“Let’s, Like, Demolish Laundry”
nymag.com
nymag.com
That seems like a really precarious position for those startups to be in. First there's quality-control: the #1 thing that's going to wreck your relationship with a laundry customer is if you mess up their clothes, and if all the clothes-handling is outsourced, how much can you do to prevent that from happening?
And second, if all the value you bring to the table is a thin layer of code over someone else's service, at some point that someone else will just write their own app and cut out the middleman. "Climbing the value chain," the MBAs call it -- start off as a provider of outsourced services to companies whose executives' noses are too high in the air to do their dirty work themselves anymore, and then slowly shoulder those companies out of the way by establishing direct relationships with their customers at a lower cost. It's a strategy Asian hardware OEMs have been pursuing with success for decades -- there's no shortage of people who used to be IBM and Dell customers who are Lenovo and Asus customers now.
Costco distributes food under the "Kirkland Signature" brand, competing with its own suppliers.
Uber was started by using a towncar service and getting cars dispatched. They now hire their own drivers directly.
Old fashioned steel companies were famous for owning the entire supply chain, all the way from the coal and iron mines and the rail roads through the steel factories.
Google is (attempting) this move by creating a review service to eat Yelp's lunch and displace them as a supplier of reviews to people searching Google.
Netflix creates House of Cards to compete with its own suppliers of movies.
You can also see this at your local grocery store, they have their own version of every major product at a discounted rate.
I worked in the past at a supplier that labelled goods on the same packing line for different grocery retailers (QC and the label being the only differentiators).
It seems like you want to have your cake and eat it. You want to criticize these guys for out-competing small businesses, but you also want to claim they aren't really doing good business, that they are just wasting their investor's money.
Not OP, but small businesses have to use operating margins to make payroll and pay for capital goods. 'Startups', through what essentially boils down to predatory pricing, can burn through investor cash to acquire customers leaving the entire market at a loss.
NYMag actually does a decent job explaining it a bit:
http://nymag.com/daily/intelligencer/2014/04/problem-with-pr...
It's market manipulation (but not the type that rises to the level of impermissible market manipulation).
It certainly seems like Amazon is beginning to exercise their strength as a monopsony to gain unfair advantages and extend their business into new areas without actually competing on merits.
As an emporium of everything, Amazon already has a distinct advantage. Even if prices are higher on Amazon than other e-commerce sites, it makes sense for me to use Amazon because I can get 2, 3, 4 products shipped at once. That can be a big saving.
Additionally, Amazon subsidised widespread free shipping on low-ticket items for many years, in the UK they have only recently gotten rid of it[1].
That free shipping policy, while great for consumers in the short term, did starve out a lot of their competition.
And of course, the larger Amazon gets, the better shipping rates they can negotiate. My orders are now delivered to me by a "Amazon Logistics". It seems they've finally achieved full vertical integration.
If the business fails, then it has disrupted existing businesses for no gain. But if it becomes extremely profitable, then presumably it has made some cost savings in order to be able to do so, and so deserves these profits.
If the average business is profitable, then the investment is justified, both for the investors, and from the point of view of society as a whole.
The same way venture funded startups destroy bootstrapped, profitable startups: by massively outspending them.
Venture backed companies can get away with it for as long as investors will support them, regardless of how profitable their business may or may not be.
Even if they're not ultimately viable and fail, the pressure can be enough to crush the viable but not venture-funded businesses in the interim.
As such, they can 'disrupt' stable markets that are largely profitable and efficient, and that basically do not need disruption, by throwing tons of cash at them. Most of the time these ventures are not profitable (though they still disrupt the market - negatively!), but the occasional hit makes up for that and makes the strategy net profitable for the VC, even as 90% of what he invests in flames out.
If the VC is profitable, then the average venture is profitable, and therefore, on average, they have a positive impact on the markets they are involved in.
EDIT: in case it wasn't clear, every use of "average" by me refers to the mean, not median. So 10% vs 90% doesn't matter as long as the 10% is high enough.
But it's still a loss for society because now we don't have those 9 small businesses or their 9 "disruptive" replacements.
> are there any nationwide dry cleaning chains? What is the markup on dry cleaning? How successful are the best dry cleaning shops?
These all seem like bigger knocks on the viability of Wash.io et al than anything else.
> And, as mentioned, they lean towards being run and staffed by immigrants. They can make a living, but I would doubt it affords them enough of an income to run a silicon-valley startup.
Putting aside the "Those People don't know how to make money like we do" argument, this strikes me as short-sighted. Because clearly the startups think there's enough money in laundry to support Silicon Valley lifestyles, right?
Of course, they could be wrong about that... but again, in that scenario I'd be worried more about the future of the startups than of the people actually doing laundry at scale.
And restaurants don't have the means to produce their own restaurant management software, or the software stack necessary to enable deliveries. But these two features are commonplace in restaurants because of white-label middleware providers.
Here in NYC I've been seeing more and more restaurants advertise their own website as a way to order delivery, as a way to get around Seamless/GrubHub's per-transaction take, and offering discounts to switching to their platform.
Both directions are viable. Wash.io and their kind can, with significant capital, eventually do laundry themselves and eliminate the individual laundry shops entirely. Likewise, individual laundry shops stand a realistic chance of purchasing middleware and cutting out the aggregator frontends.
Many successful companies [citation needed] have been built by immigrants.
Yes:
Ebay and Etsy also aggregate lots of sellers along with lots of buyers, which makes it harder for any one seller or buyer to corner their end of the newly created marketplace. But from the article, it sounds like several of the laundry startups are all really just frontends for Wash Then Fold. That gives WTF (hey, I just realized how clever their name is) a pretty fair amount of clout over them all.
If that's the case, it actually suggests a pretty clever business strategy for WTF: let the startups burn other people's money proving the market and finding out what sort of features people want in a laundry app, and then once that's established swoop in and do the same thing yourself. Free R&D!
I agree a laundry startup should definitely be on top of quality control. Also, doing the laundry makes for a much better story. :> Imagine local news footage of thin dudes with sarcastic mustaches and tight jeans moving stuff from washer to dryer. That's gold.
$1B in revenues if you count them the way GRPN does, and approx $35M if you count net revenues.
http://www.bloomberg.com/news/2013-11-12/etsy-tops-1-billion...
> They chose the name ninjas in part to signify the company’s relationship to Silicon Valley, where the title is handed out freely.
Just like Canadian engineers complain about the term "software engineer", I hope there is some remote Japanese ninja clan grumbling that "these guys didn't even pass the ninja board exam!"
The idea that the guy who delivers my laundry is a "ninja" is just cringeworthy to me. Maybe it's a SF thing.
Isn't that kind of the point of a ninja?
To call yourself an engineer you need an Engineering degree from a qualified institution (4 or 5 years), at least 2 years of apprenticeship (effectively), and to pass a difficult examination.
They're not typically huge fans of people who haven't done those things calling themselves "sanitation engineers" or "software engineers" instead of "janitors" and "programmers". The argument I usually hear is that it undermines their profession; people can hold the work of an engineer to a particular standard. If suddenly I can say "oh, I'm a software engineer" without anything backing that up, it damages the reputation of "engineer" if I behave poorly.
Unfortunately some higher ups don't seem to understand what the title engineer means. I have a formal comp sci education and I have heard things like "We can't pay you $x, you aren't even an engineer!".
Walk into an interview with a ring on your pinky (I am serious) and you have an edge on the field.
However, this is only for someone offering engineering services directly to the public. If you do engineering work for an employer, then you enjoy an "industrial exemption." At my workplace, we design stuff, then the design is checked by a third party (such as a regulatory approval outfit), which provides a technical report signed by a licensed engineer.
When people start their own side businesses, they call themselves "technology," "research," and so forth.
From what I've observed, remarkably few engineers do any engineering, such as determining appropriate strengths of structures, etc. Most product design work seems to be done by trial and error.
[0] Lawyers, on the other hand, undergo very extensive examination, and they can only practice law if they are members of the Ordem.
Calling yourself an engineer without a license is like calling yourself a doctor or a lawyer without a license - it's a crime.
Again, software engineers are a little less troubled than say civil Engineers, but you should expect that a potential employer asks to see your dimploma/certification at job interviews (I have been asked that several times, and have asked it from candidates as well).
Well, I wouldn't call it difficult. If you paid attention at all in those years of school and apprenticeship, you'll waltz through the exam without even studying.
There are universities that offer degrees in Software Engineering here in Canada, and it is officially an engineering accredited degree, but in practice I've never met a P.Eng in software. This is relevant since one of the steps in getting a P.Eng is apprenticeship... and if you have nobody to apprentice under? Then you've got no P.Eng.
I'm sure they exist, but I've never met one.
/Systems control engineering grad, but no P.Eng and I just do code-monkey work.
Especially when you look at recommendations that on software engineers with a P.Eng should be able to do any sort of software architecture, and only easy-to-follow tasks should be doled out to the other developers. (I can't find supporting links to this now, but have read these proposals in the past)
In much of the United States, however, the term is not protected. You may be able to call yourself a software engineer without having any training or experience whatsoever.
This. It feels like we are just trying to solve the smallest problems that will make us millionaires. With the resources available, why not tackle something a bit more fundamental than laundry?
The other side of this "wholly unnecessary"-business, is that with rising standards of living, necessities are already fairly well provided for, so it is quite obvious that any future desired consumer good will be mostly in the unnecessary category. A funny read about these types of things is "The Idea of Luxury: A Conceptual and Historical Investigation" by Christopher J. Berry, where he describes 18th century philosophers discussing what is luxury (i.e unnecessary) and what is necessity. They end up with a paradoxical example regardning the scant clothing of "savages" (that is non-europeans in warmer climates), and cannot resolve the fact that despite this clothing being really primitive by their standards, it is not strictly necessary for survival, or even most other activities, so they must conclude that even that is just luxury.
Option 2: Form a single company where you have to manage that entire group toward a single goal, take all the risk, probably pay some non-negligible hardware costs if the problem is interesting enough, etc. Then you either solve the problem or you fail utterly, and even then you still get to find out if anyone really wanted the problem solved in the first place, so you can still fail utterly. Then once you get past that, you can deal with patent trolls and copycats, and for each case you have about 50% probability at best of getting any kind of justice at all.
Option 3: Do the first to fund the second. Sadly there is only one Elon Musk, though.
To put it another way, we have a new tool, all of this is just testing this new tool against the world to see where it works and where it doesn't.
Making it easier for someone else to do your laundry so you don't have to is not moon-shot innovation. It's not worth doing.
Now i'm feeling the creep of excess crap again. Entertainment systems I don't use. Drawers of clothes and shoes, racks of jackets and suits I don't wear. A small mountain of various bags, boxes, knick-knacks, toys and other junk I haven't looked at in 6 months. I tried to live without a smartphone for a few months but it was just too fucking convenient, and CHEAP at $70 cash! I'm back on the Android again.
Why is this seemingly the fate of all modern industrialized middle-class Americans? Like George Carlin said, a house is basically just a place to keep all our stuff. But why we need all that stuff, while the majority of the world doesn't seem to be so materially obsessed, I used to think was anyone's guess. Now i'm starting to think the hedonic treadmill might be a kind of social disease that needs to be treated more seriously.
The alternative is just blunt consumerism - assuming I can buy things when I need them, and constantly being at the mercy of price-gouging suppliers.
I don't even know why you'd reach the conclusion that you shouldn't have useful things - i.e. a smartphone.
A lot of things are useful. I'm sure there's a gadget out there that will wipe my ass for me and tell me what I had for dinner. Doesn't mean I need it, though. I think a simpler life is probably a happier one, and the things we find useful are often just used against us in some way or another. Instead of focusing on the things we could have that would make our lives better, perhaps we should focus on what truly matters and try not to use anything we don't need? Just an idea anyway.
My idea of a fun life has evolved over time. I used to think drinking beer, eating pizza and playing video games was the pinnacle of human achievement. Now I try to practice zen laundry.
It's hard to get myself to do the things that I don't feel like doing. But when I actually start doing them, an amazing thing happens. Doing laundry becomes a tiny meditative practice. I stop and consider every action of what i'm doing, and focus just on the one task at hand. The rest of the world melts away.
What would I be doing if I had someone pick it up and drop it off? Probably watching hulu, or going to a bar, or I don't know, wandering around looking for entertainment. When i'm doing laundry, I am actually living, doing something transformative and applying myself to a life skill that can only improve with time. It's finding meaning in the things that I need to do in life, and afterwards, when I finally do that relaxation activity, I appreciate both more.
I'm not sure I see the difference. Plenty of hobbies involve learning and improving at that hobby.
That said, if you're running a business described as "uber for laundry", hiring "ninjas", and paling around with Mila Kunis and Ashton Kutcher, you've already forfeited the right to be taken seriously by anyone.
That's, like, the point.
A good strategy is to wash towels and pants yourself (these are heavier and therefore costlier to wash, and relatively easy to fold and put away yourself), and give the shirts and jackets to wash.io to wash, press, and fold.
> "One Wednesday morning this spring, after staff at Washio had gathered for their daily “stand-up” meeting—a ritual suggested in the Manifesto for Agile Software Development, a 2001 work-processes manual that advocates keeping employees on their toes by having them give status updates literally on their feet"
What an absurdly overwritten way of saying 'at their morning meeting'.
As a reader I felt my time was wasted. Some explanation was in order, but I did not need to know the origin of the technique. "Work-process manual" is snooze-inducing.
Rewritten:
This spring, after staff at Washio had gathered for their daily "stand-up" meeting–in which employees are kept on their toes by giving status updates literally on their feet–operations manager San Nadler broke some bad news.
This draws the reader a bit into the meeting and explains what is meant by a "stand-up meeting" without bogging the reader down in details or the "philosophy of software development." If that philosophy was important for the author to communicate, it really deserves its own paragraph.
How about people drop all the BS and just learn how to properly run a meeting? The gimmickry of the standup is a covert way of saying "no one here trusts anyone else to exercise restraint and common courtesy, so instead we have to come up with these harebrained schemes to enforce it".
The tribal knowledge in startup management is to half-ass a blog post you once read about how to manage employees. Why would someone invest valuable mental cycles making a company run better when they could be planning their exit?
First they front load with some great jabs at startups and the hedonic nature of man to get you interested, then call back to them just before they expect you to get bored.
The pacing is a little slow near the end, but otherwise the writing here is quite good.
At first I thought I had just imagined it had gone under, but apparently not: http://techcrunch.com/2014/01/06/prim-laundry-shuts-down/. Seems strange to not, you know, email your customers again if you decide to resurrect a product.