When Tom Harari moved to Brooklyn from Philadelphia, he had no idea what a nightmare his dirty underwear would become.
It wasn’t until after he signed the lease on his walkup apartment in Park Slope that he realized he had landed himself in the middle of a classic New York problem: His building didn’t have a washer or dryer.
This seemingly mundane fact would ultimately change the course of Harari’s life. But first, he had some laundry to do.
“Once I started to run out of underwear, I asked coworkers of mine, ‘How does anyone do laundry around here?'” says 30-year-old Harari. Not to worry, he was assured: The city is peppered with laundry services that will come pick up your soiled clothes and deliver them back to your door when they’re clean.
At first, it seemed like the perfect solution for someone like him: young, professional, and too busy with their jobs and social lives to sit around in a coin-operated Laundromat all afternoon. But as Harari would soon learn, the laundry delivery process in New York City is anything but painless.
“As I started doing it, I realized that there are all of these hassles involved,” Harari says. “It was more headache than it was worth.” For one thing, most laundry deliverymen only accept cash, which required Harari to make extra trips to the ATM down the street. If they answered the phone, the laundry service staff would often offer him an inconvenient multihour delivery window, cable-company style.
Surely there has to be a better way, thought Harari.
Harari wondered: Could he streamline laundry delivery using smartphones? “How come I can order a black limo from an iPhone app, but I can’t do my laundry?” he asked himself.
And with that, Cleanly was born. With his cofounders, Itay Forer and Chen Atlas, Harari started mapping out logistics and prototyping an app that would hopefully do for laundry what Uber did for cars. But rather than get into the business of washing people’s clothes–plenty of people already do that well–the Cleanly team decided to focus on the biggest pain point: getting clothes to and from the laundry service in a convenient manner.
“We realized that to do this well, we’d have to take the delivery part away from the cleaners,” says Harari. “They’re really good at the cleaning side of things–they’ve been doing it for 20, 25 years. The only reason they offer this delivery service is to stay competitive with all the other cleaners on the block. It’s an extra cost for them; they’re not good at it, and they can’t do more than a few blocks radius around the cleaner.”
Initially, they quietly tested a beta app, primarily using their friends as customers, whose laundry they would pick up and deliver during their off hours.
“We’d run around New York, carrying the laundry on our backs during our lunch breaks or after work,” Harari says. “Our coworkers didn’t know what we were doing.”
By May 2014, the concept had proved itself. So the team quit their day jobs to officially launch Cleanly. The on-demand “gig economy” craze was well underway by that point. They spent that summer carting people’s dirty–and then clean–laundry all over the Upper West Side, learning lessons and gathering intelligence they would need to expand to the rest of Manhattan–and, eventually, beyond New York.
Cleanly showed steady, if modest, growth over the course of the summer. But it soon became obvious that to keep growing and scaling, this heretofore bootstrapped startup would need outside funding. So they applied to Y Combinator in October and, to their surprise, the Silicon Valley startup accelerator accepted them.
But aren’t there already a million companies offering smartphone-powered delivery services of some kind? And aren’t some of them already focused on laundry? Companies like Fly Cleaners and Prim have taken a crack at Uber-for-laundry schemes. But Cleanly apparently had an approach unique enough to pique the curiosity of Y Combinator and command a $2.25 million seed round shortly after wrapping up at YC.
When Cleanly pitched investors at Y Combinator, they offered not just a relatable, real-world story about a common pain point being relieved through mobile technology, but some very smart technical and logistical underpinnings–thanks in part to the Israeli Army.
Early on, Harari knew he didn’t have all the expertise needed to make his on-demand clean-underwear dream a reality. Before Cleanly was more than an idea, Harari teamed up with Forer, who at that point was running operations for Elie Tahari, the global fashion brand. Between the two of them, they lacked the technical expertise to make the app a reality. For that, they would need the help of Atlas, a potential technical cofounder who came highly recommended from mutual friends.
“Not only is he a brilliant programmer, but he spent his time in the Israel Defense Forces (IDF) building logistics technology systems for the Israeli Army,” says Harari. After being recruited into an elite engineering unit of the IDF straight out of high school, Atlas helped route supplies on the ground as efficiently as possible.
“He was experienced moving things around in much higher-pressure situations,” says Harari. “Certainly, laundry was going to be a little easier than moving medical supplies in the heat of battle.”
Upon meeting with Harari and Forer, Atlas immediately started flexing his logistical muscles, challenging the duo to use data to further streamline the process of delivering laundry. Whereas most delivery startups track how long it takes couriers to get from delivery point A to delivery point B, Atlas proposed that Cleanly get more granular by learning the ins and outs of each individual building: Which addresses have a doorman? A buzzer? An elevator? Once a delivery person arrives at a building, how long will it realistically take them to return to their vehicle and head back to home base?
“He started talking about how we could start mapping cities vertically and collect a ton of data, which has applications beyond laundry,” says Harari.
This data is wrangled through a mix of manual and automated means. Things like time and distance are easy to track automatically inside the app Cleanly drivers use to manage their daily workload. Other details, like the internal features of a building or whether or not there’s a doorman, need to be entered manually by the driver. The longer Cleanly operates in a given city, the more complete this map of its innards will get. If anything is going to turn Cleanly into a cash cow–or the target of an acquisition–this is it. It will also come in handy as Cleanly expands from Manhattan to Brooklyn, as it’s starting to do now, or when it expands to a second city later this year.
One of the hardest parts about running a fledgling startup is knowing where to focus one’s limited resources and energy. This is something Cleanly struggled with early on–but it became easier with each weekly flight from New York to Y Combinator’s Mountain View headquarters.
Upon arriving at YC, the Cleanly team was promptly clued in on what they were doing wrong. Rather than focus on building out an impressive tech stack, they needed to focus on growing their customer base. This nearly religious devotion to pushing growth metrics north is a guiding mantra at Y Combinator. As cofounder Paul Graham once put it, “The only essential thing is growth. Everything else we associate with startups follows from growth.”
“Everybody thinks you need to be focused on building partnerships, attracting vendors, building out your supply chain,” says Harari. “A lot of that doesn’t matter unless you have growth.”
So Cleanly shifted its focus away from the back end and onto reeling in new users. The company aimed for the ambitious goal of increasing users by 10% every week, but by the end of their stay at YC, that number was closer to 25%. “Our growth chart was just insane,” says Harari.
This explosive growth exposed another unique challenge for on-demand labor startups like Cleanly: courting workers. Two months into their stint at YC, the company started getting more orders than they could fulfill. Suddenly, the cofounders were back on the streets of New York again, filling in labor gaps by delivering laundry themselves.
To meet demand, Cleanly would need to woo new drivers. But how? In the gig economy, it doesn’t matter how unique your startup’s technology is: You’re competing hour to hour for labor with every other on-demand company in the city, from Uber to Postmates. Why get up at the crack of dawn to go pick up somebody’s dirty laundry when you can drive a limo or deliver breakfast for more money?
Cleanly tries to simplify things by giving its workers shifts and an hourly rate, rather than forcing them to wait around all day for an order to come in or wonder how much money they’re going to rake in that week. They also offer bonuses based on the number of runs workers make per hour.
Still, with its sights set on expansion–Harari says they’re still determining which U.S. city to launch in next–Cleanly has its work cut out for it. With its cramped apartments and limited on-site laundry, New York is a relatively easy place to scale a laundry delivery startup. For its next launch, Cleanly will need to find a city with similar levels of demand and the right competitive landscape. Competition includes other laundry services, but also any other on-demand labor startups focused on delivery of any kind.
And if the market is already crowded, just wait. In one of these cities, somebody else is definitely dreaming up the next “Uber for XYZ” company.
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