We talked to Martin Kristerson of UpSteam about carwash in a backpack and this is what he had to say.
First of all, how are you and your family doing in these COVID-19 times?
Martin Kristerson: Estonia is having relatively high numbers of COVID-19 cases, so we have to wear masks in public places, but it’s nothing too big to worry. We’ve had to make some extra precautions in our office but other than that everything is fine.
Tell us about you, your career, how you founded UpSteam.
Martin Kristerson: After I finished the Estonian mandatory, I went to study International Business at the Tallinn University of Technology. UpSteam started as a school project. Right after the first semester, I was selling educational books door-to-door in USA (South Carolina). The program is called Southwestern Advantage. It’s a full-summer internship for students who work 12h a day, six days a week knocking on doors and selling books. It was somewhere in the middle of the summer when I had just knocked on a door, and I saw a van stop in the driveway of a neighbors house. The guy took out a pressure washer and started washing the car. I immediately thought to myself – why aren’t all carwashes done in that way? That’s where I got the idea for UpSteam. When I got back to Estonia, I completed most of my school projects with the same idea, until I had done enough preparation to call it an actual business plan. After my 3rd summer of selling books in the USA, I was ready to kick it off. Two bookmen from Southwestern (Valjo Kütt & Aleksis Anijärv) joined in, and that’s how it all got started. We chose a steam-machine manufacturer from Italy and sent our CTO (Aleksis) to check it out. It was about a 2700km drive from Estonia to the factory. When he came back, we purchased a used micro-van and started building our first mobile carwash prototype next to a construction mall. Bolt by bolt, we finished it in less than a week, and so we were ready to start washing cars.
How does UpSteam innovate?
Martin Kristerson: We love pioneering things, and one of our core values is to embrace change continually. As we don’t have too many companies to copy then innovation and learning plays a big part in our business. We are always keeping an open eye for new things out there. We consider ourselves as one of the most data-driven carwash companies there is. By collecting both qualitative data from our users and quantitative data in our system, we can navigate faster towards things that help us build more value from our users. We see that innovation starts with learning, and it is crucial first to understand what you’re trying to achieve so your efforts to innovate would help the company grow.
How the coronavirus pandemic affects your business, and how are you coping?
Martin Kristerson: Pandemic has affected our business significantly. From the first week of the lockdown, we experienced a significant drop in our B2B revenue. We are happy to see that it is restoring, but the economic situation has affected everybody. We see our user’s purchase frequency-changing, meaning that people don’t wash their cars as often as they used to. It means we need to put more effort into onboarding new users to maintain our growth speed.
Did you have to make difficult choices, and what are the lessons learned?
Martin Kristerson: We had to close down our youngest market (Poland). As this market was affected very strongly by the pandemic and we had to increase our runway, then closing this market down was a tough decision. As our growth numbers were affected by the pandemic, we had to postpone our fundraising plans and increase our runway by cutting costs in other departments as well.
How do you deal with stress and anxiety?
Martin Kristerson: This is a stressful situation for everyone, but as a leader, you must keep your head straight. No doubt, there were situations which created some anxiety, but the best way to handle that is to focus on what you can do about it. In each problem, there lies an opportunity. We saw that now, as people were moving home from their offices, then we still had a chance to clean cars. Also, as this is a pandemic related to hygiene, then it’s just a matter of how we can turn this into a favorable opportunity. Rather quickly, we found new ways of tackling this situation and differently doing things helped us get out of this situation.
Who are your competitors? And how do you plan to stay in the game?
Martin Kristerson: Currently, we do not have any direct competitors in our active markets. Some of our larger friends are from the USA (Washe, Washos, Spiffy), Germany (MyCleaner, BenFleetServices), Sweden (WoshApp) and Poland (Moxly). As none of the competitors has started to expand rapidly yet, then we have some time to get ahead. Although, we wouldn’t see that as a problem because this would help us validate the business concept even more and help us educate more users in switching from stationary to mobile. We see competition as a positive thing, and we are confident that our competitive advantage will be our compelling unit economics and user-driven approach, which in this business is proving to be a critical element.
Your final thoughts?
Martin Kristerson: UpSteam was founded by three co-founders (Martin Kristerson, Valjo Kütt and Aleksis Anijärv) in the February of 2017 and has raised a total of €1.8M in investor capital to date. We started as building vans with steam-washing equipment. In the summer of 2019, we launched a new product called waterless carwashing which is a carwash in a backpack. We can clean the exterior of a car with only 2-3 litres of specially designed detergent. Our Washers operate on a similar model as Uber or Bolt, meaning they are independent contractors delivering the service to our users. We have a full-stack platform with an app for our users, an app for our workers and a back-end system to help us manage all the orders. Our B2B and B2C users can order both interior and exterior cleaning services.
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