An important part of the entrepreneurial journey is understand what worked and what didn’t. To reflect on this, I completed a business postmortem, helping me better prepare for what’s next!
The business: 2u Cleans, a mobile car cleaning business. Instead of going to a car wash or a detailing shop, we bring the experience right to you, in your driveway!
Successes:
Not a whole lot. It was a battle from day 1 to day 365. I think there is a problem worth solving but my solution was not the right one. My biggest success is learning what not to do next time, and taking the time to reflect on that. I think I showed the courage to try something daring, and even though I failed I chose to learn and treat this as a real-world MBA.
Challenges:
- Scaling: Hard to scale because as I grow I need more employees. Employees proved unreliable without oversight
- Reliability – Employees cancelling appointments last minute (employees cars kept “breaking down” on the way to the job)
- Consistency – Increased customer service concerns. Employees not caring to do the job right or not being property trained, but the experience was not satisfactory
- Margins: Avg $30/car after all expenses, etc.
- Need to get over 5 cars/day (on average) to get to close to $70k/year (and in hindsight, this was probably optimistic)
- $120/car, profit only $30… about 25% profit margin on a hard to scale business
- Seasonality: Cold-weather was a challenge (spray would freeze to rims of car before you could wipe it off!)
- Can’t clean cars below 32 degrees, lower demand, poor conditions for employees…
- Monthly revenue: thought more people would sign up for memberships. Perception issue. I wanted it to replace a car wash but it was viewed as a detailing (which it was). If we cleaned every week it would be less work, we could charge less, etc. but our customers just wanted it every once-in-a-while
- Touch-less: Not a good way to hand-off keys, can’t get copies… (unlike home cleaning or grass cutting when its friction-less)
- Cost per Lead: Ends up being too much in ad costs per new lead. Referral program wasn’t working (wasn’t something our clients were raving about).
- Partnerships: thought apt complexes and businesses would be a good fit
- I should have leaned in more heavily here, but I wanted the solution to be for everyone, with a bigger vision. Not just a small business with a few apartment building partnerships.
- Unmotivated: have to believe in the product so you can grind day after day
- I’m not a big believer in having a clean car, so why solve that problem?
Considerations for the next one…
- Product-based business: Easier to scale. Can ramp up with suppliers when you need more items. Don’t have to hire a new employee every time you grow (have to hire first, THEN grow.)
- Also allows for more life-freedom (i.e. New Rich)
- Clients vs Customers: Want to sell into a client one-time, and then have a revenue stream. Contract based business with residual revenue.
- Evergreen: not specific to the season. Keeps from having to hire and fire employees when seasons oscillate.
- Don’t follow all the rules: Knowing when to cut some corners and not following all the rules until there is traction (Derek Sivers, Anything You Want)
- Passion: actually want to solve a problem
- I don’t even clean my own car. Hard to rationalize others wanting it too…
- Entrepreneurship is tough, need to believe in the solution to get through the hard times
- WOW Factor: Make it a remarkable experience that people have to tell their friends about! (Seth Godin, Purple Cow).
Dave Emerson 