The following is a conversation between Gabriel Mandujano, Founder and CEO of Wash Cycle Laundry, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer WNYM in New York City.
Denver: If you look long and hard underneath the dirty pile of laundry, you just might find an innovative and creative social enterprise – one that is good for the environment while also providing the so-called unhirable with a second chance. It’s called Wash Cycle Laundry, and it’s a pleasure to have with us tonight, its Founder and CEO, Gabriel Mandujano.
Good evening, Gabriel, and welcome to The Business of Giving!
Gabriel: Thanks so much.
Laundry is everywhere, and we wash it. In some sense, it’s a pretty simple business model. Beyond just getting things clean, we approach the business with a triple-bottom-line mission – that’s people, planet, and profit.
Denver: Tell us about Wash Cycle Laundry and how you came up with this idea, to begin with.
Gabriel: Wash Cycle Laundry is a social enterprise, and we’re a commercial laundry service. We were founded in Philadelphia, and we operate in Philly, Washington, D.C., and Boston, Massachusetts.
Day by day, we do laundry for businesses of all kinds. Our first client was a yoga studio. We service what seems like every CrossFit gym in Philadelphia, but we’ve grown up from there. We work with a number of universities. We have a federal contract. We service basically every airline blanket and napkin that flies on 30 airlines out of Boston Logan Airport and everywhere in between.
Laundry is everywhere, and we wash it. In some sense, it’s a pretty simple business model. Beyond just getting things clean, we approach the business with a triple-bottom-line mission – that’s people, planet, and profit. In terms of our environmental mission, we’ve invested in a lot of technology and practice inside our plant to save water and energy.
Denver: Gabriel, did you grow up doing your own laundry?
Gabriel: I did grow up doing it. I had a favorite shirt in middle school and—
Denver: You had to wear it every day.
Gabriel: Well, I wanted to, and my mom wouldn’t wash laundry every day, so I learned to wash it myself in short. I did my third-grade science fair project on detergents. I tested Tide versus Dynamo 2, but I don’t know if that was my spark.
Denver: Do you remember the outcome?
Gabriel: Tide won by a landslide. My godfather was a detergent chemist at Consumer Reports here in New York, so he gave me a few tips on how to do the test scientifically.
Denver: It’s in your DNA.
Gabriel: Yes, I guess so.
Denver: Well, let’s begin with how you pick up the laundry, and you use these truck trikes. How do they work? What are they? How much laundry can they hold?
Gabriel: Yes. We have used bikes since Day one, and more recently, we commissioned these truck trikes, which are made by a company out of Portland, Oregon. They are tricycles but the most commercial grade trike you can ever imagine. They’ve got an electric motor; they’ve got lithium-ion batteries. We custom-designed this particular truck to take a tall bulk cart. If you’ve ever seen a movie where they have the chase scene through the hotel kitchen and then the laundry, you see those big plastic bins that are about five feet tall. So this trike has a removable ramp, so you can load one of those trikes and then ratchet it down and then carry it. So that carries about 450 pounds of dirty linen.
We tested them first in Worcester. We are going to deploy them in Philly and D.C., and they’ve been great. We also just use standard bikes and trailers. That’s how we started. So there’s a company, Surly, that makes a really high-grade trailer called the Bill Trailer, and we just put laundry carts on top of that. That’ll carry about 250- to 300 pounds of laundry. And some of our bicyclists prefer that as well. So we’ve tried a lot of different products in the market.
Denver: Is bike delivery in a city actually an advantage over a truck?
Gabriel: Definitely for, especially these small and mid-sized storefront clients, clients who are sending us two, three, four, maybe five or six bins or bags of laundry per day, they’ve got a significant need. If you’re a gym or you’re a salon, you have a lot of laundry and a lot of times, these owners are loading those in the back of their car and taking it home to wash. A bike can service those storefront accounts 10 times more efficiently than any truck. We get there faster; we get there more cheaply and more reliably than trucks.
And so our bike routes in city centers are just, whatever financial metric you want to choose, are just hands-down better than a truck delivery route.
Denver: Is bike maintenance a challenge for you?
Gabriel: It is. Most bikes are not really designed to take sort of a commercial duty cycle. So I wish that there was a bike out there that had…if you get into a car that’s passed a state inspection, you can turn the ignition, and if it turns on, you can be reasonably certain that it’s going to work for the day. You don’t have anything like that level of reliability in most bike manufacture.
We do go through bikes pretty frequently, but truck trikes are much more commercially designed so we’re optimistic about that, that they can get to a commercial duty cycle. But most bikes are consumer products, and we’re not a consumer.
Denver: Not built for this – 400 pounds of laundry. I bet it’s a great marketing opportunity when these bikes are roaming around the streets, and people look at the side of them. You probably generate some business from that.
Gabriel: It’s how a lot of people downtown know us – word of mouth and the bike guys. It is a bit of a double-edged sword because as we’ve grown up, sometimes the same clients who will use us because of the bike, sometimes larger clients will assume that that’s our only mode of service, or that we’re just not capable of serving their need. And so, it has worked for us, and then sometimes it works against us, too, but it still makes sense.
Denver: Okay, so we’ve picked up the dirty laundry. Now, we’ve got to wash it and Wash Cycle does laundry in a very environmentally friendly way. Explain how you go about doing that.
Gabriel: It’s a little different in each plant, but our biggest plant in Boston, we invested in a water recycling system, which basically means that all of the water that comes out of the washing machines drains into a holding tank, and then that water is purified through a multistage process and then returned for particularly the wash cycle, so sort of the dirtier cycles of the process. And then we’re using freshwater for the rinse to make sure that everything is completely clean by the end. We get really great results with it.
The amazing thing about water recycling is that most of the energy use inside the plant and laundry is for water heating. We’re heating water to 140-, 150 degrees to wash laundry, and once that water is recycled, it still has retained most of that heat. So even though you call it water recycling, we’re also recycling the energy as well. And that’s just a huge commitment of ours and makes a big impact on our footprint.
Denver: Well, aside from it being environmentally friendly, it probably produces some cost savings as well. Is your water cost savings and your energy cost savings down from what a normal wash cycle would be?
Gabriel: We save about 20,000 to 30,000 gallons of water per day using this method in the Boston plant. Every 7,000 gallons of water in Boston is about $190, so on a daily basis, we’re avoiding $600 or $800 worth of expense, and that adds up.
Denver: That definitely adds up.
So, Gabriel, if this was one of those homemaker shows, and you were giving advice, what tip would you give for someone about how they could go about doing their own laundry more effectively?
Gabriel: I get a lot of questions about top loaders versus front loaders.
Denver: Okay. You did say one of your family members worked for Consumer Reports. Let’s hear the report.
Gabriel: Front loaders all the way. The reason why is because in a top loader, in order to get all the clothes wet, you have to fill it to the top. Whereas in a side loader, you just sort of fill it halfway and then the clothes rotate through the water. And that’s good for two reasons. One, it means you use less water and also because you use less energy to heat that water, but your detergent could be more concentrated because, ultimately, how clean it gets is a little bit less about how much water there is and much more about the concentration of the detergent.
So when you use front loaders, you’re able to reduce your water, reduce your energy, and reduce your chemical use, and that’s all good stuff. You’ve also got a really good mechanical action with the clothes tumbling through. And so, all in all, front loaders all the way.
…we have an explicit mission to create opportunities for people who have been excluded from the labor market… Our goal is really to be a supportive employer and a permanent employer for people.
Denver: Who knew? Great advice.
Well, Wash Cycle Laundry has helped to change people’s lives by hiring the historically unhirable. Tell us about this initiative of yours.
Gabriel: So that’s been core to our mission since the beginning. We typically call it “second-chance hiring” or sometimes “mission hiring.” But we have an explicit mission to create opportunities for people who have been excluded from the labor market. We track four categories: people who have been formerly incarcerated; people who have been formerly homeless; people who are in recovery; or people who have a history of dependence on public benefits. Oftentimes, people will check more than one box.
I started the business with that goal. I had come from the nonprofit sector working in economic development and workforce development and felt that there were really a few links in the chain.
There’s a lot of programs for job training, and they’re great. You have a lot of what you call “transitional work programs” where people can get their first work experience in a nonprofit work environment, and those are great and have amazing outcomes. I felt that there was this huge gap between that and regular “normal employment,” and that mission hiring and second-chance hiring within a for-profit context could help fill that gap.
Our goal is really to be a supportive employer and a permanent employer for people. So that after somebody has graduated from a job training program or has left a transitional work placement, they can land in a place where… yes, there would be less support than in a focused nonprofit program, but there would be significant longevity so that we could bridge the gap between those things.
Denver: How do you find these employees? Do you recruit them yourself, or do you work through other organizations who become a pipeline and a feeder system for you?
Gabriel: We always work with other organizations. We view ourselves as one step in the chain. If you can imagine somebody who has just been released from incarceration, you can imagine that on Day one, they’re going to have a lot of needs, and those, frankly, are not needs that employers, even mission-oriented employers, are equipped to address. So, on Day one, they might work with a nonprofit organization that focuses on everything from housing, to settling custody issues, to mental health – just any range of things.
Where we come in is when somebody is “employment-ready,” that we can be that supportive employer. So we’re always working with nonprofit partners in each city to source our employees and then working with them after hire to support those employees and retain them in employment.
Denver: What’s the average starting salary?
Gabriel: In Boston, I think we just raised it to $13.40.
Denver: That’s a good starting salary.
Gabriel: In Philly, we’re at $11.70, although our annual raise is due now, so it’ll probably take that over $12 soon. In D.C., I think we’re at $15.
Denver: And there’s really an opportunity for people who come to work at Wash Cycle to move up, correct?
Gabriel: Yes. We hire all of our supervisory team and many of our management team through internal hires. Like our general manager in D.C. – we actually have two now. They’re co-managers, and one started out on the frontline in laundry in Massachusetts, and the other started out as a frontline delivery person in D.C.
We look for talent from within. It’s a big commitment of ours, and I think that’s really where employers can make a big difference. It’s one thing to get that first job, and that’s a huge step, but landing a job even at $13.40 an hour is not the end to somebody’s economic troubles. It’s the very first step in a long journey. And so, we want to make sure that people can take a couple more steps with us.
Denver: That’s great! So, Gabriel, what does a typical day at Wash Cycle Laundry look like? Is there ever a typical day?
Gabriel: One thing about the sector of laundry that we’re in is sort of like the sun never sets on Wash Cycle Laundry. We work seven days a week, and we’re never more – and when I say never, I mean we’re never more than six hours away from a deadline.
So at 1:00 AM on Christmas Day, if we don’t show up to Logan Airport by 5:30, then a plane is going to take off without its blankets, and that is a big deal for our clients. One thing is that there’s always production. There’s always that time pressure – laundry comes in; laundry has got to get processed, it’s got to go out.
Denver: The sun never sets.
Gabriel: We typically start out the day: our delivery staff usually starts first usually very early in the morning, four or five in the morning. They’ll bring the first loads back for the day. Our staff will, depending on the plant, start between six and nine. We sort everything out. We load it up; we try to get our finishing equipment going. And then from there, it hopefully is pretty calm – 100 pounds goes into the washer, 100 pounds goes to the dryer, 100 pounds goes to the folding machine, and then 100 pounds gets delivered. But there are always, always, always things that happen. I mean, we’re working with industrial machinery, and one of the things you learn with industrial machinery is it’s often temperamental. So depending on what happens that day…
Denver: You have crisis management.
Gabriel: Yes, crisis management. And then our clients are also the same way. All of our clients are working in tight turnaround and timeframes. We might be servicing a hotel, and that hotel might call us and say, “Oh gosh. Normally, our check-in time is 3:00 PM, but I just found out that our sales manager promised this big group that they could check-in at noon. I’m out of sheets. Can you get here by 11:30?” Of course, those things happen.
We wash all the mops for a convention center, for example, and one of their biggest shows of the year is in town. And so they’ve been asking for same-day turnarounds day after day this week. And so that throws everything from a loop.
Denver: Talk about some of those major clients. Who are they?
Gabriel: We work with a number of independent and some branded hotel chains.
Denver: Can you tell us… such us?
Gabriel: We work with the Hilton Boston Logan Airport; it’s probably the biggest by rooms. There’s a great partner of ours called the CitizenM Hotel, which is a European brand that’s coming to the US, and they’ve been a phenomenal partner, and some others.
We service just about every airline that flies out of Boston Logan through a partnership we have with a national organization. We’re a subcontractor there. We service the Veterans Administration. We service the Philadelphia Eagles facilities team.
Denver: We’ll let that go.
Gabriel: We service the PA Convention Center and any number of other people.
…What I was trying to accomplish, and what I want to accomplish with Wash Cycle, is to be that link in the chain, which is to say that: here’s a model that for-profit employers not only could do, but should do, both because they’re members of society, but also because it makes business sense.
Denver: Gabriel, you elected to incorporate Wash Cycle Laundry as a social enterprise as opposed to a nonprofit organization. What were some of the factors that went into making that choice?
Gabriel: Some macro and some personal. I think personally when I founded the company, I had worked as a nonprofit executive director and I had worked in the leadership team of another nonprofit. I love the nonprofit sector. I think in my career at that point, I wasn’t ready to jump into another nonprofit. So, I think that was the personal factor.
I think from a macro perspective, a few reasons. I think from a broader impact: What I was trying to accomplish, and what I want to accomplish with Wash Cycle, is to be that link in the chain, which is to say that: here’s a model that for-profit employers not only could do, but should do, both because they’re members of society, but also because it makes business sense. I think that’s a lesson you’ve got to prove from the for-profit sector. I don’t think you can be a nonprofit pursuing a social mission and then using that as an effective model for for-profit companies. So I think that’s a big reason.
I think that raising capital for an operating business like this is certainly much easier in the for-profit sector. There are much more well-trodden pathways for for-profits to raise debt and equity than there are for nonprofits.
And then finally, I think there’s convergence between the two. There are for-profits that are social enterprises that access philanthropic capital, and then there are for-profits that are increasingly able to access commercial capital in different ways. And so I don’t think the distinction was so black and white anymore.
Denver: Talk a little bit about that business model. You generate a lot through your customers and your clients; you have investors, maybe perhaps even some philanthropic capital. What does that mix look like?
Gabriel: We’ve got a pretty diverse set of financial stakeholders. We’ve had equity investors who are both private angel groups with a social impact mission. We also have had philanthropic groups and other types of funds. A really innovative one recently is called the Boston Impact Initiative. They are really looking to leverage both philanthropic and individual capital to make a difference in the racial wealth gap in the greater Boston area or Eastern Massachusetts.
We’ve run on a lot of different types of equity. We found that a number of foundations and philanthropies are more comfortable with debt as an instrument. And so, we have a number of loans with foundations and other philanthropic actors. I think that’s the right way for philanthropy to engage with social enterprises in that “Here’s a way to support.” But we are for-profit, so it’s not appropriate that we really just hold onto the money.
Denver: Take the grant and run…
Gabriel: I wish that more philanthropies were more comfortable with sort of non-debt instruments, whether it’s equity or some sort of a hybrid. I think a lot of nonprofits default to debt because that’s what they know, and it’s easy to understand, but it’s not clear to me that social enterprises should. I think there’s a lot of social enterprises who get loaded up on debt, and that’s not always a good financial move.
So, yes, we have a number of different financial stakeholders.
Denver: How would you describe the corporate culture at Wash Cycle? What makes it different and distinctive from, let’s say, other social enterprises?
Gabriel: First and foremost, I think we’re committed to the mission, and I think that we are committed to the laundry. And what I mean by that is that when you’re in a such a tight turnaround environment, it takes a lot of effort to be able to focus on this intangible, long-term goal when you’ve got a customer in your ear who’s saying like, “Oh my gosh! I need it now.”
Denver: I need it now!
Gabriel: Exactly. And so, I think that getting that right is challenging, but I think the management team that we’ve been able to assemble does it really, really well. So it’s sort of this part firefighter, part roll-up-your-sleeves-and-get-it-done, part just really committed to the impact we’re trying to create.
And I think disproportionately, I’m not sure, but disproportionately, I think our management team often has personal background that makes the mission particularly meaningful for them and helps them keep it front and center when the crisis of the moment might have to do with fitted sheets or mop heads or whatever it might be.
Denver: Well, you have your first child on the way, so you’re going to be doing a heck of a lot more laundry any day now, come this spring.
Gabriel: Well, I am the launderer of my household, so.
Denver: I would hope so. So, what’s next for Wash Cycle Laundry in ways of new service, new cities, expansions, financing? What are you thinking about the next chapter to be?
Gabriel: We built a plant in Boston in 2018, and we’ve filled that mostly to capacity. And so, we’re excited to tie that up. I think that one of the things we’ve learned through the Boston expansion is that having the right facilities and equipment can be really transformational. And so, given that we grew organically in Philly and D.C., we’re really looking to invest in our physical plant so that we can provide a better foundation for growth in our other two markets.
I think we have also identified a couple of customer segments that are really interesting to us. And so, we basically want to match the right facilities with the right customers and the right pricing model. That’s all coming together now, and I’m really excited to see what comes out.
Denver: And maybe even someday in New York City! Who knows?
Gabriel: New York City is a rough-and-tumble laundry market. Everything’s more expensive in New York except for laundry, which is cheaper, and I’m still trying to figure that one out, but I don’t know that I’m willing to jump into this right yet.
Denver: Well, we’ll stay tuned. Well, Gabriel Mandujano, the Founder and CEO of Wash Cycle Laundry, I want to thank you so much for being here this evening. Tell us about your website and how people can learn more about what you do if they should be interested.
Gabriel: So we’re washcyclelaundry.com. We’ve got an About section. There’s a few forums for contact. In particular, we’re always looking for hiring partners in the markets where we are – in Philly, Boston, and D.C. I believe there’s a contact form, and we’re always eager in meeting new people who can help us source really talented folks.
Denver: Well, thanks, Gabriel. It was a pleasure to have you on the show.
Gabriel: Great. Thank you so much.
Denver: I’ll be back with more of The Business of Giving right after this.
The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter, @bizofgive on Instagram and at www.facebook.com/businessofgiving.