Revolutionizing Laundry with Alexander Jekowsky of Cents

Jake Aaron Villarreal: Welcome to our podcast, From the Ground Up, where we interview startup founders exploring their journeys, their successes, challenges, and lessons learned. We hope you be inspired in discovering what it takes to build a thriving startup. I'm your host, Jake Aaron Villarreal, and here with us today we have Alex Jekowsky, the founder of Cents, a startup that's raised $37 million in funding and is changing the way laundromats operate and the customer, customers it serves. Alex, welcome to the show.

Alexander Jekowsky: Hey, thanks so much for having me.

Jake Aaron Villarreal: Great. So a little bit about Alex. Alex is a serial entrepreneur with an exit under his belt, a Forbes 30 Under 30 recipient, and is hell-bent on driving, elevating, and growing the laundry industry. Alex is building the leading payments and business management system for garment care SMBs in order to outsource laundry day in America to local businesses. What is laundry day? Laundry day is a common expression that refers to a specific day or time when people set aside to do their laundry, typically washing and drying their clothes.

Alex, fascinating space you're in, and I want to dive a little bit into your background before we get there. Fascinating that you and I are in some ways like brothers from another mother. Of course, I'm much older, but we're both from Silicon Valley, we're both entrepreneurs, we've both lived in San Francisco in the Marina, we we both lived in New York City, both lived in Orange County... never crossed paths, and it's uh, uncanny to me that uh that hasn't happened. But I'm happy you're here today and super excited to understand how you went from going to school to getting into the startup world.

Alexander Jekowsky: Yeah, I, you know, I think entrepreneurship in, in my view is, is not ever something that I had a, a passion around necessarily. I think it's uh, it's... one of my favorite things about it is, when you are searching for [it] the most is when it's the hardest. Uh, I, you know my entire life I've just liked to do things, I've had hobbies and ideas, and if I could make money at it, why the heck not right? I loved playing baseball, so when I was 13 I was coaching baseball and used my Bar Mitzvah money to buy a batting cage and pitching machine, and ended up being one of the youngest kind of, I guess, in air quotes, "pro" coaches in, in Tiburon and Marin County. Coaching little leagues, having summer camps and private lessons. And probably most fulfilling I've ever experience I've ever had playing baseball was indeed coaching. But it wasn't because I felt like I was an entrepreneur and I had a drive to raise money for my business. I just loved baseball and I loved coaching and I wanted to make money doing it if, if I could.

Um, and so, well my, my whole life I wanted to be a baseball player. I, you know, didn't end up happening, both because of injury and I probably didn't have the, the MLB caliber skills. But uh, going to college, uh when I was looking at colleges I was trying to you know, think I could maybe walk on somewhere. I had injuries, thought you know, I wasn't getting really recruited, but I was like, "maybe I can, I try out and walk on." I was at the University of Miami doing a tour and found across all the different campuses I was at they had all these pin boards everywhere. And I was like, "I'm about to go to college and they have all this theoretical technology, but how are there still these pin boards with a thousand flyers? You have no idea what they are, they just put that on a TV or something and digitize it. It would be really cool if they did that." And so that was the original idea for my first company.

But again, it wasn't... I didn't go into school wanting to be an entrepreneurship major and start a business. I wanted to be an organizational behavior and psychology and, and you know have a business background for sure, but I, I've never succeeded in school in any economics, finance, or business oriented class. I think when I incorporated my first company I was on a path to get a C in Business Law at Chapman when I was there, so it's... I don't think my academic career and my or my just personal life never necessarily was driving me to be a business owner, businessman in any capacity. But that's what's beautiful about entrepreneurship, is you just end up there if you care about uh, and have a passion about what you want to make. Um and, and that's kind of what, what led me there, I think.

Jake Aaron Villarreal: Well, you know you see very successful business individuals that drop out of school to follow their passion and build a company. You had a similar experience when you were at school. What was the problem you solved or that you saw there was an opportunity to solve, and then went ahead and really dropped out to try and build a company around it?

Alexander Jekowsky: Yeah, I mean look, I think I have very strong opinions of higher education uh based on my experience. And my first company was building software for universities, so I was deeply embedded in the space. It was always the irony that I dropped out of college in order to build a company to sell software to colleges and sell software back to the school that I dropped out of, right? Try to recoup some of my tuition. But you know, I, I, I think if I didn't have to drop out I wouldn't have. I, I didn't have the... I knew plenty of people that were able to build businesses and stay in school because they had the academic prowess and fortitude and ability to balance both. I didn't have both the attention but moreover passion for any of my classes or for my student experience um, to, to, that could help push me over where I could do both. And I didn't necessarily feel right not getting back to investors or not pushing the company forward because I had to study for finals. Because it maybe took me more than the average to really study and do well. And so it was a you know, a calculated decision that I think most people don't have the luxury to do.

Unless your parents are supportive. Um, I wouldn't say my parents were thrilled about me dropping out of college. They said, "You can live at home. We're not paying for you to live anywhere. Um but if you, this is what you want to do. If it fails, you're going right back to school." But they believed in me and trusted me enough to make a decision you know even at that age. But you know, college is... again you know you're turning 18, if you're taking out student debt in particular, you're making one of the largest financial decisions of your life when you['re] deciding to go to school. And so I think as... if you're making those kinds of decisions, you should [have] the flexibility on where you want to put both your time and capital investments. Um and I was fortunate to uh to be able to, as I told my parents at the time, "take a temporary leave" uh because I wouldn't say the word "drop out" because I think that'd give them a heart attack at the time. Um but also wasn't necessarily my intention. I wasn't like, "I'm excited to be a college dropout because I want to be the Steve Jobs or the Mark Zuckerbergs." Like that, that wasn't my mentality. I simply just couldn't build a company and do well at school where I was you know going to flunk out.

And uh, but you know, going into college when I saw all those pin boards during my kind of college visits, I was doing both. I, I won the Global Student Entrepreneur of the Year award in Orange County in 2016 um when I was just about to, to, to, to leave school. I was trying to do both, um but it got to the point where the business was starting to really move. Um and we had started to kind of pivot uh from a... my first business was a marketplace platform for universities. So you go to marketplace.vanderbilt.edu and we process what we call "Student Life Commerce." So think membership dues, event tickets, as well as kind of peer-to-peer exchanges. But originally it was just a campus marketplace, and people we tried to you know rent the bars out and get people to download our app and have that B2C experience, which we knew there was demand for. But it's a hard business. Getting a college student to do anything that they don't have to do is really, really hard. Uh and we found that out pretty quickly. And so we started to make this pivot. And as we're making this pivot to a more B2B enterprise sale and, and, and product, it needed a different level of uh I think attention and understanding of the business and time frankly to really give it all I had. And that's what led me to, to drop out after my, my sophomore year.

Jake Aaron Villarreal: And when you started that business, and then pivoted, did you have to go out and get funding for it? Was you, were you bootstrapping it the whole way? Did you get into revenue pretty quickly? What was that like?

Alexander Jekowsky: Yeah we... so we bootstrapped it. I mean I'd say it was all angel investing. So you know, my mentality, and and Cents [is] maybe not a good example of that because we've raised a lot of money so far, but you know, I want to have the least amount of headcount and least amount of invested dollars possible in order to accomplish the goal. I think the vanity metric of dollars raised and, and headcount can lead you into dangerous waters very quickly. The first business I, you know, one of the big mistakes I had was I was kind of sole founder for the, for a large portion of [the] business, which is very isolating, very challenging. You have very limited feedback loops, especially in enterprise software where you don't have high volume of deals and it's a slower sales cycle. And you can kind of be driven crazy when you're in a silo. At least I, you know, it was definitely challenging for me.

So we had raised I think in total under 750,000. Uh it was, we didn't raise a ton of money. We had some capital from the angel investors that we had raised from uh while we were kind of experiencing this pivot and were able to continue to take on additional tranches of capital, and really focused on product. And I think the thing that set us apart at the end, and for me, was when I met who then became a co-founder and my CTO who really helped trans- Ethan who's our, our VP of Engineering at Cents now, um who, who really helped kind of transform the business from just this kind of conceptual product that was a B2C that we kind of made to work for more enterprise B2B. But when you actually start selling to college campuses and you go through the EDUCAUSE Higher Ed Vendor Cloud Assessment, IT audits and uh you know you can't just you know put some plaster on it and put a couple Band-Aids and um to make it look like a B2B product. You really got to invest the dollars and the time and the effort, and you got to have the right people to do it. So um, I'd say both capital but just execution and, and, and uh kind of commitment to make that pivot successful and build a good enough product that you know puts you in a position to have an exit. Uh that can you know really rock, you know, create more of higher velocity growth from a go-to-market perspective because I think that the B2B in enterprise is, ends up being such a go-to-market engine once your product is there. But it's a challenging space, particularly you know, government contracts, higher education, university contracts. It's a difficult uh space that in some ways from [a] go-to-market perspective I wouldn't, I wouldn't wish on my worst enemy at times.

Jake Aaron Villarreal: I hear you. You know, you say on LinkedIn uh that you're obsessed with "unsexy industries." What led you down the path of the business you're in today, Cents?

Alexander Jekowsky: Yeah, I mean I, I, I, I think I am obsessed with unsexy industries just based on my past and history of just the things that are off the beaten path is just the most interesting to figure out. Um I, I you know I wouldn't say in both in higher ed and now in garment care and repair businesses, laundromats, dry cleaners, alterations, it wasn't because I was born in a dryer and I loved universities, right? It's like it was, it was much more about opportunities that just found their way based on a unique experience. So after I sold my first company I had some liquidity and was thinking about alternative investments. I had a, a significant earnout and a long time that I had to stay with the parent company. I loved working there, it was a great fit for the acquisition that we had and it's a great business. But I just started feeling, "I want to have some, it's not the same. It's not the same feeling of getting to build something uh you know from scratch just being an executive at another company." Obviously you know my first company was my baby, I wanted to see it successful uh and thriving in its new home.

But I started to get a little itchy. And when I thought about kind of alternative investments, opportunities like bars, restaurants you know what, what, what can I do? And meanwhile I lived in the Marina uh as, as you mentioned, and was paying an arm and a leg for my apartment but in, in a great area, all of that, but still took me you know 50 plus quarters to do my laundry in the two laundry machines we had in our basement. So there's a mix of I hated my own laundry experience and was taking it to laundromats when our machines wouldn't work, and was thinking about alternative investments. And I met somebody who mentioned that their neighbor at their lake house in Massachusetts was the former President of New England Coin Laundry Association, and made a killing owning like four laundromats. He's, and and kind of just gave the idea of like, "hey maybe you should buy some laundromats."

So what do you do? You join the Coin Laundry Association. You go to the Golden State chapter gala of the, the Coin Laundry Association, meet up at this El Torito in San Leandro and you just try to learn as much. You, you read the Planet Laundry magazines, you try to learn as much as you can. And I was just thinking about you know buying stores, wasn't particularly interested in building anything for them, wasn't an idea that I had always had. But the deeper I got in the space when I was looking at what companies would I be able to use, is "was there a Toast? Was there a Square? Was there a DoorDash? Was there a Squire? A GlossGenius? An OpenTable? A Mindbody?" of all these other verticals, whether it's a gym right, salon, barber shop, restaurant, small accounting firm. I mean every seemingly other vertical has some really solid institutional venture-backed, huge in value and product tech company that's helping these small business owners. But in this industry that I think in many people's view, and mine particularly, was underserved, cash only, not sophisticated business owners, all of these antiquated kind of assumptions I had of the industry... the deeper I got I was like, "Oh my God, it's none of these things. Super high caliber operators like unbelievably durable space, a lot of crazy high margin of almost recurring revenue from how durable and frequent the customer visits are and the retention of the customers are of a laundromat or dry cleaner." So I was like, "All right, I'm gonna buy some stores, what software can I use?" And then I was like, "Holy crap, this is a huge industry and there's nobody doing anything in it." Uh and, and that's kind of what led... it wasn't a passion for garment care and repair. And a lot of my... I'm a great example of the average laundromat owner. The average laundromat owner doesn't get into the industry because they love fashion or cleaning clothes. They do it because it's a byproduct of entrepreneurship. They want to work for themselves, they work in corporate America, they own restaurants, they... it's low employee count and high margin. And so you stumble up-, stumble upon this business and you realize you're kind of in this gold mine um of, of an industry.

Jake Aaron Villarreal: Tell me about the product you built and how is it serving the operators of these laundromats. Because they're all across the US, some of them are scaling up, some of them are just stable, others are [going out of] business. What is it you do for the operator?

Alexander Jekowsky: Yeah, when we first launched we kind of getting into the industry myself I was thinking "what are the, what are the elements of revenue, right? What are the different revenue streams a business owner can have?" Because when, when you're building vertical SaaS, the reason that horizontal solutions, generic solutions... not to say that they don't serve a purpose or can't be helpful to a business owner um like, like the Squares of the world, the Clovers of the world that can be horizontal and have some industry focus, yes. But when there's a lot of nuance it's hard for horizontal products to really work. And so the goal when we set out to build something was to create an all-in-one system for these business owners. But building an all-in-one in an industry with a lot of nuance you got to be a student of the industry and talk to as many own-, owners and operators. I ran the counter at stores, went to every laundromat I could find in San Francisco, talked to as many operators from all over the country. My co-founder and I um, who was actually, who built a company in another, another kind of verticalized space in interior design.

And what we realized together was there are essentially four main revenue streams. There's self-serve, like "I do the laundry myself." There's the counter business, so think dry cleaners, wash and fold where you bring a bag of laundry, they wash, dry and fold it for you at the store, product sales, alterations, etc. Uh there's commercial laundry, so think every restaurant and gym and nail salon and barber shop and massage parlor and the US government and air you know, all the laundry around us. And then there's pickup and delivery. And there's a nuance with pickup and delivery a lot of people don't appreciate is there's a pickup and a return delivery for the same order, and it's going to be in a different state when it goes to the store than when it leaves, potentially in different bags and packaging. And, and it could be in one bag, three different preferences on my comforters and my clothes and my cashmere sweaters right. It's there's a... it's not rocket science but there's enough nuance there where pickup and delivery has some specialty where you can't just have DoorDash pick it up and drop it off. And that's why if you wanted to get in the pickup delivery historically, you'd have to buy a van and hire a driver and build it all in house.

And so when you looked at those four revenue streams, we wanted to be able to power the whole thing. But we found the fastest growing side of the industry was wash and fold and this concept of full service laundry. And launching out of COVID, that was COVID was certainly an accelerant to this full service laundry because people didn't want to stay, they were doing laundry more frequently and they didn't want to stay inside these laundromats to do it themselves. And so they give it to the laundromat so they could walk away and not be in a you know COVID infested whatever that, that the fear was at the time. And so to, in order to really support wash and fold, that's where the point of sale was our initial product which we call Cents OS. But point of sale in an industry like this, you taking a payment you need to be able to do, super valuable for sure. But because you could bring in two bags of laundry and some things are charged by weight, some things are charged by individual unit, you want to know which employee is processing what orders in what machines and which cycle types at what, what times for which customers. And how did they pay, and integrations across different things in the different tools of the store you know, the, the clocking in, clock out and full employee management. And then billing, you can start to understand the cascading needs that when you just offer a point of sale "what about this and that the other?"

So we started with the point of sale but really wrapped around an operating system to be the heartbeat pulse of that store. And over the last call it two and a half years since launching in, in January of 2021, now two and three quarters I guess uh, we've built starting with that kind of POS and in-store operating system, we've built as much product as I've ever seen any company build. And it's not as much of a flex as it is an indication of how we don't sleep and [are] masochists to a certain extent of the pain we put ourselves through in building such an insane amount of product. Um we've been, online ordering, fleet management, driver applications, employee management, marketing tools, CRM, point of sale, in-store payments hardware that converts coin operated machines to pay-by-card and pay-by-phone. We're launching payroll and integrations with gig economy providers. And we're soon to launch the first ever integration with, with uh Reserve with Google so operators can actually leverage the Reserve with Google tool that's never been done. So you get a sense, it's a lot of stuff to, to start out with one thing and then be able to be that all-in-one tool to consolidate all the different paths in which all the different needs an operator uh would have.

Jake Aaron Villarreal: So from an operator perspective, you're giving them a system or a solution or a platform that helps them operate the business better, maybe see the forecast where the business can go better. Ultimately the experience probably is much better as you operate the business. What's the experience like for the person doing the laundry?

Alexander Jekowsky: Yeah.

Jake Aaron Villarreal: From your system too.

Alexander Jekowsky: Absolutely, and the first thing I'll say from the operator's perspective on their experience, we try to tell folks in my opinion a vertical SaaS is... it's not that a small business owner can't run their business without Cents or Mindbody or any of that right. Our job and our responsibility in industry is to digitize their business, not to change it is just to digitize it and make it accessible and easy, and then give them the option to make those changes and improvements and enhancements. And that's the kind of partnership between technology and customers that can really be powerful. Um but you know, we're trying to make it so folks don't have to Frankenstein their business together by using 17 different tools when they could use one at a more affordable price right.

Now from the end user perspective, that's where a lot of the actual longtail value gets to. Because if a customer coming in without Cents is paying with coins on their machines, now they don't have to. They can pay with their phone or pay with credit and debit cards. That's a material change in terms of the experience of a customer. And some listeners might be thinking, "No, no laundromat owner wants to, to do that because then they can't launder all the money that and all the cash that would go through that business." Which is the mentality that I had getting into the space. And I think the what folks have to realize is the change in a lot of SMBs. Laundromats being a you know obviously one of them is, one this one of the easiest businesses on the planet to audit. You give me the utility bill of a local laundromat, I could probably back into their P&L pretty effectively right. This is a business now that is not hard to audit. And two, managing cash especially as you're trying to scale is more expensive than the taxes you pay in terms of theft opportunity, the cost of dealing with cash, customer experience etc.

So from the customer experience not to have to be able, not to have to pay with coins and be one coin short on that washer that you really need you know, that you want to start or that dryer. Um to be more accessible before. So when they're walking in and dropping off their wash and fold or uh their laundry for the store to do, before they're just going to have a paper receipt and hopefully the store calls them when it's ready and they pick up the phone. Now they actually through Cents can get a, they get a text message and a digitized receipt with a live link that tracks 100% of the different stages of their order. So they know when it's being processed, when it's ready for pickup. They can add additional tips right from their phone, pay on their phone. They can even say "I want it delivered back to me because I can't make it into the store."

And these are things that again we're not trying to transform a laundry business, we're trying to provide the optionality in order for them to introduce, introduce better customer experiences. But from a, from a retention perspective, from an increased average ticket perspective, from an overall kind of CSAT or customer satisfaction uh of a store we've seen in exponential increases. Even in tipping, the average operator experiences a 45%, 40 or 45% increase in tips through Cents because that customer experience is so positive. And when small business owners are trying to find ways to pay their employees more and deliver better employee experiences, you know, we see a pretty material lift in, in our impact there.

Jake Aaron Villarreal: Sounds amazing um, almost sounds like Domino's Pizza. You order the pizza, you know when it goes in the oven, it tells you when it's out, you go pick it up or it's delivered. And as a, as a user or as a pizza lover, you know exactly what the process is. But your experience, you feel more connected to that company so...

Alexander Jekowsky: Yeah um, Domino's, Domino's calls themselves right not a pizza chain but a technology company that happens to sell pizza. You know, that's what you know I love, it's, it's... but you're exactly right that the ex-, the benefit to the business is directly passed through to the customer. The more improved the business can operate, the better a customer experience will be. And that's how you go from you know Laundromat A and Laundromat B should have the same product theoretically right. They could be having the same machines, they're pulling from the same labor pool, they're probably, they might be using the same Tide detergent or whatever soaps they're using, and everything could be the same. But why can one charge a dollar a pound and the other charge 2.50? Because of this. The experience of that customer. And that's where you move from commodity to service there. You can get different point of sales out there, you can listen to different podcasts right. But you know if, if we're both having, we're having the same conversation another podcast is happening is having, the difference is just the experience right. It's not just the topic of our discussion, it's the quality of it. So it's not just the fact that you know we're cleaning people's clothes, a laundromat is cleaning people's clothes is "what is their experience?" It's not just "I'm ordering pizza from do-, from Domino's" is "what is my experience in placing that order associated to that, that order, to that brand?" And that's what changes your ability as a small business owner to increase price and, and increase retention um and acquisition of new customers.

Jake Aaron Villarreal: Well, not to be trite, but you know look everyone needs clean underwear, right? It's never going to go away. You either wash your clothes in your house, or if you're New York City or you're in SF or big metropolitan or you just don't have it, you got to get your clothes washed somewhere. The economy has really been interesting the last 24 months. How does the economy impact this kind of business? Absolutely at all?

Alexander Jekowsky: Yeah, no ab-, it's a great question. I think you know when there's dislocation in the market I think it presents a lot of opportunity both from a, a company perspective like ours, but taking it down to the small business level, what you're seeing today and you've seen it in the last decade is a new caliber of operator dying to get into this space. One of the big problems in, in the laundromat industry in particular is a lack of supply of laundromats to buy. Because people buy it, it's kind of like a Porsche, right? Porsches hold their value, the used car market of Porsches is terrible because nobody wants to sell them. Um and so one of the things that has contributed positively in the industry is when there's this I say dislocation and, and, and constraints in the market, these what we call "zombie mats," which are run-down stores living on 40-plus year leases with old machines that the business owners won't put any money into it because they know customers, they know they got a built-in 90% retention and they don't have to do anything. They're just going to collect as much money as they can and ride off into the sunset when they retire. And the changes in the market can actually accelerate some of this zombie mats going down the drain, creating more opportunity for new investors to get into the space. Uh and so I think that's some of what you're seeing.

Laundromats are extremely durable, they're not impacted by pandemics, recessions, uh you know geopolitical issues. Like you know, you drop a bomb somewhere, a laundromat's gonna pop up the next day. Like that's just the reality. And this sounds negative so I don't say it that much, but they're kind of like the cockroaches of Main Street. It's just they don't die, it's just, it's, it's an unbelievable business. That's what's so attractive from an investment perspective. And if you decide you're not going to you know kill yourself to work every day in that store and not, you're not going to get 40 or 50% margin, you're going to try to be a more hands-off operator and get 50, 15% cash on cash returns. That's still pretty incredible as you kind of taking a step back. And so that's the opportunity it presents.

So in terms of the, the market environment I think you find investors looking for more say more secure investments that you can leverage you know. You can get bonus depreciation on your assets of your store when you buy your equipment. You can invest in Opportunity Zones that present addition, additional tax benefits. So you have more sophisticated investors looking to diversify portfolios, get into the industry because they know another pandemic happens, they can ride it out. And with, with no impact to their wallet, their, their portfolio. And the market's down 20%, their laundromats are not. Uh and, and the demands for those laundry services as an amenity either for, if you have washer and dryer in your, in your home, or you have to go there, is pretty you know elastic. It doesn't really change.

Jake Aaron Villarreal: Sounds like an amazing business. Talk to me about the funding. Uh, Bessemer funded you uh initially and you've raised capital. What's that journey been like for you and where are you guys at today?

Alexander Jekowsky: Yeah, so you know, we try to be pretty quiet uh on how much money we've raised, who we've raised from. You know, we put some on Crunchbase because people you know, we got to know that we're legitimate when we're hiring and all of that. But you know, we, we never want to be on the cover of TechCrunch, we never want to be on the NASDAQ "congrats Cents for raising X." I think this is one of the best kept secrets in all of vertical SaaS in any industry, and so we've been trying to quietly not just be a market leader but really be a market owner before you know we try to do even, even more press, if we ever do. To date we've raised in the last two and a half years about 37.5 million um across two, three different series of fundings. Uh Bessemer was our seed investor, led our first two rounds, and then Tiger led our Series A. Um and, and the purpose with, for raising the capital that we have is, besides building a truly extraordinary amount of product, to be able to be in a position to rapidly scale and really own this market because we have very little competition to begin with.

Uh the strategy for us, I call it from a fundraising perspective is, you know year one seed round: prove concept, product-market fit, you know early signs of, of strong core unit economics. That's the, that's the goal in year one, year two, or end of year one. But call it year two, is raise that, that growth round, put us in a position to not just prove out those unit economics, but you know experiences that we're you know experiences... the you know knocks on the chin we're going to get from mistakes that we make of being a high growth company that we're trying to see around corners as much as we can um. But be able to move quickly despite the growing pains that we experience in order to put ourselves in a position in year three to do not just operate and grow our business but also be strategic in both organic and or inorganic growth, growth. So more strategic you know customer acquisition either through M&A or through you know new channel partners that we're able to leverage because of the R&D investments and the position and purchasing power uh that we have in the market today. So that's been some of the strategy to get us to where we are.

We've been fortunate to have I would consider some of the best vertical SaaS investors um both in their pedigrees and, and portfolios, but also just in terms of quality of people. Um we have always optimized for people over valuation. We've been very fortunate to have you know great values and enterprise values across our various funding rounds, but at all times we've tried to really optimize for the people that we have at the table. Because in our opinion and in my view, we're in an industry again that's extremely durable, with very little competition, uh with amazing, amazing customer and operators in an incredible industry that's really like coming up more than I, I think than most in terms of the opportunity that we see. It's really the renaissance in the garment care and repair space in my view. Uh and so in timing, in opportunity, in a lack of competition and all of that, we have very little risk as a business. And so it really is about execution. And that's, that all comes down to people.

Jake Aaron Villarreal: Let's talk about people a little bit here. Defining a culture and the challenge of hiring and retaining top people and sometimes, you know, sometimes that's underestimated by maybe first time founders. Second time founders maybe not so much. How much attention do you put into your people's strategy?

Alexander Jekowsky: Oh yeah, I mean it's the core of everything. The first thing I did differently in this one was get co-founders. First business had very, very small team and no co- and no co-founders until I found you know Ethan at the towards the end of the business. Thankfully that was the biggest wake-up call of "the people equal success" and, and well, "caliber of people equal high success." Um and in this business I think the most impactful thing that I've done and had the ability to do based on learning so much from our investors, advisors, great entrepreneurs... I give a shout out to, to a CEO founder named Chase Gilbert who runs a company called Built Technologies who's taught me so much uh of what it means to build great culture and the development of at Cents what we call our "guiding principles." And the guiding princi-, principles are the sole definition in, in our view of what makes a great Cents employee. Personally, they are very much on how I live my own, my life personally. But that has been the compass for us of identifying great people.

And it's proven to be extremely successful in identifying talent. Because of course we've had to terminate employees for lack of performance or things like that, but we've had, also had experiences with employees that are poor performing but are just a complete embodiment of our guiding principles. And so we think to ourselves before we make a move: are they performing in their, in their role or they, or, or is it, is it something deeper? And, and the reality is in my experience, if a, if a employee embodies 100% of our guiding principles it is impossible for them not to be successful at Cents. However they might be in the wrong role. We had a really poor performing account executive but he really embodied our guiding principles and we moved him to the SDR role and he's been our best SDR month over month since he's started in that role. Same in product operation, same in customer success. So look, I, I'm not going to say I've got a sample size of a thousand employees that I'm going to you know preach from the mountaintops saying this is 100% how it works. But in my experience so far, when we have moved people that embody our guiding principles they succeed. And so we try to in all of our interview processes as well as our shoutouts every week, in everything that we do in our awards at the end of a year, at our, at our offsite, everything is rooted around our guiding principles and that's how we really are identifying you know high caliber talent.

Jake Aaron Villarreal: Little about your guiding principles and what those are?

Alexander Jekowsky: Absolutely. I mean they're on our website so I can, I can, I can say that anybody can find them on the about page of uh, of trycents.com. And the, the reason that we have them on that page is we want our customers to also know what's important to us. It's not just the, the employees and the prospects, but our culture and our people are a representation of the product that you're buying. And we tell every customer of ours that it's not just the product you're buying, it's the partnership and people that you're working with you know at Cents. So you know, some of our guiding principles are things like "great responsibility," which is about us feeling the weight of the responsibility we have in this industry to our customer, excuse me, to our customers, to our partners, to our co-workers. Because there is an, an insane opportunity. We is the only venture-backed company doing what we're doing in the space. And I like to think that you know it's a rising tide that lifts all boats, and we're part of maybe a, maybe it's a small ripple, but a part of something that, that's rising, raising the tide of this industry. Uh and that's a huge responsibility that we have to have.

And every employee needs to have what we call a "one-to-one say-and-do ratio." You don't, we don't want you to say two things and do one. You don't have to you know say one thing and do two. If you say something and you do it, you're going to win and our customers are going to be happy. So like great responsibility, attitude over everything, uh being customer obsessed, working fast, fast and working smart right. Don't, don't work fast to cut corners, and don't be so careful in working smart that we're also not you know focusing on speed and agility. Act like an owner is one of my, my favorites, where you really are not just acting like an owner of like a business owner because you need to embody who you're selling to and who we're building product for. But act like the owner and the shareholder in Cents that you are. I, you know, I'm just as much of an owner, maybe the equity percentage is different, but just as much of an owner as anybody in the company that has shares. And we have to feel that same weight of ownership in, in the success, right. Diversity in team, culture, and thought, critical in, in, in our growth. Self-awareness, commitment to communication, running through walls, staying curious. Like those are the things that have enabled us to be in the position we're at today and have nearly, not exactly, but nearly 100% employee retention um you know at our business which is, wow, not, not easy to do.

Jake Aaron Villarreal: That's amazing. You know, you shared a little bit with me about your one-to-one ratio mantras. Walk us through that. I think you mentioned one of them, kind of walk us through that. I think it's really strategic and interesting, and also uh can keep people focused on, on the bigger picture.

Alexander Jekowsky: Yeah. So our, our three one-to-ones are "one-to-one say and do ratio" is really just about execution. Uh one, the one is more of a financial metric. But one the one... uh we have a, our business model is about software as a service subscription, payments as well as payments and other ancillary kind of revenue streams we have. We want to make sure the cost to acquire a customer doesn't exceed the value in just software that, that we're, that we're selling right. That enables us to have a much higher CAC to ACV uh or ACV to CAC ratio where you know the best-in-class SaaS companies are, are, are, are trading at. Uh so one-to-one SaaS to CAC ACV at a minimum. One-to-one say-and-do ratio.

And then the goal, and I'll say we're at, we're at 55 I think employees today and I can say we're not there yet but hopefully soon, uh a million in revenue per every one headcount. That, that is the goal. Uh you know this is not a business, and I think many businesses aren't... I challenge as many founders as I can, and I'm not saying I'm right by any means. If I could have a thousand employees to do all these things that I'm sure it would make life easier, but in reality we've historically just, since I can't speak for any other business, have been more efficient and more successful when we've had less. When we raised our Series A, we decided to throw some money at problems. So throw some body at pro- throw some bodies at problems, hire more AEs, hire more engineers, hire, spend more on marketings. But it wasn't the right... the intention wasn't there. I'm not saying that it's not valuable to do those things, uh but one of my favorite quotes from uh Biz Stone's book uh on the founding of Twitter was "characters without characters builds character," right. It's like you can do a lot when you are restricted with less. And we have had a much uh more efficient experience in, in building a great business when we've had to have less. Uh and so we try to keep this mentality where we want to be doing 100 million [in] revenue when we have 100 people. If not have better uh revenue per headcount especially as we scale. But early days that's where we want to get to, and those are our, our three one-to-ones.

Jake Aaron Villarreal: I mean that's great. I think it should be exciting not just for your employees and yourself, but also your investors. You know, those are the ones that are also, you know, you're accountable to and I think um that uh is music to anybody's ears. Um as a founder, as an operator of a company yourself, as you scale up you know, you have a 100 fires to put out every day. What's the one that today, right now, keeps you up at night that you're thinking about has to get solved?

Alexander Jekowsky: Oh, that's like picking a favorite kid. I don't have kids, but I imagine picking a, what's the most important problem to solve is the equivalent of picking your favorite kid because they're all so important. Um you know, you're, you're catching me at a unique time in, in, in deals that we're doing right now. Um so I'd say the, the, the, all the deals that I've been kind of working on the last six plus months are things that I've been really uh you know those are most pressing for me personally. But outside of that um I think it, I'd say the most pressing fire that I want to put out, which is a fire that I don't think will ever go away, um is a constant evaluation of, of people, talent, leaders, etc. Is making sure that at every stage of the business we have the right people involved. It's very easy to get complacent by the wins and be happy when, with the good news that comes out, um and not consistently and constantly pushing ourselves when we know we can deliver better, right? When you have a lot of B players, you can be excited by passing through school and, and, and, and, and doing okay. Uh but when you know deep down you have the opportunity to be... if I make the baseball analogy, you know it's great to have uh you know line drive hitters. It's what you want, to get base hits all the time. But I mean as a Giants fan, I want a really strong right-handed bat to be able to actually you know hit more than 20, 20 home runs in a season. And so part of the... that's my own Giants venting.

But uh but, but I think in our view we want to make sure that we're constantly evaluating from a talent perspective, constantly evaluating high, and, and recruiting high caliber home run hitters, rock stars that can continue to elevate and raise uh you know the metrics, the quality, um and the overall culture of the business. So we don't get complacent at any particular individual stage. Um so that, that is the I'd say the fire. There are a couple roles that we're really excited to hire for right now, and as we open new executive and leadership positions as well as IC roles, um but just making sure we have the best people at all times is the thing that keeps me up at night a little bit.

Jake Aaron Villarreal: Yeah, understand that. I think that's uh very common with a lot of companies today. And you know, there was this large you know down, downsizing pattern that happened across the industry, especially in technology. And there's a lot of companies that downsized, maybe over-downsized, and now they're having to backfill to close the gap so that the culture of the people that are still there, that stayed you know, the stress levels kind of get back to normal, they're not doing more than they should. And we're seeing this kind of boomerang trend come back around. Uh but I think yeah, um it's important to make sure you've got the right team in place and also you're keeping a pipeline of you know healthy talent in ahead of you. So I think that strategy is a great strategy. Um for all the founders out there that might be listening, having a couple startups under your belt, having a win an acquisition, what's one lesson that's priceless to you that you can share of being an entrepreneur and being a founder of a technology company?

Alexander Jekowsky: That's a good question. I, I think I'll give a, I'll give maybe a couple. But the first one to me is just try to simplify things. Because it's very easy to overthink. Um and, and simplify doesn't mean don't put a lot of effort into strategizing and forecasting and planning. But there are so many times where I, I, I personally have overcomplicated a solution. Whether it's a go-to-market strategy, whether it's a uh a pitch, whether it's a process. Because a lot of founders as they grow, as their business grows and matures, it's "let's add a ton of process because now we, we need process in order to scale." Uh and, and that is true, but process and automations can remove the human element uh of, of either selling to an SMB or selling to a customer, or things can actually fall through the cracks the more that you do automate. Uh and so I try to tell folks every time you're adding complexity in process, how do you simplify? How can you just make it a little bit simpler, 1% every time, because it's gonna, you're going to reduce the amount of potential issues you have.

If I make another baseball analogy it's, you know, if you're a pitcher you can have a crazy windup with a lot of different movements or you can have just straight to the plate. And doesn't mean that you shouldn't have crazy movements, but there's a higher chance for an issue to go wrong. Uh and so you know, you want to make sure that you're, you're, you're building the most powerful motion in whatever business unit or, or operations that you're running, but just try to think "do I need to have five hires here? Do I need to build this automation in process? And if I do, how do I make sure that something doesn't slip through the cracks um uh you know by doing that, or how does something that could take four days to do in one person end up taking two weeks and three because we're adding all this process in place to, because that's what we feel like we need to do as we're scaling." Um so I think that that would be something that's been echoing around in my head, you know as we've raised more money and gotten larger as a business and larger as a customer base, is you know you don't have to be too big for yourself and you don't need to, to try to overcomplicate things that in reality are so simple. Especially as I look at other businesses that have eight people in it and are highly, hugely profitable and still growing well. You don't... there isn't a formula for success. You don't need to raise $200 million and have a thousand employees like in order to build an amazing business. If that's what it takes for you in your business then that's what you should do, but there isn't an exact formula of, of, of how and, and what you're supposed to do. And I think you talk [to] 10 investors, 10 investors gonna are going to say potentially 10 different things depending on their fund mandate, depending on their portfolio, depending on their thesis. Uh so just you know try to listen to your gut more.

Jake Aaron Villarreal: Yeah I love that. Cl- to your gut, always a good one. Um Alex, thanks so much for hopping on here and spending some time with us today. If people wanted to learn about Cents where would they find Cents? Where would they find you if they wanted to just have a chat?

Alexander Jekowsky: Yeah, visit trycents.com, t-r-y-c-e-n-t-s.com. If you're interested in buying a laundromat, get on the phone with one of our sales guys, join our community. We have tons of introductions to folks that uh that are super helpful in understanding the laundry industry. It's an amazing industry and it is hungry for new investors, sophisticated high caliber investors. Uh and so I recommend anybody to just learn about it. Uh and of course you know be a Cents customer if you aren't interested in buying a laundromat. Make sure you're looking at laundry pickup delivery and local business around you. Because out of all the luxurious amenities I've ever experienced, wash and fold pickup delivery is by far the most wonderful. Um and try to focus on supporting the, the, the small business owners all around you uh because they're doing really, really important work in serving their communities. So highly recommend that. So visit our website trycents.com. You can find me on LinkedIn, my first name and my last name. Feel free to reach out. Uh you know I'm, I always love talking to founders, entrepreneurs, uh you know shoot the sh- on different ideas. And uh if I, I'm hungry to learn so if I can learn from anybody that reaches out, that is a huge win. Um and anything I say on this podcast of course it's simply a data point. I can't say it's works for anybody else but me, and I don't even know if it works yet for, for me. But um, so remember that. Um uh but uh yeah, no, Jake thanks so much for having me on and uh uh this was, this was a lot of fun.

Jake Aaron Villarreal: Great. Well as we wrap up here, I just want to give a big shout out again to Alex for joining and to all the listeners for listening. It means the world to me that you chose to spend your time with us today on this Friday. This is Jake Aaron Villarreal signing off for now, but can't wait to connect with you all soon again on the next episode. Until then, take care.

Before we wrap up, I want to give a big shout out to all the entrepreneurs that have joined to make this podcast possible. And for all the listeners for listening, it means the world to me that you chose to spend your time with us today. I'm your host Jake Aaron Villarreal signing off for now, but can't wait to connect with you all soon on the next episode. Take care.

This show is sponsored by Match Relevant, a company that helps venture-backed startups find the best people in the market and they do it in three simple steps. First, they sit down with founders to understand their story. Second, they tell their story into multiple candidate channels. And third, they schedule interviews within 48 hours. Find us at matchrelevant.com to learn more about how we do it.

‍