In an earlier post entitled “On-demand markets that aren’t”, I used the example of Rinse, a laundry and dry cleaning managed marketplace where we’re investors, to highlight how many markets that at the outset appear to be suitable for on-demand service, and as a result of the hype around on-demand services are often named that way, are in fact not on-demand.
In a recent post entitled “On-demand isn’t always in-demand”, Rinse’s co-founder Ajay Prakash explains why this is the case in much more depth than I did. As Ajay points out, businesses succeed by solving the primary pain points of their customers. And “none of the pain points in dry cleaning, laundry, or any other form of clothing care require an on-demand solution.”
In fact, Ajay argues that other verticals which are also often given as examples of on-demand services, like house cleaning, storage, and car washes, also do not require an on-demand solution.
You can read Ajay’s full post here.
Rinse, a managed marketplace for laundry and dry cleaning services where we’re investors, announced earlier this week that it has acquired the customer assets of its competitor Washio.
Before shutting down its operations in August, Washio served 7 geographies including Boston, Los Angeles, Chicago, San Francisco, Oakland, New York, and Washington D.C. This was 5 more than the San Francisco and Los Angeles markets served by Rinse.
In addition, Washio picked up and delivered its customers’ laundry whenever customers wanted. This was in contrast to Rinse’s approach of scheduling pickups and deliveries only between 8PM and 10PM in the evenings.
Finally, Washio delivered its customers’ laundry a day after picking it up, while Rinse offers a 3 day turnaround time.
While these three decisions gave Washio the opportunity to serve a larger number of customers whenever these customers demanded service, they also made Washio’s operations more costly. And the resulting benefit for customers isn’t large enough for customers to pay more for. Most people are home at some point between 8PM and 10PM, and they have enough extra clothes in their wardrobe that they don’t need a next day turnaround from their laundry and dry cleaning service provider.
As Rinse’s co-founder Ajay Prakash points out, “the on-demand model isn’t the most efficient or economical way to handle the dirty business of cleaning clothes”.