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Comment by joshfraser | Hacker News Reader

I called it a great idea because it's actually something I could see myself using. My time is my most valuable asset and so I love the idea of having my car washed in my driveway instead of driving somewhere and waiting around. But as I learned with my last company, a good idea doesn't mean that it will be a good business. It's a rough business for the all reasons listed above. And yes, it's a shame they weren't able to figure that out on 500k instead of 5m.

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Why would they need $500K to figure it out? Honestly, why? I did it with $600 (no zeroes missing). I dont get how people just throw around huge amounts of money like it was nothing. 500K is a huge amount of money and it should be put to work towards building wealth and not towards speculating on bad business models.

And see, you just said something very important. You see yourself using them. But tell me, who washes your car right now? How much do you pay them? How come you don't have one of the local on-site car wash businesses come by and work on your car?

Probably marketing. You need to buy your initial leads to get the business going.

Not marketing. Definitely not marketing. I spent $50 on marketing and it got me about $3k worth of business on the first two weeks. Just some flyers and self-printed business cards.

Ok, so you had 1 subcontractor (yourself). I don't know Cherry's deal, but doesn't seem unreasonable to say that they were shooting for a 1,000. Or 10,000. In geographically dispersed areas. You can see how it can start adding up.

I never said I was the only one washing cars. I had sub-contractors that I paid on a per-car basis. Scaling an on-site car wash to 1,000 or 10,000 sub contractors is not going to happen. And here is why: Too many problems will arise. Insurance claims, theft, etc. will quickly make them raise the price to keep a healthy profit margin. Problem is, once you pass a certain price point, people will simply not buy. Thus you end up scaling for nothing. On site car washing is one of those businesses that just doesn't scale favorably.

There have been onsite carwashers for some years now, decades even. If someone could see themselves using Cherry, they would probably already be aware of this.

Home car detailing businesses are already successful. Basic car washes are only profitable when done at a facility designed to make them as cheap as possible. I cannot see trying to make something more convenient that takes a few minutes and can often be done at the same place where one fuels their vehicle.

Josh - they did their series A 7 months ago. They had raised ~ $1m for seed. I am guessing they didn't burn more than $1.5-$2m to fully scale one market and test what the unit economics look like at a small scale. Since they probably had $3.5-$4m in the bank and they chose not to scale to a few more markets, my guess is that either they really found a much better business opportunity, or they discovered that even at scale retention rate/LTV was low.

Webvan was a great idea too... if you were the consumer. Not such a great idea to run that money pit of a business.

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