Prepare a two-page write-up of viable business concept that could be the basis of the business plan.
For each of the following issues, 3-5 sentences
What is the essence of the business?
We can save time and energy with a negative cost of energy saved (profitably). There are lots of ways to do this, X-Lint is one that works with your clothes dryer. You slide your dryer filter out, slide X-Lint in, and save! This works for commercial Laundromats/Laundrettes, Industrial dryers, multifamily dwellings, and home owners. Please see the X-Lint project page on Kickstarter and see how your dryer model is doing!
What market segment are you considering?
- Three segments: Industrial, Commercial, Residential. Commercial is the beach head: Laundromats, Laundrettes (UK)
What is the size and growth rate?
- 3,500 US Laundromats with an average of ~20 dryers = 70,000 units at ~$300 retail (estimated 2 year simple payback on avg. energy)
- ~3,000 Laundrettes in the UK means roughly again the US market we'll presume it's zero, but double the numbers if you like
What are the major trends?
- Homeowners seek efficient appliances, but this is not a major driver for appliance sales. There is no Energy Star dryer as of Oct 2012.
- In-store sales reps indicate a $50 ticket increase would be easy for a an upsell on a dryer, which they're seeking to boost avg ticket
- Laundrettes have experienced significant market shrinkage and have stabalized around 3,000 locations in the UK
Product or Service
What are the major features?
- Improved efficiency
What are the benefits?
- Time, money, demand reductions
Who is the target customer?
Industrial - very centralized (Aramark...), heavy equipment (different hardware - custom retrofit consulting engagement)
- 1% market share in year 1 = $2,100,000 in revenues, springboarded off of 1,000 units sponsored, directly opening to 20,000-40,000 potential unit sales.
Residential - Huge and complicated
- 2x customer acquisition costs relative to Commercial segment
- SKU variation is challenging, but not insurmountable (80/20 rule)
- ~$4 Billion dollar market at $35 retail (~90 million units)
- A local Walmart store manager said a price point of $20 would have X-Lint "flying off the shelf"
- Go-to market strategy includes local retailers and online, especially given the capacity to measure aggregated SKU data.
- This is a critical point: pledged purchasing can unlock each SKU for batch manufacturing - the escrow-like model eliminates risk for consumers concerned about whether their model dryer will have a retrofit X-Lint filter that will fit: guaranteed.
What is the compelling need?
- Slow dryers clogged with lint, fires
What problem are you solving?
- Takes too long to dry clothes
- Costs too much to dry clothes
- Uses too much energy to dry clothes
What is your distribution channel?
- Commercial: Coin Laundry Association is the sole trade publication for the niche, and disproportionately consumed by those who are interested in conservation. These sales will be consultative in nature because of the state level incentives, etc.
- Residential: Online, Accessories warehouses, Service providers (value added resellers / VARs), Retail
How does the product or service work?
Retrofit: slide your filter out and slap this one in: bam!
How will it be produced and delivered?
Parts assembled domestically, shipped via domestic carriers + Amazon UK.
Where will you be located?
Who are you major competitors?
This is a long story, but the answer includes a nod to major manufacturers (along with a polite request to not infringe my IP), including, specifically Whirlpool's Accessories division and analogs at other OEMs. While there are other SKUs in the space, including dryer heat recapture devices that help people with dryer ducts in their space recapture heat as warm air, vent caps, dryer balls, and other components of the system -- we recommend you buy them all and let them know we sent you ;)
What is unique about your concept?
No one has ever done anything like this. Washing machines have been the focus of much attention and rightly so: the water used to makeup hot water for washing a load of laundry is the biggest energy culprit in the system. Buy clothes at Patagonia and wash everything on cold/cold if you're into that kind of thing. Also, use an environmentally inoffensive detergent - I'm using Seventh Generations no dyes or perfumes in their new bag-in-a-bottle, pressed paper recyclable/compostable packaging - another awesome idea! Way to go, 7th Gen!
What is your sustainable competitive advantage?
- We call it the IP Fountain
What are the major risks?
- IP infringement
- Technology risk ("What if it does not work?") - we are still in prototype versions and do not have a working product (see above)
What are the expected revenues in 3 years?
- $6 million - $25 million
What gross margins can be achieved?
- Undisclosed but known.
What resources (money and people) will be required?
- Money is being raised through pre-sales and contributions via a Kickstarter campaign