Washio on-demand laundry service shuts down operations
techcrunch.com
techcrunch.com
I scheduled for it to be picked up and had to wait 2 days, versus the neighborhood folks who do it same day.
I paid $100 to do the laundry (plus a $15 recommended tip). I was expecting it to be cheap since I had a coupon but was blown away. I didn't do the math to estimate the costs going in. My SO and I, I guess, had a ton of laundry.
All in all, it's expensive and not a wonderful/magical experience. It serves a fairly basic need and with the price I paid, after 2-3 trips, it is cheaper for me to buy my own washer and dryer in no time.
I can now use this as a "look I was right" to my SO, because after I got the bill I said "they are going to go out of business with these prices".
That is bonkers expensive. At my old place in Somerville, MA (not exactly a cheap place to live), $100 would be four large hampers full of laundry and my shirts would be pressed.
Of course, it's not a VC-backed startup, just an actual business, so it's not cool.
Was the before, or after the 10% Tufts discount though? If you're below 35, you gotta pretend you forgot your ID, and take that sweet sweet discount. Same for the Sushi place that's right next to the Tufts-discount laundry place.
In other (totally irrelevant) news from current-Somerviller to (past?) Somerviller: area around Davis has gotten almost on par with Harvard Square prices (in terms of rent). Things are crazy around here!
Somerville's prices are disgusting, as is most of the area--I just moved to Malden, where I've got a really nice 2BR that isn't in a falling-apart house for about two-thirds of what I'd have paid in Somerville or Cambridge. And I'm actually a touch closer to downtown Boston for when I want to go out...I thought I'd be sacrificing something I cared about to move here, but nope.
I miss my days of $12 wash and fold in Brooklyn :-/
I think the lesson here is that the Uber for X model was predicated on people being so unhappy with the incumbents that they would switch. Pre-Uber taxi services were criminally awful enterprises that deserved to get a beating. Local neighborhood businesses might be a bit low tech, but they know what they are doing (so there isn't much to disrupt).
Laundry and dry cleaning? First, that's definitely not a daily need. Debatably a weekly need. Second, it's not really a mobile need, and I don't just mean in terms of the device. It's not an on-the-go problem. Sure, the idea of on-demand pickup and dropoff sounds mildly more convenient than the traditional method -- but not so much more so that it's worth the price premium.
At the time, I wondered if there actually proved to be any money to be made here what would stop Wash Then Fold from just setting up their own app and cutting Washio out of the transaction entirely. Three years later, here we are and lo and behold:
During my move from SF to Ann Arbor I made the mistake of outsourcing the washing of pretty much all of my clothing and linens with them. They lost all of it and couldn't find it for about a month.
Let's just say I am very glad I have a washer and a dryer in my home. Certain things just shouldn't be outsourced.
Plus, since I knew the laundromat it came from, I could just return it and they could put up a "did you lose this shirt" sign, and have a reasonable chance of finding the owner.
If you want another "wtf, do we need this" service, check out TrashDay.co, saving us the indignity of taking out our own trash.
One more startup that makes the statement "assisted living for the young" that much more true about SF.
It seems possible that this inconvenience is mostly caused by municipal garbage monopolies? I can haul my own bins, but contracting for trash service in monopoly areas has consistently been more trouble than doing so out in the countryside.
Also, I hope you're still washing your clothes semi-frequently, or at least your workout clothes.
The next competitive advantage for hiring is going to be "doesn't force you to live in the bowels of San Francisco or New York".
35 minutes to wash, 45 minutes to dry. 10 minutes to get to the laundromat, 5 minutes to move your clothes from washer to dryer, 10 minutes to haul it back, and let's say 20 minutes to fold it.
That's two hours, assuming there is no wait, no other interruptions, etc.
In New York, our local laundromat charged a pretty low cost in comparison to feeding quarters into a machine, so it made complete sense to just drop the laundry off on the way to work, and pick it up on the way back. (I don't remember the exact costs, but I do remember being surprised at just how cheap it was, especially considering the time it would save me.)
And you don't need a dryer. No, really. You just get a drying rack and hang stuff up for 24-48 hours, and it's fine. Use a fan to circulate the air if it's absolutely necessary. It's usually not. This is how 99% of Europe works, from Scandinavia to the Mediterranean.
A bigger problem is vibration from spinning. Depending on the structure (e.g. wood frame), that can be felt throughout a multi-story building.
But, as you say, these services are already commonly available in large (and not-so-large) cities. I'm not sure what a premium-priced startup brings to the table especially given that pick-up and drop-off isn't even clearly a win over taking your clothes down to somewhere local instead.
Curious what makes one service shut down while others continue. Better operational efficiencies? Better unit economics? They raised more funding so it's a matter of time before they all die?
Genuinely curious what makes one die and one thrive.
I know where I'm placing my bet...
edit: Ok, apparently overly snarky given down-votes...
How about this? Dry cleaning is a low-margin, capital-intensive business that already has a huge existing base of experienced competitors. If you live in a major city, your local dry cleaner already has pick-up and drop-off service on-demand. They can already keep your credit card on file. They already reap economies of scale by outsourcing the actual cleaning to huge centralized facilities. How much extra value does a company like Washio think they can really generate by letting you schedule it via app instead of via phone, and how much capital investment are they willing to make to capture that value? This is a tough business, and if any company is going to succeed at consolidating it like Washio et al are trying to do, they will have to spend a lot to get there.
if they wanted to be an "Uber for laundry" they should have similarly tapped into underutilized resources - ie. their contractors should have been doing the laundry on personal washer/dryers in homes/garages... We'd see garages in residential neighborhoods full of washers/dryers, without permits, etc... Such an increased efficiency (due to the disruption in particular by cutting off the regulations related and commercial lease expenses) would have generated the required margins like in Uber and AirBNB cases. Of course, whether the world would be a better place for that - that as usually would depend on whether you're the one getting that margin :)
Using city water and plugged on the neighbours' electrical power line.
I've never used services that picked up and dropped off at my house/apartment but I'm not sure I'd ever have paid much of a premium for that but the Wash-and-Fold services I've used have always been just fine--if I lacked easy access to a washer/drier myself.
They're all presumably burning cash trying to establish themselves in the market, but Washio was probably burning the fastest due to their rapid expansion. They also raised a little more money than the others, which probably encouraged them to expand faster.
It's just a matter of time before the others run out of cash. They're all hoping that they'll be able reach the scale they need to turn a profit before the money train runs out. With Washio's closure, they must know that fundraising is going to be very hard, so you'll probably not see much more expansion in this space for a little while. Instead, they'll all work on increasing efficiencies and saturating existing markets, then try to leverage that into another round of funding to expand to more markets before the competition.
Phase 1: Achieve growth at any cost, promise profits when scale increases
Phase 2: Slow down growth to achieve profits, promise scaling when profits increase
Phase 3: Fail to achieve either scale or profits, close down or pivot to more lucrative market.
With the exception of Uber, are there any logistics startups that have avoided Phase 3?
Some of them do not realise that the logistics problem (of picking up stuff and delivering them) can't be solved by common routing.
Most of them work mostly on their mobile apps.
Some of them realise that the logistics problem they have is an NP-hard problem and try developing the solution in-house. Most of the time it results in failure (I believe some other firms that fell apart, I believe it was some Google acquired team cleaning services, particularly mentioned they couldn't solve the logistics problem in time and just when they did the funding disappeared).
Some realise that they can outsource their optimisation to services like:
+ open source: optaplanner, OpenVRP, jsprit, mixed integer programming solvers
+ proprietary services (ascii sorted): ArcGIS, ClearD Optima, DirectRoute, Foxtrot, Graphhopper, Optimoroute, Paragon, Roadnet, Route4Me, RouteXL, Routific, Routyn, Satalia, jOpt
All designed for different variants with some features that miss in others, available in all or some.
For some business the quality of routed paths isn't that important, for some it's crucial, especially if one wants to bring down the price.
Oh yeah, the problem is called Vehicle Routing Problem (or multiple travelling salesmen), it has variants that include vehicle capacities, pickup and delivery (one location preceding the other), pickup or delivery time windows, lunch breaks that don't have real location and other features.
That stuff is hard to solve if you have to run a business like Washio.
Most of the "my mom used to do this for me" service startups are destined for failure.
If you can afford washio, you can afford a maid.
I understand fierce competition + low margin + high growth required is needed and profitability is hard to reach, but so, I wonder what it takes (or how many similar failures) for the "market" to balance and finally come up with something sustainable.
By that I mean, ok, we've seen X number of the exact same laundry services failing. If the business model has been proven unsustainable multiple times in a row, why founders continue to try and investors continue to believe?
I'm wondering if at some point some kind of balance can be achieved where founders/investors will only build something that can be sustainable? Like, ok I'm happy it get cheap and fast laundry service right now, and i don't mind changing provider regularly, but if at some point the offer is a little more expensive and takes a little longer (the sustainable business model) then I guess I wouldn't have a choice and use this one (still better to most people than going to dry cleaning or wash my own stuff at the laundry 2 blocks away)
It already has. As others have pointed out, just about every laundromat and dry cleaners already offers these services. Just not through apps.
Start-ups can be really idiosyncratic and rise and fall based on the talents, failings, and egos of their core founding teams. So it's really easy to tell yourself that the idea is good but th execution was bad.
Who hasn't said, "I wish my laundry were done and folded by someone else?!" The problem might just be that the problem is so much easier to state than the solution, however.
Maybe the solution isn't related to a service that comes to your house, takes your laundry elsewhere, and brings it back to you. Each of the failed startups (I think? going off the top of my head) did this, in one form or another.
Investors funding "Uber for X"-style startups generally seem to miss the things that make Uber work so well -- on-demand low-trust service that fully replaces the alternative. Cleaning my house or doing my laundry can't effectively be done on-demand, and done in a scheduled manner involves a trust relationship too extreme to rely on reputation/rating systems.
No, I think the problem is that dry cleaners and wash-and-fold operations already exist. Its basically Uber fighting the taxi services -- if the taxi services weren't artificially limited in supply by medallion system and other special regulations that Uber could simply choose to ignore (accepting legal risk in so doing) while building a market and then lobbying for special regulatory accommodation based on the market it developed proving the need.
And businesses have had their uniforms laundered for quite some time, but their orders are more uniform than consumer orders, and damages to items probably are probably a non-issue, whereas consumers will have sentimentality attached to clothing.
Too much money, too much time. We slowly went insane.
We're putting laundry onto the Uber platform.
1. Work more (for your boss)
2. Spend money on XYZ so that at the end of the month your account is cleared and you have to work more --> 1.
1. Spend more time with your kids.
2. Spend more time outside looking at the birds.
3. Working out at the gym.
4. Go to the movies.
5. Playing video games.
And considering you might make enough money, this trade off might be worth it. Plus, a lot of folks hate doing laundry.
How do companies get Angel Investors from these people?
I was curious if it existed.