Morgan Lavoie

And it saves money. Good for the environment. I'm sold.

It's Morgan, the EP of the show filling in this week for Nicole while she's out on mat leave. A few weeks ago, Nicole did an episode about old school businesses that are finally having their day in the sun and getting real props for their recurring revenue. Businesses like plumbing companies, pest control, and laundry.

According to data from PitchBook, private equity investors have bought over 800 plumbing, electrical, and HVAC companies since 2022. Today, I'm talking to someone who saw this potential long ago, Ajay Prakash, co-founder and CEO of Rinse, a company that is building the first national brand in laundry and dry cleaning.

And you might be thinking, how excited could someone really get about running a laundry business? The answer will surprise you. My fiance, Jack, bought and operated a laundry business in college with some of his friends. One of his partners in that business, Eitan, hi Eitan, went to work at, you guessed it, Rinse after college.

And you should see how excited Jack and Eitan get when they talk about laundry even now. So in my conversation with Ajay, I wanted to see what all the fuss was about. And I have to admit, I'm kind of excited about laundry now. Ajay and I chat about how to find, test, and scale these old school businesses that are ripe for innovation. But we also go beyond that. Ajay is a really excellent leader.

You can tell that just by listening to how thoughtful he is about how he manages his company and team. And as we're staring down the final days of 2024, I wanted to get some advice. Ajay gives a framework for founders on how to set goals for your company in a meaningful and achievable way.

And also advice for anyone who's thinking 2025 might be the year they finally take the leap and start their own company. Here's our conversation. Ajay Prakash, welcome to Money Rehab.

So happy to have you here. Of course, we have to start with the origin story of Rince. Can you take us through it?

So you knew that you wanted to apply innovation and disruption to an old school business. And we actually did an episode about this on the show a couple of weeks ago because we've been seeing a lot of business media recently really glorifying some of those kind of more traditional businesses. Like there's a lot of reporting around is the plumber your millionaire next door type of thing.

But businesses like plumbing, pest control, laundromats. And I think part of the reason why there's this glorification happening in the media is because there's more PE activity around these types of businesses. So is this what you were seeing 11, almost 12 years ago that made you excited about an idea like Rinse?

I love that, that sort of check-in of, are you still excited about this? Are you still excited about this? And so you went through that process of saying, what am I good at? And then you mentioned another question you asked yourself, which is so important. And it's that question of like, is this something that's needed? Like, what do people need? And I think that...

That can be an easy trap for entrepreneurs to fall into. If they're just really excited about an idea, they feel like they want to do something, but actually testing whether or not something is needed, their ideal customer profile is somebody who actually needs this service. And so you did a test with 11 friends. Was there anything about that test that surprised you?

Yeah. Yeah. Debate debatably. One of the more important steps was rinse always called rinse, or was there another idea for the name of the business that you tossed around?

That makes so much sense. And I'm so glad that you did that. And I love that you brought up Lyft because I was wondering if this story would go like, we considered Rince with a Y, we considered Rince without an I, we considered Rince with no E at the end. So that's the origin story of, Fast forward 11, almost 12 years.

I'd love for you to sort of paint a picture for the listeners about what the service actually looks like. So I'm in a room where I can see my laundry hamper right now. I have a puppy. We went to the dog park today. We both came back muddy and disgusting. If I want to use rinse, can you tell me about the journey that my now muddy pair of jeans will go on?

That's something that really does... sort of serve as a heartbeat through rinse, the consideration of the people along that are involved in the processes, like the fact that your valets are W2 employees and the fact that you actually are supporting local mom and shop businesses, because especially like you think about the time and the influences, you mentioned Uber and Lyft.

Around the same time, people are getting really interested in marketplaces like Airbnb. And so I could see a world in which Rinse is a marketplace that helps people find those mom and pop shops. Or you could have decided we're going to have Rinse facilities and we'll own the space and the machines and things like that.

But I love that you've kept this through line of just really considering the industry at large and the people involved to pull it off. It really shows.

Yeah, that's great. Make mom proud. That's going to be our KPR, our key performance indicator for next year. I love that.

Speaking of KPIs for next year, we're approaching the end of 2024. This is a time where people, businesses are making their goals for next year. Can you talk a little bit about how you set goals as a company and use what your goals are for 2025 as an example of that decision-making process?