Stefan Michaelis, Jonny Fresh
The Jonny Fresh on-line business is really cleaning up. Not in the most obvious sense of clothing, but the dry cleaning market itself. With its back-end software, the start-up helps large dry cleaners and laundries multiply their customer base without having to open a single additional branch. And the entire operation is now running so smoothly that more and more cities in the DACH region are enjoying the company’s freshly laundered service.
It took multiple attempts and setbacks to achieve the efficiently coordinated service that operates today. Between the hours of 7 a.m. to 10 p.m., Monday to Saturday, drivers collect dirty laundry from customers and deliver them cleaned within 48 hours across Berlin, Munich, Vienna and Hamburg – and by May at the latest, in Cologne, Frankfurt and Hanover. Stefan Michaelis, Commercial Manager, explains with pride: “We are technically able to provide dry cleaners with an ideal trip plan for each vehicle. They then dispatch their employees based on our information.” However, the story doesn’t end with order management and personnel and route planning because Jonny Fresh also coordinates all billing and customer management for the dry cleaners.
The ability to react pro-actively is a matter of survival for Jonny Fresh because many international players such as ZipJet, which is backed by Rocket Internet, are operating in the major cities. Each of the competing companies has a unique business model; some also operate their own vehicle fleets, unlike Jonny Fresh. “At some point, you stop continuously comparing yourself with others. Ultimately, we are all providing the same service – there’s no need to kid ourselves”, notes a relaxed Michaelis, turning instead to the focus of his attention: “We are building a kind of product that does not exist. And for that reason, you have to listen to lots of people giving out and complaining. Based on this criticism, you then select the things that are important. And then the thing is built.
Indeed, it was in just such a relaxed fashion that university pals Sebastian Schmidt and Stefan Michaelis came up with the idea back then to create a kind of deposit station where customers could drop off their dirty clothes and collect their clean clothes at any time of the day or night. Schmidt, now the logistics director at Jonny Fresh, had written his diploma thesis on dry cleaning services, while Michaelis was already involved in business. Though their network of friends, they met physicist Kay Kagelmann, who programmed the website. The drafted a business plan, developed the model of a web shop and a theoretical prototype of the collection station. The idea was not only well received in the media: The young founders were granted a subsidy that covered their salaries for one year, and even managed to secure finance for their collection station.
However, they realised better late than never that this would not be enough to solve their target customer’s actual problem: He or she would still have to collect the clean clothes from somewhere after work. Moreover, this concept could not be used to expand the catchment area of the dry cleaning branches, and the investment in collection stations was too high when compared to the expected revenue. All three of them saw their opportunity in the digital domain: They started from scratch, developed a software program and finally launched the business in 2012. They were soon in profit, found additional partners and set about finding a larger investor.
One day, Stefan Michaelis mentioned this in passing to his notary, who in turn mentioned “Engelhardt Kaupp Kiefer“ because his son worked there. The pitch that the entrepreneur sent immediately to the investment company aroused the interest of Tobias Engelhardt – not just because his mother once ran a dry cleaners. Michaelis assumes that he and his team were looking for a very specific type of person, precisely because they do not adhere to a “hard-nosed investment style”, but believe in providing intensive personal support to carefully selected companies. “It’s like being in a marriage, you stick together through thick and thin. And this is when you have to trust your counterpart’s character, trust that he is not moaning, otherwise you’ll end up ruining your business.” From Jonny Fresh’s perspective, one thing soon became clear: “This is a good fit.” Even though Engelhardt Kaupp Kiefer likewise envisaged a partnership, it decided not to offer a financial investment in 2014, but provided its expertise instead in order to unravel the start-up’s tangled business structure. In the – verbal – deal, they defined joint objectives and agreed unanimously that Jonny Fresh should target growth throughout Europe. Today, Michaelis appreciates this unusual approach. He knows that many companies would simply have shrugged their shoulders, that few would have understood the core team. The fact that the investors’ instincts were right was borne out when Jonny Fresh, initially without the hoped-for cash injection, launched an app and expanded to Munich.
However, important decisions continued to be put on the long finger or were simply never made – which almost led to the downfall of the start-up. Tension between the shareholders was growing. “The company was not ready for investment”, says Tobias Engelhardt, who as the new shareholder anticipated some difficult negotiations to come. The disputes reached a climax a couple of days before Christmas 2015. Cold drizzle weather and the harsh neon lighting of a conference room in Frankfurt Airport emphasised the tense atmosphere. The original shareholders torpedoed the meeting, saying that they would only agree to the deal with the investment company if it purchased shares from them. “It felt like extortion”, recalls Engelhardt. Following some tough negotiations, however, agreement was finally reached. At the kick-off event in May 2016, even Engelhardt’s 85-year-old mother was present. And though she had little time for the ceremonious uncorking of bottles of Champagne in broad daylight, she took particular delight in this investment give her status as an expert in the field
The seven-figure financial injection enabled the start-up to hire new teams for IT, sales and customer support. The firm also acquired the Munich-based competitor WashNow and with it, Johannes Humpert, now a shareholder and director of sales and marketing. The company now set its sights on Vienna and Hamburg. A significant part of the money was invested in the software, which was created in the usual PHP programming language – an unsuitable state of affairs for an application that was being continuously worked on. “Our original platform was like a game of Tetris. Every feature was merely dragged down and if you wanted to add something new, you might end up breaking something somewhere else”, recalls Stefan Michaelis. So we switched to “Ruby on Rails“ – knowing full well that engineers that work with this efficient but unusual programming language are sought-after and expensive. However, Jonny Fresh gained an experienced technical director in Mihai Gabriel Muntenas. Having previously worked with various international start-ups, he was more than up to the challenge of developing something of this complexity from scratch. And through all of this, says Michaelis with a grin,“Mr Engelhardt was there for us. To look on sympathetically and to give the whole project a chance”.
The investment in good quality basic equipment enables the start-up to expand more quickly today – in cities with a specific population size and density per square kilometre. At present, Jonny Fresh is replicating its standardised model (which is also optimised for each new iteration) for additional cities in the DACH region. Based on a check-list that is used to verify available machinery, vehicle and financial resources, the start-up actively targets major centralised operations as potential partners. Smaller businesses could not keep up with the huge volume of orders. This emerging company also works tirelessly to optimise its services, for example, with an app that allows customers and dry cleaning staff to enter orders directly – without having to resort to customer support from Jonny Fresh. And every now and again, the directors flip a few burgers as a gesture of gratitude for the women on ironing and washing duty. But who ends up washing the barbecue experts’ dirty aprons?
Stefan Michaelis has founded three companies since the age of 21; Jonny Fresh is the fourth. He knows how to set up teams, and how to create and expand structures. Despite this, or perhaps because of this, he values the role played by Engelhardt Kaupp Kiefer as a sparring partner on an equal footing. Monthly strategy meetings ensure that the shareholders remain focussed and don’t get carried away. “Although I am my own boss, it helps if there is a co-owner who asks: ‘what’s going on, guys?’ It gives you that extra little push to deliver.” For Michaelis, this is harmonious way of achieving his goal, “to create a fantastic company in an old-school and dusty industry”.