera had
begun to formalize a small slice of the informal domestic work sector, as Aliada required its maids
to open bank accounts, through which they received weekly deposits from Aliada, and helped them
understand the importance of paying taxes. f t i s was nontrivial, as 83 percent of aliadas did not
have bank accounts prior to joining Aliada. Explained Corcuera:
It’s hard for us to convince the aliadas to get bank accounts. They want cash. It’s a
cultural thing. You previously were not earning that much, and you may need to spend
some of your earnings right away, on your transportation home. Plus, now they have to
pay taxes.16
Online payments were initially a challenge for customers as well, who were wary about paying
by credit card online for fear of fraud. E-commerce was not a prevalent practice in Mexico; in fact,
only 38 percent of Internet users in Mexico shopped online. And in the company’s early days, nearly
half of Aliada’s online transactions were rejected by Mexican banks and payment gateways, as these
institutions did not yet have well-developed fraud detection algorithms to monitor e-commerce.
Still, Corcuera felt strongly that he was providing a superior alternative to both aliadas and
customers (see Figure 2) and wanted to secure venture capital to develop a 2.0 platform and a
mobile app through which aliadas and customers could connect via smartphone. In Mexico and
throughout Latin America, smartphones were becoming pervasive among even the lowest
socioeconomic classes. Securing funding was an uphill battle. f t e venture capital (VC) space was
not well-developed in Mexico, as Mexico’s economy was dominated by firms backed by wealthy
founding families. “ftere were about a dozen VCs in Mexico City at the time, and I got rejected
by seven. So the list was getting short,” recalled Corcuera, who thought he was rejected because of
his lack of entrepreneurial track record.17
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Figure 2: Aliada vs. CleaningAgencies
Aliada Cleaning Agency

Immediate booking confirmation Three days on average to confirm booking
No contracts Written contracts
No cancellation fees if cancelled 24 hours in advance Cancellation fees
Secure online payment with debit or credit card only Cash payment
Providing keys to your home is not permitted. A person Providing keys is permitted
aged 18 or older must be present during the first ten
minutes of the appointment to give the aliada access
Booking online only Booking by telephone most common
Source: Aliada and case author secondary research.
f t e n , in early 2015, he pitched to DILA Capital, one of the newest VC firms in Mexico
City, seeking 1.2 million USD in equity for the purposes of further developing the web platform,
developing a mobile app, refining the company’s recruiting program, expanding into cities near
Mexico City, and growing the company’s staff and marketing efforts. DILA considered Aliada’s
mission and its potential, and decided to invest.
Expansion
f t e early days of expansion were filled with small wins and big challenges. Aliada worked to
refine its recruiting process for accepting maids onto the platform (see Figure 3). Prospective
aliadas had to pass a rigorous selection process that included a background check (Aliada partnered
with BlackTrust, the company in charge of background checks for Uber drivers), verification of
identity and place of residence, references from past jobs, psychometric exams with situational
judgment questions designed to gauge integrity, and an exam on basic home cleaning knowledge.18
f t e company rejected 80 percent of applicants, focusing on quality over quantity.19 It also provided
basic training for the aliadas whom the platform successfully recruited.
Al i Ad A KE1034
Figure 3: Recruiting Framework
Acquisition channels
(online, newspapers, NGO partnerships,
referrals program)
Funnel online platform

(quick requirements check)
Selection process
(psychometric exam,
interview)
Training
Source: Aliada.
f t e security and convenience of Aliada seemed to be resonating with customers, who

particularly liked that the company was insured to cover any damage a maid might cause, as well
as its seven-days-a-week online customer service to provide support and address issues, such as
helping book a different aliada as quickly as possible when a maid cancelled at the last minute.
Within a few months, Corcuera began witnessing word-of-mouth promotion of Aliada on
Facebook (see Exhibit 2). He also noticed that older customers with larger homes were beginning
to join the platform. In the case of large homes, Aliada would send multiple maids to the job so
that the cleaning could still be accomplished in the typical four-hour duration of an Aliada service.
Attracting More Aliadas and Customers Than Ever

Before
In spring 2016, Corcuera reviewed his sales projections for the rest of the year and knew he
needed to drive more maids and customers to the platform. He planned to launch a subway ad
campaign in Mexico City (see Exhibit 3) and was looking for ideas that would resonate with
prospective aliadas. He began scanning through some of the data the company had been able to
gather on the aliadas and customers currently using the platform.
f t e average age of aliadas was 41 (see Figure 4). About 74 percent of the aliadas were the
primary breadwinners in their households. For the majority of them, high school was the highest
level of education attained (see Figure 5). Before Aliada, they earned about 4,200 pesos per month.
With Aliada, they earned about 6,700 pesos per month after taxes and worked about 50 percent
fewer hours than they had in their previous jobs.20
KE1034 Al i Ad A
Figure 4: Age ofAliadas
25%
20%
20% 19%
16%
Frequencies
15%
10%
10% 9% 9%
8%
5% 4% 4%
0%
< 25 25-30 31-35 36-40 41-45 46-50 51-55 56-60 > 60
Age
Source: Aliada.
Figure 5: Level of Education Attained by Aliadas
60% 54%
50%
40%
31%
30%
20%
11%
10%
2% 1%
0%
Less than Primaryschool High school Technical career At least some
primary school college
Source: Aliada.
f t e average age of customers was 33. Over half were women (56 percent). fteir average
household income was around 32,000 pesos per month, 21 and they worked in the fields of business
(70 percent), technology (10 percent), and art, music, architecture, etc. (15 percent). Corcuera
thought that the best venue for promoting Aliada’s service was Facebook ads (see Exhibits 4 and 5
for samples of Aliada’sad campaigns), but he needed a strongmessage.
Al i Ad A KE1034
Inspired by the transformation he was witnessing in the lives of aliadas, Corcuera was motivated
to grow Aliada as quickly as he could. He also felt a sense of urgency to make an impact on the
entrepreneurship scene in Mexico:
We need a big exit. We need a success story of a Mexican entrepreneur’s company so VCs
are more excited to invest. Then more kids here would say, “I don’t have to go to Silicon
Valley.Wein Mexico have our own ideas.” 22
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Exhibit 1: Socioeconomic Levels in Mexico

f t e Mexican Association of Marketing Research and Public Opinion Agencies—Asociación
Mexicana de Inteligencia de Mercado yOpinión (AMAI)—is an independent organization composed
of Mexican market research companies whose purpose is to establish common standards in
methods, terminology, etc., related to market research in Mexico. Its first index of socioeconomic
levels in Mexico in 1994 became the standard used throughout the country. f t e NSE (niveles socio-
económicos, or socioeconomic levels) index is a segmentation and classification tool that has now
been used for over 20 years by research companies, consultancies, advertising agencies, the media,
companies, and government institutions.23 Below are definitions based on AMAI’s 2005 survey.24
In 2017, there will be a planned update to the index to continue refining it in order to adequately
reflect the current condition of Mexican consumers.25
A/B: Upper Class—ftis is the segment with the highest standard of life. Heads of households
are individuals with an educational level of a bachelor’s degree or higher. f t e y live in luxury
houses or apartments with all services and amenities.
C+: Upper Middle Class—ftis segment contains those with incomes and/or lifestyles slightly
superior to those of the middle class. Heads of households are individuals with an educational
level of a bachelor’s degree. f t e y generally live in apartments or houses (some are luxury homes)
and they have all amenities.
C: Middle Class—ftis segment contains what is typically known as the middle class. Most
heads of households are individuals with an educational level of a high school degree. f t ey live
in houses or apartments, which may be owned or rented, with some amenities.
D+: Lower Middle Class—ftis segment includes those with incomes and/or lifestyles slightly
inferior to those of the middle class. f t e y have the best standard of living among the lower class.
Heads of households are individuals with an educational level of having completed junior high
or elementary school. f t e y mostly own their homes, although some rent and some are in public
housing.
D: Low Class—ftis is the middle segment of the lower class. Heads of households are individuals
with an educational level of having completed elementary school. f t e y may own or rent their
homes, which are often public housing or low-income housing withfixed rents.
E: Lowest Class—ftis segment is not usually included in marketing segmentation. Heads of
households are individuals who typically have not completed elementary school. f t e y usually
lack property, so they use other resources to acquire housing. Typically many generations live
under the same roof.
Source:
Original: Demian Magallán,“Distribución de los niveles socioeconómicos en México,” Dosis Mexicana de realidad (blog),
June 18, 2007,http://dosismexicana.blogspot.com/2007/06/distribucin-de-los-niveles.html.
English translation: “Distribution of Socio-Economic Levels in Mexico,” posted by Travelling fella, February 21, 2009,
http://www.city-data.com/forum/mexico/573620-distribution-socio-economic-levels-mexico.html.
Al i Ad A KE1034
Exhibit 2: Word-of-Mouth Recommendations on Facebook
Source: Rodolfo Corcuera.
Translation of the post:“If anyone knows of a housekeeper who is available, it would be a great favor to us! We’re
looking for someone to come clean on Mondays and Fridays in the Virreyes neighborhood.Thanks!”
KE1034 Al i Ad A
Exhibit 3: Aliada’s Planned Subway Ad Campaign
Source: Aliada, April 1, 2016.
Translation:“Do you want to earn more than 10,000 pesos per month? At Aliada, you are your own boss because you
decide your hours and the neighborhoods where you clean. Sign up at www.BeAnAliada.com and improve your quality
of life!”
Al i Ad A KE1034
Exhibit 4: Facebook Ad to Attract Customers
Exhibit 5: Facebook Ad to Attract Maids
KE1034 Al i Ad A
Endnotes
1 Katy Watson, “Maids in Mexico: Defending the Rights of Domestic Workers,” BBC News, December 23, 2015,
http://www.bbc.com/news/business-35113707.
2 Ibid.
3 Nina Lakhani, “Mexico City’s Domestic Workers: A Life Being Treated as a Lesser Person,” The Guardian,
November 10, 2015, https://www.theguardian.com/cities/2015/nov/10/mexico-city-domestic-workers-life-
lesser- person.
4 Ibid.
5 Rodolfo Corcuera, founder and CEO of Aliada, in interview with the authors, February 20, 2017.
6 Data provided by INEGI (Instituto Nacional de Estadística y Geografía, Mexico’sNational Institute of Statistics
and Geography), as cited in Aliada Investor Deck.
7 Lakhani, “Mexico City’s Domestic Workers”; SEGOB (Secretaría de Gobernación, Mexican Secretariat of the
Interior) and CONAPRED (Consejo Nacional para Prevenir la Discriminación, Mexico’s National Council to
Prevent Discrimination), “Condiciones laborales de las trabajadoras domésticas” (“Labor Conditions for
Domestic Workers”), 2014, http://www.conapred.org.mx/userfiles/files/TH_completo_FINAL_INACCSS.pdf.
8 U.S. Department of State, Bureau of Diplomatic Security, “Mexico 2016 Crime & Safety Report: Mexico City,”
https://www.osac.gov/pages/ContentReportDetails.aspx?cid=19202 (accessed February 21, 2017).
9 Aliada Investor Deck.
10 Ibid.
11 Ibid.
12 Ibid.
13 Jonathan Shieber, “Aliada, a Housekeeping Service with a Social Justice Slant, Raises $800,000,” Tech Crunch,
May 15, 2015, http://techcrunch.com/2015/05/15/aliada-a-housekeeping-service-with-a-social-justice-slant-
raises-800000.
14 Aliada Investor Deck.
15 Rodolfo Corcuera, in interview with the authors, February 20, 2017.
16 Rodolfo Corcuera, in interview with the authors, April 1, 2016.
17 Ibid.
18 Aliada, “Preguntas Frecuentes” (“Frequently Asked Questions”), https://aliada.mx/faq (accessed April 3, 2017).
19 Shieber, “Aliada, a Housekeeping Service with a Social Justice Slant, Raises $800,000.”
20 Ana Isabel Orvañanos, chief operating officer of Aliada, in e-mail communication with the authors, March 9,
2017.
21 Ibid.
22 Rodolfo Corcuera, in interview with the authors, April 1, 2016.
23 “Quées NSE”(“What Is NSE”), http://nse.amai.org/nseamai2 (accessed April 4, 2017).
24 Heriberto López Romo, “Avances AMAI: Distribución de Niveles Socioeconómicos en el México Urbano”
(AMAI Advances: Distribution of Socioeconomic Levels in Urban Mexico”), November 2007,
https://jorgecardenas.files.wordpress.com/2007/11/art_nse_amai.pdf.
25 “Quées NSE”(“What Is NSE”).

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KE1034

Aliada: An Online Platform Matching

Figure 1: Aliada Homepage

Source: Company archive.

Figure 2: Aliada vs. CleaningAgencies

Aliada Cleaning Agency

Source: Aliada and case author secondary research.

Figure 3: Recruiting Framework

Funnel online platform

f t e security and convenience of Aliada seemed to be resonating with customers, who

Attracting More Aliadas and Customers Than Ever

Figure 4: Age ofAliadas

Figure 5: Level of Education Attained by Aliadas

Exhibit 1: Socioeconomic Levels in Mexico

Exhibit 2: Word-of-Mouth Recommendations on Facebook

Source: Rodolfo Corcuera.

Exhibit 3: Aliada’s Planned Subway Ad Campaign

Source: Aliada, April 1, 2016.

Exhibit 4: Facebook Ad to Attract Customers

Exhibit 5: Facebook Ad to Attract Maids

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