Startups To Start Noticing: Cleanly
kaylee | Mar 31, 2017 | 10:30AM |

Who doesn’t hate doing laundry? Even though I have a washer and dryer in my basement I always and forever wait until the last second and then I’m even worse when it comes to folding. Shirts and pants will sit on my desk for a full week before I finish folding them and putting them away. I hope you’re a less garbage person than me, but considering almost all of my friends and coworkers complain about the same things, I feel safe in assuming you are not.

Which is why I have some very exciting news for you. You don’t have to do laundry anymore. No, this doesn’t involve buying an infinite number of clothes (although, I guess you could technically do that if you hate the environment and are also made of money), all you have do to is download the Cleanly app (also, try and make sure you have money). Press a few buttons, give them some information, and a person will show up to take your laundry away. Just like magic, they’ll come back with your clothes so clean they could possibly be brand new.

We were obviously enamored with this concept from the get go (never underestimate our laziness) so we called up Tom Harari, one of Cleanly’s co founders to talk about making laundry magic, their expansion from New York to D.C. and why people in this city love dry cleaning so goddamn much.

Can you tell me a little bit about Cleanly’s origin story?

I moved to New York six years ago, to Brooklyn, for a job with Omnicon Media Group. I had a very funky brownstone apartment with a garden in the back, but alas, no washer and dryer. After two weeks of just killing myself at work with very little time for chores, I ran out of clean underwear and I was like, “How the hell does anyone get laundry done in this city?” Friends at work put me onto this concept of pickup and delivery, which is really common in New York. Lots of local laundromats do pick up and delivery… Which I thought was fascinating. I could just call someone and they’d pick up my laundry, do it for me, and then bring it back. In practice, the actual experience was often really inconvenient, very frustrating. At the time, I think Uber had come into New York and I think Instacart was starting and it just kind of made sense that a lot of these industries were going to become more tech enabled. Laundry just seemed like a very obvious industry that was going to be taken over by some kind of tech.

The more I started looking into it and the more I started reading about it, I became very obsessed with this industry. It just finally hit me and I said, “I have to do something.” So a good friend, who is my co-founder now… His background is in operations management, I kind of pitched him the idea and he said, “Let’s build it together.” We brought on a third co-founder whose background is in building a large scale supply chain and logistics technology systems for the Israeli military. So we basically built the first version of the app in a week and a half and somehow convinced some local papers to write about us even tho we were just three founders in a coffee shop.

Orders started to come in and we just went out and started picking up people’s laundry ourselves and were doing all of the deliveries. Over time, the model changed. We started to learn more about where the big inefficiencies were, but that was kind of the origin story. It all culminates in that we had applied to Y Combinator, which is a prestigious startup accelerator in Silicon Valley. We applied three times, we were rejected twice and then the third time they flew us out to Silicon Valley. We met all of the partners there, pitched to them and then ended up calling us that night saying that they wanted to work with us.

What sets Cleanly apart from other laundry delivery services? What are the features you provide that they don’t?

Where we are today is night and day back from where we were when we started. Now we’re the only ones who offer a one hour window of delivery, which is very aggressive. Fresh Direct, which is a really popular grocery chain in New York, they only offer a two hour window. Cable companies are notorious for giving you four or five hour windows. We’re very aggressive and really try to hit those one hour windows all the time. We also do pick up and delivery when you’re actually home, so early in the morning and then late at night, not during business hours when most of us are working. Beyond that, there are a bunch of features and services that we added.

For instance, our rush delivery service is the only one that offers same day or overnight delivery for wash and fold. So you give it to us in the morning, you get it back at night. You give it to us at night, go to sleep, then you wake up in the morning and your clean clothes are at your doorstep. We’re the only ones who offer a subscription service, so think of it like an Amazon Prime for laundry and dry cleaning. So you pay a monthly subscription fee and you get a whole host of benefits and perks that end up saving you something like $400 or $500 a year, based on our calculations if you’re a regular customer. We’re constantly pushing the boundaries of how much choice we can give you as a consumer. If you have sensitive skin, if you want hypoallergenic, if you want to choose different wash temperatures for your whites versus your colors, all of those things are done through technology. If you have a stain on one of your blouses, for dry cleaning, you can snap a photo of it, right in the app, and then circle where the stain is, just like you would in Snapchat. That image will go through our entire supply chain all the way to the crew that does the dry cleaning. So we’re really pushing the envelop in how we can use technology and all of the supply chain processes to deliver the really exceptional experience that customers expect.

How do you go about studying people’s laundry habits and deciding what new features you’re going to implement?

So we collect a ton of data, not to scare anyone, but we know what brands you’re sending in, what sizes and all of that is done for us to get smarter. So when our drivers are on the road, when they enter your building we know if it has a doorman or not, whether there’s an elevator or not, how much time it takes the driver to get from the entrance of your building to the door, so we can optimize that drivers route in the future and get even smarter about how many pick ups he or she can do in a shift. We also do a ton of surveys and we’re always asking for customers to give us feedback. Things like same day and overnight were some of the most requested features for a long time. It’s not done, this doesn’t exist. You can’t find any local mom and pops, maybe one or two of them might, but it’s not something that’s common. So we really had to think backwards. If we wanted to pull this off then how would we do it? It took several months of thinking through operation challenges and technology challenges, eventually we rolled it out and it’s been a huge hit. A significant portion of our revenue comes from people choosing same day and overnight.

So when you’re collecting and sifting through this data to come up with new features, do you ever notice anything surprising?

There’s always things that will come up. I’ll give you an example with Washington D.C. In New York, most of the apartments don’t have a washer and dryer. 85% of apartments in New York don’t have a washer or dryer in the unit. So it makes sense that most of our orders tend to skew to laundry with a little bit of dry cleaning. You might send us two weeks worth of laundry and a little bit of dry cleaning. That’s a typical order in New York. We knew it might be a little different in D.C., we weren’t sure exactly how much, but it’s almost entirely reversed. Most of the orders that are coming in are dry cleaning with very little wash and fold laundry. It’s such a suit and tie town, right? So therefore the average order value is one and a half times higher than in New York. Things like that are completely changing the entire model for us. That’s why we went to D.C., we really wanted to prove it would work in a completely different town.

So in the press release you guys sent me, you sort of tout your quality over the speed of your operations and you kind of make fun of the startups that pop up and call themselves the Uber of Y or the Uber of X, has that been a successful marketing technique for you?

It’s funny that now there is a marketing angle to it. When we first started we made a very calculated bet that we did not want to be on demand. We said that it makes no sense for this industry. How often do you get a stain on your shirt and you’re like oh no I need the dry cleaner to come in the next few minutes? It just doesn’t really happen. It’s more of a scheduled thing that’s a part of your routine of home chores. On the flip side there are a lot of different inefficiencies that come from being on demand. You have to have a lot of drivers out there on the road who are just sitting and waiting for orders to come through so that you can call yourself on demand and you end up burning through tons and tons of capital. So we never thought it made sense. When we started there were several other players in this space that were on demand and we were like, “Oh my god… Is anyone going to use us? We’re the ones that aren’t on demand…” and it turns out customers don’t really care about that feature, so these other companies were wasting resources for something that no one wants.

Why do you think we all hate doing laundry enough to necessitate these services?

It’s the number one most hated chore based on the imaginary survey I created in my mind. [laughs] Whenever I ask people which chore they hate the most, they always say laundry. No one likes doing it. Even for people that have washers and dryers in their home, and we have a ton of customers who do… They’re typically homes with young moms who have a couple of little kids at home, so laundry never ends. It’s not so much the washing and the drying, it’s the folding part that takes so long. As long as you have the trust and confidence that all of your instructions will be followed correctly and that nothing will happen to the items and that they’ll come back nice and clean and smelling fresh… It’s just nice to have it come back in a plastic sealed bag. Everything is folded. All the men’s stuff is separated, all the women’s stuff is separated, all the baby’s stuff is separated. You just have to put it back in your drawer and it takes a huge amount of stress off of your plate.

So you mentioned your subscription service earlier, is that always a feature you always envisioned, or was that a newer idea?

No! We started doing that in June of last year and we put that together in three or four weeks just based off of a survey. We were trying to think of ways that we could make the service more sticky. New York is a very tough city for businesses like ours because there are so many options for cleaners. So if you have one not really great experience with Cleanly, you’ll say, I like the technology and being able to use an app, but maybe I’ll just go back to my local cleaner. There are 3500 local cleaners in New York, to give you the scope of the size of the market here. So we wanted to think through how we could make it a little more sticky and how we could keep people coming back. Just being an Amazon Prime user, that kind of was the genesis for this. We thought about what kind of perks and goodies we could give customers to use something similar and to give it a kind of exclusive feel, we called it Cleanly Reserve.

I know you guys just moved into D.C., but do you have any timeline for when you’re going to be finished and will be in every D.C. neighborhood?

We never think of it as finished. There’s always a new neighborhood that we could go to. Right now we’re kind of in a good spot, we’re operating in almost all of the main area of D.C., we haven’t gone into Virginia yet, that will probably be next year. So Arlington and around the Pentagon campus, maybe even downtown Alexandria. So we don’t rule anything out, we just try to take a deliberate or measured approach to how we open up new coverage areas because we’re very focused on the bottom line and not just opening up a new service area and putting drivers on the road that aren’t doing pickups and deliveries. So we really try to build density and build up a wait list of customers so when we open we have high confidence that there are going to be orders on day one.