Prim launched in mid-2013, after passing through the prestigious Y Combinator business accelerator program earlier that year. Here’s how Prim’s laundry service worked. Customers bagged their laundry and then went online to choose a pickup and delivery time. The price was \($25\) for the first bag and \($15\) for each additional bag.

A driver, recruited by a third-party delivery service, collected the bags. (Rickshaw was the name of the delivery service in the city where Prim started.) Everything would be back, washed and folded, later that day or early the next day. No cash changed hands between the customer and the pickup or delivery drivers. All payments took place at Prim’s website. Prim gained favorable press and early momentum. When it closed, it was handling 1,000 pounds of laundry daily from 40 clients and was growing.

What went wrong?

Two things went wrong with Prim. First, once Prim got your clothes, it went from an innovative disruptor to an old-school company. It would take your clothes to a laundry service and utilize its wash-and-fold services.

Prim negotiated volume discounts with several laundry services. However, these discounts were verbal, not written. What Prim did not anticipate was the partnerships going sour. While the laundry services were receptive initially to working with Prim, they had their own delivery services and eventually saw Prim as siphoning off their customers and revenue. During its short history, Prim churned through three different laundry services.

A lack of passion and resolve on the part of its founders is the second issue that “went wrong” with Prim. Faced with the reality that working with local laundry services was a fragile business model, Prim’s founders, Yin Yin Wu and Xuwen Cao, had a decision to make. Should they build or lease their own laundry service? This was a daunting prospect, given the hundreds of thousands of dollars necessary to build and staff a high-volume laundry wash-and-fold facility. Even more daunting was the prospect that they would need to replicate this step in each new market Prim entered. After two months of deliberation, Wu and Cao pulled the plug. While they estimated that by constructing their own laundry service they could build a profitable business in 5 to 10 years, with revenues of \($10\) million to \($15\) million, it was a direction they simply did not want to pursue. Both were computer science students in college and had no direct experience in the laundry business. In an article published by Bizz Bucket, Garry Tan, a partner with Y Combinator, reflecting on why Wu and Cao closed Prim, said, “They didn’t want to actually have to wash the laundry—they wanted to be the connector....

Questions:

1. Why is passion such a critical part of entrepreneurial success? Prim’s founders were apparently passionate about building a company but not passionate about the laundry business specifically. In what ways is this combination problematic?
2. How could Prim’s cofounders have better anticipated that laundry services would eventually see their firm as a competitor siphoning off their own business and be reluctant to work with them?
3. Rather than employ its own drivers to pick up and deliver laundry for its customers, Prim relied on the use of third-party delivery services. In what ways do you think this approach could have limited their growth in other markets?
4. San Francisco, the city in which Prim launched, has several innovative laundry services. These services include Sfwash, a delivery service where you pay by the pound and Sudzee, which requires special lockable bags. Take time to study Sfwash (https://www.sfwash .com) and Sudzee (https://www.sudzee.com). Select the service that you think has the most potential and explain the rationale for your selection. Compare the service to Prim’s approach.