Rinse is a company that is building the first and largest national and global brand in clothing care. Pulse 2.0 interviewed Rinse co-founder and CEO Ajay Prakash to learn more about the company.
Ajay Prakash’s Background
What is Ajay Prakash’s background? Prakash said:
“For the past 11 years, I have been the co-founder and CEO of Rinse, a leader in pickup and delivery of laundry and dry cleaning. Since starting Rinse, I’ve become passionate about mentoring and advising early-stage startups. Currently, I am also a Lecturer in Management for “Startup Garage,” one of the Stanford Graduate School of Business’s most popular classes on entrepreneurship, and have angel-invested in and advised numerous early-stage startups.”
“Before starting Rinse, I was the COO and CFO of humble Brands, a consumer product start-up in San Francisco. I also worked with Bonobos, Berkshire Partners, the NBA, and Bain & Company.”
“I also received a BA from Dartmouth College, and an MBA from the Stanford Graduate School of Business.”
Formation Of Rinse
How did the idea for Rinse come together? Prakash shared:
“In early 2013, my co-founder James Joun came to me with the idea of starting a company in clothing care and the story of Rinse began. James has been one of my closest friends since college, and has always been someone I viewed as a potential co-founder one day.”
“James grew up working at his parents’ dry cleaning facility in San Francisco and over the years he witnessed firsthand the growing challenges the industry was facing. As consumers have turned to more seamless and convenient solutions for some of their least favorite chores, dry cleaning and laundry continued to be industries that desperately needed disruption to remove the friction customers experienced in getting their clothes cleaned.”
“At the time James brought up the idea, I was actively looking to start my own business with a focus of bringing technology to an old school industry that was ripe for innovation. Together, we had the perfect business idea that would not only offer customers a more convenient solution to their laundry and dry cleaning woes, but also help bring in more business to local laundry and dry cleaning services that were struggling.”
“With Rinse, our goal has always been to remove the friction on both sides. For our customers, we are systematically dismantling the ‘thousand cuts’ by providing one simple solution for everything in their closet. For our cleaning partners, we send a predictable and steady stream of volume and enable them with technology to help ensure they grow their business while providing the highest quality cleaning for our customers.”
Favorite Memory
What has been your favorite memory working for Rinse so far? Prakash reflected:
“I’ve been building Rinse for the last 11 years and I would equate building, growing, and scaling a company from scratch to being a parent and raising a family. For example, I have three kids, and I don’t have one favorite memory from being a parent for the last almost 10 years. But the culmination of all the hard work to get to where we are today makes me the proudest.”
“What I love the most about Rinse is the culture we’ve built: the people we have hired who have come to Rinse, who have grown at Rinse, and those who have left to go do great things and still continue to foster friendships with those still at Rinse. What we have been able to build together over the 11 years is what gets me most excited about continuing to build this every day.”
Core Products
What are Rinse’s core products and features? Prakash explained:
“Rinse is a direct-to-consumer and mobile-first laundry and dry cleaning service, meaning that we come to you, not the other way around. Through Rinse’s digital platform (accessible via web, text, and mobile app), Rinse brings unprecedented convenience to scheduling the pickup and drop off of your laundry, and gives you three hours back in your week to focus on more important things.”
“Rinse currently offers a variety of services that best fit our customers needs and preferences to make laundry and dry cleaning more convenient and hassle-free. We have Wash & Fold, Dry Cleaning (including Launder & Press), Hang Dry, and we even pick up clothing donations.”
“With the Wash & Fold service, Rinse will pick up, clean, and deliver your laundry right back to your door. Your clothes are cleaned according to your preferences, and delivered to your door neatly folded and sorted. Our Dry Cleaning service allows our customers to have their items professionally cleaned, pressed, and returned on a hanger.”
“Rinse is also dedicated to using the most eco-friendly products and practices. We work closely with our cleaning partners to ensure they are using sustainable business practices and opting for the most environmentally friendly products and energy efficient machinery.”
Challenges Faced
What challenges have Prakash and the team face in building the company? Prakash acknowledged:
“The startup journey is hard, and there are a ton of challenges along the way regardless of what industry you’re in. The most important thing to remember as founder and CEO is that you have to manage your psyche if you are going to overcome all of the obstacles in your way. It’s important to remain balanced and objective in times of uncertainty and make decisions with the data in front of you, and to move quickly and decisively to take the steps needed to get over, around, or through various obstacles. As the leader, you can’t let you or your company be a victim of circumstance.”
“We have faced many challenges along the way, from small ones to significant ones. Perhaps most noteworthy is in March 2020 we lost about 40% of our revenue overnight and the industry started to face tremendous headwinds because, not surprisingly, demand for dry cleaning dropped precipitously when COVID hit. My main focus at that time was to make decisions to preserve cash and maintain morale during a time of significant uncertainty. One of our core values at Rinse is to “embrace change and ambiguity,” and that’s exactly what the team did. We took steps to make sure our team and customers remained safe, that we could continue to serve customers, and that we were able to preserve cash and job security throughout the pandemic. We did just that and emerged from COVID in a position to play offense while the rest of our industry was playing defense.”
Evolution Of Rinse’s Technology
How has Rinse technology evolved since launching? Prakash noted:
“When we started Rinse, we were running the business on spreadsheets, using pen and paper to track routes, and would send manual texts to our customers. We brought on our third co-founder and CTO, Sam Cheng, in August 2013 to ensure we had the technology needed to scale. Today, we are the most digitally advanced company in our industry with tools and technology to help us provide a seamless customer experience and manage all of the operational complexity.”
“Most people think about customer-facing technology, like our mobile app, website, and sophisticated SMS communication, but that’s really the tip of the iceberg. We have developed robust technology to support and enable our Valets, Cleaning Partners, and internal team as well. The technology we have developed over the years has been core to our ability to scale. We’re in 10 major markets and have cleaned around 100 million garments, and technology has enabled us to handle all of the logistics surrounding pickup and delivery, and the complexity of cleaning all those garments – including managing different service types, inventory control, and quality control – seamlessly everyday.”
Significant Milestones
What have been some of Rinse’s most significant milestones? Prakash cited:
“I view milestones more as checkpoints along the way to becoming a household name, and I believe they come in many different forms and sizes. For example, getting off the ground and actually launching our service was a huge milestone. Hiring our first employees felt like a huge milestone at the time. Raising our first round of capital was also a huge milestone.”
“The reason I view these as just checkpoints along the way is that we’re still working towards the overarching goal of becoming a national brand and household name. Milestones are validation of the great progress we’ve made in our journey. You have to stay focused because the double-edged sword of a startup is that you can have a great month, and you can celebrate it, but then you have to get back to work and do better the next month to ensure you’re always moving in the right direction.”
Customer Success Stories
When asking Prakash about customer success stories, he highlighted:
“The customer stories that stick out to me are the ones where Rinse has had a really meaningful impact on a person’s day-to-day life. I’ve received messages from customers who have been struggling with health issues, whether they’ve been undergoing chemotherapy or recovering from some sort of injury, where they haven’t been able to do their own laundry and dry cleaning, and using Rinse has been a lifesaver for them.”
“I’ve also received several customer emails over the years about how Rinse has actually saved their marriage. We know that dry cleaning and laundry can be a point of contention in a relationship. So just by taking that off their plate and maybe removing another excuse to have an argument or frustration towards your significant other is really powerful to hear.”
“We also get a lot of messages from older customers in their 70s, who are just really thankful that we’ve removed the physical burden of dealing with laundry directly.”
Total Addressable Market
What total addressable market (TAM) size is Rinse pursuing? Prakash assessed:
“At Rinse, we view the total U.S. addressable market as a $40 billion market opportunity. Laundry and dry cleaning are universal needs where everyone can benefit from help. It’s continuously growing as we’re seeing more and more people looking to outsource laundry for convenience. About 30% of our customers have a washer and dryer in their house or in their apartment, and yet they continue to choose Rinse because of the ability to gain back three hours of time. The market for laundry and dry cleaning services is big and growing, and for us, we want to be the dominant player in the space.”
Differentiation From The Competition
What differentiates Rinse from its competition? Prakash affirmed:
“Over the past 11 years, Rinse has been working very hard to create a differentiated service and grow into the market leader in laundry and dry cleaning. Our focus from day one has been to build a seamless experience for the customer that removes the many points of friction that comes with laundry and dry cleaning. We have remained laser-focused on addressing that friction and providing the most consistent, reliable, high-quality, and convenient service possible for our customers.”
“A product of our hard work over the past 11 years is what we call our ‘Rinse Operating System.’ This is at the core of our differentiation. In order to scale, you can’t just be good at one thing; you need to be great at all the things that matter when building the dominant national brand.”
“Looking at the various components, here are a few thoughts:
— Team – Service-based businesses are won and lost through execution, and execution starts and ends with the team. To that end, we have the best team in the industry. Not only have our three C-level executives and co-founders been building Rinse for the past 11 years together, but our top 10 leaders have over 70 years of experience at Rinse. That sort of institutional knowledge about the business and how to work well together is unheard of in our industry and in startups in general.
— Operational excellence – Rinse has built a strong and defensible moat around managing the operational complexity that comes with scale. The barriers to entry in this space are low, but the barriers to scale are very high. It is a very operationally complex business, which is why survivors in this space are typically small and subscale, and most entrants haven’t actually survived.
— Technology – we are the most digitally advanced company in the industry. Technology is a core part of our ability to manage operational complexity and provides the backbone to everything that we do. Our tools are key differentiators.
— Delivery infrastructure – we have a differentiated team of Valets. We have employed them (W2) since the beginning and have been able to achieve retention levels well above other delivery companies, which has helped ensure we always have friendly, professional Valets in front of our customers and representing our brand.”
Future Company Goals
What are some of Rinse’s future company goals? Prakash concluded:
“Our big overarching goal is to become a national brand and a household name. We currently operate in 10 major U.S. markets, with the goal to continue expanding the Rinse footprint by growing our presence within our existing markets while also expanding to new markets.”
