In business, you’re always looking for new ways to serve customers and increase profitability. That’s why we’re so excited to announce the new SMB Tech Innovators Podcast where we bring top business leaders, technical leaders, product managers, and C-level executives together to share valuable insights around building vertical SaaS solutions that small to medium sized businesses need.
In our inaugural episode, we speak with Alex Jekowsky, co-founder and CEO of Cents, the all-in-one software platform revolutionizing the way laundromats grow, manage and understand their business.
(The following was transcribed and edited for clarity)
Tell us about why you decided to launch Cents?
I have always had an affinity for unsexy businesses. When I went to college in Orange County at Chapman University, I had the idea for my first business which initially was a marketplace for college students. ‘Craigslist for college’ didn’t stick but I knew there was a market of students who wanted to buy and sell within a campus environment. So we pivoted to a B2B option, selling this white label marketplace directly to universities so they could create a secure environment supporting student life and commerce.
That was probably my first view into verticalized software in a way. I realized that when you build something very specific for a somewhat outdated industry, you can make a massive impact and the market can be huge. After selling that business, I heard from a friend whose neighbor was the president of the coin laundry association of New England and his story absolutely fascinated me. I thought maybe I should buy a few stores with 30% margins and live easy for a while.
But the more I talked to these operators, the more I understood how sophisticated the industry was. Operators were asking for the tools to match their needs. That’s when it really clicked for me: maybe my path isn’t to run a bunch of laundromats in San Francisco but actually build something for these operators. When we put our heads together and thought more critically about what it takes to support a small business owner, we realized everything revolves around building the best product.
So, you were ready to retire from tech and just be a small business owner for a while?
I think that whenever you have an idea for any kind of business, it’s never because you’re hunting for the idea. It was always purpose driven. I had an experience that caused me to look at something differently.
In an industry like laundry which is $40 billion in size with close to 80,000 rooftops between laundromats and dry cleaners, it’s very stable. But it is a close knit community. The most important thing is to focus on the relationships that you build with the operators because I wasn’t a laundromat owner. I didn’t have that domain expertise.
To really have a powerful product in the space you have to feel the pain, you have to know what it’s like. And so the first thing I did was talk to operators. I would work the counters of stores and travel all around the country. I spent time in New York with one of the biggest laundromat owners in the country who let us work inside of his stores, interview employees and customers, and learn how they ran their operations. That’s how you build SMB tech, by thinking like an owner and an operator.
What has been the biggest learning curve for you?
What’s so cool about SMB, and I would say in particular laundromats and dry cleaners, is the operators are so diverse and so unique and there isn’t one sales pitch or one conversation like another. And so I think the biggest learning curve was realizing that to sell an operator on our product, it wasn’t just to tell them about our product, it was for us to understand their business and for them to understand our why. Why are we doing what we’re doing? Why do we care so much about partnering with an operator? Why do we get up every day? It’s very important for us to convey why we care so much.
According to Benchmark, just 2% of laundry businesses have adopted a modern laundry solution. How do you think about creating differentiation as you go to market?
We have a well defined roadmap and playbook internally but I will say that how we really differentiate and how I think we’ve secured such a real differentiation in the market is that our operators have really built our product and have helped drive the product development so much.
We are on the phone with the operators all the time from the happiest to the least happy, making sure we understand what is going on. Our goal is not just to build a point of sale, not just to build a software system for a laundromat owner or dry cleaner, but to create an all-in-one that can enable an operator to really grow, manage and understand their business like they’ve never been able to before.
When you think of all-in-one software for the laundry industry, what excites you the most?
Giving our customers the ability to think about their business differently. If you went to an investor and you said, here’s all the stuff we’re going to do, they’re going to say focus on one thing and do it the best, right? Because that’s how you win now. However, now if you have a great team, the resources, and great partners like Gusto, you can focus on that one thing, but also sprinkle in some other stuff. And that can help us get to that all-in-one solution a hell of a lot faster.
Listen to the entire podcast with Cents co-founder and CEO, Alex Jekowsky, available on Spotify and Apple.