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For each of the barriers you brought up, have you got any ideas on how Cherry could've addressed them? One trick I've learnt in the past couple of years is that
by rprasad 14y ago
For each of the barriers you brought up, have you got any ideas on how Cherry could've addressed them? One trick I've learnt in the past couple of years is that solutions don't need to be 100%. If Cherry had found solutions that worked 80 - 90% of the time for those barriers, they would probably be doing an alright job of overcoming them.
There aren't any. The problem is that car washing is an extremely low-margin and low-volume business relative to other industries. High margins are measured in the singles of dollars; high volumes frequently means reaching double-digits in customers in a single day.
Cherry's business model actually increased the costs of business substantially by adding in costs for traveling, equipment, employee or subcontractor acquisition, insurance that would apply to infinitely variable service sites, and marketing costs that a normal car wash service would not have to deal with (note: making a distinction between a car wash service and a car wash facility; the two are separate and distinct business models). Thus, economically, it was essentially impossible for Cherry to succeed without first conquering the basic problems that dog existing car wash services.