Invest in washbnb

let's get started with the problem... why does washbnb exist?? 

Imagine you had family staying for the weekend. It's Monday and they've all gone home. On top of the the guest bed, it's been a couple of weeks since you washed your sheets, and those of the kids... Come to think of it, the towels are starting to smell and there's just so much laundry. You need to wash all of the bed, bath, & kitchen linens in your home. It's a MOUNTAIN of laundry that your washer & dryer simply aren't well equipped to handle, let alone fold.

Now do that 3x a week. It doesn't scale. That's the old way.

bonus content: search "fitted sheet memes" 😂

*personal note from Daniel*

I stumbled into Airbnb hosting in 2016 and quickly discovered it was a great side hustle. I started by just sharing my loft when I was away while transitioning from San Francisco to Milwaukee but ended up homeless when I didn't block my calendar and sold out the entire summer! When additional properties came available on my block in Milwaukee, I pounced to get them on Airbnb. Suddenly, I was earning into the six-figures but changing 12-beds multiple times a week! It's relatively easy to scale a hosting business with some hospitality basics, but the cleaning and operations don't scale so easily. There's no escaping the daunting chore of laundry and it was detracting from my ability to provide the best possible hospitality to guests and stunting growth.

I called every laundromat and industrial laundry operator in the area but couldn't find a solution that was high quality, didn't take a whole day of labor, and reasonably priced. My solution ended up being Cat, my first co-host who did her homework at a laundromat while working through the weekly mountain of linens.

🙌 solution time

washbnb automates luxury linens as a service for Airbnb hosts, vacation rentals, enterprise providers, and hotels. It's linen rental, logistics, and laundry included in one simple service that's purpose built for the new decentralized hospitality marketplace!

Customers outsource their entire linen/laundry operation to washbnb and we provide their guests with a luxurious bed & bath experience that rivals top luxury chains like the Ritz-Carlton. Our customers never have to invest money in bedding, towels, kitchen towels, or cleaning rags and the never ending chore of laundry is completely eliminated.

the new way

washbnb creates value for its customers around four primary value propositions:

• Convenience: eliminates procurement decision paralysis & laundry chore
• Quality: luxurious, all natural, professionally cleaned and pressed
• Trust in Clean: guaranteed safe from pathogens
• Sustainability: 80% reduction in water/energy, zero plastic, linen upcycling

washbnb was born February 5th, 2020.

If you're wondering, totally the BEST month ever to start a travel + hospitality company. 🤦

Our first month in business we covered 50 reservations at just 5 units. We knew we had something special, and then the pandemic struck. In almost every way possible the pandemic was terrible, but we found a way to persevere (see washhero.org story below). Perseverance recently surfaced as a company value at our first ever in-person all-hands meeting. Reservation volume came back slowly at first and then by June it was right back to 100% capacity. With most hotels closed or deemed unsafe, short-term rentals became the only way to travel.

In May we landed the linen contract at the soon-to-open Dubbel Dutch Hotel, a magnificent 17-room mansion transformed into a chic boutique hotel. Our original customer, Cream City Executive Stays kept adding more units, and we picked up some Airbnb hosts. Before we even knew how to segment our customers, we had paying customers in all of them.

😖 ACRONYM ALERT: RevPAD is our one of our primary key performance indicators, or a data point we use to measure business performance. It stands for Revenue Per Available Door and is calculated as follows:

Monthly Revenue / Total # of Doors during the month. 

We borrowed from the Hotel industry which uses RevPAR (Revenue Per Available Room) to measure how much revenue is generated from each room during the month. We use doors to help understand how units perform whether hotel rooms, apartments, or homes in a portfolio and further break them down by customer segment as you'll see in the "How We Make Money" section.

Adding investment capital during Q2 2021 will enable us to add more capacity and customers in Milwaukee, and expand to Chicago. We are anticipating a lag between deploying capital and fully adding as many customers as will be on the waiting list due to the time it will take to acquire additional inventory and hire/train new staff while laying a sturdy framework to build a high-growth startup.

We are expecting a significant drop in our RevPAD below our targets this year as we onboard new customers and deal with lingering low reservation volumes due to the pandemic.

our market

Every industry on earth had to deal with some type of pandemic related effect on their business. For short-term rental hosts it was devastating at first, many went bankrupt or left the industry. But for those that survived, the revenues have returned faster than in any other travel related industry. The secret was out, Airbnb became the way to travel and went public with a blockbuster IPO.

🌎 market size

We've segmented our customers into B2C (Business to Consumers, or Airbnb hosts for us) and B2B (business to Business transactions) verticals and are tailoring our service to the unique needs of each. Initially we will scale on the back of B2B contracts and build the logistics network capable of adding tens of thousands of Airbnb properties through an automated sales cycle that will take time and investment to properly build out.

Globally, our market sizing math adds up to just over $69 billion (TAM = Total Addressable Market)

Hotel = 17M rooms * $150/month = $30.6B.     +       STR = 16M doors * $200/month = $38.4B

We think that's a big enough market to chase down, but to make it a little more reasonable in the medium term:

SAM (Serviceable Available Market) = just the 850K Airbnb & VRBO units, and 4,500 boutique hotels in the US. If we got all of them to use washbnb we'd make $2.6B/year!

SOM (Serviceable Obtainable Market) = is what we think we can realistically achieve. In this case, we think we can capture about 1% US market penetration if we're in 15 of the best STR markets in the next 3 years.

🦄 can washbnb be a unicorn? (yes, but with zebra stripes)

The chart above shows a 5-year path to $100MM in revenues, the gold standard for achieving the coveted 🦄 status. This is a projection, and achieving it will likely require washbnb to raise at least one more round of growth capital to help pay for additional scale which functions both to reduce costs and increase revenue per available door due to more favorable client and market conditions. We're bullish about our ability to generate cash from our services while keeping costs low, which combined with the increased leverage that comes with scale should allow us to use less equity sales for growth and achieve profitability early on the journey.

Zebra companies are both black and white: they are profitable and improve society. They won't sacrifice one for the other.

business model

💰 how washbnb makes money 💰

This is how much we expect to make per unit, per month. MRR stands for Monthly Recurring Revenue, which we will expect to earn from the B2C segment (mostly Airbnb hosts) for a subscription based service. 

⚠️These numbers are projections based on non-pandemic occupancy levels and our expected pricing power. We expect there to be a delay of two or more years until we're able to meet or exceed these revenue targets.

💰💰💰 how washbnb can make even more money 💰💰💰

washbnb will be so much more than linens and laundry, it’s a trojan horse into the physical spaces we live/work/play/and travel in. We hope that there will be millions of guests using our sheets each year so we’re already drawing up plans for our own direct to consumer line of linens. We believe we can further monetize our logistics network by adding product partnerships that align with our values or white labeling goods commonly used in Airbnbs. And those are just the easy ideas. 

washbnb is unique because this is a differentiated business model from the digital tools and automations that nearly all of the other startups are working on in this industry. But, we are tech enabled and data driven managers and already investing in technology to streamline our operations, lower costs, drive sustainability, and capture valuable data along the way.

It will take time to develop the company and geographic scale around the core washbnb service, but we're excited at all of the really un-sexy categories we can start to create once we get there.

🕵️ competition

🥇We are the first mover in this space and are creating a category that our innovative business model is built to dominate.

Our primary competition is the status quo. Anyone that provides overnight accommodations must provide clean linens for each stay, thus; have some existing solution. Large hotels have access to bulk providers of laundry services but anyone with less than 200 rooms is left scrambling for options, none of which are ideal. Our sales process and talk tracks are full of objection handling that prioritizes value creation and puts customers firmly in control of their journey to hospitality bliss.

Laundry EXTRACTS from companies who have to do it. Extracts time, energy, and money.

washbnb ADDS to companies who use it. We strengthen their businesses by saving time, improving guest experience, improves sustainability, removing decision paralysis, and only making money when they do. What's more, we advise customers to get guests to pay for the service by passing on the cost of washbnb through cleaning and linen fees. Guests appreciate the added transparency around costs and the super soft linens.

but don't take our word for it....

washbnb is ready to grow 🚀

We believe we're building the right product, at the right time, and in a market that is hungry for our service. With early product-market fit, it's a crucial moment to write the playbook that improves our customers business and quickly scale it across the earth, wherever people are staying overnight.

Milwaukee is a fantastic place to build a company like washbnb. The worlds largest laundry machine manufacturer is about 100 miles away, the most innovative laundry machine manufacturer (Marathon Laundry Machines) is our neighbor, and there's a burgeoning water-tech industry here. It's also an incredible value. Your investment dollars go much further in funding actual growth instead of insanely expensive office rents, software engineers, or lavish bi-monthly launch parties 🙄. We're frugal, midwest-nice bootstrapers at heart but maniacal stewards of turning capital into rapid growth. 

next steps, execute our go-to-market strategy

washbnb will first be open to our two B2B segments (enterprise & boutique hotels), allowing us to add significant volume while we build operational capabilities to serve smaller customers like Airbnb hosts. Much of the work at this stage is quite manual, but will allow us to learn on-the-job and turn best practices into automated and repeatable processes needed to add more customers at a low cost to serve. In the meantime we are developing educational tools for hosts of all sizes and making ourselves available to any host who may have questions around hospitality principals. Aside from being the right thing to do 🤗, we also aim to cement our position as thought leaders while building a robust waitlist full of passionate hosts.

🐮 the bull case

what the COVID-19 pandemic did to washbnb

*another personal note from Daniel*

I quit my job at GE Healthcare on Jan. 31, 2020. One month later Brian and I were in NYC at a Guesty event with a freshly designed and printed washbnb business card. We left that event high as kites on the energy in the room generated by just talking about laundry as problem and washbnb as a solution. 2 weeks later we started gBETA Milwaukee, an early stage accelerator run by gener8tor and the following week we were locked in our houses. I lost my two bartending jobs, all of my Airbnb bookings, and it looked like washbnb was the worlds worst idea.

Sitting around not knowing what to do, or plan for, Cat came up with an idea. We still had a trickle of laundry to do for Cream City Executive Stays and had a laundromat secured. With nothing but time and anxiety on our hands we were brainstorming and she suggested we find ways to help people and perhaps we could do their laundry. It took about 24 hours to realize that not only was it the right thing to do, it could potentially be a good thing to do for the business as well. We spent all weekend around a whiteboard and laptops frantically trying to get a consumer wash+fold business off the ground from zero. In just 4 days we pivoted to wash+fold laundry for seniors and others who couldn't safely get to a laundromat. We took donations, asked people to pay what they could or did it for free, and hired out-of-work service industry professionals.

The letters, reviews, texts, emails, and elbow bumps we have received from people are amongst the most heartfelt any of us have ever received. We landed some great media coverage which got read by a Milwaukee entrepreneur with similar values who happened to be building a boutique hotel. We put together a proposal for the linen contract and won. 🥳 

washbnb was born again.

We got back to work on the original idea and service which we view as infinitely more scalable, but knew we had something meaningful with the laundry service and couldn't leave our customers out to dry. We created washero.org, named Cat the CEO, and took a minority ownership position in the company who's mission is to provide "clean laundry for all." washhero and washbnb are financially separate and independent companies.

Peloton may seem like a stretch here but they've built a vast logistics and services network in a relatively short amount of time while combining hardware sales with software services that create multiple streams, and types, of revenue. The long-term vision for washbnb is to create a similar flywheel type category creation machine that is able to spin up, or into adjacent categories and quickly dominate them. A few other companies that have pulled off similar logistical feats: Amazon, Tesla, Imperfect Foods, Blue Apron.

If you still don't think washbnb has the potential to be a unicorn, we present to you, Rent the Runway. An incredible business started by two tenacious women who refused to be told they couldn't scale a rental business. They have quietly built the worlds largest dry cleaning facility and disrupted multiple categories in the fashion industry.

Outfitting an entire property with bed and bath linens creates a heavy package, so we need to scale through our own network of drivers who are also key customer touchpoints. It's more expensive, but also more valuable. Amazon, Peloton, Tesla are three companies who all recently built their own logistics and services network across the country, and soon will have global operations moving a lot of atoms. As the lines blur between live, travel, work, and play, and people become ever more dependent on services, we think this is the best possible time to build a hospitality and services company into this new world.