Laundry INC Value Story

     Its a Sunday evening and Jeff, the tech savvy young professional working in the densely populated city of New York City, has the dreaded chore of laundry. He cannot postpone the chore any further as it needs to be done in order to have clothing for the week (he is down to his last pair of socks...). To avoid delays, he grabs his Smart Phone, kicks off the Laundry INC application and looks for a local self service laundry establishment that has open washers and dryers. He sees that Spin City Cleaners on 50th street has 6 washers and a bunch of dryers available. He likes Spin City Laundry due its location and different activities and shops that are in the area. Jeff, is concern about only seeing 6 washers available and knows they can be had by someone else. He decides to reserve 2 of these washer machines for use in an hour. He watches the rest of the football game and collects/bags his laundry and grabs his detergent a heads over to Spin City Laundry to tackled the task.

     Jeff heads into Spin City Laundry and sees his 2 washer machines reserved, numbers 34 and 40 which are locked. He pulls his Smart Phone out, kicks of the Laundry INC application and confirms his wash cycle purchases for each washer machine and the front door unlocks and ready to load. Jeff loads his laundry and detergent, hits start and the cycle starts. He takes a look at his Smart Phone Laundry INC application and sees the cycles will complete in 60 minutes. with the laundry in-process , Jeff decides to head a street down to the gym to get a work out in while his laundry is washing. He is working out and receives a text and alarm stating his laundry cycle will be done in 10 minutes. With this, he wraps up his work out, grabs a health shake and makes his way back to Spin City. On his way there, he receives another text and alarm stating his wash cycle is complete.

   A few minutes later, he arrives and heads over to his washers, pulls out his Smart Phone and unlocks the door's to remove his laundry. He has a piece of mind knowing his clothing cannot be tampered with, as he has control of a security mechanism to only allow him to remove his laundry. He walks over to 2 dryers, loads his laundry, and with the Laundry INC application pays for 75 minutes of drying time. With 75 minutes to burn and the Sunday night football game on, heads to one of his favorite pubs a few blocks down watch. He is able to grab a seat at the bar, order a beer, and starts watching the game. 30 minutes into the game, his phone is about to die. He does not worry as he see an additional 15 minutes to finishing his drying cycle for his laundry. In 10 minutes, he heads to Spin City, goes to a kiosk, highlights his dryers, and unlocks the machine through a security pin, and grabs his laundry, folds, and heads home.

Through the use of the Smart Phone Laundry INC application and Spin City laundry washer/dry communication and security system, Jeff is able to hit the gym and grab a beer while having the convenient and piece of mind of doing the chore of laundry.

Sizing up the Market for Laudry Inc Inc.

Below is my view of defining the market size for Laundry Inc Inc.  leveraging the four different cuts of market data:

The Demand

Understanding the market demand is defined by the overall laundry businesses which are operational currently in the US which also extends to the Laundromat consumer. The demand for our product is based on providing a competitive advantage to Laundromat's that look to provide a better experience and piece of mind through allowing the ability to pay for laundry service through a smart phone application, receive real time status on what stage of the cycle the laundry is at, provide a level of security which leverages a lock mechanism on the machine (people cannot remove laundry), and allow data analytic to understand utilization of its capital (washers and dryers) to understand trends and high/low usage times to possibly define change to reflect this information.


 The Addressable Market Size

When looking at the total addressable market for our product, a starting point is based on the current Laundromat market and where it stands today. The Laundromat market size is approximately $4b in annual revenue with flat growth due to home washers and dryers usage growth, the emergence of drop-off and pick-up laundry, and dry cleaning services. With this, the projected industry growth is predicted to be flat to a reduction of .5% annually. Current total laundromat businesses across the US tops over 22,000.

Realistic Opportunities versus Competition

When researching whether competing solutions were offered by any possible competitor, we could not find such a solution and approach to mimic Laundry Inc Inc.. There were aspects of our business idea that were offered by various companies which are considered possible competitors. 1st the payment option via a smart phone application could not be identified, but alternative payment solutions were via credit card swipe payment and blue tooth with Google Wallet. Another aspect to our business model is providing real time status of washing/drying cycle through a smart phone application which is a product offering for a washer machine and dryer for home use which allowed you to control the cycle via your phone. Lastly, the security feature is something which currently is not provided by any competitor. With this, our real opportunity is substantial as such a solution does not exist for Laundromat businesses and is dependant on industry acceptance.

 "Winnable" Market Opportunities

In terms of winning market opportunities, our product is targeted to a specific Laundromat market segment. This target market is focused on mid-to-higher end Laundromats which are located  in a specific location which are not as cost sensitive in providing the lowest laundry service cost possible. This mid-to-higher market segment can be viewed as people with discretionary income who are located in a metropolitan area where a high population of Laundromat users reside and willing to pay the incremental costs through higher customer service. Of the 22k laundromats across the US, we can assume 30% of the addressable market would identify the return on investment through the incremental costs associated with the product.

The Need for In and Out

This weeks Blog discussion is based on the recent board discussions on the marketing model called in-bound which is now a viable part of every company. The In-Bound Marketing strategy is based on the idea of leveraging specific tactics in order to be identified by potential customers. Such In-Bound Marking looks to attract it's leads by bringing awareness through content to become identified. Comparing it to the traditional outbound approach, the customer is looking for you versus you looking for the customer. The Inbound Marketing techniques are executed various tools such as blogging, interacting on social media, search engine optimization, webinars, and videos to promote awareness.

But the big question is, can a company survive on just In-Bound Marketing? My opinion on the matter is that a company can survive on just leveraging In-Bound market strategies, but will be unable to grow/mature and nurture into something larger through increased sales through Out-Bound Strategies. The signification advantage between In-Bound versus Out-Bound is based on the cost parity and waste. With little capital, a start-up company can identify marketing success leveraging an in-bound approach versus out-bound. Out bound has vast inefficiencies which poses cost impacts for strapped companies. Below are some statistics on some of the Out-Bound Marketing tools used:

• 44% of direct mail is never opened. That’s a waste of time, postage and paper.
• 86% of people skip through television commercials.
• 84% of 25 to 34 year olds have clicked out of a website because of an “irrelevant or intrusive ad.”
• The cost per lead in outbound marketing is more than for inbound marketing.

For this reason, In-Bound marketing can allow a company to survive during cash strapped time of a strat-up company.

In order to grow it's customer base, brand, and market share, I feel there is a need to balance the two marketing strategies in order to identify all possible opportunities the may exist. For companies to grow their customer base, a successful Out-Bound approach is leveraging inside existing customers to identify new leads. Trying to identify accounts which may have new selling opportunities can be executed efficiently through targeted out-bound marketing tools to open new sales opportunites with such potencial customers that have a relative to an existant client.

I feel a big advantage to Out-Bound marketing (though costly) is building brand awareness and creating a buzz. I feel this is more challenging to execute in a short amount of time leveraging in-bound techniques.I feel Out-bound marketing technique such as commercial ads can present immediate results to build brand awareness quickly. An example is the ever popular Super Bowl ads that run an average of 30 seconds and cost upwards of $3.5m. Though the cost is high, it brings immediate brand awareness to the necessary audience. A great example is the Apple commercial that aired during the Superbowl in 1984 for the Macintosh. It created such buzz and awareness that led a computer revolution. This commercial only aired just once, but left a buzz that captured consumers and made a connection to the Apple Macintosh. The video can be seen below: