Cents · B2B · software for laundromats
Sign a 73-store operator as your first customer and build with them
Got full access to their stores and back office; product a bit overbuilt but solid
What they did
What happened
- Stage
- pre-product-market-fit
In their words
How Does Laundry Software Make $60M a Year?
Nathan LatkaTake us through uh when you got your first paying customer, and then the growth tactics to get your first 100 customers.
Alex JekowskyYeah, we were introduced to a large-scale operator in New York uh as kind of our first customer. And most people say, "Don't sign the whale first. You overbuild. You have all these enterprise issues the SMB doesn't have." I challenge that by industry, because if you're if your first customer's a big enterprise customer, they tend to be invested in your success. And really, this operator gave us their full store and their entire G&A to help us understand what's important. And in our vertical, and I think a lot of SMBs, uh you know, a a 73-store operator or a one-store operator are not remarkably different from a store operation standpoint. They're just the problems that a one-store operator has compounds meaningfully for the large-scale. But we learned a hell of a lot and were able to build a a a a product that maybe a little overbuilt in the beginning, but set the right foundation. I thought this big customer would be enough for us to raise capital. All the feedback I got from from seed investors early on was, "Prove to me you can pound the pavement, and you can sell another five or 10 customers yourself. If you can't do that, I don't understand how you think more capital will get you where you want to be." It was really pounding the pavement to try to figure out the product-market fit. The way I did it was physically walking into stores, or going into the contact form on all their websites, if operators had them, or picking up the phone and calling the the the store. And trying to figure out, if they didn't do delivery, we were building the first ever gig-economy …
Nathan LatkaDo you remember what revenue finished for in 2021?
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More from this episode
- Walk into laundromats and call them, pitching a no-labor delivery add-on firstGrew to about 80 stores and ~$700K revenue in 2021
- Sell your own payment hardware at a profit, with software and payments attached~$140M a month in payments; 200-250K devices installed; 99% customer retention
- Buy a hardware company when building your own hardware gets too hardRevenue went from $6M to $36M the year of the deal
- Raise at a price investors can 4-6x, and turn down higher offersRaised $140M at 10-20x revenue while profitable; guest says exit options stay open
- Set aside $30M of a funding round to buy shares from employees$30M tender inside a $140M round; employee retention 98%
- Aim for $1M of revenue per employee and keep the team small~$750K revenue per employee, 20%+ EBITDA margin, 98% employee retention
Tags: design-partner, enterprise-first, vertical-saas