combined experience addressed both ends of
the business: Joun knew cleaning operations,
thanks to all those summers and weekends
at his parents’ store; Prakash could lean on his
background to manage customer service.
And in San Francisco, they could easily find
someone to build the technology platform
to link the two. Their premise: The laundry
process is a series of minor annoyances that they could
make invisible. “There were all these little friction
points,” says Prakash. “For example, you don’t know
who’s a good dry cleaner.”
They started with three ZIP codes in San Francisco in
2013, using friends and their extended networks as beta
testers. Joun served as the valet, collecting laundry bags and
delivering them to his parents’ shop, where he supervised
the cleaning. “I was the only driver,” he says. “I personally
met our first 300 or so customers.” They initially limited
service to Wednesdays and Sundays between 8 and 10 p.m.
Now it’s seven days a week. “Forcing that constraint allows
you to build density much quicker,” Prakash explains.
Density—the number of customers in a defined delivery
route—is vital to Rinse. The more customers in a given
neighborhood, the more that can be handled by one valet.
You basically want a valet driving in a tight circle.
Rinse has about 105 valets in San Francisco, who assemble at the company’s distribution center on Brannan Street at
7 p.m. Each bag is logged in to their smartphones; the exact
order of delivery is determined by a mapping algorithm that
Rinse developed. In a departure from the gig economy, the
valets are employees who are paid $18 to $21 an hour plus
mileage. Joun and Prakash believe that having W- 2 workers
is critical to the service (as do the founders of Cleanly
and 2ULaundry). It allows the company to invest more in
training, and to expect more of the valets, says Joun.
Once they had ironed out the kinks, in late 2013 the
founders began adding ZIP codes and valets, and raising
money from friends, family, and angel investors. “The barri-
ers to entry into this space—to get up and running and start
serving a handful of customers—are pretty low,” says
Prakash. “It’s the barriers to scale that are incredibly high.”
That part—the operational complexity—has kneecapped
earlier laundry startups. There is plenty of extra capacity
in the dry-cleaning industry, but it’s scattered, quality varies
greatly, and it isn’t always available at the right time. Joun
focused on finding retail and commercial vendors who could
meet Rinse’s capacity requirements and quality standards.
One is Douglas Waters, owner of Laundry Express, who
arrives around midnight every night to pick up 3,000 to
4,000 pounds of laundry. He hauls those clothes to his com-
mercial facility in Richmond, California, which is stacked
with high-speed, high-capacity Electrolux washers and
dryers. There, a crew sets aside high-risk garments and then
loads the machines. (All processes are recorded by cameras.)
Waters was a general contractor before putting his ham-
mer down and entering the laundry business. (“The attrac-
tion,” he says drolly, “was that it is not general contracting.”)
But he quickly found that the retail laundry he built was
underutilized—that problem again. He made a pitch to Rinse
for business and won it. When Rinse expanded to Los Ange-
les, so did he, in the way that key suppliers often accompany
automakers when they build new plants. Rinse, Cleanly, and 2ULaundry, having bro- ken out of their home turfs, are studying the map for their next opportunities. Rinse is eyeing Houston and Dallas. 2ULaundry aims to spread through the Southeast, perhaps to Miami. At presstime, Cleanly, now in San
Francisco and D.C., was nearing a $15 million to $20 million
funding round to underwrite a significant expansion.
There’s a bit of a trojan horse strategy developing too. If
you are a Rinse or Cleanly or 2ULaundry customer, you have
given these companies permission to enter your home. What
else can they o;er? Rinse and Cleanly are collecting tons of
data about what their customers buy and wear—both photo-
graph all dry-cleaned items. Craig, Rinse’s VC and adviser,
suggests the company could “have the largest collection of
data in consumer wardrobes”—so “we could help brands and
retailers sell into your closet.”
That’s either very creepy or very helpful to you and the
companies that want shelf space in your closet. This closet
play is predicated on Rinse’s having a national footprint.
Craig says Joun and Prakash have the operational chops to
pull that o;, which is why he’s betting on them. “When we
started, we had ambitions to be the first and largest national
brand,” says Prakash. “If we can create the best customer
experience, and also remove the friction for the vendors, we
have the opportunity to really be that dominant brand.”
So are mom-and-pop dry cleaners—and, for that matter,
Joun’s mom and pop—doomed? Not necessarily, he says:
The best will be partners to the new national brands. Assum-
ing, of course, Rinse and its rivals have the right formula to
win business from the rest of us—the great unwashed.
BILL SAPORI TO is an Inc. editor-at-large.
“We knew right away,” says Prakash, “that it wasn’t about just taking the Uber playbook and applying it to this business.”
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