4 ms·

>On top of that, Washio has seen fierce competition over the past few years from the likes of Flycleaners in NYC, Rinse, and Cleanly, which is already operation

>On top of that, Washio has seen fierce competition over the past few years from the likes of Flycleaners in NYC, Rinse, and Cleanly, which is already operational in New York and launching in D.C. in the next few weeks. 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.

peterbonney 10y ago
>They raised more funding so it's a matter of time before they all die? 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.
- trhway 10y ago
  > If you live in a major city, your local dry cleaner already has pick-up and drop-off service on-demand. 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 :)
  - wott 10y ago
    > We'd see garages in residential neighborhoods full of washers/dryers, without permits, etc... Using city water and plugged on the neighbours' electrical power line.
- ghaff 10y ago
  I'm not sure how capital-intensive it is; there's probably a fair bit of (low-cost) labor. But, yes, to all your other points. I'm not sure what about the current services is most places can really be significantly optimized from either an efficiency or a customer experience perspective. 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.
bcherry 10y ago
It looks like Washio was operating in a lot of cities. None of the others are operating in more than two markets. 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.
- in_cahoots 10y ago
  This seems to be a pattern I see with many on-demand startups: 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?
  - madebylaw 10y ago
    Does Netflix or Amazon count ;-)
  - dilemma 10y ago
    We don't know yet if Uber will manage to avoid phase 3. In China, they didn't.
fastoptimizer 10y ago
> Better operational efficiencies? 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.
chris_7 10y ago
I haven't used any of these, but I have experience with seeing FlyCleaners operate in Williamsburg, so it could be that Washio drivers were less willing use bike lanes as parking spaces and believe in stop signs, yielding to crosswalks, and speed limits.
- gkop 10y ago
  Can confirm that Washio was more than willing to be a shitty neighbor in SF; they abused the heck out of their 14th St. site, parking on the sidewalk and double parking all the time, leaving discarded Washio-branded packaging on the street. Good riddance.

peterbonney 10y ago

>They raised more funding so it's a matter of time before they all die? 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.

trhway 10y ago
> If you live in a major city, your local dry cleaner already has pick-up and drop-off service on-demand. 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 :)
- wott 10y ago
  > We'd see garages in residential neighborhoods full of washers/dryers, without permits, etc... Using city water and plugged on the neighbours' electrical power line.
ghaff 10y ago
I'm not sure how capital-intensive it is; there's probably a fair bit of (low-cost) labor. But, yes, to all your other points. I'm not sure what about the current services is most places can really be significantly optimized from either an efficiency or a customer experience perspective. 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.

bcherry 10y ago

It looks like Washio was operating in a lot of cities. None of the others are operating in more than two markets. 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.

in_cahoots 10y ago
This seems to be a pattern I see with many on-demand startups: 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?
- madebylaw 10y ago
  Does Netflix or Amazon count ;-)
- dilemma 10y ago
  We don't know yet if Uber will manage to avoid phase 3. In China, they didn't.

fastoptimizer 10y ago

> Better operational efficiencies? 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.

chris_7 10y ago

I haven't used any of these, but I have experience with seeing FlyCleaners operate in Williamsburg, so it could be that Washio drivers were less willing use bike lanes as parking spaces and believe in stop signs, yielding to crosswalks, and speed limits.

gkop 10y ago
Can confirm that Washio was more than willing to be a shitty neighbor in SF; they abused the heck out of their 14th St. site, parking on the sidewalk and double parking all the time, leaving discarded Washio-branded packaging on the street. Good riddance.