Business
Pressbox and Tide Cleaners: Vijen Patel. The $1.99 Gamble That Built a National Brand
In this episode of 'How I Built This,' Vijen Patel shares the journey of transforming Pressbox, a dry cleaning service, into a national brand under Tide Cleaners. Discover how a $1.99 price ...
Pressbox and Tide Cleaners: Vijen Patel. The $1.99 Gamble That Built a National Brand
Business •
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Interactive Transcript
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It was a night in Nashville was raining and I was walking to an event to sell dry cleaning and I remember realizing
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I don't want to do this when I'm 45 years old. We had been working for about 1,000 days in a row. We were open 24-7 and
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there was just such a toll that had taken on us from bootstrapping this. You were burned out. Incredibly. And guy I made $40,000. I had friends in private equity who were at this point making partner and making $1 million
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plus per year. I'm at one point calling my dad and saying hey dad when this doesn't work out if this doesn't work out can I borrow some money so I can start again.
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Like not a business but a start life again.
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Welcome to how I built this a show about innovators entrepreneurs idealists and the stories behind the movements they built.
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I'm Guy Raus and on the show today how Vigen Patel spun dirty laundry into a tidy business with press box a dry cleaner that grew to hundreds of locations.
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I'm going to go back to the foreselling to Proctor and Gamble.
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You know how some prices kind of get burned into your brain like a $2 cup of coffee or a $10 movie or if you grew up like me a $1.99 to get a dress shirt cleaned at the dry cleaner.
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That number really stuck even when shirts haven't actually cost a $1.99 to clean for a long time.
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And in a way that number tells you almost everything you need to know about the dry cleaning business.
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Razor thin margins, mom and pop shops struggling to compete and customers like me racing to drop their shirts off on a Saturday morning
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and scrambling midweek to pick them up before the place closes at 6.
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In 2013 Vigen Patel looked at that $1.99 shirt and saw an opportunity not because he loved dry cleaning but because he loved the numbers.
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Vigen actually trained as an actuary then worked in consulting and private equity and when he set out to build his first company he didn't chase a passion project or a dream.
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He chased what he called the least worst idea. That idea was laundry.
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But instead of storefronts Vigen and his co-founder Drew McKenna put lockers in apartment buildings in Chicago.
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Places where young professionals could drop their clothes anytime, day or night and then picked them up a few days later, cleaned and folded.
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On paper the margins suddenly looked a whole lot better without the cost of storefronts.
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But in practice the work was grueling. Vigen and Drew spent years running pickup routes, pitching building managers and hustling to win over skeptical investors.
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But their company, press box, eventually expanded to other states.
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And a few years later it caught the attention of one of its biggest competitors, Proctor and Gamble.
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PNG bought press box, folded it into tied cleaners and today it's in nearly 1200 locations nationwide.
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Now one of the main reasons this story caught our attention is that like Spot Hero and Kinko's copies also brands we featured on the show,
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press box is part of a so called boring industry. It's not a new tech product or a flashy beverage brand, it's dry cleaning and laundry.
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And as you'll hear, Vigen is such a champion of boring startups that he actually started his own VC fund in Chicago to support them.
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Vigen Patel grew up in Chicago in the 1990s. After he graduated from Notre Dame, he took a job as a consultant with McKinsey.
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But the year was 2008 and the financial crisis changed everything for Vigen's cohort of newer cruts.
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And it was interesting because we were the 2008 class and everyone said hey you're going to be able to do these case studies with the NBA or do all these amazing things,
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travel around the world and everyone got there and the economy had shifted and everyone was doing cost cut in in Iowa or whatever it might be and you know,
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being from the Midwest, I was just incredibly thankful to have a job.
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But I think even to this day our satisfaction level of like a cohort of business analysts was probably one of the lowest you ever had.
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And so we had, you know, among us 55 people, I think 30 of the 55 became entrepreneurs, well something around that that number.
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But I at the end of the day, the end of our work always culminated in a PowerPoint presentation.
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And so it just felt like there was something left to be desired.
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All right, so you you're there for like three years or something, almost three years.
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And then you moved to San Francisco to join private equity from tell me about your one of your jobs as a, I'm assuming you're an like an analyst there.
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Correct and associate to to that potential acquisitions, right?
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You're just going through looking at all these opportunities that they might be interested in acquiring.
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That's correct and I focused on consumer.
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And I'll never forget there were some of these brands like kind of you're a colleague, Brookside, Sahale Nuts.
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And we had the opportunity to put investments in and ultimately we didn't get there because we're so analytical about everything and the problem with consumer is that there's a bit of a gut feel relative to other, other areas that you can invest in.
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And so I end up over two years not being able to do any deals.
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But I think sometimes about all those companies we could have backed in that basket.
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And it's probably north of worth more than five billion today.
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Wow. And I realized I mean, I was mediocre at private equity at best because you know, a good private equity analyst is just needs to sit in front of computer all day and just crank on models and decks.
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And I was here and I needed to be with people and create change and change the world.
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And that was the aha of like, oh my, I need to go put my money where I'm out there is like, I need to go be myself.
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I mean, when you are in San Francisco, I mean, this is like, you know, that time, I mean, it's like Uber is starting to make waves and obviously Airbnb is already, you know, really starting to have an impact and Slack is coming out.
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And I mean, there are all of these things.
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Were you following those trends, were you cognizant of them or was that sort of front and center in your mind?
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You know, I would think the answer is yes, but it wasn't. And the reason why I was like, I was in this private equity bubble, you know, all the private equity firms in San Francisco were in one building in one maritime plaza.
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And then I kind of looked at starting a company as like a private equity guy. And I was like, all right, let me think through what would be a good opportunity.
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And there was literally zero to no dream. It was all right. I need to find a highly fragmented industry.
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One that has low technology and no branding. And so like, by the way, the irony is that if you pick those three things up, you actually should result in taxis.
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But as you know, I ended up with dry cleaning. Right. And so it was a different path altogether.
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Well, taxis were obviously there were there was some fierce competition, right between Uber and Lyft at the time. But you're, I mean, you were convinced by this point, because you're there from 2011, 2013.
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By the end of your time in San Francisco that you wanted to start a business time, I'm trying, I'm imagining that part of that was because you were vetting so many businesses.
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And you were listening to all kinds of pitches already in your mind, you're thinking, I'm going to do this and I've got to find something.
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And you had access to all kinds of tools, right? And analytics tools. And so how did you start to search for what that could be?
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I looked at what I had a passion for moderately, right, which was consumer and retail. And I had some edge on that just because I had spent five years on it.
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And then it was like pick the least worst idea. And I'm a right idea of creating chai packets from India. And that probably would have been a better idea.
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Another one was dentures. But at the end of the day, there was something about dry cleaning that got us excited.
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Like actually, to be clear, actually now that I look back at it, our private equity firm was business formal.
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Like I still, to this day, have all these suits and ties and shirts, you had to dress formally. And I remember, you know, we worked long hours.
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And it was a pain point to go to the dry cleaner. And again, think back to 2012, 11. So a dry cleaner was often frequently visited.
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And I remember the only time I'd be able to drop it off would be a Saturday. And that was like, I don't want to go to the dry cleaner on Saturday. I want to go see my friends and then combine that with like this analytical finance math background I have.
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And one of the best things you ever did is over those six months, over that six month process, my eventual co-founder would fly out to San Francisco.
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And guy, we just, I just made an investment deck on it. Like it wasn't even a startup deck. It was like, hey, how would I grade this startup?
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And it was like a 12 page deck, but we put this idea in front of anyone we could talk to. And you can imagine, you know, I think we talked to probably a hundred people over the course of the six months.
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And 90% of them said this is an awful idea.
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All right, let's break this down a bit because this is 2013. And you are, you have this idea. Let's talk about the idea first.
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For the most part, when you drop your clothes off at a dry cleaner, they do not do the laundering of the dry cleaning on site.
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They're just a storefront and there's usually central facilities that service all these dry cleaners. So when people say, oh, my dry cleaner is the best, it's actually not true necessarily because they're all getting it cleaned at the same central place.
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What was the opportunity you saw to quote unquote disrupt that model from the consumer side, the biggest one was the 24 seven access.
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And could you create something? And actually, there was like a little company at the time called laundry locker that kind of tried this out a bit in San Francisco.
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And the idea was to, hey, you know, go here 24 seven. I think it's like, you need like a fob to try to get into the building, but you could then access a 24 seven.
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But then as we dug in, we realized, oh, my not just could we create something more convenient, but this had actually allowed us to eliminate half the cost.
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Because dry cleaners operate 15% margin businesses. And by the way, when you take out the salary of the owner operator, it's like 0%.
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And so, you know, everyone said, hey, why are you doing this? This is a low margin industry. But what we realize is that if we could get some 24 seven access or depot,
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you can get rid of rent and labor on site. And that all is in allows you to operate up 40% margins.
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It wasn't that you were going to be any different from a traditional dry cleaner.
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It was just that access to dropping a close off would be because most dry cleaners would be closed after 5 or 6 p.m. on a weekday.
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Right. And so the idea is you could go there two in the morning and drop your stuff off. And I guess pick it up from the locker.
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That's correct. And we thought our ideal customers would be bankers and doctors and people to see who had longer hours that couldn't meet the dry cleaner hours.
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But this was going to be I'm assuming a tech enabled company, right? Was tech going to be part of it?
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It was, but it was 20% and by tech guy, we were referring to SMS. I mean, it's funny. We, one of the biggest pieces of feedback we would get is actually from people who say they love going to their dry cleaner.
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And we ask why and the simplest response back we like pointing out where stains are and any specific detail request.
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And so our solution to that was actually not even tech. It ultimately became tech. But at the time it was actually put a pen and paper on the side of our locations and a sticker roll.
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And so tech was actually not part of our DNA.
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All right, we're going to get back to that because that comes later when you actually set up the lockers. But, but before that, you're in San Francisco and you're talking to people about this idea.
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You're just trying to get feedback. And most people are telling you this is not a good business to pursue.
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I would say overwhelming, you know, every night out of 10 people would say, Hey, why are you doing this? And in fact, I remember calling the mom and telling her I was going to start this.
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And she cried. And she said, you're doing what? Like you're leaving private equity to go start a dry cleaner.
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And it's not something that like any, you know, traditional private equity firm would ever look at doing or a venture capital firm.
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You know, they would have looked at ways, actually, your ideas. But what was fun about that experience guy was that by being so vulnerable and telling everyone about it and telling all the reasons we'd failed.
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We actually sat on that feedback and then just started thinking proactively about how to mitigate those failures.
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Okay, let's let's go back to San Francisco for a moment because at this time, right, when you come up with this idea as, as is the case with so many different kinds of startups, there were other people working on similar ideas.
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There was a brand called Washio. There was another one called Rinse, which is still around. Were you aware of those other companies? Those are the brands.
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So funny enough, Ajay, who is the CEO of Rinse, we both approached and created dry clean businesses in the same month and had many common friends who said to each other to talk to each other.
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And so we actually, and he's still a friend, we actually got coffee in 2013 to talk about it. And it was great because we made a connection.
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We didn't talk again for three or four years, but he went down a different path, which is pick up and drop off. And I went down the hardware path.
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Yeah, but yeah, we did research. And to your point, Washio was the big one, but I didn't, we never made contact with them because they were, you didn't, they didn't have a locker model.
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You would just put your clothes in a bag and these drivers would drive it to all these houses. So it's not a great model. I mean, it's a less efficient model.
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Exactly. It's a less efficient model. And our solution was more convenient relative to them having to wait for a driver to come. They could just go down, throw it into a locker, text us and go on with their day.
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But tell me about this person that you started it with. Who is name is Drew, right? Correct. Drew McKenna, tell me about Drew and who is he and why did you start it with him?
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So Drew and I went to Notre Dame together. And when I was going to start this, one of the biggest issues in this, in this idea was just how hard it was going to be.
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Yes, it's a giant flaw. And how is some private equity guy going to all of a sudden turn into a dry cleaner. And so we knew that I needed a co-founder period and quickly through some conversations with friends, I realized Drew could be that person.
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Literally, we did an MBTI test early on and we were the exact opposites, which I loved because we were different personalities, but we had a common kind of similar value system.
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And then we dated, right? We dated like we were we were friends, but we weren't the closest of friends. And getting into known over three or four months, I realized we would have different strengths that could compliment each other.
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Okay, so you guys start working. So he moves to Chicago to work on this with you. So he was in Chicago, actually, and this is this is hysterical. I'm probably the only founder ever who moved from San Francisco to Chicago.
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Right. We decided to start this in Chicago. And why why in Chicago? Well, we had advantages there. Drew is from Chicago. I am as well.
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We had some relationships with real estate owners. Drew specifically did that would help us get some early wins. But this was a hard business. And as we thought about who to hire, who we could survive ourselves with, we had a tribe, we had a community in Chicago that we didn't have in San Francisco.
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So all right, you moved to Chicago to really start to work on this. And when you were telling people about it, how are you describing this? Was it going to be a like Uber for for dry cleaning? Like what? How is it going to work for a consumer?
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So at that time, the Uber for X movement was wild. There was Uber for everything. Right. And that was the wash your pitch. That was a rinse pitch. And it was a set of pitched VCs. If this is Uber for, you know, ice cream, whatever, you know, whatever might be.
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I think that was an actual startup. Flour is everything. I mean, it was that. And ours was as well. Except the difference was that we realized because we had a for profit, like we just were so focused on private equity lines of like, hey, we need to make profit.
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And so we were just dogmatic about what we eventually call the un economics. And we put the math on like a rinse model or some of these other models like Washoe.
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Like how are they going to make money? And we did the math and the max transactions you could do with a pickup and drop off service, which have been the true Uber model was four to six transactions per hour.
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And then we realized with our model, we could do 26. And so that was the real like unlock is you know, pitching these measures like, hey, like this thing will make money.
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So you you actually in Chicago started to pitch investors to raise money to do this and tell me about that experience.
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So move back to Chicago 2013 and was so excited to be back home. And I think at the time they're like five to seven VCs. And we pitched them all.
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And the general feedback was like, hey, you're building a nice small business like lifestyle business. I think was the right word, which like still hurts my soul when I hear that.
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And so all of them passed all of them passed. But ultimately guy I was having so much fun. It was the first time in my career where I was just having eight blast.
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And I think Drew and I can find each other and said, hey, there's something here. And it was a lot of belief like this is worth it.
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But it was incredibly discouraging. In fact, it got to the point where after we actually launch an investor came back and said, we do want to invest with you.
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But at that point, we were just so sick of hearing, no, we're like, we're not going to take on any investment.
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All right. One of the things that I'm curious about is the is like how you validated why this would work. Right?
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Like what did I mean, you want to be an actuary, right? And so I guess you put on your actuary hat and started crunching numbers and discovered that if you if you got a certain number of customers, you would be profitable quickly.
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Explain how you how you sort of figured that out. So to me, this is a math equation. You're exactly right. We did research and we said, hey, the average person spends about $40 per month.
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So how many people do we need to get to use our service so that we can just make money. And actually before that even guy, we set up a table on sidewalks.
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And before we spent any dollars on actually any of the piece of equipment, we would just survey people sidewalks where in front of buildings?
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In Chicago. No, we did it at like main intersections and we said, hey, if we were to put a location at your office, would you use it? If we were to put one near your home, would you use it?
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And our initial hypothesis guy was that offices were actually the place to go. And we did the math that if we just get half a percent of people to use our service, we would have taken home two or three thousand dollars a month from each location.
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So what were your, I mean, so your upfront costs were going to be the lockers, right? And let's, let's kind of break this down. First of all, you couldn't raise any money. So how much money did you have to work with?
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We put all of our life savings into it. I had about $120,000 say from McKinsey and private equity. And my co-founder did as well. And we were fortunate we raised like $100,000 of debt from our parents.
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Okay, so the idea what would be there'd be lockers initially in office buildings. And let's talk about the locker first. Like I'm imagining an Amazon locker today that's digital and you know, but this is 2013.
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So what, what were those lockers going to be and how would people access them?
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So you're exactly right. They were simple. We actually called them dumb lockers, but they were dumb by design because that brought costs low. They had a diggy lock on them. And you would just type of four digit code and you turn it.
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And then the only other thing that would make it special was we put a number at the top. So each person, so say a certain building would have eight lockers.
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Yeah, four on the top, four on the bottom. Each of those would be numbered one through eight. You'd go guy drop off your laundry in this, you know, hypothetically office building. And you would just send us a text.
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And it would just be this this one number and you would just say the number three. And that would give us the signal to go pick it up. And we want to keep us as simple as possible.
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Got it. Okay. And then SMS message would go to your phone or to you or to Drew.
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Correct. It would go to us. And we use like a at the time it was called Twilio.
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Mm-hmm. Yep. Still around. And that was it. And what if all the lockers were locked? There was there was no availability.
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That would be a giant issue. And we would add lockers right away because that would be the best issue we could have.
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So when you would if you were ready to drop your stuff off, you first have to go to the website, set up an account, put your credit card details in. And then you could leave your clothes in a locker and send a text.
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Correct. It's funny because today like you look at a model like that and somebody would say, oh, there's just so much friction. But I guess at that time in 2013, 2014 people were willing to do all those things.
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Yeah. I think at the end of the day, you know, you say all that. That does sound painful. But it was still less painful than the alternative.
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And what about price? I mean, was price the thing that mattered or was it convenience? It was more important.
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It was convenience, but it was price on one item. And ultimately, I still think to this day, I don't know if people know how much they pay to dry clean a sweater.
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But everyone knows how much it costs to dry clean a shirt. $1.99. Exactly. And that was the price we were incredibly focused on. All of our marketing said, $1.99 a shirt.
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And actually, I think we started at $1.79 guy because we wanted to undercut to just get volume in. And I believe we had $5 for a dress. And that was the, that was enough justification on the price for people to take a leap of it.
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So let's talk about getting there. So you had to buy lockers. That's right. So we had $340,000 to our name in this company. 80% of a guy went to lockers.
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And how did you get any building to agree to let you install lockers in the lobby?
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This is where the edge in Chicago help. But we, and actually before that, we also started a storefront. So we needed a place to work.
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And we put lockers in the front and we use the back two thirds of our office. And so that was actually our first location. And so it was in Lakeview Lincoln Park.
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And then we started talking to office buildings and gyms. And we tried to get as many office buildings as we could. And we completely failed.
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When we come back in just a moment, Vigen and Drew figure out the lockers situation and learn the basic math of laundry business, which includes a massive pay cut for themselves.
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Stay with us. I'm Guy Ross and you're listening to How I Built This.
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Hey, welcome back to How I Built This. I'm Guy Ross. So it's 2013. And Vigen has just joined his co-founder Drew in Chicago to launch their new laundry business, press box.
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They're going to use lockers to pick up and drop off the clothes. And they want to put those lockers in office buildings.
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To start, we would just call like family members and be like, hey, do we know anyone who's in real estate and has an office building? And we get one meeting and they'd be like, all right, this isn't going to work. But you should meet my friend. And actually another, another favor we asked was actually at Notre Dame.
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But we actually asked at the time they had the endowment to say, hey, we're going to go do this idea. And he so kindly sent 10 emails to owners and developers in Chicago who were Notre Dame alums.
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They were actually the endowment had invested into their companies.
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Okay, wow. And so again, it was like some of these favors were like, all right, we got 10 leads from this engine, 10 from our family, 10 from like our friends.
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Specifically guy, we thought offices were like where we were going to clean up. And we were completely wrong.
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Why people were not like lawyers and finance people weren't leaving their stuff in lockers.
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We quickly found out that no one wanted to bring their draw claim to work.
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Right. And that was when the light bulb went off where we need to find the path of least resistance.
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And it ended up being we soon found out proximity to someone's wardrobe in terms of not even not even in the buildings of apartment buildings, but also in terms of where we go in the apartment building.
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If we can be close to someone's wardrobe, we had a higher ability for them to become customers.
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So you had to be in the buildings and where they lived.
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We had to be in the buildings and our big breakthrough movement moment guy was around the month eight mark.
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And I'll never forget this building. It's called 1225 Old Town. And at the time, this was the hottest property to be in.
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It had the highest rent per square foot. It had a bunch of users who were around the 20 to 35 mark.
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And we knew if we could get them, we could get any residential building in Chicago.
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And they said no for five months. And ultimately we were lucky.
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But we ended up having a lot of friends or friends or friends who lived in that building.
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And we actually had them incessantly email the property manager.
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And I think at the time of like the ninth email, she's like, all right, I'll meet.
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And guy, once you got 1225 Old Town, that's when the model started working.
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How many lockers did you put in there?
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Ten.
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So five on the top, five at the bottom.
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And was there a big sign that said, get your dry cleaning done here?
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I mean, how did you catch people's attention?
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We did a lot of gorilla marketing. So that same idea we had where we sat at a storefront and put a table down and talked to people.
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We did the exact same thing in the lobbies.
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Because what we realized in all the work we did up front is that the reason why I ever wanted to drop off their clothes with a known person
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is because they're dropping off what they love to wear.
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And that gives them confidence.
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And so ultimately when we realize that best tactic is it's not the lockers.
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But it was actually us setting up tables in the lobbies of apartment buildings and offices to say, hey, we're a dry cleaner.
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And this was really, I mean, guy, I think over the course of our entire entrepreneurship, I think I might have hosted a thousand events in lobbies of buildings.
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And that would be really where we convert.
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Let's talk about the unit economics for a moment because you knew that even with 15% margins, well, you could increase those margins because you weren't paying rent for a storefront.
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And did you have to pay rent for the lockers? The buildings charge you?
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No, this was the huge benefit. But we were called in amenity.
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And so as a result, our pitch to all these buildings was you will now be able to charge higher and rent or keep people longer in their buildings.
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And that was enough for these owners to take a chance.
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Because they could say on-site dry cleaning.
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Correct.
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In their advertising.
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So basically you got into these buildings rent-free.
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Rent-free.
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To the Uneconomics, it cost us $5,000 to set up a location.
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That's it.
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And the cost was the locker and then the install.
spk_0
And doing the math, if the average person spends $40 a month on dry cleaning, and you get 25 users, that's it.
spk_0
We realized you generate $1,000 a revenue.
spk_0
You have to spend about half of it to actually get it cleaned.
spk_0
And most of your costs were to pay for the dry cleaning, right?
spk_0
That's right.
spk_0
52% of it.
spk_0
And there's transport costs.
spk_0
And then the other one was actually parking tickets.
spk_0
We ended up on our P&L, having a line item which was parking tickets.
spk_0
You know, I've been to all of Chicago's tow yards.
spk_0
Drew has been to more of them.
spk_0
But the end of the arm marketing was a flyer. That's it.
spk_0
And so we realized our break even mark was around that 26th mark.
spk_0
26 customers.
spk_0
And so if we can just get 26 customers to use us.
spk_0
In one location.
spk_0
In one location.
spk_0
We'll make money.
spk_0
And by the way, that's every month.
spk_0
So over the course of a year, we were going to be cash-ful-positive.
spk_0
And this is when it clicked.
spk_0
And this is when we really found what we'd call product market fit.
spk_0
It was at 1225 old time moment where we broke even guy in six weeks.
spk_0
And once you got that apartment building.
spk_0
You broke even six weeks.
spk_0
In six weeks.
spk_0
So you were profitable within the first year.
spk_0
In the first year, I'll never forget when we hit the $80,000 mark per month.
spk_0
Because 80 times 12 was roughly a million dollars.
spk_0
And we got there at the round.
spk_0
Around like the 15 month mark after starting.
spk_0
And how did you identify?
spk_0
How did you find a place that was willing to work with you to clean the stuff?
spk_0
Because I imagine dry cleaners like taxis are, you know, there's probably some.
spk_0
They're represented by maybe some lobbying groups.
spk_0
I don't know.
spk_0
I don't know how it works.
spk_0
But was there any resistance from the sort of the central dry cleaning facility
spk_0
that was going to clean the stuff?
spk_0
Was there any resistance to working with you guys?
spk_0
So in general, with all these facilities, they have a big fixed cost component, right?
spk_0
Which is labor.
spk_0
People ironing, washing clothes all day.
spk_0
And so they were open to working together with other dry cleaners to process more volume.
spk_0
spk_0
But to your point, our work would always be secondary.
spk_0
So they always wanted to care of their own customers.
spk_0
And then if they had capacity, they would then entertain our items.
spk_0
And so to start off with, we actually used three or four different cleaners.
spk_0
And ultimately we realized that was an operational headache.
spk_0
And this is where again, maybe call it a break, but we realized there was a cleaner in this city
spk_0
that did a lot of hotels.
spk_0
And they had capacity to take.
spk_0
And so around again, the one year mark we started using this facility on Goose Island.
spk_0
And they became our ultimate supplier for ultimately a lot of Chicago as we scaled.
spk_0
So in the first like 12 months, let's say, when you get a text, hey, I'm in lock or one or whatever,
spk_0
who's picking up the stuff, who was driving the cars and dropping the clothes off of the dry cleaners
spk_0
and making sure that you didn't lose clothing.
spk_0
And I mean, who is doing all that stuff?
spk_0
So we, it was Drew and I doing a lot of it, but we ended up hiring two people.
spk_0
And these were our third and fourth employees.
spk_0
And David came on to work with Drew.
spk_0
And Ariana helped me on the marketing and sales side.
spk_0
Drew would be in charge of ops.
spk_0
I would be in charge of sales.
spk_0
And so the team of the four of us did this work.
spk_0
We operated seven days a week.
spk_0
One of the worst decisions we ever made.
spk_0
But we did it seven days a week.
spk_0
And Drew and I would always do the routes on the weekends.
spk_0
And David would do it on Saturday, on Monday through Friday.
spk_0
All right. So you've got this.
spk_0
And now, I mean, as you begin to see more traction,
spk_0
did it become easier and easier to get into other buildings?
spk_0
This is why 1225 Alltown is so, you know, clear in my mind.
spk_0
Is that we then could go to any building in Chicago and say,
spk_0
we work with 1225 Alltown.
spk_0
And in real estate, it's so critical you are matching the amenities of the building across the street.
spk_0
And once we were in 1225 Alltown,
spk_0
the snowballs started to form.
spk_0
And we ended up adding eight new locations a month.
spk_0
And then ultimately guy, we gridded 250 locations in Chicago over the course of, call it three years.
spk_0
And, you know, I go back to this idea of like 15% gross margins, right?
spk_0
For a dry cleaner, what kind of margins were you guys able to hit?
spk_0
20 to 25%.
spk_0
Roughly was our EBITDA Marching if you want to call it that?
spk_0
And how much money were you paying yourself?
spk_0
$40,000.
spk_0
So you went from probably making over 100 grand a year in San Francisco to 40 grand?
spk_0
Yeah, I was making almost $300,000.
spk_0
And I was what, 27?
spk_0
Wow. And threw it all away to make $40,000 for five years and drew the same.
spk_0
So as it was growing and you start to get some significant numbers,
spk_0
you must have also been keeping an eye on competitors that were popping up at other cities, right?
spk_0
Did that worry you or stress you out at any point?
spk_0
It did. And the big gorilla in the room was Washoe.
spk_0
Because Washoe had raised like $18 million or something.
spk_0
Yeah, enormous amount.
spk_0
And it was an AASHING COACHER.
spk_0
Like just it was the boat he was an investor.
spk_0
He was an investor and it was the one that we were terrified of.
spk_0
And again, I'll remember this moment.
spk_0
It was around the year two mark.
spk_0
They decided to come to Chicago as their third market.
spk_0
And guy, I don't think I slept that month.
spk_0
And I'll never forget just the paranoia Drew and I had.
spk_0
I mean, like we don't have nearly as much money as them.
spk_0
You know, how are we going to compete with these guys?
spk_0
And then I never will also forget feeling as good as I felt one month after they launched.
spk_0
And we looked at our revenue and had only gone down by 2%.
spk_0
And that was the moment where I was like, oh my god, it actually does not matter how much money you've raised.
spk_0
I mean, it's wild because Washoe doesn't exist anymore.
spk_0
I don't know the exact story, but it shut down in 2016 and then its assets were purchased as what I've seen.
spk_0
So clearly something must have happened. Maybe they expanded to quickly.
spk_0
Who knows?
spk_0
But that was a real threat to your business.
spk_0
I mean, that was a potential threat.
spk_0
It was an incredible threat.
spk_0
And by the way, you know, they had the funding to go down to a dollar per shirt.
spk_0
And we didn't have that.
spk_0
And all of these customers, users, buildings, they could have switched.
spk_0
But they didn't.
spk_0
They were happy with our service.
spk_0
And they kept using us.
spk_0
Yeah.
spk_0
Let me ask you about the expansion because you're doing well enough in Chicago.
spk_0
So you decide to go to Washington DC next.
spk_0
Correct.
spk_0
And I'm assuming because DC is a dry cleaning heavy town.
spk_0
Yes.
spk_0
And they also had a lot of new construction coming up.
spk_0
But there were two pieces of data that we missed completely.
spk_0
One is that no building in DC could be higher than the capital statue.
spk_0
Yep.
spk_0
And our entire model is built off of density.
spk_0
And two is that we didn't realize how hard it would be to staff our facilities because we're competing versus the government for hourly labor.
spk_0
Our cost for a driver was 60% higher than Chicago.
spk_0
Wow.
spk_0
And also, they wouldn't stick around.
spk_0
We ended up turning through people in DC at two times the rate that we did Chicago.
spk_0
So was the DC market profitable?
spk_0
It was.
spk_0
Luckily, we were incredibly frugal.
spk_0
But we never saw the lift off like we did in Chicago.
spk_0
All right.
spk_0
So back to Chicago, you've got your own, I mean, at a certain point, I think like two and a half, almost three years in,
spk_0
you guys decide that you don't outsource this anymore.
spk_0
You actually want to control, you want to be vertically integrated.
spk_0
You want to clean your own clothing with a plant that you own.
spk_0
And you decide to explore this idea.
spk_0
That's right.
spk_0
So the big trick we realized in our business model was that take 1225 Bulltown.
spk_0
There's 220 units.
spk_0
If we lost a customer guy in that building, our serviceable addressable market now is 295.
spk_0
And so it was so critical that we nailed quality because we couldn't just replace someone.
spk_0
Right.
spk_0
We kind of had a smaller audience.
spk_0
And so for us, quality is what really kept me up at night.
spk_0
And we ended up with our wholesaler and our supplier.
spk_0
We ended up just building this friction where at times, you know, they might, they might have a, a staff shortage.
spk_0
And so all of a sudden, you know, they're delinquent all of our cleaning by six hours.
spk_0
Which then means lower quality cleaning, which means that we then take the hit on our user base.
spk_0
And we did the math guide.
spk_0
We realized that the difference between 98% retention and 96% retention.
spk_0
Even though it sounds small, when you compound that every month, it's astronomical.
spk_0
The difference, I think, is between having 55% of your customers at the end of two years versus 78.
spk_0
Wow.
spk_0
And so we realized that it was so critical for us to be at 98% retention or higher.
spk_0
98%.
spk_0
It had to be that high.
spk_0
When we come back in just a moment, press box guards its customer base by building its own laundry facility.
spk_0
And then winds up competing with one of the biggest companies in the world.
spk_0
Stay with us.
spk_0
I'm Guy Razz and you're listening to How I Built This.
spk_0
Hey, welcome back to How I Built This.
spk_0
I'm Guy Razz.
spk_0
So it's 2016 and Vigen and Drew are taking on a massive project building their own laundry facility just north of Chicago.
spk_0
But to do it, they need cash.
spk_0
So at this point, we probably should have race adventure funding.
spk_0
We should have raised something.
spk_0
Guy, our bank account, I'd get to call every two weeks from our banker because our bank account would go from positive to 300,000 to negative 400,000.
spk_0
And the driver of it was payroll.
spk_0
But how many employees did you have to pay?
spk_0
So I think around this three year mark, we were in DC and then also Nashville.
spk_0
And so I want to say at this point, we probably had 45 to 50 employees.
spk_0
And so we had a huge transportation team.
spk_0
We had a team that would inventory all the items.
spk_0
At this point, we had a marketing team that would set up these events.
spk_0
We had a sales team.
spk_0
And when we decided to insource this, this is where the issue with the business model up front became our asset later on.
spk_0
Because this opened us up for debt financing.
spk_0
And so we were able to buy all this equipment.
spk_0
We bought some of it used, some of it new.
spk_0
But we were able to finance about 80% of our plant using debt and asset back lending.
spk_0
And you just needed a warehouse that was relatively inexpensive.
spk_0
Did you buy the warehouses you leased it?
spk_0
We leased it.
spk_0
And it was really hard to build this plant.
spk_0
And you know, we had to get all these licenses and utilities figured out.
spk_0
We even had to get an architect because we were the first dry cleaner that was in this facility.
spk_0
But once we were up and running, we ended up realizing that we could all of a sudden get rid of this middleman.
spk_0
And so instead of 50% of our costs, all of a sudden going away,
spk_0
all we had to do was pay for our own people and rent.
spk_0
And so again, you know, our margin was typically around 25% of the bottom line, 50% at the gross margin level.
spk_0
Both of those went up by 10 percentage points.
spk_0
Even though now these are your employees running the facility.
spk_0
There are employees.
spk_0
And this was probably a guy though the hardest part is that it's one thing to hire a driver or someone who's to, you know,
spk_0
to consider in front of a lobby at a table.
spk_0
It's harder to staff a presser.
spk_0
You know, I thought we would at the time indeed was out, Craigslist, you know, we'd post these roles and we got no hits.
spk_0
People literally pressing shirts and trousers like you couldn't find people to do those shops.
spk_0
Where would I, I didn't know where to go.
spk_0
And you know, we asked our suppliers if they would work for us and they would say no.
spk_0
And then we finally this light bulb went off that we were looking in the wrong place.
spk_0
You know, instead of looking at it indeed, we decided we just started advertising in Spanish newspapers.
spk_0
And so there's a newspaper in Chicago called Oy.
spk_0
And so all of a sudden, we posted these jobs of this new facility open up in Skokie.
spk_0
And my phone wouldn't stop raining.
spk_0
And we ended up staffing this entire plan in two or three months with incredible people all through this Spanish newspaper Oy.
spk_0
All right. So now you've got your own facility, a bunch of new employees.
spk_0
And tell me a little bit about how you were, I mean, just growing.
spk_0
Was it organic or did you, I mean, were you constantly, because now you've got Waschio and other potential competitors coming in,
spk_0
I mean, when you would go into a building, for example, in Chicago or even in Washington, D.C., presumably they might push back and say, well, you know, we've been approached by Waschio and they're offering us this incentive.
spk_0
That's right. And you know, timing plays such a huge role in everything.
spk_0
But one thing that we got right was that we were on the front end of not just the amenity war, but also the new construction development in all these major cities.
spk_0
But I think the year was 2016 and I believe there were 55 new buildings coming up in Chicago.
spk_0
And guy, I think we were in 53 of the 55.
spk_0
And it was because we just, we just skipped the game overall.
spk_0
We didn't pitch any prop manager. We didn't go to any of their customers. We talked to the owners.
spk_0
And we said, hey, we're in three of your buildings.
spk_0
We noticed your building, this other building.
spk_0
Can we just go ahead and speck these lockers into your architectural drawings now?
spk_0
And then the best part was as we got into new construction buildings in Chicago, D.C.,
spk_0
National was our third market, not just did we get these lockers in a great location where they'd be highly visible.
spk_0
We ended up being able to create behavior instead of change behavior.
spk_0
So someone would move into their building.
spk_0
And as they walk into their apartment, we'd have a gift box.
spk_0
This cost us like $7. But it would be a bag, a water bottle, a handwritten note, and a flyer with our pricing.
spk_0
Those four things. And we would drop off 200 of these at every one of our new buildings.
spk_0
And we slowly realized that we would track this KPI called Revenue Per Unit.
spk_0
And Revenue Per Unit was twice as high at a new construction building versus an existing building.
spk_0
Because people move in, and it's part of the welcome package, and they're like, great.
spk_0
When you set this up while I'm setting up my phone or my internet or...
spk_0
Exactly. And we realized that people are just really reluctant to change behavior.
spk_0
So if you can find them during these moments of change, then you get them, they're set in their ways.
spk_0
Yeah. And then Wash-you can come to them, and then you come to them and they're like, no, I'm good.
spk_0
I'm kind of into my habit. I'm going to use press box.
spk_0
Alright, I think around 2016, you've got another fire to put out, maybe a fire to battle, which is Procter & Gamble,
spk_0
one of the biggest multinationals in the world.
spk_0
They launched their own version of this, a competitor called Tide Spin.
spk_0
And I guess they launched it in Chicago.
spk_0
And so tell me about how you reacted, at least in your mind, when you first heard about Procter & Gamble coming to this space.
spk_0
So luckily we were used to competition.
spk_0
And as Tide Spin started to get going, we kind of...
spk_0
We saw them coming, but it wasn't like we had a different level of fear.
spk_0
It was like, alright, same old, same old.
spk_0
Tide Spin followed the Wash-you model, they started with pickup and drop-off.
spk_0
And around the year mark, I think, for them, they realized that they were not going to make money off of this.
spk_0
Because again, the Uneconomics just don't work, where if you're just doing four transactions per hour for a driver,
spk_0
and you then take up into account this 50% gross margin guy, you're taking home like $5.
spk_0
And funny enough, their order sizes were bigger.
spk_0
I think for that model, you generally have like $80 per order instead of like $40 for us.
spk_0
But still, it was really hard to make money.
spk_0
And the good part guy at this point for our journey was we had 250 buildings in Chicago.
spk_0
And so we'd go to one building.
spk_0
We'd pick up four orders, drop off six.
spk_0
Then we'd drive half a block down the road and pick up three orders and drop off five.
spk_0
Then we'd take a left turn, do that all over again.
spk_0
We could do 26 transactions per hour, where all of our competitors are doing four.
spk_0
And so it's the same cost where everyone has to send a driver on the road.
spk_0
And by the way, because it's 24-7, we got our drivers on the road at like 5 AM.
spk_0
And they were done with their routes at 9 AM.
spk_0
And what was the average cost per order?
spk_0
So the average cost per order for us was around $26.
spk_0
What I'm curious about was you would think that tied, you know, that PNG with their tied branding
spk_0
would just switch to your model, would just say, all right, this doesn't work.
spk_0
We need lockers like press box has.
spk_0
And that's exactly what they did.
spk_0
And so they ended up realizing that pickup and drop off was not the path.
spk_0
And then they went down the locker path.
spk_0
And for about three to six months, they competed with us head to head.
spk_0
They would what would they do?
spk_0
They would go and try to get into the same buildings you were in.
spk_0
They get into the same buildings.
spk_0
They would try to pitch the new construction.
spk_0
And every time we would win because we would have this track record.
spk_0
We've also oftentimes worked with these developers and owners.
spk_0
And if it was an existing building, it's like, why would I take out these lockers
spk_0
and put your lockers in?
spk_0
Like, that's the same thing.
spk_0
And again, press box has done a great job.
spk_0
So I'm not here in complaints.
spk_0
So why would I create my own headache?
spk_0
So I'm wondering now, I mean, by the way, you have, you've got, you've expanded a Nashville,
spk_0
your DC Nashville Chicago anywhere else yet.
spk_0
Yes, so 2016, we were in Philly.
spk_0
And I believe we were just getting going on Dallas.
spk_0
And what was exciting is around that 2016 mark.
spk_0
Partly why we went to DC is that four of our developers in Chicago said,
spk_0
hey, we're going to go build in DC.
spk_0
Do you want to come with us?
spk_0
And then those same developers did that in Denver.
spk_0
And this became our expansion plan is that we kind of just followed our customers.
spk_0
And then that would always lower how much we need to get in revenue for us to break even
spk_0
because we would have a head start versus any competition.
spk_0
And this is still without any outside capital, right?
spk_0
You're doing this all through cash flow.
spk_0
So you must have been thinking this is going to be a national brand.
spk_0
We're going to expand this all over the country.
spk_0
That's our goal.
spk_0
No, even back then, we were just focused on execution.
spk_0
I mean, we had enough confidence that DC was going well, but still it was like death by
spk_0
thousand cuts.
spk_0
Like, it was just barely starting to stay afloat.
spk_0
And so we just had this tension throughout our company's history of like grow,
spk_0
but also be paranoid about quality.
spk_0
And so yeah, there were probably some in cleans of like, you know, we could be a national company,
spk_0
but it didn't feel like it.
spk_0
And did it feel like there was going to be one winner?
spk_0
Like there was the Uber lift wars, right?
spk_0
Going on at that time.
spk_0
Did you feel like one of these companies is going to, is ultimately going to win?
spk_0
Or were you not even focused on that because you didn't see yourself competing with those other competitors?
spk_0
Our view was that if we just capture three percent market share, we're going to be millionaires.
spk_0
And so we didn't view this as a winner take all market because again, we could only sell into high rises.
spk_0
And so if you're in some small building and, you know, Marina and S.F. or Bucktown and Chicago or, you know, Brooklyn and New York,
spk_0
we can't serve you.
spk_0
And so our view is that we knew exactly what our product was for, which was these 25 to 45-year-olds in high rises.
spk_0
And if we could just capture that across the country, that would be our model.
spk_0
And you only needed what percentage of those residents to use your service?
spk_0
10% to break even.
spk_0
Wow.
spk_0
So the numbers were on your side.
spk_0
The numbers were on our side and it was because we were so frugal.
spk_0
We didn't have any money to spend to make any of the upfront cost.
spk_0
Like we would have loved to have invested more upfront to make the lockers and get QR codes and to do all this signage, but we didn't have the money.
spk_0
Did you hire PR firm?
spk_0
Never.
spk_0
Never.
spk_0
So all of the, I mean, because there were, every time you go to a new city, there were articles, right, written about.
spk_0
And so all this was just earn media, earn media.
spk_0
All right.
spk_0
So it's 2017 and Procter & Gamble is really going head to head trying to get into the same buildings you guys are in at least in Chicago.
spk_0
And I'm wondering, and as you're sort of expanding, you're going to move into Philadelphia and, you know, you're in DC and Nashville,
spk_0
I'm wondering why you didn't, the two of you, you injured it at that point say, all right, we have got to do a fundraiser.
spk_0
We've got to go out and raise money because now you're profitable, right?
spk_0
You've got a nice business going.
spk_0
You've got, I mean, you could really raise money on pretty good terms at that point.
spk_0
So why didn't you, or did you start to explore this?
spk_0
So I think two things. One, I think we were still, you know, of a view of like, these guys were never, they were never there for us.
spk_0
You had a chip on your shoulder.
spk_0
We had a huge chip on our shoulder.
spk_0
You know, we tried to be vulnerable and expose ourselves and let people invest and they all said no.
spk_0
And so we had a huge chip on our shoulder.
spk_0
And probably too much of a chip on our shoulder because at that point, you know, we talked about we have a few regrets,
spk_0
but one of them is that we should have raised because at that point, like my homepage for our computer was my bank account.
spk_0
And I only now realize how unhealthy that was because we were so focused in our business that we never actually got time to split on our business.
spk_0
And so this was a, this was a huge issue and it was, it was an issue that we never fixed, but it was around that 2017 mark where we started to realize also like, what are we going to do with this thing?
spk_0
Right? Because as you know, we were not looking at this as like, we were passionate about dry cleaning.
spk_0
You know, one of the first things we did guy in that 12 page deck early on, that investment deck, one of the biggest issues was who are you going to sell this to?
spk_0
And we knew you never IPO it.
spk_0
You would not really be able to sell the private equity because we had come from that world.
spk_0
And so it was always quite logical that we would want to get a strategic buyer.
spk_0
And we actually viewed as a really good sign that PNG was doing work here.
spk_0
And so we were always just actually bite proactive about I always kept our competitors close.
spk_0
And it was, you know, it always be guards up, not tell them everything, but we would always have a relationship.
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And so around 2017 mark, we actually got to know the tide spent team.
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And we just said, hey, what are you guys doing here? I got remember they actually wanted to come to our plant and Drew said, yeah, I come.
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And I was like, absolutely no way you're coming in.
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But we were, we wanted to make sure we knew all of our competitors because either we were going to buy them or they would buy us.
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Yeah. And so because we were just off front about that, whenever there was a PNG conversation, we would be there.
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And we'd say, yeah, we'll make the time for this. Let's make it happen.
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Because from their end guy, they were, they were thinking through, all right, they're at 52% market share of tide.
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And they can't push that much further. And so they've always organically had this journey where if they can't provide the goods for laundry, can they just do your laundry?
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And so they were more curious to meet with us because of how we built press box.
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And then guy, we ultimately around 2017 realized like, hey, we will have no negotiating power with PNG if we don't have anything else on the table.
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And so this is when we did then start having some conversations for additional funding.
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So you started to go around and now you've got some private equity firms who are interested in raising.
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You guys were trying to raise about, I think, $5 million.
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That's correct. And this is where multiple things happen at the same time, but we then ultimately got some, some term sheets.
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And for PNG, they started offering capital to owners to switch from press box to tide spin.
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And how much were they offering?
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You know, we don't have it know, they also have numbers, but I think it was anywhere between 10 to 25,000 dollars.
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They were going to pay these buildings 10 grand to bring on the tide blockers.
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Yep. And switch from us.
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And it makes a ton of sense because from them, their math they're doing is again, build or buy.
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Do we should just give tide spin more money or should we buy or something special here?
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And ultimately, all of our partners except for one said no thanks.
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And that meant an incredible amount to us.
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And still I get emotional thinking about it because we had this trust that was embedded with all of these partners that have been compounding over five or six years.
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So while you're doing that, you get a, from whatever you get an offer from PNG.
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They basically say, all right, we want to acquire you.
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But I think their initial offer was like a low ball offer.
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Yeah, we, we ended up with a couple of term sheets for funding and PNG had expressed interest.
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And they lowballed us a couple times.
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And I remember the third time Drew was a little bit fired up and upset.
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And I think within 20 minutes of the response had her acted a term sheet and sent it back to them and said,
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we're going to go ahead and sign this term sheet.
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We look forward to competing head to head.
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And I'll never forget, I was next to my wife and she's like, don't you just want to talk about this maybe for a second?
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And she was right because it was like, it would have been life changing money.
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But what I value so much about Drew is how principal he was, about how, how we had built something of value.
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And yeah, maybe we should have taken longer than 20 minutes to respond to it, but we, we didn't.
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And I think a few hours later, PNG, they said, give us 24 hours and, and we'll come back with something.
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And, and we ultimately decided to sell.
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And you and Drew go work for, for PNG.
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We'd go work for PNG and they would rebrand press box to tide cleaners.
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It was a short debate about seven minutes of which brand name was taught was stronger.
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Yeah, tide one.
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And the tide spent team would work for us and we would end up running the urban division of tide cleaners in which they wanted our model to go national.
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Wow. From every end, I mean, it sounds like from virtually any perspective, it made sense because they were aggressive.
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And they had certainly had the money to pull into this if they really wanted to go after this business.
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You saw that there were opportunities, but there are also potential pitfalls.
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And so partnering with the big one of the biggest multi-nationals in the world would enable you guys to really superscade.
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I think that we were able to use that as a whole, but to be able to take care of this business too.
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100%. And we know we wanted a home.
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Right? I think what kept us up at night guy was, it was a night in Nashville was raining and I was walking to an event to sell dry cleaning.
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And I remember realizing, I don't want to do this when I'm 45 years old.
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Like, we need to find a home for this, and it doesn't have to be now, but there has to be some longer vision here.
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Why did you say that to yourself? What was it about? What were you feeling that gave you that
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that impetus to say I don't want to be doing this at 45? You know at this point we had been working for
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about 1000 days in a row and I'm not joking like we we worked seven days a week we were open 24-7.
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I had missed friends weddings I stopped getting invited to friends birthday parties because I would
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just be no show and this path of us building just took a huge toll on our life you know every night my
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wife would come home and on the weekends and she was a resident in med school and you had no kids yet right no
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kids no kids and she said let's go out on Saturday night and like I want to see my friends and I'd be like I
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I am so exhausted that I can't do that and there was just such a toll that had taken on us from
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bootstrap in this that we just wanted to make sure that this wasn't our permanent state you were burned
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out incredibly and guy I made 40 thousand dollars you know I had friends and private equity were at
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this point making partner and making you know a million dollars plus per year I'm at one point calling
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my dad and saying hey dad when this doesn't work out if this doesn't work out can I borrow some money
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so I can start again like not a business but to start life again my wife and I are first trip we we were she
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was a resident I was this dry cleaner we wanted to trip and so we went to Kansas City because it was where
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we could find spirit airlines flights and we found a hotel on like some website and like the all
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together the trip cost us five hundred dollars that was our life and I just didn't know what the end
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state would be and we were incredibly burned out so the deal with tide was wasn't just obviously
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wouldn't just change your life financially but it was a real it was a lifeline yeah like I think we
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would have we would have probably you know found another purchaser another dry cleaner to sell to
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but they never to match the terms or the capital available and it was an incredible alignment that
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led us to that opportunity how long because you were acquired in July of 2018 so when you
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now transition becoming a PNG and play how long did you stay with the company we stayed for two
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years and in fact they wanted me to stay longer and I had a great experience like I we not just
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we have capital but drew and I could shine you know I could finally for the first time I made a
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PowerPoint slide again and you know all of our employees who were making 15 20 25 dollars an hour
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because we didn't have more capital also they got a pay raise we made some like actual salary
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didn't make a lot but we had like a real salary were like I could you know pay rent not from savings
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yeah yeah so we had this this two year experience under PNG it was great and finally like our
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earn out had ended and around then there was also this thing called COVID and we got
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guy our last earn out check March of 2020 and so the world was falling apart our business right you
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could think about dry convalumes our business had had a wall and was starting to see some real
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head in terms of what people were wearing and I was somehow in this sanctuary in Chicago with
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capital and with free time and it was a wild world to be in yeah but I mean I guess after
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this time around this time you you took some time off like quite a few months off just to take a break
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from from all that and then you eventually kind of jumped back into things you found a venture firm
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called the 81 collection and and I guess you're focusing on something pretty specific which is
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investing in companies like press box basically like boring industries right companies that
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really don't get a lot of attention from VCs right yep we did some math on this recently guy and
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there's about 3,400 early stage or early investing firms and about 90% focus on software yep leaving
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only 10 to 20% to fund things that are quite critical to our society and even in that group
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half are not of an active anymore and I noticed that everyone in this technology world was continuing
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to look for the same thing they were all looking for the next asset light employee light cloud-based
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unicorn and then I look back at my own experience guy and I'm like wait we built the opposite you
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know we built this plant up in scoki we ended up having these assets all across the walls of America
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bolted into the walls of all these buildings and we also built a good company but in a completely
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different way you know a lot of our employees who originally started making 15 20 dollars an hour
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as the business grew they started making 50k a year 75k a year and having gone to their
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weddings and seeing them by homes and in many cases even start their own businesses we move people
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from lower class into middle class yep and I realized this is a giant hole in our economy you know
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we're in the greatest economic period in global history but the profits are going to 10,000 people
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and so that was the inception of the 81 collection yeah I mean when I think of like boring businesses
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or businesses that are unsexy like I think about in high school there was a there's a brother and sister
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in their family owned a mortuary and they were like the richest kids in town and some mortuary but
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it's a I think funeral homes are profitable businesses mortuaries are profitable like right am I
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right about that we just recently did an investment impact cremation and we were blown away 80%
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EBITDA margins well and I have to imagine there was a similar profile with the end of life space yeah
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so now you're looking at these sort of quote unquote boring businesses right like
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what are some other I mean I think of like car washes or laundromats or like are you are you
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looking at industries you're looking at specific businesses like how do you evaluate where you
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want to deploy your capital you know we've realized these opportunities are everywhere you know from
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dentistry you know we looked at recently in property tax appeals we've looked at pediatric services
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like if there's all of these industries that are frankly they're oversubscribed from private
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equity and buyouts but they're completely under subscribed from technology and innovation and
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you know what was the last time you went to a doctor's office and it was newer or you know a more
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petition and it was newer their integral but they're 40 years behind best practices and so if we
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think about some stuff that's going on right now it's important that we lift these industries which
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then will lift these economies yeah um Legion when you think about the the journey you took in and the
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outcome how much of of of it do you attribute to the work you put on the grind and how much you think
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had to do with luck and timing I think a luck plays a huge role in our life and timing and luck
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played a huge influence and not just the exit timing but the multifamily wave the new construction wave
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and so I think there were a lot of forces that we benefited from I used to think 80% of it was hard work
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smarts great I now think 80% of it was luck
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that's Vigen Patel co-founder of press box now known as tied cleaners hey thanks so much for listening
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to the show this week please make sure to click the follow button on your podcast apps you never
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