"No way to collect and recycle the waste water for example." - yeah, but there was no waste water from the wash. Cherry used a waterless carwash solution that actually worked pretty well.
My husband was working for Cherry as a second job 3 days a week, and we're really sad to see it go. The money and hours were decent, and he thought it was better than being stuck in a coffee shop or something like that for a second job. He was solidly booked with customers on the days he worked, so I don't think Cherry folded for lack of customers. I also want to point out that not all Cherry car washers were social rejects who had no others options for work except for menial labor... my husband is college educated, we just needed some extra cash.
I think the real crime here, which no one has brought up, is that Cherry gave ZERO notice to the washers that it was going to fold up yesterday. We got an email last night that it was over effective immediately. I'm glad it wasn't our only source of income, but even a weeks notice to get things sorted out would have been nice. FU Cherry!
Cherry was not a great idea. Had they done some research (well, the people who gave them 5.25 million dollars to waste away), they would have learned some very simple things. Disclaimer: I used to own and operate (as in also wash cars) a successful on-site car wash business. Closed it down because it was a pain in the ass to run.
On-site car washing (or any other type of on-site auto service (YourMechanic guys should pay attention)) is very low on margins, and competition is tough. You have to compete with every 13 year old kid who wants to buy a new playstation game and will wash cars for $5. You will also have to compete with every other joe who will basically wash a car for a couple of bucks. So creating a solid customer list is tough.
There are also logistics issues. Getting a group of car washers who are not complete and total fuckheads is impossible (I'd say its easier to win the lottery twice). Cherry tried to circumvent that by having sub-contractors, which in other words means giving some random joe $5 to wash some car. They only provided them with some basic equipment. If you have ever washed a car in the cold, you know that you need more than a fucking soap sprayer and a sponge. There is a lot of equipment needed to correctly wash a car in diverse weather conditions. Sub-contractors did not buy equipment because they were being paid shit. So, getting good employees is impossible, getting good sub-contractors is like finding out you have a rich uncle who died and left you money and that suddenly, every hot celebrity out there is hot for you.
There is also the issue that people dont give a shit about cancelling an appointment 30 seconds before it is due. That plus rain, shady owners trying to blame you for "missing stuff", and people who smoke. Its just a shitty business to be in. The only people who manage to do something in that market are the professional detailers. Those guys do make some good money, but have to spend a shitload of time on a single customer, and cannot (in most cases) reliably duplicate their business in order to have any horizontal growth. The high end market is also very competitive and customer loyalty is very high. No Porsche owner will have some unknown detail his baby in order to save $50.
Also, I so called this. This is one of those "investments" that makes you go "huh?".
Edit:
And here I was feeling bummed about wasting $600 on car washing equipment. 5.25 million bucks! Hell, give me $500k and I'll make Nuuton so awesome that people will say "Google? What is that?" :)
> At least in the state where I live, there are regulations that require car wash locations to recycle the runoff water. I don't see how this would be possible with this model.
I'm curious too. In the process of looking for relevant information (which I haven't found yet), I see that each washer Cherry contracts with in California will have to pay for a $250 per year car washer license. They'll have to do a pretty large number of washes before they start making any money.
There have been onsite carwashers for some years now, decades even. If someone could see themselves using Cherry, they would probably already be aware of this.
I apologize for the tone. But Cherry just pisses me off because so much money was wasted on that really bad idea. It doesnt even compare to a Facebook for cats kind of thing (which was an un-tested market). Car washing has been going on since carriages were invented (300 years go?). I just hate seeing good money being wasted.
Your sub-contractor part does hit me straight in the heart, because I'm a sub-contractor right now. Its not all rosy and nice, but I do get to work remotely and make my own schedule. It also allows me to work on Nuuton without having to worry about IP issues with an employer. But would still consider a good remote job offer. ;)
Edit:
I also have to add that I studied this market from every angle. Even went as far as testing an android app to get customers to order car washes through it. People would download the app and just create an appointment through the app to get their car washed. Payment would be handled by the app itself. But it tested horribly and the local market did not want it. In the end, its just one more business that did not work out. After a dozen or so, it doesn't make you feel bad about it failing. :)
For each of the barriers you brought up, have you got any ideas on how Cherry could've addressed them? One trick I've learnt in the past couple of years is that solutions don't need to be 100%. If Cherry had found solutions that worked 80 - 90% of the time for those barriers, they would probably be doing an alright job of overcoming them.
There aren't any. The problem is that car washing is an extremely low-margin and low-volume business relative to other industries. High margins are measured in the singles of dollars; high volumes frequently means reaching double-digits in customers in a single day.
Cherry's business model actually increased the costs of business substantially by adding in costs for traveling, equipment, employee or subcontractor acquisition, insurance that would apply to infinitely variable service sites, and marketing costs that a normal car wash service would not have to deal with (note: making a distinction between a car wash service and a car wash facility; the two are separate and distinct business models). Thus, economically, it was essentially impossible for Cherry to succeed without first conquering the basic problems that dog existing car wash services.
The last cab company I worked for had a car wash in the yard that usually managed to make the car dirtier than it was before it was washed. But that was their 'standard', it was free and I really didn't care so...
What really makes Cherry that special that it needed or received funding? There have been mobile detail services for years already. Was it the "startup" label?
Plus, we really don't need more wasteful services. No way to collect and recycle the waste water for example. Car washes are just ugly wastes of a resource we don't have enough of.
Cherry is the carwash that comes to you. Park anywhere, check in online, and we'll wash your car right where you left it. Just $29 per wash, tip's included.
Cherry.com washed my car for free 3 months ago, and I didn't even ask them to. They did a great job, really, it was a excellent car wash. I intend to use them in the future.
* Anything is low margin if you provide a commodity. By being a car washer, the only people you see are people getting their car washed. What you don't see is people who need to get their car washed but don't. Some proportion of those people don't because the existing interfaces are too difficult to use. I just used a pathjoy recently to clean my apartment and I was willing to pay a premium to use them because I have no idea how to otherwise find a good house cleaner.*
People who don't wash their cars just don't care enough about their cars to wash them. That's it. Also, finding a good house cleaner is not the same as a good car washer. You can stroll into a tunnel type car wash any day of the week and not have to worry about a thing. Having a stranger come into your home to clean is really stressful. Congrats on finding a good service provider for that.
shalmanese 2 hours ago | link | parent | flag
I'm not a car owner so I have no stake in this fight but I feel the need to rebut some of the claims:
* Anything is low margin if you provide a commodity. By being a car washer, the only people you see are people getting their car washed. What you don't see is people who need to get their car washed but don't. Some proportion of those people don't because the existing interfaces are too difficult to use. I just used a pathjoy recently to clean my apartment and I was willing to pay a premium to use them because I have no idea how to otherwise find a good house cleaner.
* Staffing is hard but I think you exaggerate how hard it is. Lyft has managed to solve this problem successfully and I would argue Exec has as well so this is at least two existence proofs. Postmates and Instacart also seem to have solved this problem but I haven't had enough datapoints to confirm.*
Have you ever had a car washing business? How did you fare with finding a good staff?
* Proper incentive structures can trivially solve the cancellation problem. Just charge a cancellation fee if you cancel within an hour of cleaning.*
Oh charge a fee you say? How do you think I will do that? Credit card? Then I have to deal with chargebacks and lose even more money than not doing anything. Mail them an invoice? Not going to work. Please provide some insight into this because I do want to learn how you would do this.
* Some people are going to be fucktards the best way to deal with it is to just treat it as a statistical phenomena and price it into your model. There are lots of things you can do to bias the natural level of fraud but, anecdotally, companies I've talked to seem to report that just "has to own a smartphone" is enough to cut fraud by a significant amount.*
My model could only be priced at a given rate because of competition. By pricing in fucktards I would be pricing myself out of non-fucktards.
* Barring certain mathematical proofs, it's impossible to prove that a startup won't work, only that it hasn't yet. The reason to spend $5M is that if you discover a way that it could work that nobody else had the patience/foresight to discover, it could be worth many multiples of that.*
You are right. But it does not take 5.25 million dollars to prove that Cherry would not work. Just a couple of thousands to test at a local market. In fact, most startups these days don't need millions of dollars to prove their business model. They just need thousands, not millions. Thats why YC only gives people a small bit of money as seed. They know that there is no need to spend that much. Where you do need money is to scale the operations and that varies a lot from business to business. Cherry would have been able to scale without much money, because they did not do anything themselves (the sub contracted the work).
I do appreciate that you took the time to reply, but I have real world experience with this, whereas you only are speculating while using Silicon Valley startup logic to it. Doesn't apply (hardly ever, actually).
My husband was working for Cherry as a second job 3 days a week, and we're really sad to see it go. The money and hours were decent, and he thought it was better than being stuck in a coffee shop or something like that for a second job. He was solidly booked with customers on the days he worked, so I don't think Cherry folded for lack of customers. I also want to point out that not all Cherry car washers were social rejects who had no others options for work except for menial labor... my husband is college educated, we just needed some extra cash.
I think the real crime here, which no one has brought up, is that Cherry gave ZERO notice to the washers that it was going to fold up yesterday. We got an email last night that it was over effective immediately. I'm glad it wasn't our only source of income, but even a weeks notice to get things sorted out would have been nice. FU Cherry!
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