X-Lint

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X-Lint

Winner of the Wal-Mart Better Living Business Plan competition in 2011. X-Lint is a widget that makes clothes dryers more efficient.

Created by @lowellbellew

Many thanks to my professors and teams at CU's Leeds MBA program as well as CU's Engineering undergrauate program for their contributions.

Open Sourcing X-Lint - ideas this good should be free.  

2p Concept Summary for X-Lint

1p tear sheet for X-Lint 

Placeholder for X-Lint Product Page

 

 

What follows here supports the 10 minute deck, visuals are stripped, like the sensitivity analysis.  

This award-winning, patent-pending technology helps save time & money & reduces the environmental footprint of the laundry industry for residential and industrial markets.

The problem we identified is that Clogged dryer filters reduce airflow and increase drying times. 

Americans spend SEVEN BILLION DOLLARS every year, just drying clothes. Clogged lint filters make that process up to 30% less efficient because it’s that much harder to get the humid air out of the dryer drum when you’re trying to push it through a clogged lint filter.

By preventing lint buildup, X-Lint provides a path of least resistance for the air and reduces drying times. It is this technology forwhich we have a patent pending. Our technology attaches to a regular old dryer filter. In one concept design, the propeller brushes against the filter throughout the dryer cycle and removes lint from its path. Other technologies are under development and testing.

“SO WHAT?”, right? “How much of an impact does this have?”

Let’s talk about the Impact

First: the time you save with X-Lint each year in terms of reducing the time your dryer takes to achieve the same task: drying your clothes. 15 minutes saved per load here – an estimate at 30% efficiency on a 45 minute average cycle time. So at an average 325 loads times 15 minutes saved equals 4875 or ~81 hours per year. 81 hours of time you spend waiting for your dryer to inefficiently dry your clothes. 81 hours where your dryer is leaking hit air into your air conditioned space. 30% more throughput AND reduced energy costs if you’re a Laundromat…

Unlike many social ventures, we presume primary sales drivers will be monetary (non-green):

  • Energy savings: $35-$70 per year
  • Time savings / performance enhancement -- That’s the 81 hours, from before [THUMBS-UP]
  • Safety (reduced dryer fire risk)

Next, we have a quick look at a sensitivity analysis of percentage efficiency and loads per time to forecast payback periods: 

As the color moves to green, there is a 1-year payback. Please take note: this presumes time value of money AND green benefit at ZERO (i.e. the time savings and green benefit are worthless) AND ZERO additional ‘envelope savings’ (see below)  

Our national averages put us right at this sweet spot, here, on a value- pricing model at $45 MSRP. Remember, any utility rebates also change this game significantly for the better – EnergyStar washers get a $40 rebate in my service area, for example. 

And finally the environmental impact. This is a big deal for me because I want to make a positive, levered impact on the world that more than offsets my lifetime consumption and this is a solid chance to do it.

To help put those 81 hours saved in perspective, the aggregate, at only 10% market penetration, would be the same as 51M BBQ canisters, EVERY YEAR! 

So how do we get from here to there? Let’s take a look at the Market. 

The levers are at right -- 1:1 ratio in the household market, one decision maker per 20 units in the Laundromat segment and 1:200 in the University segment.

For households, this means a high cost of customer acquisition. Utility partnerships will lower this cost via lowered marketing costs and rebates, but this is not our initial target. We will pick low-hanging fruit from the HH segment through low cost PR strategy, reaching out through websites like Treehugger, GreenHome, and Inhabitant who reach our green, early adopters. 

Laundromats are our point of entry due to their lower cost of customer acquisition and intense use pattern which yields payback periods as short as 3 months and a powerful, compelling, dollars-and-cents value proposition. This segment is also eligible for scaled utility rebates. Almost all of the revenue we discuss later is based on this segment and the next: 

Colleges, Universities & Apartment Buildings: Our focus on the segment will start with Universities, where there is values alignment on the green issues. Our conversations with Strategic partners like Mac Gray indicate that they are interested in our core value proposition as well as satisfying green demand in this segment and reduced depreciation of their on-site, coin-op equipment. 

~5 MIN

If that’s the roadmap, these are the ‘directions’

Utility partnerships, strategic partnerships, and a dash of web strategy to skim some early adopters.

We understand that utilities are traditionally slow to move and do not anticipate these partnerships until we are ready to reach meaningfully into the HH segment in year 5, which we’ll see later in our financial models. 

Recent developments will also help us reduce significant R&D costs covered in our current financials and increase HH segment revenues through use of the Quirky platform (EXPLAIN)

We also have some very useful data to help focus our rollout strategy: follow the energy prices. Where they are highest, the payback periods will be fastest for the consumer, regardless of segment. Also, these hot zones have more aggressive utility policy, which will speed up utility partnerships. 

As we reach to the HH segment, we will also want to examine the retail channel. Walmart has expressed interest in helping us commercialize this technology and have been helpful so far. We believe that Home Depot, Lowe’s, and Best Buy may be more appropriate initial partners to explore this channel. Once we experience success in these big box chains, we look forward to exploring opportunities with Walmart stores, their dot com, and Sam’s Club. 

So what’s the analog…? X-Lint is like a CFL for your dryer. It’s easy & saves you Time & Money; in less time than it takes to screw in a light bulb, you can install your X-Lint – just pull out your dryer filter and insert the X-Lint replacement – no tools – easy… 

To recap, this is a quick review of assumptions which we can revisit during Q&A and here’s another short list... 

So you can imagine Rob, talkin’ like guys from Long Island, and we’re talking about the X-Lint and he goes… “Yeah, but aren’t there like a million types of dryers?” And the reason I tell this story is because it’s the #1 question people ask. It turns out, ~90% of the dryers for sale at Best Buy and Home Depot, today are what we call a “Type-A” configuration 

You may be familiar with these : they slide vertically down into their slot in the front of the dryer, when you open the door. In their various shapes, Type-A filters represent ~90% of the market. They are also similar to the Laundromat filter configuration, seen here at right… similar enough that the engineering challenge is almost the same for this filter type, so we plan our first 2 SKUs to be one for the Commercial Laundromat segment and one for the HH/Multi-Unit/Laundromat segment – the “HH-Type-A” filter.

It’s true: there are other configurations… And we actually started designing for Type-C before we realized Type-A was the dominant market configuration. 

Now that we’ve covered that, one more quick thing I’d like to touch on are the financials, which we see here…

As you can see, everything checks out from the bottom-up as opposed to the top-down US market, which, incidentally, represents 4.2 billion in revenues at 80% gross margin…  I’ve got the financials in my pocket if you’d like to take a look at the ratios, the Income Statement, Balance Sheet, or even customer acquisition costs. With that, I’d like to thank you for your time and attention and open it up to questions… 

More 

Utilities may find X-Lint to be the analog to the CFL for the household dryer! There are 93.6 million household dryers in the US. A 30% energy savings for the typical dryer which consumes 5.8% of household energy, spread across 9 million installs (~10% market penetration for one segment, which notably does not include commercial / industrial applications outlined below), would result in a reduction of more than 1.8 billion kWh in the US each year. 

  1. Another way to understand, "X-Lint: The Problem"

Consumers may have found a way to do laundry faster & cheaper:

If the average cycle takes 60 minutes and can be reduced by 30%, this means 20 minutes back each time you dry a load. This translates to more than fifteen hours each year per load you do each week. In a busy household this can add up: one load each day turns 17.33 hours into over 120 hours back from father time each year! (121.3) Most of our projections assume a 45 minute cycle, which yields 81+ hours per year savings.

X-Lint Resources

The Path: Addressable Segments

The cost of customer acquisition rises as we move along the path - Coin-op Laundromats are the low hanging fruit with high use patterns and consequentially fast payback periods, as well as relatively leveraged buying decisions: 1 decision ~ 20 unit sales

1. Commercial / coin-op

2. Multi-unit (apartment buildings and college campuses)

3. Households

Commercial / coin-op

There are ~35,000 Laundromats in the US. Each has about 40 units split ~50/50 between washing machines and dryers.

Our financials forecast roughly 90% of year 1 sales coming from this channel and the multi-unit channel. For the later, a strategic partnership with Mac Gray or a similar player in the laundry services management space will facilitate a dozen relationships in the first year. 75 Laundromats will be on-boarded using a direct sales approach combined with trade publication advertising.

Multi-unit:

For an average property manager with 1 dryer running 20 times per week, energy savings for the dryer alone would be ~$34-64.

Households:

By far the largest market segment, households are also more difficult to reach (higher cost of customer acquisition). We will develop utility partnerships to leverage our marketing spend to this diluted segment. Until such slow-moving partnerships develop, we will use our website to serve early adopters, likely greens and gadget geeks, via websites like Treehugger, who cater to this demographic.

The energy iceberg: building envelopes and energy modeling

If the dryer in question is located in an air conditioned space, operating during periods of warm temperature, fighting a cooling and dehumidification system (air conditioning / AC), there is potentially significant additional cost of operation due to the heat & humidity released during dryer operation. While this additional energy savings could be as high as 100% of the energy 'spend' of the dryer if the unit vents directly into the living space, it is likley to be less in most cases.