Pressbox and Tide Cleaners: Vijen Patel. The $1.99 Gamble That Built a National Brand

Summary

How I Built This with Guy Raz

Episode: Pressbox and Tide Cleaners: Vijen Patel – The $1.99 Gamble That Built a National Brand
Release Date: October 6, 2025

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Episode Overview

In this episode, Guy Raz interviews Vijen Patel, co-founder of Pressbox, a disruptive dry cleaning startup that embraced the “boring” world of laundry and spun it into a national brand. The conversation traverses Patel’s journey from risk-averse consulting and private equity to bootstrapping a low-margin business, all the way to Pressbox’s eventual acquisition and national integration with Procter & Gamble’s Tide Cleaners. Key themes include entrepreneurship in ‘unsexy’ industries, the power of analyzing unit economics, the grit needed to succeed in a competitive marketplace, and the underestimated opportunities in so-called “boring” businesses.

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Key Discussion Points & Insights

1. Early Career & Foundations (06:56–10:10)

• Corporate Disenchantment:

  • Patel reflects on joining McKinsey during the 2008 financial crisis, noting that “our satisfaction level… was probably one of the lowest you ever had” (06:56).
  • Highlights how many peers became entrepreneurs feeling unfulfilled by corporate life.

• Private Equity Lessons:

  • Discusses time as an associate in San Francisco, focused on consumer brands.
  • Realized the limitations of analysis alone: “There’s a bit of gut feel relative to other areas”—recognizing that data doesn’t always capture why a business will succeed (08:11).

2. Finding the "Least-Worst" Idea: Why Dry Cleaning? (10:10–13:57)

• Searching for a Startup:
  • Patel sought a “highly fragmented industry, one that has low technology, and no branding” (09:31), emphasizing numbers and market dynamics over passion.
• Personal Pain Point:
  • Dry cleaning pain as a working professional: Only time to drop off was Saturday, highlighting a wider customer frustration (10:51).
• Market Research and Feedback:
  • Pitched the idea to about 100 people; “Ninety percent of them said this is an awful idea” (12:27).
  • Used the negative feedback to address shortcomings and plan mitigation strategies.

3. Reinventing the Dry Cleaning Model (13:01–16:09)

• Core Innovation:

  • Shifted from traditional storefronts to 24/7-accessible lockers, drastically reducing labor and real estate costs.
  • “If we could get 24/7 access...that would actually allow us to eliminate half the cost” (13:01).
  • Noted most dry cleaners operate at 15% margins, potentially zero when adjusting for owner salary.

• Tech’s Modest Role:

  • Emphasized practicality: Tech was limited—“by tech... we were referring to SMS,” and initially “put a pen and paper on the side” for stain notes (14:32).

• Product-Market Fit:

  • Focus was on convenience; price was secondary except for the all-important $1.99-per-shirt anchor (25:16).

4. Bootstrapping & Early Struggles (19:06–26:45)

• Starting in Chicago:

  • Patel and co-founder Drew McKenna leveraged personal and family real estate connections to secure initial locations.
  • Moved to Chicago (not Silicon Valley) to utilize their local networks (18:33).

• Initial Funding:

  • “We put all of our life savings into it... about $120,000 saved from McKinsey and private equity, and my co-founder did as well... plus $100,000 of debt from our parents” (22:58).

• Breaking into Apartment Buildings:

  • Expected offices to be the target, but found that proximity to home wardrobes was key (30:47).
  • The breakthrough: landing 1225 Old Town, the city’s hottest residential building after five months of persistent networking and friendly resident campaigns (31:19).

• Guerilla Marketing:

  • Relentless face-to-face marketing: “I think I might have hosted a thousand events in lobbies of buildings” (33:19).

5. Unit Economics & Operational Grit (33:19–39:07)

• Cost Structure:

  • Locker installation was $5,000 per location—no charge for space as it was deemed an “amenity” by building managers (34:00).
  • Needed only ~26 regular customers per location to reach break-even (34:26).

• Personal Sacrifice:

  • Paid themselves $40,000 per year after previously earning ~$300,000 (39:07).
  • “I had missed friends’ weddings... I stopped getting invited to friends’ birthday parties because I would just be a no-show” (64:25).

6. Competition & Expansion (39:20–54:35)

• Facing Well-Funded Rivals:

  • Washio (backed by significant VC and celebrity investors) and later, P&G’s Tidespin, posed existential threats.
  • Despite Washio’s aggressive entry, “our revenue had only gone down by 2%” (40:24).
  • Washio ultimately failed while Pressbox’s model—“twenty-six transactions per hour... versus four to six for a pickup/drop-off model” (20:27, 53:33)—proved operationally superior.

• Geographic Expansion:

  • Expanded to D.C., Nashville, Philadelphia, and Dallas by “following our customers”—developers who brought Pressbox into new markets with their new buildings (54:43).
  • Pride, but no hubris: "We were just focused on execution... death by a thousand cuts" (55:26).

7. Vertical Integration & Scaling Up (42:01–49:16)

• Investing in Their Own Facility:

  • Built an in-house cleaning plant to control quality, a critical move for retaining their high-value, captive apartment market.
  • Financed the plant with debt due to their significant fixed assets (47:19).
  • Discovered unique staffing sources—hired via Spanish-language newspaper ads to fill presser and washer roles (48:33).

• Customer Retention as Survival:

  • “The difference between ninety-eight percent retention and ninety-six percent... is astronomical... fifty-five versus seventy-eight percent customer survival over two years” (43:40).

8. Acquisition by Procter & Gamble (54:35–65:00)

• The Tide Spin Battle:

  • P&G launched Tidespin as a direct competitor, only to eventually realize lockers were the key (53:50).
  • Pressbox’s head start in “two hundred fifty buildings in Chicago” enabled operational dominance (52:12).

• Negotiating the Acquisition:

  • P&G initially lowballed; Patel and McKenna held firm—“within 20 minutes... redacted a term sheet and sent it back...we look forward to competing head to head” (62:01).
  • P&G acquired Pressbox in 2018, rebranded all locations as Tide Cleaners, and put Patel and McKenna in charge of the urban division (63:05).

• Critical Decision Factors:

  • Extreme burnout and personal exhaustion—“working for about 1,000 days in a row...I remember realizing I don't want to do this when I'm forty-five years old...we just wanted to make sure this wasn't our permanent state” (63:56–66:10).
  • Financial and operational stability: acquisition meant capital to grow and relief from the constant grind.

9. Life After Exit & The Power of "Boring" Businesses (67:52–71:54)

• Post-Exit Reflection:

  • Took time off, then launched the Eighty-One Collection, a VC fund focused on overlooked, “boring” industries.
  • “There’s about 3,400 early-stage investing firms, and about 90% focus on software... leaving only 10–20% to fund things that are quite critical to our society” (68:22).
  • Invests in sectors like dentistry, property tax appeals, pet cremation—underserved by VC despite robust fundamentals (70:35).

• On Luck vs. Grit:

  • “I used to think 80% of it was hard work... I now think 80% of it was luck” (71:30).

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Notable Quotes & Memorable Moments

• “Pick the least worst idea. I remember I had an idea of creating chai packets from India...another one was dentures. But at the end of the day...dry cleaning got us excited.”
  — Vijen Patel [10:51]

• “If we could get 24/7 access...that would actually allow us to eliminate half the cost.”
  — Vijen Patel [13:01]

• “All of the VC’s passed. It was so discouraging...but I was having so much fun. It was the first time in my career where I was just having a blast.”
  — Vijen Patel [20:34]

• “We realized the best tactic is not the lockers, but setting up tables in lobbies...I might have hosted a thousand events in lobbies...”
  — Vijen Patel [33:19]

• “The difference between ninety-eight percent retention and ninety-six percent retention…is astronomical…the difference is between having 55% of your customers at the end of two years versus 78%.”
  — Vijen Patel [43:40]

• “We worked seven days a week. We were open 24/7. I had missed friends’ weddings...stopped getting invited to birthday parties because I would just be a no-show.”
  — Vijen Patel [64:25]

• “I used to think 80% of it was hard work, smarts, grit. I now think 80% of it was luck.”
  — Vijen Patel [71:30]

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Key Segment Timestamps

• Vijen finds his “least-worst” idea, dry cleaning: [10:51–12:27]
• Model innovation—lockers, margin analysis: [13:01–14:32]
• Early struggle to get buildings, breakthrough at 1225 Old Town: [31:19–33:19]
• Unit economics, break-even math, $1.99 shirt anchor: [33:19–35:17]
• Personal financial/career sacrifice: [39:07–39:20]
• Threats from Washio and Tidespin, Pressbox’s operational advantage: [39:20–40:57], [52:12–53:50]
• In-house facility buildout, staff recruiting innovations: [42:01–49:16]
• Acquisition negotiation showdown, why Pressbox sold: [62:01–66:32]
• Post-exit: Eighty-One Collection, the opportunity in 'boring' business: [68:22–71:54]
• Luck vs. grit in entrepreneurship — Patel’s perspective: [71:30]

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Final Thoughts

• Pressbox’s journey offers a masterclass in executing on operational excellence in “unsexy” industries, validating through math and relentless hustle rather than hype.
• Patel’s story reframes the narrative about entrepreneurship, success, and the underestimated value and impact of “boring” but necessary businesses.
• Above all, it’s a candid testimony on grit, humility, luck, and knowing when to take ‘life-changing’ opportunities even when they demand letting go.

Transcript

[Guy Raz]

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[Vijayan Patel]

It was a night in nashville it was raining and i was walking to an event to sell dry cleaning and i remember realizing i don't want to do this when i'm forty five years old we had been working for about one thousand days in a row we were open twenty four seven and there was just such a toll that had taken on us from bootstrapping this you were burned out incredibly and guy i made forty thousand dollars you know i had friends in private equity who were at this point making partner and making you know a million dollars plus per year i remember at one point calling my dad and saying hey dad when this doesn't work out if this doesn't work out can i borrow some money so i can start again like not a business but to.

[Guy Raz]

Welcome to how i.

Built this a show about innovators entrepreneurs.

Idealists and the stories behind the movements they built.

I'M guy raz and on.

The show today how vijayan patel spun dirty laundry into a tidy business with pressbox a dry cleaner that grew to hundreds of locations before selling to procter and gamble you know how some prices kind of get burned into your brain like a two dollars cup of coffee or a ten dollars movie or if you grew up like me one dollar ninety nine cents to get a dress shirt cleaned at the dry cleaner that number really stuck even when shirts haven't actually cost one dollar ninety nine cents to clean for a long time so and in a way that number tells you almost everything you need to know about the dry cleaning business razor thin margins mom and pop shops struggling to compete and customers like me racing to drop their shirts off on a saturday morning and scrambling midweek to pick them up before the place closes at six in twenty thirteen vijayan patel looked at that one dollar ninety nine cents shirt and saw an opportunity not because he loved dry cleaning but because he loved the numbers feejan actually trained as an actuary then worked in consulting and private equity and when he set out to build his first company he didn't chase a passion project or a dream he chased what he called the least worst idea that idea was laundry but instead of storefronts vijian and his co founder drew mckenna put lockers in apartment buildings in chicago place where young professionals could drop their clothes anytime day or night and then pick them up a few days later cleaned and folded on paper the margins suddenly looked a whole lot better without the cost of storefronts but in practice the work was grueling feejan and drew spent years running pickup routes pitching building managers and hustling to win over skeptical investors but their company pressbox eventually expanded to other states and a few years later it caught the attention of one of its biggest competitors procter and gamble p and g bought pressbox folded it into tide cleaners and today it's in nearly twelve hundred locations nationwide now one of the main reasons this story caught our attention is that like spot hero and kinko's copies also brands we've featured on the show pressbox is part of a so called boring industry it's not a new tech product or a flashy beverage brand it's dry cleaning and laundry and as you'll hear vijian is such a champion of boring startups that he actually started his own vc fund in chicago to support them vijayan patel grew up in chicago in the nineteen nineties after he graduated from notre dame he took a job as a consultant with mckinsey but the year was two thousand eight and the financial crisis changed everything for vijan's cohort of new.

[Vijayan Patel]

Recruits and it was interesting because we were the two thousand eight class and you know everyone said hey you're going to be able to do these case studies with the nba or do all these you know amazing things travel around the world and everyone got there and the economy had shifted and everyone was doing cost cutting in iowa or whatever it might be and you know being from the midwest i was just incredibly thankful to have a job but i think even to this day our satisfaction level of like a cohort of business analysts was probably one of the lowest you ever had and so we had you know among us fifty five people i think thirty of the fifty five became entrepreneurs wow something around that that number but i at the end of the day the end of our work always culminated in a powerpoint presentation and so it just felt like there was something left to be desired all right.

[Guy Raz]

So you you're there for like three years i think almost three years and then you move to san francisco to join a private equity firm tell me about your one of your jobs as a i'm assuming you're like an analyst there correct an associate to to vet potential acquisitions right you're just going through looking at all these opportunities that they might be interested in acquiring that's correct.

[Vijayan Patel]

And i focus on consumer and i'll never forget there were some of these brands like i don't know if you recall like brookside sahale nuts and we had the opportunity to put investments in and ultimately we didn't get there because we were so analytical about everything and the problem with consumer is that there's a bit of a gut feel relative to other other areas that you can invest in and so i end up over two years not being able to do any deals but i think sometimes about all those companies we could have backed in that basket and it's probably north of worth more than five billion today wow and i realized i mean i was mediocre at private equity at best because you know a good private equity analyst just needs to sit in front of a computer all day and just crank on models and decks and and i was here and i needed to be with people and create change and change the world and that was the aha like oh my i need to go put my money where my mouth is like i need to go.

[Guy Raz]

Be myself i mean when you are in san francisco i mean this is like you know that that time i mean it's like uber is starting to make waves and obviously airbnb is already you know really starting to have an impact and slack is is coming out and i mean there are all of these things were you following those trends were you cognizant of them or was that sort of front and center in your mind you know i would think.

[Vijayan Patel]

The answer is yes but it wasn't and the reason why was like i was in this private equity bubble you know all the private equity firms in san francisco were in one building in one maritime plaza and then i kind of looked at starting a company as like a private equity guy and i was like all right let me think through what would be a good opportunity and there was literally zero to no dream it was all right i need to find a highly fragmented industry one that has low technology and no branding and so like by the way the irony is that if you pick those three things up you actually should result in taxis but as you know i ended up with dry cleaning right and so it was a different path altogether.

[Guy Raz]

Well taxis were obviously there was some fierce competition right between uber and lyft at the time but you're i mean you were convinced by this point cause you're there from twenty eleven twenty thirteen by the end of your time in san francisco that you wanted to start a business i'm trying i'm imagining that part of that was because you were vetting so many businesses and you were listening to all kinds of pitches already in your mind you're thinking i'm going to do this and i've got to find something and you had access to all kinds of tools right and analytics tools and so how did you start to to search for what that could.

[Vijayan Patel]

Be i looked at what i had a passion for moderately right which was consumer and retail and i had some edge on that just because i'd spent five years on it and then it was like pick the least worst idea and i remember i had an idea of creating chai packets from india and that probably would have been a better idea another one was dentures but at the end of the day there was something that about dry cleaning that got us excited like actually to be clear actually now that i look back at it our private equity firm was business formal like i still to this day have all these suits and ties and shirts you had to dress dress formally and i remember you know we worked long hours and it was a pain point to go to the dry cleaner and again think back to twenty twelve eleven so dry cleaner was often frequently visited and i remember the only time i'd be able to drop it off would be a saturday and that was like i don't want to go to the dry cleaner on saturday i want to go see my friends and then combine that with like this analytical finance math background i have and one of the best things you ever did is over those six months over that six month process my eventual co founder would fly out to san francisco and guy we just i just made an investment deck on it like it wasn't even a startup deck it was like hey how would i grade this startup and it was like a twelve page deck but we put this idea in front of anyone we could talk to and you can imagine you know i think we talked to probably one hundred people over the course of the six months and ninety percent of them said this is an awful idea all right let's.

[Guy Raz]

Break this down a little bit because this is twenty thirteen and you are you have this idea let's talk about the idea first for the most part when you drop your clothes off at a dry cleaner they do not do the laundering and the dry cleaning on site they're just a storefront and there's usually central facilities that service all these dry cleaners so when people say oh my dry cleaner is the best it's actually not true necessarily because they're all getting it cleaned at the same central place what was the opportunity you saw to quote unquote disrupt that model from.

[Vijayan Patel]

The consumer side the biggest one was the twenty four seven access and could you create something and actually there was like a little company at the time called laundry locker that like kind of tried this out a bit in san francisco and the idea was to hey you know go here twenty four seven i think you'd use like a you'd get like a fob to try to get into the building but you could then access it twenty four seven but then as we dug in we realized oh my not just could we create something that's more convenient but this would actually allow us to eliminate half the cost because dry cleaners operate fifteen percent margin businesses and by the way when you take out the salary of the owner operator it's like zero percent and so you know everyone said hey why are you doing this this is a low margin industry but what we realized is that if we could get some twenty four seven access or depot you can get rid of rent and labor on site and that all of a sudden allows you to operate at forty.

[Guy Raz]

Percent margins it wasn't that you were going to be any different from a traditional dry cleaner it was just that access to dropping your clothes off would be because most dry cleaners would be closed after five or six pm on a weekday right and so the idea is you could go there two in the morning and drop your stuff off and i guess pick it up from.

[Vijayan Patel]

The locker that's correct and we thought our ideal customers would be bankers and doctors and people just who had longer hours that couldn't meet the dry cleaner.

[Guy Raz]

Hours but this was going to be i'm assuming a tech enabled company right was tech going to be part of.

[Vijayan Patel]

It it was but it was twenty percent and by tech guy we were referring to sms i mean it's funny we one of the biggest pieces of feedback we would get is actually from people who say they love going to their dry cleaner and we'd ask why and the simplest response would be like we like pointing out where stains are and any specific detail request and so our solution to that was actually not even tech it ultimately became tech but at the time it was actually put a pen and paper on the side of our locations and a sticker roll and so tech was actually not part of our you know dna all right.

[Guy Raz]

We'Re going to get back to that because that comes later when you actually set up the lockers but before that all right you're in san francisco and you're talking to people about this idea you're just trying to get feedback and most people are telling you this is not a good business to purs i.

[Vijayan Patel]

Would say overwhelmingly you know every nine out of ten people we'd say is like hey why are you doing this and in fact it i remember calling my mom and telling her i was going to start this and she cried and she said you're doing what like you're leaving private equity to go start a dry cleaner and it's not something that like any you know traditional private equity firm would ever look at doing or a venture capital firm you know they would have looked at way sexier ideas but what was fun about that experience guy was that by being so vulnerable and telling everyone about it and telling all the reasons we'd fail we actually sat on that feedback and then just started thinking proactively about how to mitigate those failures okay let's let's go.

[Guy Raz]

Back to san francisco for a moment because at this time right when you come up with this idea as as is the case with so many different kinds of startups there were other people working on similar ideas there was a brand called washio there was another one called rinse which is still around were you aware of those other companies those.

[Vijayan Patel]

Other brands so funny enough ajay who's the ceo of rinse we both approached and created dry clean businesses in the same month and had many common friends who said to each other to talk to each other and so we actually and he's still a friend we actually got coffee in twenty thirteen to talk about it and it was great because we made a connection and we didn't talk again for three or four years but he went down a different path which is pickup and drop off and i went down the hardware path but yeah we did research and to your point washo was the big one but we never made contact with them because.

[Guy Raz]

They were you didn't they didn't have a locker model you would just put your clothes in a bag and these drivers would drive to all these houses so it's not a great model i mean it's a less efficient model exactly.

[Vijayan Patel]

It'S a less efficient model and our solution was more convenient relative to them having to wait for a driver to come they could just go down throw it into a locker text us and go on with their day but tell.

[Guy Raz]

Me about this person that you started it with who his name is drew right correct drew mckenna tell me about drew and who is he and why did you start it with him so.

[Vijayan Patel]

Drew and i went to notre dame together and when i was going to start this one of the biggest issues in this idea was just how hard it was going to be yes it's a giant flaw and how is some private equity guy going to all of a sudden turn into a dry cleaner and so we knew that i needed a co founder period and quickly through some conversations with friends i realized drew could be that person literally we did an mbti test early on and we were the exact opposites which i loved because we were different personalities but we had a common kind of similar value system and then we dated right we dated like we we were we were friends but we weren't the closest of friends yeah and getting to know him over three or four months i realized we would have different strengths that could.

[Guy Raz]

Complement each other okay so you guys start working so he moves to chicago to work on this with you so.

[Vijayan Patel]

He was in chicago actually and this is this is hysterical i'm probably the only founder ever who moved from san francisco to chicago right we decided to start this in chicago and why why in chicago ultimately we had advantages there drew is from chicago i am as well we had some relationships with real estate owners drew specifically did that would help us get some early wins but this was a hard business and as we thought about who to hire who we could surround ourselves with we had a tribe we had a community in chicago that we didn't have in san.

[Guy Raz]

Francisco so all right you moved to chicago to really start to work on this and when you were telling people about it how were you describing this was it going to be a like uber for for dry cleaning like what how is it going to work for.

[Vijayan Patel]

A consumer so at that time the uber for x movement was wild there was uber for everything and that was the washo pitch that was the rinse pitch and it was that's how they.

[Guy Raz]

Pitched vc's this is uber for you know ice cream whatever you know whatever.

[Vijayan Patel]

It might be i think that was actual startup flowers everything i mean it was that and ours was as well except the difference was that we realized because we had a for profit like we just were so focused on private equity lines of like hey we need to make profit and so we were just dogmatic about what we eventually called unit economics and we put the math on like a rinse model or some of these other models like washio like how are they going to make money and we did the math and the max transactions you could do with a pickup and drop off service which have been the true uber model was four to six transactions per hour and then we realized with our model we could do twenty six and so that was the real like unlock as we're you know pitching these investors like hey like this thing will make money so you.

[Guy Raz]

You actually in chicago started to pitch investors to raise money to do this and tell me about that experience so.

[Vijayan Patel]

Moved back to chicago twenty thirteen and was so excited to be back home and i think at the time there were like five to seven vc's and we pitched them all and the general feedback was like hey you're building a nice small business like lifestyle business i think was the right word which like still hurts my soul when i hear that and so all of them passed all of them passed but ultimately guy i was having so much fun it was the first time in my career where i was just having a blast and i think drew and i confided in each other and said hey there's something here and it was a lot of belief like this is worth it but it was incredibly discouraging in fact it got to the point where after we actually launched an investor came back and said we do want to invest with you but by that point we were just so sick of hearing no we're like we're not going to take on any investment all right one of.

[Guy Raz]

The things that i'm curious about is how you validated why this would work i mean you want to be an actuary right and so i guess you put on your actuary hat and started to crunch the numbers and discovered that if you if you got a certain number of customers you would be profitable quickly explain how you sort of figure.

[Vijayan Patel]

That out so to me this is a math equation you're exactly right we did research and we said hey the average person spends about dollar forty per month so how many people do we need to get to use our service so that we can just make money and actually before that even guy we'd set up a table on sidewalks and before we spent any dollars on actually any of the piece of equipment we.

[Guy Raz]

Would just survey people sidewalks where in.

[Vijayan Patel]

Front of buildings in chicago no we did it at like main intersections and we said hey if we were to put a location at your office would you use it if we were to put one near your home would you use it and our initial hypothesis guy was that offices were actually the place to go and we we did the math that if we just get half a percent of people to use our service we would have taken home two or three thousand dollars a month from.

[Guy Raz]

Each location so what were your i mean so your upfront costs were going to be the lockers right and let's.

Let'S kind of break this down first.

Of all you couldn't raise any money so how much money did you have.

[Vijayan Patel]

To work with we put all of our life savings into it i had about one hundred twenty thousand dollars saved from mckinsey and private equity and my co founder did as well and we were fortunate we raised like one hundred thousand dollars of debt from our parents.

[Guy Raz]

Okay so the idea would be there'd be lockers initially in office buildings and let's talk about the locker first like i'm imagining an amazon locker today that's digital and you know but this is twenty thirteen so what what were those lockers going to be and how would people access them so you're exactly right.

[Vijayan Patel]

They were simple we actually called them dumb lockers but they were dumb by design because that brought costs low they had a digilock on them and you would just type a four digit code and you'd turn it and then the only other thing that would make it special was we put a number at the top so each person so say a certain building would have eight lockers four on the top four on the bottom each of those would be numbered one through eight you'd go guy drop off your laundry in this you know hypothetically office building and you would just send us a text and it would just be this this one number and you would just say the number three and that would give us the signal to go pick it up and we wanted to keep this as simple as.

[Guy Raz]

Possible got it okay and an sms message would go to your phone or to you or to drew correct it.

[Vijayan Patel]

Would go to us and we use like a at the time it was called twilio yep still around and that.

[Guy Raz]

Was it and what if all the lockers were locked there was there was.

[Vijayan Patel]

No availability that would be a giant issue and we would add lockers right away because that would be the best issue we could have so when you.

[Guy Raz]

Would if you were ready to drop your stuff off you first have to go to the website set up an account put your credit card details in and then you could leave your clothes in a locker and send the text correct it's funny because today like you look at a model like that and somebody would say oh there's just so much friction but i guess at that time in twenty thirteen twenty fourteen people were willing to do all those things.

[Vijayan Patel]

Yeah i think that at the end of the day you know you say all that and that does sound painful but it was still less painful than.

[Guy Raz]

The alternative and what about price i mean was price the thing that mattered or was it convenience that was more.

[Vijayan Patel]

Important it was convenience but it was price on one item and ultimately i still think to this day i don't know if people know how much they pay to dry clean a sweater but everyone knows how much it costs to.

[Guy Raz]

Dry clean a shirt dollar ninety nine.

[Vijayan Patel]

Exactly and that was the price we were incredibly focused on all of our marketing said one ninety nine a shirt actually i think we started at one hundred seventy nine guy because we wanted to undercut to just get volume in and i believe we had dollar five for a dress and that was enough justification on the price for people to.

[Guy Raz]

Take a leap of faith so let's talk about getting there so you had.

[Vijayan Patel]

To buy lockers that's right so we had three hundred forty thousand dollars to our name in this company eighty percent of a guy went to lockers and.

[Guy Raz]

How did you get any building to agree to let you install lockers in.

[Vijayan Patel]

The lobby this is where the edge in chicago helped but we and actually before that we also started a storefront so we needed a place to work and we put lockers in the front and we used the back two thirds as our office and so that was actually our first location and so it was in lakeview lincoln park and then we started talking to office buildings and gyms and we tried to get in as many office buildings as we could and we completely failed.

[Guy Raz]

When we come back in just a moment vijan and.

Drew figure out the locker situation and.

Learn the basic math of the laundry.

Business which includes a massive pay cut.

For themselves stay with us i'm guy raz and you're listening to how i.

Built this.

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How i built this i'm guy raz.

So it's twenty thirteen and vijian has just joined his co founder drew in chicago to launch their new laundry business pressbox they're going to use lockers to pick up and drop off the clothes and they want to put those lockers.

[Vijayan Patel]

In office buildings to start we like we would just call like you know family members and be like hey do we know anyone who's in real estate and has an office building and you know we'd get one meeting and they'd be like all right this isn't gonna work but you should meet my friend and actually another another favor we asked was actually at notre dame but we actually asked at the time the head of the endowment to say hey we're gonna go do this idea and he so kindly sent ten emails to owners and developers in chicago who were notre dame alums they were actually the endowment had invested into their companies okay wow and so again it was like some of these favors were like all right we got ten leads from this engine ten from our family ten from like our friends specifically guy we we thought offices were like where we were going to clean up and we were completely.

[Guy Raz]

Wrong why people were not like lawyers and finance people weren't leaving their stuff.

[Vijayan Patel]

In lockers we quickly found out that no one wanted to bring their dry cleaning to work right and that was when the light bulb went off where we need to find the path of least resistance and it ended up being we soon found out proximity to someone's wardrobe in terms of not even not even in the buildings of apartment buildings but also in terms of where we'd go in the apartment building if we can be close to someone's wardrobe we had a higher ability for them to become customers so you had to be.

[Guy Raz]

In the buildings where they lived we.

[Vijayan Patel]

Had to be in the buildings and our big breakthrough moment guy was around the month eight mark and i'll never forget this building it's called twelve twenty five old town and at the time this was the hottest property to be in it had the highest rent per square foot it had a bunch of users who were around the twenty to thirty five mark and we knew if we could get them we could get any residential building in chicago and they said no for five months and ultimately we were lucky but we ended up having a lot of friends or friends of friends who lived in that building and we actually had them incessantly email the property manager and i think at the time of like the ninth email she's like all right i'll meet and gaia once we got twelve twenty five old town that's when the model started.

[Guy Raz]

Working how many lockers did you put.

[Vijayan Patel]

In there ten so five on the.

[Guy Raz]

Top five at the bottom and was there a big sign that said get your dry cleaning done here or i mean how did you catch people's attention.

[Vijayan Patel]

We did a lot of guerrilla marketing so that same idea we had where we sat at a storefront and put a label a table down and talked to people we did the exact same thing in the lobbies because what we realized in all the work we did up front is that the reason why everyone wanted to drop off their clothes with a known person is because they're dropping off what they love to wear and that gives them confidence and so ultimately when we we realized the best tactic is it's not the lockers but it was actually us setting up tables in the lobbies of apartment buildings and offices to say hey we're a dry cleaner and this was really i mean guy i think over the course of our entire entrepreneurship i think i might have hosted a thousand events in lobbies of buildings and that would be really.

[Guy Raz]

Where we'd convert let's talk about the unit economics for a moment because you knew that even with fifteen percent margins well you could increase those margins because you weren't paying rent for a storefront and did you have to pay rent for the lockers the buildings charge you.

[Vijayan Patel]

No this was the huge benefit but we we were called an amenity and so as a result our pitch to all these buildings was you will now be able to charge higher in rent or keep people right longer in their buildings and that was enough for these owners to take a chance because they.

[Guy Raz]

Could say on site dry cleaning correct in their advertising oh so basically you got into these buildings rent free rent.

[Vijayan Patel]

Free to the unit economics it cost us five thousand dollars to set up a location that's it and the cost.

[Guy Raz]

Was the locker and then the install.

[Vijayan Patel]

And doing the math if the average person spends dollar forty a month on dry cleaning and you get twenty five users that's it we realized you generate one thousand dollars of revenue you have to use to spend about half of it to actually get it cleaned and.

[Guy Raz]

Most of your costs were to pay for the dry cleaning right that's right.

[Vijayan Patel]

Fifty percent of it and there's transport cost and then the other one was actually parking tickets we ended up on our p and l having a line item which was parking tickets you know i've been to all of chicago's tow yards drew has been to more of them but at the end our marketing was a flyer that's it and so we realized our break even mark was around that twenty six mark twenty six customers and so if we can just get twenty six customers to use us in one location in one location we'll make money and by the way that's every month so over the course of a year we were going to be cash flow positive and this is when it clicked and this is when we really found what we'd call product market value it it was at twelve twenty five old time moment where we broke even guy in six weeks in six.

[Guy Raz]

Once you got that apartment building you broke even six weeks in six weeks so you were profitable within the first.

[Vijayan Patel]

Year in the first year i'll never forget when we hit the eighty thousand dollars mark per month because eighty times twelve is roughly a million dollars and we got there at around around like the fifteen month mark after starting and.

[Guy Raz]

How did you identify how did you find a place that was willing to work with you to clean the stuff because i imagine dry cleaners like taxis are you know there's probably some they're represented by maybe some lobbying groups i don't know i don't know how it works but was there any resistance from the sort of the central dry cleaning facility that was going to clean the stuff was there any resistance to working with you guys so in general with.

[Vijayan Patel]

All these facilities they have a big fixed cost component right which is labor people ironing washing clothes all day and so they were open to working together with other dry cleaners to process more volume right but to your point our work would always be secondary so they always want to take care of their own customers and then if they had capacity they would then entertain our items and so to start off with we actually used three or four different cleaners and ultimately as we realized is like that was an operational headache and this is where again maybe call it a break but we realized there was a cleaner in the city that did a lot of hotels and they had capacity to take and so around again the one year mark we started using this facility on goose island and they became our ultimate supplier for ultimately a lot of chicago as we scaled so in.

[Guy Raz]

The first like twelve months let's say when you'd get a text hey i'm in locker one or whatever who was picking up the stuff who was driving the cars and dropping the clothes off at the dry cleaners and making sure that you didn't lose clothing and i mean who was doing all that stuff.

[Vijayan Patel]

So we it was drew and i doing a lot of it but we ended up hiring two people and these were our third and fourth employees and david came on to work with drew and ariana helped me on the marketing and sales side drew would be in charge of ops i would be in charge of sales and so the team of the four of us did this work we operated seven days a week one of the worst decisions we ever made but we did it seven days a week and drew and i would always do the routes on the weekends and david would do it on saturday on on monday through friday all right.

[Guy Raz]

So you've got this and now i mean as you begin to see more traction did it become easier and easier to get into other buildings this is.

[Vijayan Patel]

Why twelve twenty five old town is so you know clear in my mind is that we then could go to any building in chicago and say we work with twelve twenty five old town and in real estate it's so critical you are matching the amenities of the building across the street and once we were in twelve twenty five old town the snowball started to form and we ended up adding eight new locations a month and then ultimately guy we grew to two hundred fifty locations in chicago over the course of call it three.

[Guy Raz]

Years and you know i go back to this idea of like fifteen percent gross margins right for a dry cleaner what kind of margins were you guys.

[Vijayan Patel]

Able to hit twenty to twenty five percent roughly was our ebitda margin if you want to call it that and.

[Guy Raz]

How much money were you paying yourself.

[Vijayan Patel]

Forty thousand dollars so you went from.

[Guy Raz]

Probably making over one hundred grand a year in san francisco to forty grand.

[Vijayan Patel]

Yeah i was making almost three hundred thousand dollars and i was what twenty seven wow and threw it all away to make forty thousand dollars for five years and drew's the same so as.

[Guy Raz]

It was growing and you start to get some significant numbers you must have also been keeping an eye on competitors that were popping up in other cities right did that worry you or stress you out at any point it did.

[Vijayan Patel]

And the big gorilla in the room.

[Guy Raz]

Was washoe because washoe had raised like eighteen million dollars or something yeah enormous.

[Vijayan Patel]

Amounts they had ashton kutcher like just.

[Guy Raz]

It was the big oh he was.

[Vijayan Patel]

An investor okay he was an investor and it was the one that we were terrified of and again i'll remember this moment it was around the year two mark they decided to come to chicago as their third market and guy i don't think i slept that month and i'll never forget just the paranoia drew and i had i mean like we don't have nearly as much money as them you know how are we going to compete with these guys and then i never will also forget feeling as good as i felt one month after they launched and we looked at our revenue and it had only gone down by two percent and that was the moment where i was like oh my god it actually does not matter how much money you've raised i mean.

[Guy Raz]

It'S wild because washu doesn't exist anymore i don't know the exact story but it shut down in twenty sixteen and then its assets were purchased is what i've what i've seen so clearly something must have happened maybe they expanded too quickly who knows but that was a real threat to your business i mean it was a potential threat it was.

[Vijayan Patel]

An incredible threat and by the way you know they had the funding to go down to a dollar per shirt and we didn't have that and all of these customers users buildings they could have switched but they didn't they were happy with our service and they kept.

[Guy Raz]

Using us yeah all right let's let me ask you about the expansion because you're doing well enough in chicago so you decide to go to washington dc next correct and i'm assuming because dc is a dry cleaning heavy town yes.

[Vijayan Patel]

And they also had a lot of new construction coming up but there are two pieces of data that we missed completely one is that no building in dc could be higher than the capitol statue yep and our entire model is built off of density and two is that we didn't realize how hard it would be to staff our facilities because we're competing versus the government for hourly labor our cost for a driver was sixty percent higher than chicago wow and also they wouldn't stick around we ended up churning through people in dc at two times the rate than we did.

[Guy Raz]

Chicago so was the dc market profitable.

[Vijayan Patel]

It was luckily we were incredibly frugal but we never saw the liftoff like we did in chicago all right so.

[Guy Raz]

Back to back to chicago you've got your own i mean at a certain point i think like two and a half almost three years in you guys decide that you you don't outsource this anymore you actually want to you want to control you want to be vertically integrated you want to clean your own clothing with a plant that you own and you decide to explore this idea.

[Vijayan Patel]

That'S right so the big trick we realized in our business model was that take twelve twenty five old town there's two hundred twenty units if we lost a customer guy in that building our serviceable addressable market now is two hundred nineteen people and so it was so critical that we nailed quality because we couldn't just replace someone right we kind of had a smaller audience and so for us quality is what really kept me up at night and we ended up with our wholesaler and our supplier we ended up just building this friction where at times you know they might they might have a staff shortage and so all of a sudden you know they're delayed in all of our cleaning by six hours which then means lower quality cleaning which means that we then take the hit on our user base and we did the math guide we realized that the difference between ninety eight percent retention and ninety six percent retention even though it sounds small when you compound that every month it's astronomical the difference i think is between having fifty five percent of your customers at the end of two years versus seventy eight wow and so we realized that it was so critical for us to be at ninety eight percent retention or higher.

[Guy Raz]

Ninety eight percent it had to be that high.

When we come back in just a moment pressbox guards its customer base by building its own laundry facility and then winds up competing with one of the biggest companies in the world.

Stay with us i'm guy raz and.

[Vijayan Patel]

You'Re listening to how i built this.

[Guy Raz]

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This i'm guy raz so it's twenty.

Sixteen and vijian and drew are taking on a massive project building their own laundry facility just north of chicago but to do it they need cash.

[Vijayan Patel]

So at this point we probably should have raised adventure funding we should erase something guy our bank account i'd get a call every two weeks from our banker because our bank account would go from positive three hundred thousand to negative four hundred thousand and the driver of it.

[Guy Raz]

Was payroll but i mean how many employees did you have to pay so.

[Vijayan Patel]

I think around this three year mark we were in dc and then also nashville and so i want to say at this point we probably had four forty five to fifty employees and so we had a huge transportation team we had a team that would inventory all the items at this point we had a marketing team that would set up these events we had a sales team and when we decided to insource this this is where the the issue with the business model up front became our asset later on because this opened us up for debt financing and so we were able to buy all this equipment equipment we bought some of it used some of it new but we were able to finance about eighty percent of our plant using debt and asset backed.

[Guy Raz]

Lending and you just needed a warehouse that was relatively inexpensive did you buy the warehouse or did you lease it.

[Vijayan Patel]

We leased it and it was really hard to build this plant and you know we had to get all these licenses and utilities figured out we even had to an get architect because we're the first dry cleaner that was in this facility but once we were up and running we ended up realizing that we could all of a sudden get rid of this middleman and so instead of fifty percent of our costs all of a sudden going away all we had to do is pay for our own people and rent and so again you know our margin where is typically around twenty five percent of the bottom line fifty percent at the top at the gross margin level both of those went up by ten percentage points even.

[Guy Raz]

Though now these are your employees running.

[Vijayan Patel]

The facility there are employees and this is probably guy though the hardest part is that it's one thing to hire a driver or someone who's you know can sit in front of a lobby at a table it's harder to staff a presser you know i thought we would at the time indeed was out craigslist you know we'd post these roles and we got no hits people literally.

[Guy Raz]

Pressing shirts and trousers like you couldn't find people to do those jobs where.

[Vijayan Patel]

Would i didn't know where to go and you know we asked our suppliers if they would work for us and they would say no and then we finally this light bulb went off that we were looking in the wrong place you know instead of looking at indeed we decided we need to start advertising in spanish newspapers and so there's a newspaper in chicago called oi and so all of a sudden we posted these jobs of this new facility open up in skokie and my phone wouldn't stop ringing and we ended up staffing this entire plant in two or three months with incredible people all through the spanish.

[Guy Raz]

Newspaper oy all right so now you've got your own facility a bunch of new employees and tell me a little bit about how you were i mean just growing was it organic or did you i mean were you constantly because now you've got washio and other potential competitors coming in i mean when you would go into a building for example in chicago or even in washington dc presumably they might push back and say well you know we've been approached by washoe and they're offering us this incentive.

[Vijayan Patel]

That'S right and you know timing plays such a huge role in everything but one thing that we got right was that we were on the front end of not just the amenity war but also the new construction development in all these major cities but i think the year was twenty sixteen and i believe there were fifty five new buildings coming up in chicago and guy i think we were in fifty three of the fifty five and it was because we just we just skipped the game overall we didn't pitch any property manager we didn't go to any of their customers we talked to the owners and we said hey we're in three of your buildings we notice you're building this other building can we just go ahead and inspect these lockers into your architectural drawings now and then the best part was as we got into these new construction buildings in chicago dc nashville was our third market not just did we get these lockers in a great location where they'd be highly visible we ended up being able to create behavior instead of change behavior so someone would move into their building and as they walk into their apartment we'd have a gift box this cost us like seven dollars but it would be a bag a water bottle a handwritten note and a flyer with our pricing those four things and we would drop off two hundred of these at every one of our new buildings and we slowly realized that we would track this kpi called revenue per unit and revenue per unit was twice as high at a new construction building versus an existing building because people move.

[Guy Raz]

In and it's part of the welcome package and they're like great let me set this up while i'm setting up my phone or my internet or exactly.

[Vijayan Patel]

And we realize that people are just really reluctant to change behavior so if you can find them during these moments of change then you get them they're set in their ways yeah and then washoe can come to them any of these come to them like no i'm good i'm kind of into my habit i'm gonna use pro press box all.

[Guy Raz]

Right i think around twenty sixteen you've got another fire to put out maybe a fire fire to battle which is procter and gamble right one of the biggest multinationals in the world they launched their own version of this a competitor called tidespin and i guess and they launched in chicago and so tell me about how you reacted at least in your mind when you first heard about procter and gamble coming into this space.

[Vijayan Patel]

So luckily we were used to competition and as tidespin started to get going we kind of we saw them coming but it wasn't like we had a different level of fear it was like all right same old same old tidespin followed the washing model they start with pickup and drop off and around the year mark i think for them they realized that they were not going to make money off of this because again the unit economics just don't work where if you're just doing four transactions per hour for a driver and you then take into account this fifty percent gross margin guy you're taking home like five dollars and funny enough their order sizes were bigger i think for that model you generally have like eighty dollars per order instead of like forty dollars for us but still it was really hard to make money and the good part guy at this point for our journey was we had two hundred fifty buildings in chicago and so we'd go to one building we'd pick up four orders drop off six then we drive half a block down the road and pick up three orders and drop off five then we take a left turn do that all over again we could do twenty six transactions per hour where all of our competitors are doing four and so it's the same cost where everyone has to send a driver on the road and by the way because it's twenty four seven we got our drivers on the road at like five am and they were done with their routes at nine am and what was the.

[Guy Raz]

Average cost per order so the average.

[Vijayan Patel]

Cost per order for us was around.

[Guy Raz]

Twenty six dollars what i'm curious about was you would think that tide you know that p and g with their tide branding would just switch to your model would just say all right this doesn't work we need lockers like pressbox.

[Vijayan Patel]

Has and that's exactly what they did and so they ended up realizing that pickup and drop off was not the path and then they went down the locker path and for about three to six months they competed with us head.

[Guy Raz]

To head they would what would they do they would go and try to get into the same buildings you were.

[Vijayan Patel]

In they get into the same buildings they would try to pitch the new construction and every time we would win because we would have this track record we've also oftentimes worked with these developers and owners and if it was an existing building it's like why would i take out these lockers and put your lockers in like it's the same thing and again pressbox has done a great job so i'm not hearing complaints and why would i create my own headache.

[Guy Raz]

So i'm wondering now i mean by the way you have you've got you've expanded to nashville you're in dc nashville chicago anywhere else yet yeah so twenty.

[Vijayan Patel]

Sixteen we were in philly and i believe we were just getting going on dallas and what was exciting is around that twenty sixteen mark partly why we went to dc is that four of our developers in chicago said hey we're going to go build in dc do you want to come with us and then those same developers did that in denver and this became our expansion plan is that we kind of just followed our customers and then that would always lower how much we need to get in revenue for us to break even because we would have a head start versus any competition and this is still.

[Guy Raz]

Without any outside capital right you're doing this all through cash flow so you must have been thinking this is going to be a national brand we're going to expand this all over the country.

[Vijayan Patel]

That'S our goal no even back then we were just focused on execution i mean we we had enough confidence that dc was going well but still it was like death by a thousand cuts like it was just barely starting to stay afloat float and so we just had this tension throughout our company's history of like grow but also be paranoid about quality and so yeah there were probably some inklings of like you know we could be a national company but it didn't feel like it and did.

[Guy Raz]

It feel like there was going to be one winner like there was the uber lyft wars right going on at that time did you feel like one of these companies is going to is ultimately going to win or will were you not even focused on that because you didn't see yourself competing with those.

[Vijayan Patel]

Other competitors our view was that if we just capture three percent market share we're going to be millionaires and so we didn't view this as a winner take all market because again we could only sell into high rises and so if you're in some small building in you know marina and sf or bucktown in chicago or you know brooklyn and in new york we can't serve you and so our view is that we knew exactly who our product was for which was these twenty five to forty five year olds and high rises and if we could just capture that across the country that would be our model.

[Guy Raz]

And you only needed what percentage of those residents to use your service ten.

[Vijayan Patel]

Percent to break even wow so the.

[Guy Raz]

Numbers were on your side the numbers.

[Vijayan Patel]

Were on our side and it was because we were so frugal we didn't have any money to spend to make any of the upfront costs like we would have loved to have invested more upfront to make the lockers and get qr codes and to do all this signage but we didn't have the money.

[Guy Raz]

Did you hire a pr firm never never so all of the i mean because there were every time you'd go to a new city there were articles right written about and so all this was just earned media earned media all right so it's twenty seventeen and procter and gamble is really going head to head trying to get into the same buildings you guys are at least in chicago and i'm wondering and as you're sort of expanding you're going to move into philadelphia and you're in dc and nashville i'm wondering why you didn't the two of you you and drew didn't at that point say all right we have got to do a fundraise we've got to go out and raise money because now you're profitable right you've got a nice business going you've got i mean you could really raise money on pretty good terms at that point so why didn't you or did you start to explore this so i think two.

[Vijayan Patel]

Things one i think we were still you know of a view of like these guys were never they were never there for us you had a chip.

[Guy Raz]

On your shoulder we had a huge.

[Vijayan Patel]

Chip on our shoulder you know we we tried to be vulnerable and expose ourselves and let people invest and they all said no and so we had a huge chip on our shoulder and probably too much of a chip on our shoulder because at that point you know we talked about we have a few regrets but one of them is that we should have raised because at that point like my homepage for our computer was my bank account and i only now realize how unhealthy that was because we were so focused in our business that we never actually got time to spot on our business and so this was a this was a huge issue and it was a it was an issue that we never fixed but it was around that twenty seventeen mark where we started to realize also like what are we going to do with this thing right because as you know we were not looking at this as like we were passionate about dry cleaning you know one of the first things we did guy in that twelve page deck early on that investment deck one of the biggest issues was who are you going to sell this to and we knew you never ipo it you would not really be able to sell to private equity because we had come from that world and so it was always quite logical that we would want to get a strategic buyer and we actually viewed as a really good sign that p and g was doing work here and so we were always just actually proactive about i always kept our competitors close and it was you know we'd always be guards up not tell them everything but we would always have a relationship and so around twenty seventeen mark we actually got to know the tide spin team and we just said hey what are you guys doing here like i remember they actually want wanted to come to our plant and drew said yeah come and i was like absolutely no way you're coming in but we were we wanted to make sure we knew all of our competitors because either we were going to buy them or they would buy us yeah and so because we were just upfront about that whenever there was a png conversation we would be there and we'd say yeah we'll make the time for this let's make it happen because from their end guy they were they were thinking through all right they're at fifty two percent market share of tide and they can't push that much further and so they've always organically had this journey where if they can't provide the goods for laundry can they just do your laundry and so they were more curious to meet with us because of how we built pressbox and then guy we ultimately around twenty seventeen realized like hey we will have no negotiating power with p and g if we don't have anything else on the table and so this is when we did then start having some conversations for additional funding so you.

[Guy Raz]

Started to go around and now you've got some private equity firms who are interested in raising you guys were trying to raise about i think five million.

[Vijayan Patel]

Dollars that's correct and this is where multiple things happened at the same time but we then ultimately got some some term sheets and for p and g they started offering capital to owners to switch from press box to tide spin.

[Guy Raz]

And how much were they offering you.

[Vijayan Patel]

Know we don't even know the ultimate numbers but i think it was anywhere between ten to twenty five thousand dollars.

[Guy Raz]

They were going to pay these buildings ten grand to bring on the tide.

[Vijayan Patel]

Blockers yep and switch from us yep and it makes a ton of sense because from them their math they're doing is again build or buy do we should we just give tidespin more money or should we buy is there something special here and ultimately all of our partners except for one said no thanks and that meant an incredible amount to us and still i get emotional thinking about it because we had this trust that was embedded with all of these partners that had been compounding over five.

[Guy Raz]

Or six years so while you're doing that you get a from what i've read you get an offer from p and g they basically say all right we want to acquire you but i think their initial offer was like a.

[Vijayan Patel]

Low ball offer yeah we we ended up with a couple term sheets for funding and png had expressed interest and they lowballed us i think a couple times and i remember the third time drew was a little bit fired up and upset and i think within twenty minutes of the response had redacted a term sheet and sent it back to them and said we're going to go ahead and sign this term sheet we look forward to competing head to head and i'll never forget i was next to my wife and she's like don't you just want to talk about this maybe for a second and she was right because it would have been life changing money but what i value so much about drew is how principled he was about how we had built something of value and yeah maybe we should have taken longer than twenty minutes to respond to it but we didn't and i think a few hours later p and g they said give us twenty four hours and we'll come back with something and and we ultimately decided to.

[Guy Raz]

Sell and you and drew would go work for for p and g we'd.

[Vijayan Patel]

Go work for p and g and they would rebrand press box to tide cleaners it was a short debate about seven minutes of which brand name was taught was stronger but tide won and the tide spin team would work for us and we would end up running the urban division of tide cleaners in which they wanted our model to go.

[Guy Raz]

National wow from every and i mean it sounds like from virtually any perspective it made sense because they were aggressive and they had certainly had the money to pour into this if they really wanted to go after this business you saw that there were opportunities but there were also potential pitfalls and so partnering with the big one of the biggest multinationals in the world would enable you guys to really super scale this business.

[Vijayan Patel]

Too a hundred percent and we know we wanted a home right i think what kept us up at night guy was it was a night in nashville it was raining and i was walking to an event to sell dry cleaning and i remember realizing i don't want to do this when i'm forty five years old like we need to find a home for this and it doesn't have to be now but there has to be some long why did you.

[Guy Raz]

Say that to yourself what was it about what were you feeling that gave you that that impetus to say i don't want to be doing this at.

[Vijayan Patel]

Forty five you know at this point we had been working for about one thousand days in a row and i'm not joking like we we worked seven days a week we were open twenty four seven i had missed friends weddings i stopped getting invited to friends birthday parties because i would just be no show and this path of us building just took a huge toll on our life you know every night my wife would come home on the weekends and she was a resident in med school.

[Guy Raz]

And and you had no kids yet.

[Vijayan Patel]

Right no kids no kids and she'd say hey let's go out on saturday night and like i want to see my friends and i'd be like i i am so exhausted that i can't do that and there was just such a toll that had taken on us from bootstrapping this that we just wanted to make sure that this wasn't our permanent state you were burned out incredibly and guy i made forty thousand dollars i had friends in private equity who were at this point making partner and making you know a million dollars plus per year i remember at one point calling my dad and saying hey dad when this doesn't work out if this doesn't work out can i borrow some money so i can start again like not a business but to start life again my wife and i on our first trip we we were she was a resident i was this dry cleaner we wanted a trip and so we went to kansas city because it was where we could find spirit airlines flights and we found a hotel on like some website and like the altogether the trip cost us dollar five hundred that was our life and i just didn't know what the end state would be and we were incredibly burned out so.

[Guy Raz]

The deal with tide was wasn't just obviously wouldn't just change your life financially but it was a real it was.

[Vijayan Patel]

A lifeline yeah like i think we would have we would have probably you know found another purchaser another dry cleaner to sell to but they never would have matched the terms or the capital available and it was an incredible alignment that led us to that opportunity how.

[Guy Raz]

Long because you were acquired in july of twenty eighteen so when you now transitioned to becoming a p and g employee how long did you stay with.

[Vijayan Patel]

The company we stayed for two years and in fact they wanted me to stay longer and guy i had a great experience not just did we have capital but drew and i could shine you know i could finally for the first time i made a powerpoint slide again and you know all of our employees who were making fifteen twenty twenty five dollars an hour because we didn't have more capital all of a sudden they got a pay raise we made some like actual salary we didn't make a lot but we had like a real salary where like i could you know pay rent not from savings yeah yeah so we had this this two year experience under p and g it was great and finally like our earn out had ended up and around then there was also this thing called covid and we got guy our last earnout check march of twenty twenty and so the world was falling apart our business right you could think about dry clean volumes our business had hit a wall and was starting to see some real hit in terms of what people were wearing and i was somehow in this sanctuary in chicago with capital and with free time and it was a wild world to be in yeah i bet.

[Guy Raz]

I mean i guess after this time or around this time you you took some time off like quite a few months off just to take a break from from all that and then you.

Eventually kind of jumped back into things.

You founded a venture firm called the.

Eighty one collection and i guess you're.

Focusing on something pretty specific which is investing in companies like pressbox basically like boring industries right companies that really don't get a lot of attention from vc's.

[Vijayan Patel]

Right yep we did some math on this recently guy and there's about three thousand four hundred early stage or early investing firms and about ninety percent focus on software yep leaving only ten to twenty percent to fund things that are quite critical to our society and even in that group half are not even active anymore and i noticed that everyone in this technology world was continuing to look for the same thing they were all looking for the next asset light employee like cloud based unicorn and then i look back at my own experience guy and i'm like wait we built the opposite you know we built this plant up in skokie we ended up having these assets all across the walls of america bolted into the wall walls of all these buildings and we also built a good company but in a completely different way you know a lot of our employees who originally started making fifteen twenty dollars an hour as the business grew they started making fifty k a year seventy five k a year and having gone to their weddings and seen them buy homes and in many cases even start their own businesses we move people from lower class into middle class yeah and i realized this is a giant hole in our economy you know we're in the greatest economic period in global history but the profits are going to ten thousand people and so that was the inception of the eighty.

[Guy Raz]

One collection yeah i mean when i think of like boring businesses or businesses that are unsexy like i think about in in high school there was a there's a brother and sister and their family owned a mortuary and they were like the richest kids in town it's a mortuary but it's a i think funeral homes are profitable businesses mortuaries are profitable like right am i right about.

[Vijayan Patel]

That we just recently did an investment in pet cremation and we were blown away eighty percent ebitda margins wow and i have to imagine there's a similar profile with the end of life space.

[Guy Raz]

Yeah so now you're looking at these sort of quote unquote boring businesses right like what are some other i mean i think of like car washes or laundromats or like are you are you looking at industries you're looking at specific businesses like how do you evaluate where you want to deploy your capital you.

[Vijayan Patel]

Know we've realized these opportunities are everywhere you know from dentistry you know we looked at something recently in property tax appeals we've looked at pediatric services like if there's all of these industries that are frankly they're oversubscribed from private equity and buyouts but they're completely under subscribed from technology and innovation and you know when was the last time you went to a doctor's office and it was newer or you know a mortician and it was newer they're integral but they're forty years behind best practices and so if we think about some of the stuff that's going on right now it's important that we lift these industries which then will lift these economies yeah vijian.

[Guy Raz]

When you think about the journey you took and the outcome how much of it do you attribute to the work you put on the grind and how much do you think had to do with luck and timing.

[Vijayan Patel]

I think luck plays a huge role in our life and timing and luck played a huge influence and not just the exit timing but the multifamily wave the new construction wave and so i think there were a lot of forces that we benefited from from i used to think eighty percent of it was hard work smarts grit i now think eighty percent of it was luck.

[Guy Raz]

That'S vijayan patel co.

Founder of pressbox now known as tide.

Cleaners hey thanks so much for listening to the show this week please make sure to click the follow button on your podcast app so you never miss.

A new episode of the show and.

Also if you're interested in interested in insights ideas and lessons from some of the world's greatest entrepreneurs please sign up for my newsletter at guyraz dot com or on substack this episode was produced by alex chung with music composed by ramtin arablouei it was edited by neva grant with research help from olivia rockman our engineers were patrick murray and maggie luthar our production staff also includes casey herman chris masini sam paulson kerry thompson kathryn seifer noor g gill rommel wood andrea bruce and elaine coates i'm guy.

Raz and you've been listening to how i built this.

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[Vijayan Patel]

With the ihd one rewards premier business.

[Guy Raz]

Card visit ihd dot com businesscard cards.

[Vijayan Patel]

Issued by jpmorgan chase bank and a.

[Guy Raz]

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