Why deliberate constraint outperforms undisciplined expansion
Jon Schemmel built an impressive laundromat empire. 22+ locations in 5 years. That's the kind of growth that gets attention at industry events and makes people lean in when you're talking.
But here's what he shared at the Laundry CEO Forum last week that made me pause, (if you weren't there, you missed out on some really great information) they're pumping the brakes. They're slowing down acquisition to optimize systems, tighten procedures, hire the right people, and fine tune operations.
Think about that for a second. A successful operator who's built what many of us aspire to is saying "we need to focus on what we have before adding more."
That's the conversation no one is talking about in an industry obsessed with scale.
The Bigger is Better Assumption
I made a YouTube video about the wrong question operators ask each other: "How many stores do you have?"
It's an ego question disguised as a business question. The number of locations tells you nothing about profitability, operations, or success. It means someone owns a lot of stores.
Here's a real example of owners I know I shared in that video. One operator has 8 locations averaging $325,000 gross annually. Total: $2.6 million. Another operator has 4 locations averaging $750,000 gross annually. Total: $3 million.
Half the stores, more revenue, less complexity, less overhead. Which business would you want?
This bigger is better thinking isn't really pushed by any particular group. It's just ambient industry conversation mixed with ego. Social media posts about getting more locations. Casual chats at events. The natural assumption that more equals success.
But research tells a different story.
What the Data Shows
The Global Simplicity Index, the world's 200 largest companies lose an average of $1.2 billion each year to unnecessary complexity.¹ That’s a lot. McKinsey research found that Fortune 500 companies waste $250 million annually in lost labor costs due to decision making complexity alone.² I see this based on interactions with large clients we work with.
MIT Sloan Management Review discovered something fascinating, companies that maintain focus while growing (what they call the "complexity sweet spot") outperform scattered competitors by 6.3 percentage points in profit margin.³
Even at smaller scales, this principle holds. Harvard Business Review research identified what they call the "innovation fulcrum”, the point where adding another location, service, or product destroys more value than it creates.⁴
The math isn't theoretical. Let me show you what constraint looks like in practice.
Examples of Strategic Constraint
Service Area Contraction
Years ago, The Soap Box was doing pickup and delivery across multiple Brooklyn neighborhoods, Bedford-Stuyvesant, Crown Heights, parts of Fort Greene, and Clinton Hill. We were copying what other PUD services did, casting a wide net.
Then I read Marketing Warfare by Al Ries and Jack Trout. The book talks about guerrilla marketing strategy, focusing on defendable territory instead of trying to be everywhere. It clicked.
I looked at where our orders came from. Most clustered in specific areas. We contracted our delivery zone to those concentrations.
The results, we doubled pickups per hour (from 3-4 to 6-8), cut marketing spend by 25%, knew our clients better because we interacted with a smaller base, got faster deliveries because we were hitting the same blocks repeatedly, and provided better service because we understood their patterns.
Fishing in a barrel beats fishing in the ocean.
Location Maximization
When we opened the most recent VIP Bubbles location, we focused on it hard for a full year before considering the next one. Just self-service. We weren't even pushing wash and fold yet.
We tweaked the client experience. Tested different amenities. Adjusted operations. Experimented with what worked and what didn't.
That one year of focused optimization got us to 10+ turns per day on self-service alone. Not chasing multiple locations. Not layering on every possible service. Just nailing one thing at one location.
The Success Story That Slowed Down
Back to Jon Schemmel. His 22+ locations in 5 years represent successful scaling by any measure. But even success at that level requires strategic constraint.
He's intentionally slowing acquisition because more locations without proper systems, procedures, and staffing just creates expensive chaos. The insight here isn't that scaling is bad. It's that even successful scale requires deliberate focus.
The Hidden Costs Nobody Mentions
Adding locations, services, or expanding service areas creates complexity that multiplies faster than revenue.
More locations means more management overhead. More area managers. More travel. More quality control challenges. More employee turnover. More of your attention spread across more problems.
Let's look at the math. 30 locations each doing $35,000 weekly at 33% profit margin nets $18 million annually. 100 locations each doing $17,500 weekly at 20% profit margin also nets roughly $18 million.
Same profit on paper. But which operation would you rather manage? 30 optimized locations or 100 mediocre ones?
And that 20% margin at scale? It assumes the margin holds as you add complexity. In reality, those hidden costs quietly erode it.
Thinking about the thinking of laundry:
When you realize that constraint creates clarity, you see expansion differently. It's about how well you can maximize what you already have.
The Path Forward
Before adding your next location, service, or expanding your service area, ask one question, have I maximized what I already have?
Set clear revenue goals for each location before opening the next one. For VIP Bubbles, we want each location hitting specific weekly revenue targets before we move on.
Focus on extraction before expansion. Get everything you can out of what you've built before building more.
In a world where everyone can buy the same equipment and offer the same services, your competitive advantage isn't what you have, it's how well you operate what you have.
That's all I got for you today.
Waleed
Echoing the thoughts of Bruce Lee.
It's not the daily increase but daily decrease. Hack away at the unessential.
Footnotes:
¹ Complexity Kills Profits - European CEO, Global Simplicity Index
² The Real Impact of Business Complexity - Lucid, McKinsey Research
³ Revisiting Complexity in the Digital Age - MIT Sloan Management Review, 2014
⁴ Innovation Versus Complexity: What Is Too Much of a Good Thing? - Harvard Business Review, 2005
