Episode 844 | Building a $1M+ ARR SaaS for Laundromats

Rob Walling: Welcome back to another episode of Startups for the Rest of Us. I’m your host, Rob Walling. And in this episode, I talk with Brian Henderson, the co-founder of Wash Dry Fold POS, which is SaaS software made for laundromats. And it’s such a fascinating story to hear how he and his co-founder over the last 10 years have built a seven figure SaaS company in a very atypical fashion using no code in a very small market. And as Brian told me offline, they’ve used a tremendous amount of the lessons that he’s learned listening to this very podcast. In fact, Brian and his co-founder Ian are TinySeed investors, and he gave me permission to say that, but he told me right after we stopped recording that he’s traveled such an interesting journey of bootstrapping, finding this podcast, using those lessons to grow a company, and then has made enough wealth as an entrepreneur that he is able to give back in sorts by reinvesting in this ecosystem and investing in one of our TinySeed funds that then goes to invest in future founders. 

So it’s a great story. I think you’re going to enjoy it. Before we dive into that, I want to give you an early heads up for TinySeed Accelerator applications. They’re going to be opening in early September. As you know, TinySeed is one of the best accelerators in the world for B2B SaaS. And it’s an effort my co-founder and I started eight years ago now, and we have raised just shy of $60 million. We’ve invested in 217 B2B SaaS companies. If you’re an early stage founder doing between $500 MRR and say $40,000 of MRR, and you want the perfect amount of funding, an amazing world-class community, mentors and advice, you should head to tinyseed.com/program. You can check out all the details and get on the mailing list to get notified as soon as applications are open. Applications are open for one week, and then we’ll be doing interviews a couple weeks after that. 

Tinyseed.com/program. And with that, let’s dive into my conversation with Brian. Brian, welcome to Startups for the Rest of Us. 

Brian Henderson: Hey. 

Rob Walling: It’s great to have you on, man. So with your co-founder, you run a business called Wash Dry Fold POS. And the H1 is a laundromat POS system and laundry software. Lower cost, better performance. I’ve been to a laundromat before, but I’m not sure I fully understand what your software does. Do you want to give listeners an idea of what the business is? 

Brian Henderson: Yeah. Usually the first response I get when I say I make software for laundromats, I get kind of a glazed over response from people and they say, “Oh, I didn’t know that laundromats needed software or technology.” 

Rob Walling: I believe when you and I met at MicroConf, because you’ve been to a few MicroConfs, you told me, and I remember thinking, the initial reaction in my head was, “Oh, cute. This must be like a tiny, teeny weenie, a little business.” And then you told me you guys have done a lot of business and I was like, “Holy shit, this is great.” So yeah, I interrupted you. Keep going with that. 

Brian Henderson: Well, I mean, it’s nice to be kind of a big fish in a small pond. The laundromat industry is one that flies under the radar a great deal. People don’t think about laundry, but it is universal and it is forever. So to date, we’ve sold over 1,300 systems, point of sale systems to laundromats in all 50 states. So we have subscribers all over, not just local to where I am. In fact, we work almost entirely remotely and we just serve the laundromat vertical. And another kind of reaction I get from people when I say our name is Wash Dry Fold POS. Most people don’t know what POS means. It stands for point of sale. So think like a cash register point of sale system at the service counter at a laundromat where the sales transactions occur. So in broad terms, it’s that spot where you have a combination of hardware and software for recording sales transactions. 

And then it’s grown into a lot more than that over time, but that is kind of the initial starting point there. There’s something like 30,000 laundromats in the United States total. And that’s all sizes, huge ones, tiny ones, self-serve only. Others like who we serve that have drop off laundry services where there are laundry tenants at the store. You can leave your laundry there with them. They’ll use those washers and dryers in the laundromat to clean your laundry and then you come pick it up when it’s ready. And then an increasingly growing sector, especially since COVID and all of that, is the pickup and delivery side of business. That is a quickly growing section in the laundry industry where people just have laundry picked up from the front door. And then a day or two later or even later that day, it comes back. It’s all nice and clean and you can just put it away and you’re completely free of doing that chore. 

And so laundromats all over the country have found that as a growing source of revenue and expanding the reach beyond just where they’re physically located. 

Rob Walling: I’d imagine you’ve built modules or segments in your software that handle that for them. 

Brian Henderson: Yeah. Well, I mean, that’s a prime example, one of those moments when an industry pivots or shifts. And so then you have a fairly mature product and then all of a sudden you have to shift gears to add on something or make some changes in order to keep up with what people are asking for. And that was one of the biggest shifts in market demand over the years that we’ve encountered. 

Rob Walling: And can you give us an idea of where the business stands today? 

Brian Henderson: Yeah. It wasn’t too long ago that we finally passed the seven figure mark for our ARR. And so – 

Rob Walling: Congrats. 

Brian Henderson: Yeah. It’s incredible. We’ve got a team of seven people. And so part of our story is how we’ve been able to grow as much with a pretty lean team. And then getting ahead of ourselves on the story here is a few years ago, the business was so successful. I was able to use revenue that we had to then purchase a chain of three laundromats that my parents had established. And so we run the two companies in parallel. We’ve got the chain of laundromats in addition to our software that serves laundromats all over the country. So it’s this nice virtuous cycle of the two sides feeding each other in features and experience and field testing and all that. 

Rob Walling: That’s cool. Eating your own dog food. 

Brian Henderson: Yeah, for sure. 

Rob Walling: So seven figures of revenue, seven folks, you’ve done it over about 10 years and you’re bootstrapped. Is that right? You haven’t raised any funding. 

Brian Henderson: Entirely. Yeah. Oh yeah. Hope and a prayer. No. So my folks started their first store, Liberty Laundry in Broken Arrow, Oklahoma next to Tulsa in 2005. And then opened up their second store in 2010 and then third store in 2014. I came on board kind of as a full-time manager in 2010, helping grow those stores and helped design and build that third location. But by 2016, wanted to have a business of my own, had been involved in the laundromat industry for some time, knew that there was a need for technology solutions for managing multiple laundromats. There just wasn’t anybody serving that. And so yeah, $100 to open up a business checking account is about the only money that we’ve put into it. The rest has been self-funded by the business. Yeah, open up that business account so I then go spend the money on filing for an LLC and all that. 

So that’s it. 

Rob Walling: Well, so take me back to 2016. So your family owned a few laundromats, as you’ve mentioned, and you decided to solve a problem they had yourself. And I’m just curious how that came about. Was there literally no other software on the market that could do this? 

Brian Henderson: So the story actually kind of goes back to 2011 when just shortly after we had opened our second store and going from one location to two, managing multiple locations, realized that there needed to be some systems to help make sure that things were working the way they needed to in the store without me having to be physically present at each location. And back then, really the only software for point of sale systems for laundry services was just dry cleaning software. And dry cleaning and laundromats are two separate things. Kind of similar industry, but they’re very different businesses and the processes you need. For dry cleaning, it’s a lot of individual garment tracking and racking systems. And when they actually process the dry cleaning items, they put everybody, all people’s stuff together on one machine all at one time, which I think is disgusting, but I’m not involved in dry cleaning. 

So I can have opinion about it. Whereas with laundry services and laundromats, orders are kept separate from each other. Typically, only one person’s laundry goes into one machine at a time and they’re washed separately. So it was pretty common for laundromats in this era, if they were going to computerize anything, because most places just used carbon copy triplicate tickets and cash registers back then, you would use dry cleaning software, if anything at all. It was the infancy of Square. I don’t recall if Square was available then or not. It was right near the beginning anyway. And so if you were to go with something like that, then that was another alternative, but that’s more of just generic retail point of sale. So the downside with doing that is there were a lot of features that you didn’t need as a laundromat owner that were dry cleaning specific, and then not enough that were laundromat specific. 

And I can talk about that all day if you’d like. I don’t know if it’s relevant to the audience, but for example, most wash dry fold laundry services are priced by the pound. So put your laundry in a bag or hamper on a big weight scale and then it’s priced per pound. Whereas most dry cleaning has not done that. That’s done per individual garment and all that. So having an integrated weight scale, for example, is one thing that was typically lacking for most solutions at the time. 

Rob Walling: Yeah, that makes sense. And for the first few years though, you were like a value added reseller of other people’s hardware and software. Is that right? What did you learn from that? 

Brian Henderson: Well, yeah, let’s get into that. I mean, you yourself are a huge proponent of the stair stepping method where it’s just small steps at a time. What’s available to you? Don’t try to build the perfect contraption out the outset. It’s solve problems and work your way up with the resources you have, with the things you know. Solution focused rather than problem focused, rather than falling in love with your own coding or how you’re making software. Okay. So by 2016, we had three locations. We had managers at each location, which was rare for laundromats to actually have a whole full management structure that’s not just your family. So we’re a bit rare in that. Being a guest speaker at national laundry conventions and guest author in trade magazines for the laundromat industry and just getting involved and talking to other laundromat owners and realizing that a lot of these systems that I built and pieced together to help with managing our team across multiple locations, for you and me and probably most of the audience listening to this podcast, these are solutions that were not rocket science. 

I mean, we were probably one of the first laundromats in Oklahoma to use QuickBooks Online back then when we made that switch from the QuickBooks desktop, or installing Dropbox on these point of sale system computers so that I can upload files like that week’s work schedule so the team could see it when they come to work. And realizing that all of these various systems that we had tied together, that central touchpoint for the team was the point of sale system because that was really where the laundry tenants are interacting with it. And it was something that was internet connected that I could upload things to, make changes to remotely. So the product became the point of sale system, not because I set out to sell that, but because it was something that could be packaged and allow me to put all these different solutions together for laundromat owners. 

But most of our customer base of laundromat owners are people who are very smart in their own way and may have had past careers where it’s not uncommon to hear bank presidents or Wall Street executives to get into the laundry business because it was very appealing to them. But piecing together these different silos of information and building stuff to make it all talk to each other was just a bit far, a bit beyond them. They’re not central to what their business was. And so I realized, oh, that’s the business model. I can create a point of sale system and package these things together. So to that point, the point of sale system is a combination of the software and then also literally the actual hardware that we’re selling. And then also the training of laundry attendants and how to implement this in your store. So it’s the whole system, not just the software that was the solution. 

And at that time, I didn’t know how to make software. The only thing I had written up to that point in time was our company website. And then also a little thing I made in Visual Basic for creating these bag labels for finished bags of laundry. That was about the extent of my coding experience, but it worked well enough. 

Rob Walling: Visual Basic for the win. That’s great. Oh man. Scrappy as hell. I mean, MVP, stair step, whatever we call it, you figured it out and you cobbled it together. And then it’s like, oh, this is a viable business. I’m going to keep going. 

Brian Henderson: Well, it’s even further than that. The software we were using at the time was kind of retail focused point of sale software, but it was something that I had found after a journey of spending maybe $12,000 of my dad’s money for the business on point of sale systems that didn’t work out for our business. So I’d become kind of a self-taught expert of point of sale systems for laundromats by that point in time. The software that we were using turns out that they actually did operate through a reseller type of network. And I put the feelers out there on some online forums for laundromat owners saying, “Hey, I’m thinking about making these point of sale systems available. You might be interested in it.” And I had actually collected payment from the first three customers before I was technically officially a seller of that software, but I knew what the price points were going to be. 

I was waiting on the paperwork to come back saying, “Yeah, you’re approved.” The very first one was a laundromat about half hour away from us that we were on friendly terms with. And the guy was a former NSA agent and also an air traffic controller in a previous career. And so very, very serious, very interesting guy, very smart man. But he had built a laundromat and he said that he had found all the equipment they needed except for a point of sale system. And if I would sell him one just like what we were using in my family’s laundromats, then he would be customer number one. And that was around the same time I was thinking about creating this business. So I was like, okay. So I spent some time pricing computer hardware off on newegg.com or TigerDirect or whatever it was we were using at the time and came up with the price and collected that first check. 

And then around that same time, put out the online forums message there and got a couple of the people interested. And so collected payment from them and got approved as that reseller and just one step at a time. And so I learned all these lessons about where do you buy computer hardware from? And how do you handle sales tax across state lines? Or do you pay sales tax? Or how’s that handled when you’re dealing with tangible goods? And I think it was the first 34 systems that I sold. I literally had all the computer hardware shipped to my house first. I was taking the computers out of the box, installing this, what was then desktop based software with MS SQL database type stuff, and taking forever to load and then packaging it all back up and driving it to the post office and shipping it off before I finally learned this whole world of wholesale suppliers and third party logistics. 

And actually it turns out if you pay them a little bit, they’ll install software for you before they ship stuff directly. And so I didn’t know that that was a thing. 

Rob Walling: You learn that as you go. Yeah. 

Brian Henderson: But the hardware has morphed over time too, just based off of those experiences. 

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Rob Walling: So I mean, you were super scrappy to get started and you were just figuring out like anybody would, but it’s oftentimes engineers or it’s entrepreneurs who just don’t say no. And they’re just like, “I know there’s a solution to this and I will figure it out.” And that’s kind of what you got to. 

Brian Henderson: That’s it. My entire journey has been, “I’m going to figure it out. I have a direction I’m going. I’ll do small tests to kind of see what do I know, what do I not know? And then what’s available to me?” And later on, which we can get into it, actually developing our own software was a means to move on to the next level. It wasn’t that I set out to learn how to build software or be a developer. It was conducive to continuing to grow and scale and add on all these features. Yeah. It was just that continued commitment to chipping away at it. 

Rob Walling: Yeah. So tell me about that. In 2020, you’re in the middle of COVID, and you really haven’t written much code. You’ve written some VB, it sounds like, but you decide to rebuild the bulk of the product on Bubble. Is this right? Walk us through that decision because you’re going all in on that, diving in with both feet. 

Brian Henderson: Yeah. I’ve heard you express opinions about no-code tools. And there’s pluses and minuses to everything, absolutely just like anything else. But every other year, the laundry industry puts on what’s called the Clean Show. It’s a big trade industry show from vendors from around the world. And there’s like 20,000 attendees and 450 exhibitors. And it’s just crazy numbers, live demonstrations of laundry equipment and washers and dryers and the big guys, the linen companies with tunnel washers that are million dollar plus pieces of equipment that can continuously process thousands of pounds of laundry. And then there’s us, there’s Wash Dry Fold POS. We’re selling point of sale systems to laundromats there at our little booth. And it was the 2019 Clean Show when we had, I think it was six different vendors, different companies related to the laundry industry approach us saying, “Hey, we’ve been hearing things about you guys. 

Everybody says you’re great. We want our stuff to integrate with your software. We want our products to talk to each other.” And these are things like laundromat payment systems. So think like a value loaded card that you go and pay for your washers and dryers with. They wanted that payment system to tie into our point of sale system over at the service counter, for example. And in addition to that, there were a couple of laundry delivery software companies. So they just specialized in tracking of the pickup and delivery. Two separate conversations, almost identical, telling us, “Hey, we’ve spent over the past 12 months, about $150,000 developing our own point of sale system. It’s no good. It’s crap. In fact, we’re throwing in the towel. Our customers have been waiting very impatient. Can we just send people your way for point of sale system? You send them our way for delivery features?” And it was two conversations like that. 

One was $150,000, another $100,000, and they had nothing to show for it. And 12 months wasted time. So that was mid 2019, late 2019. And we had been thinking about to go further with our software, we wanted to build integrations. We had a number of features we wanted to add that are very just laundromat specific that would never get included in any other point of sale software. And then also ringing in our ears were these other companies that were kind of on a parallel journey to us saying that they had blown six figures on software development with nothing to show for it. And in fact, going to a semi-competitor saying, “Can you help us? Or can we just send people your way so we don’t lose them on this?” Because at the time we weren’t doing pickup and delivery features. We do now. So started searching for how could we do this? 

How could we build it in a way, our own software that was cloud-based, that we had control of the development of it. We knew that there was a lot we needed to discover along the way. So it wasn’t like we had a perfect picture of what we needed to build. And as I started getting quotes from various different development houses and resources and even just looking at things on Upwork, which we had had a small experience with that before that went sideways, which we can talk about, about a developer just evaporating when you needed them. It’s like, okay, we’re going to throw six figures at developing this version one. And then what? If we don’t form our own development stuff in-house or at least get good rapport with a development house, what are we going to do? So all of that led us to discovering Bubble, which is one of the, if not the biggest no-code development platforms out there for making web apps with minimal coding. 

And then also there’s a coaching service called Coaching No Code Apps. Gabby Roman and Kristen Young, hi, if you’re watching. They really specialized in helping business owners or people with an idea for making a web app and how to spend like a 90 day sprint on building your MVP with it. And then more importantly, if you have aspirations on it growing and scaling, they had their built to scale program where it was teaching you those fundamentals of database design and all that, that can scale elegantly over time. And so that was probably the best return on investment we could have ever made. I won’t say how much it was, but it was several thousand dollars for that course. But within just a few months, I feel that we got about 10X return on that investment. And then many times of that ever since then. And so it was late 2019 when I went through that course. 

And then early 2020 when I was really getting into working on it and developing it. And then March 2020, everything shut down because of COVID. And so by that point in time, I had pretty much resigned from the family business back in 2018 to just focus on the point of sale system business because it was growing so much. And we literally had several sales deals in that month of March 2020 that just fell flat because everybody was just kind of taking a let’s wait and see stance to anything for the business. And so over that summer, had a lot of downtime and basically became a software developer myself over that summer. And it was the late of 2020 when we actually launched our cloud-based solution that we built in-house with literally hundreds of improvements from that prior software we’ve been using. And if you look at revenue charts of a company from that time, this is just a clear inflection point because we had a successful business as a reseller of hardware, as a reseller of other software. 

But when we took the reins and developed our own software and built these integrations with the integration partners and were able to just regularly take feedback from customers and just bake it right into the software, or if we had any sort of hardware or technical issues that we can then just circumvent completely by building better solution in the software so we never have to solve that tech support issue again, then it was just a clear inflection point. We’ve grown multiples of times since then in revenue. 

Rob Walling: Sounds like a great choice. And I believe that given that you’re doing a million ARR, that you are probably running the largest no-code app that I know of in terms of a SaaS app. Everyone, it’s interesting with no code, especially this was before all the AI and vibe coding stuff, but I think no code’s great and has its place. It can do some things. It’s a tool. There are some no-code maximalists though who are just like, no, it can do everything that code can do. It’s like, no, that’s not true. And there are no downsides. Or AI platforms, so does everyone else. And it’s like these are not true statements you’re saying. 

Brian Henderson: It’s yes, and it’s design choices. It’s a tool just like AI is a tool that can do a lot of amazing things. But when all you have is a hammer, then everything looks like a nail. And when all you know is AI, then there’s that. If all you know is coding, that’s another approach there. And then if all you know is no code tools, then you can run into that. 

Rob Walling: Here’s the other issue I have with it though, is the folks who really pro no-code have been like, “No, no, no. There’s all these SaaS apps built on no code.” And I would go check them out and it’s like, “Hey, they were either really, really small, like doing a few thousand a month.” And it’s like, “Oh, that’s cool. But these are not what we’re talking about.” And then they’d be like, “No, here’s one.” And it’s doing a million or two million a year and I go check it out. It wasn’t a SaaS app. It was like an agency that was using no code software to help onboard customers and stuff. And it’s like, that’s a thing. Right. 

Brian Henderson: Productized service. 

Rob Walling: Type of thing. Yeah, that type of thing. So anyways, I think you guys though, I mean, you are true SaaS, so I think you might be the biggest one that I know of. I want to ask you though, if you were starting from scratch now with AI coding tools the way they are, how would you think about Bubble and how you did it versus AI assisted development? 

Brian Henderson: Well, one of the cool things about Bubble is that I guess you could describe it as a low code solution. If you want to go pure no code, you can, but they very cleverly, very smartly built it so that you can extend it with JavaScript and other type functions and build your own plugins for it. Or you can even purchase plugins that others have made for it to add functionality. So one of the best case in point is, and I’ll answer the question about AI and how this dovetails. This ties into it. I’m on that path here. So with the point of sale system, there’s a lot of hardware you interact with such as a receipt printer, a cash drawer, label printer, weight scale, credit card reader, barcode scanner, lots of hardware. And very appropriately, typically software running in a browser, a web app does not have access to hardware connected to your computer. 

And that’s by design. That’s a very wonderful and very good thing for security for browser-based software. Typically, you don’t want that accessing hardware you have connected to your computer. That could be disastrous if you went to a website that wanted to just hijack things. But for a point of sale system, you need to be able to press a button and a cash drawer kicks open. So how do you deal with that? We found some software that is a third party program that runs on the client’s computer that can be interacted with via JavaScript in the browser. And so there’s some action that happens on the screen. It runs some JavaScript and then we’re interacting with the hardware. And so it’ll print a receipt without having to use the Google Chrome print dialogue window or anything like that. And coincidentally, a cash drawer is typically controlled through a receipt printer. 

So we send some command to the receipt printer and that kicks open the cash drawer. So that’s an example where that little bit of code, just enough, not a whole solution that we crafted, but just enough to add the extra bit of functionality helped. So here’s the really cool thing. With no code tools like Bubble, you can iterate and very quickly build and test solutions with the small lean team to make sure you’re solving the right problems first, get feedback and then improve that. And then now with some of these AI tools, you can go a step further and you can build your own plugins without needing to know how to code JavaScript or whatever language you’re needing to do. But because it’s tied into that no-code ecosystem, for the majority of the logic of the workflow of your application, a normal human can actually read it. 

And so we’re more and more adopting AI tools for our software development that play nice with Bubble. And case in point, just recently we needed a better solution for PDF generation. And one of our developers realized like, oh, this is a perfect use case for having AI build our own PDF generator plugin on the server side as we’re generating invoices and receipts to be able to email them to laundromat customers. And so we just whipped that up within a week or two and it’s great. So now we have the best of both worlds of some of the power of AI tools for development, but then leaning on the strengths of platforms like Bubble where they’re handling a lot of the heavy lifting in terms of server management, privacy rules, security. The AI tool we’re currently using the most. It’s called BuildPrint by a company called Not Quite Unicorns by George Collier, which Not Quite Unicorns should be a band name. 

It really sounds like a really good band name, but it’s an AI tool, kind of third party that tacks on to Bubble and allows you to interact with it using a lot of the modern AI development tools that have gotten all the buzz while still leaning on the strengths of using a platform like Bubble. And we were very much the poster child for Bubble of you can start whether you just have a few customers or whether you’re enterprise and you have thousands of daily users and all that, and you can work your way up on the subscription plans and the platforms. And so we started off with just the very basic and regularly moved our subscriptions on up. And then it was March of 2023 when we switched over to their dedicated server hosting enterprise level of subscription. And eventually doing that is more stability. 

It does cost more, but our app hasn’t been down for what, three and a half years now, like ever. And so that’s nice. And somebody else is doing all the watching and safeguarding of that to make sure that that stays where it’s supposed to be. So in terms of the trade-off in there, that was worth it to us because again, we didn’t set out to be software. Well, we didn’t set out to be coders, but rather we set out to build software to solve problems because it served the business and our customers, and that was the best method to do that. 

Rob Walling: I want to switch it up and talk about hardware because obviously you have these POS systems. It’s just like a cash register type thing, or it’s probably a tablet these days. I imagine it’s a computer. 

Brian Henderson: That’s evolved over time. 

Rob Walling: Yeah, I bet it has. What I want to hear though is specifically, [VERIFY: “A&R” — unclear who Rob is referencing] had talked a couple episodes ago about now having hardware as a component of a SaaS is a valuable moat. Do you see it that way as well as someone who’s operating a business like this? 

Brian Henderson: I do. I really do. The point of sale software was not the whole solution. We’ve really focused on being a point of sale system. And we discovered early on that just trying to sell the software by itself and the customer goes and sources the right hardware, trying to find the right hardware for their store was difficult. Part of the solution that we sell is that we’ve sourced commercial grade equipment, computers and touch screens and printers and all that, that will survive a harsh commercial environment. Laundromats are really, really hard on computers, especially ones that have fans in them. Lots of lint in the air. You literally have to take the computer out and dust it off with some cans of compressed air to get the lint out of the computer. It’s bad. It’s rough. And there’s water and there’s humid environments can be sometimes. And the very first few systems that we sold back in 2016, it was a separate touchscreen monitor and a separate tower. 

And one of my first customers, she was in New Jersey and I was talking to her on the phone trying to walk her through how to set up her system remotely. She did not know how to connect a monitor to the computer. It was an utterly foreign concept to her. And I realized, oh, this is bad. If I’m hoping to help laundromat owners across the country set up point of sale systems entirely remotely and talk to them on the phone, then I need something that they can simply pull out of the box and plug it in and start getting value out of it almost immediately. And so that quickly led us to finding all-in-one solutions that has the touch screen and the computer hardware all in just the monitor basically. And for a long time, we even sold a unit that had also the receipt printer built into the base of the thing. 

So it was literally the computer, the screen and the receipt printer all installed in one unit and they just plug in power and internet and that was that. So that was an important part of it. 

Rob Walling: So as we’re approaching time, I have one more question for you that I’d like to hear about, and it’s about competition. You entered this space when it was nascent, non-existent, potentially literally the first entrant. And now venture capital has come into the category. And I believe you told me or producer Ron that your main competitor has raised $220 million in VC since 2021. So my question to you as the final kickoff here, because I know that there are other bootstrappers in the audience who have had to deal with this, what is that like for you? What does it look like day to day to compete against that kind of a war chest as a completely bootstrapped company? 

Brian Henderson: There’s two thoughts about it. One is a little bit of remorse in terms of not just playing in a wide open ocean anymore. I’ve joked before that all I want is an uncontested monopoly. I don’t think that’s too much to ask. But at the same time, I do recognize that competition does drive innovation. It helps you avoid complacency and it has been healthy for the market and the industry. I used to be a lot more opinionated about the right way to run laundromats when I was younger. And likewise, I used to be a lot more opinionated about the right way to build a SaaS company and run a tech startup when I was back in my 20s. I’ve just turned 40 not too long ago. And so I recognize that there are a lot more ways to be successful in this world and that these things can live alongside each other. 

On one hand, the fact that a competitor has raised so much money is very validating that, yeah, hey, there is a market here. I found something. There is an industry here that needs to be served. On another hand, it can be intimidating, the fact that they’ve raised so much. And it’s been fascinating to observe how people interpret venture capital funding as some type of measurement of validity of what that company in particular is doing as if they’ve got something special. Obviously I’m a little bit biased and I don’t think that what they’re doing is special, but they are very skilled at getting investors. That is their power is getting buy-in from them. And they are making a play for an entire industry. When you talk about total addressable market, we at Wash Dry Fold POS, we’re very focused on laundromats that have drop off laundry services and/or pickup and delivery. 

And they do a certain volume of that service in addition to their self-service income. Whereas this competitor is really talking about, well, all laundry in the United States, whether it’s at home or in apartment laundry rooms or laundromats, then they’re using those numbers for the total addressable market. And so you see them needing to burn through these investments and getting into things like lending for laundromats, wanting to build stores or building out self-service payment systems in addition to point of sale system and serving people who are trying to start a pickup and delivery business out of their home using just the residential washer and dryer in addition to a full laundromat with staff and a service counter and infrastructure and all that too. So they’re making kind of a different play. And the thing that lets me rest easy at night and gives me confidence is the fact that we have been bootstrapped. 

We don’t have a burn rate or a runway that a funded startup would have. And we don’t have a mandate to burn through cash like somebody trying to build a unicorn would have. And we’ve been operationally profitable since day one. And so it’s to our advantage that our churn rates. I’m remembering a time that Ian and I had a consultation call with you and we were telling you about some of our churn rates and longevity of our customers. And you’re just like, ah, man. 

Rob Walling: Kill for that. 

Brian Henderson: Kill for it. 

Rob Walling: Yeah. 

Brian Henderson: Anyway, we’re designed and built to be here indefinitely. And I feel an obligation to our customers. They build their operations around using our software as core to how they’re running their laundromats. And so building a company that is tried and true based off of real feedback, it’s built to operate for the long run, has stability and security, and building up quite a war chest of funds to last through really any situation. I feel an obligation, a responsibility to do that rather than a venture-backed company that is like burn as much cash as you possibly can, buy your way into the market and go big or go bust. That’s just not for me, which is why I’ve been a listener to Startups for the Rest of Us for the past 10, 15 years. Yeah. So the net result has been that we’ve benefited from it because this competitor has spent a lot of money on market education. 

And we’ve shifted over the years. We’ve been at it long enough. We’ve seen a shift from people being product or solution unaware to they’re typically looking for a point of sale system for the laundromat and preferably a cloud-based one. And so they’re coming in a bit more informed. And I think that we’ve benefited from the millions of dollars that this competitor has pumped into advertising in the market. And then when they stumble and fall and aren’t as good of a solution, then they go looking for another point of sale system. And so we’ve benefited from that as a net result. So that helps. 

Rob Walling: That’s cool. And then when they go out of business, you can buy their assets for pennies on the dollar. I won’t say it’s inevitable because it’s not, they could succeed. But yeah, when someone raises that much money in a space like this, it’s a long shot they’re taking for sure, which is the nature of venture capital. 

Brian Henderson: Yeah. I remembered something I was going to say about hardware earlier, and that was the advantage of selling the hardware upfront. And then on the long tail, having the software subscriptions and the payment processing kind of on the long tail. So typically in terms of customer acquisition costs, the amount that you’ve spent to acquire that customer in advertising dollars or however you’re going about marketing to them and literal buy-in from your customers. We sell them the hardware upfront for a few thousand dollars depending on what equipment they get. And that covers our initial setup and training costs for that customer. We have a wonderful customer success manager named Chelsea based out of Kentucky who was a former manager of a chain of eight laundromats. And so she knows the business inside and out, who helps get them set up and make sure they have the right hardware. 

And so it’s covering her costs and her time for all of that. And then the customer acquisition cost is covered. And so we hit the ground running with each customer already profitable and moving forward. And so now that we have the chain of laundromats more than covering lifestyle and technically we make more money from the laundromats than we do from the software company at this moment, which is really cool. And they’re some of the top performing laundromats in the country. And we’ve converted Wash Dry Fold POS to a C Corp for tax reasons a few years ago, and we’re motivated to keep cash within the business. And so now we’re in a spot where we’re going to be kind of pouring fuel on the fire to continue on with that growth. Yeah. So that’s an advantage of selling the hardware, having that thing you’re selling in the front, whether that’s a setup and training session or if that’s the literal physical hardware, make profit upfront, cover your customer acquisition cost, and then do what you can to keep them a subscriber for the long term. 

Then that’s worked out really well for us. And it’s led to a very low amount of churn and allowed us to continue growing in a profitable way from the very start. 

Rob Walling: Builds a great business for sure. Brian Henderson, folks want to keep up with what you’re doing. Washdryfoldpos.com. And where are you on the internet? LinkedIn? I know you’re not doing much on X Twitter. 

Brian Henderson: I’m technically on LinkedIn. That’s probably the best way to reach me, just Brian Henderson. And I sometimes forget that it exists. I’m not on it too often. I’m very much a Facebook guy too. I was in college when it came to our campus back in the day. So that’s the level I’m at. I remember everybody being excited and talking to each other on the sidewalk saying, “Hey, we’re getting Facebook, getting Facebook at our college.” So we are focused on growing, so we are looking for more sales and marketing people to join our team. So if you’re in Oklahoma, give us a shout out and we’d love to talk to you. 

Rob Walling: Sounds great, man. Thanks again for joining me on the show. 

Brian Henderson: Thank you. 

Rob Walling: Thanks again to Brian for coming on the show. I enjoyed that conversation and just the unique journey that he and his co-founder have traveled building their SaaS company. So thank you for listening this week and every week. This is Rob Walling signing off from episode 844.