Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. And I started Mixergy because I find entrepreneurs and entrepreneurship fascinating. As a kid I didn’t read about superheroes, I read about Wayne Huizenga who put Blockbuster video all across the country. It became bigger than the next two or three competitors combined, sold it at the height, and went on to buy the Miami Dolphins, and then went on to do a bunch of other stuff.
And I love entrepreneurship and I’m a little concerned that with today’s guest, you guys are going to be a little bored with the business, not the guest. The guest is fascinating. But I don’t want you to be. Here’s the thing, yeah, let me introduce it. Tommaso, how about that by the way for an introduction? You come here as my guest and the first thing I say to people is, “You might be bored by him.”
Tommaso: It’s pretty true. It’s the first time it happened, but it makes sense.
Andrew: Tommaso Tamburnotti is the founder of Easyship. Easyship gives e-commerce sellers the ability to ship worldwide. Here’s the thing, you cannot hold on to their stuff. It is the invisible part that keeps businesses going and what we found is that these infrastructure companies outlast, often, the people who build their companies on their infrastructure. These infrastructure companies end up being super huge, super prevalent in the business culture, and invisible to most people, which is why I think that we have to study them. We have to consider them.
Nobody grows up and says, “I want to be an infrastructure company,” but if you open your eyes, you realize, “Yes, FedEx is an example of one, and yes, there is Amazon Web Services, which is a huge example of others and then there are many, many others that if you open your eyes you realize these businesses are solid businesses that are exciting to run and the opportunities to create something like that is actually both exciting and it’s big.
And so I had to get today’s guest on. He runs a company called Easyship. Frankly, if you guys are in Shopify, you probably have seen their name a million times. Now, we’re going to hear the story of how this guy took an idea and a problem that he had, and turned it into a business whose revenue I have here but it’s in my private notes and we never reveal the private stuff that to the guest or to the producer. So, I’ll give him a chance to talk about in a moment.
First, I’ve got to say that this interview is sponsored by two phenomenal sponsors or customer is fine. The first is the segment that will host your business right, it’s called HostGator and they even work with Easyship. And the second is the company that will help you hire your next phenomenal developer, it’s called Toptal.
And I know that Tommaso had some developer issues, so the Toptal, I can go back in time and tell you about them and it would help. Tommaso, good to have you here.
Tommaso: Thanks, Andrew. It’s great to be here.
Andrew: I see your revenue. Will you say them? What is your revenue, annual?
Tommaso: I’d say it’s reaching around $50 million to $100 million.
Andrew: Fifty to $100 million? And does that include the shipping cost because I would use you guys to ship through a company like FedEx, right?
Tommaso: Yeah. So it’s a combination, like we allow our clients to use their own couriers or to use couriers that work with us directly.
Andrew: Yep, and then the price of the courier, if they work with you directly, that’s part of the $50 million to $100 million in revenue, right?
Andrew: And this is for a company that was founded what, 2014? So about four years ago.
Tommaso: 2015. Yeah, at the beginning of 2015.
Andrew: You know what? I want to give people an example of how this works, and I really love the example that you gave me before we started, GoFish Cam. What does GoFish Cam?
Tommaso: So GoFish Cam is one of our clients. We like to work with all kind of companies ranging from small business sites like bigger clients. So they are like, I would say, a medium client size. I think one of the reason why we talk about them is because, I think, their entrepreneurship journey is really interesting. So they found their brand and started . . . their product is basically a camera for a sporting fishing.
Andrew: If I go fishing, I want to see the fish that are getting close to my hook, I put this GoFish Cam on my fish line and I get to see them as they come close and walk away and get to see how [inaudible 00:04:22], right?
Tommaso: Yeah. On the website gofishcam.com, they provided of information about how the products works. I’d say that is like they’re killing it for . . . Obviously, like, people that love to go fishing because it increase kind of their performances and it makes the whole thing much more fun.
Andrew: I see that they were a Kickstarter campaign that did about $100,000 and they said, like a lot of other Kickstarter campaigns, “This is going well. Let’s just start selling it on our own site.” So they got a website called gofishcam.com, and they sold where in the world?
Tommaso: So at the beginning, they started selling only domestically, in the States.
Andrew: Okay. Now, why do people do that? I use FedEx to ship internationally. Can’t you just go to FedEx and say, “I can ship to New York or ship to anywhere else in the world, to London?”
Tommaso: Yeah. Sure, for sure, they do that. They ship worldwide.
Andrew: At first, why didn’t they ship worldwide? I’m trying to understand the problem that you’re solving because one of the reasons people use you is to get to ship worldwide, not just to ship to their country. But what’s the problem with shipping internationally? Why couldn’t GoFish Cam before they ever heard of you say, “All right, we’ll ship wherever you are?”
Tommaso: Yeah. I think there are mainly two problems. The first one is in terms of costs, that first is very expensive to ship internationally. Second, there are a lot of hidden costs. So, in other way, you know, you go to FedEx or any other couriers and they provide you a basic shipping cost that is purely the cost of delivering these products. And this can maybe, let’s say an average cost is, let’s say $40 to ship worldwide but then on this, there are a lot of other extra cost that can bring this the cost around $80 to $100.
So the extra fees can cost as much as the original shipping cost, and if you don’t know this, you’re on the risk to lose a lot of money on shipping. So a lot of merchants are really scared by it by this because this might happen to their profits and it’s very hard for them to know exactly how much is it going to cost.
Second problem is about taxes and duties. You know, when you ship internationally, obviously, every has different regulation and, therefore, this means that you need to know what kind of documents you need to prepare for every country, for every kind of products, otherwise, your products are going to get stuck at custom. And second, again, you need to know how much to pay in taxes, otherwise, this can eat your profits.
So I just think there is not much transparency in the market, I mean, it used to be like that. So a lot of merchants, they were probably thinking, “Why should I go through all this pain and sell worldwide? I can just, like, focus on the domestic market is much simpler.”
Andrew: So you know what? I’m looking at a GoFish Cam right now, it sells for $216. Is it unusual for them to have to pay $40 to $50 in shipping, plus another $50 in fees on top of it?
Tommaso: I think they can probably now I have access to much cheaper shipping options with us.
Andrew: So you’d give them cheaper shipping options and then you also let their a customer know how much the shipping is going to be so that they could decide whether they want to ship to their country or not. Am I right?
Tommaso: Yeah. Correct. So, basically, once every visitor can see exactly what the different shipping option, they can choose the cheapest shipping option, which is going to take a little bit longer to deliver they can go for something faster, but you now get the choice and then they can see how much taxes this is going to be for their order, and they can decide to pay in advance or at pay at the door.
Andrew: Oh, okay. And that’s what you do, you don’t do shipping. What you do is you integrate with their website so that their customers know how much it’s going to cost and can pay for the shipping and the taxes and everything else and because of that, these companies, these e-commerce sites can start selling internationally. They don’t have that question mark every time they sell, “Are we going to make a profit or lose it because of all these extra fees?”
Tommaso: Correct. So this is one of the things . . . One of the main things we do is provide visibility like international shipment. At the same time, we also are pretty strong at domestic level. We integrate with many different shipping solution. So we want our clients to see us as a sole shipping platform to use for all their needs.
Andrew: By the way, you’re talking to me from Hong Kong but your accent is telling me you’re from Italy. I read a little bit about your history and your family in Italy, like, your father was a hard-driving guy. Can you talk a little bit about what it was like to work growing up?
Tommaso: Yeah, sure. So I come from a small town near Milan, [inaudible 00:09:05] Italy. So my dad has a trading company. It was basically importing and exporting cars and machinery, in general.
Andrew: Into Italy?
Tommaso: Yeah. It was importing first into Italy and then exporting to all the distributor and clients worldwide. So, yeah, I think my dad is very old-style. So it’s something, like, you know, couldn’t think of me having my summer holidays getting bored at home with my friends, so I spent a lot of . . . pretty much all my summer holidays working with him. And the same time, I think, you know, he always told me that running a business is like running a ship. So the first the first thing that marines learning on ships is basically to keep it tidy, to keep it clean. So I started doing our jobs that nobody else wanted to do in the company.
Andrew: Just going out, and cleaning everything, doing the little things that people don’t care about, and you’re smiling at this. Why weren’t you resentful? You actually enjoyed it?
Tommaso: I didn’t enjoy back then, but I think that it was a very good learning for me and it gave me a lot of discipline, and at the same time, I think it was the best way to enter in my family company because I started from the bottom. So, all of other colleagues were not looking at me like thinking I was a privilege, actually, they were paying me. So, actually, it was the best way to break the ice and feel like . . .
And later on, when I started to go to uni and coming back for summer to work there, I was doing, of course, many other things. So not just cleaning, I got promoted to do other things but a lot of people they were respecting me much more because they saw that I started from the bottom.
Andrew: Before Easyship, you had a platform of some kind. What was it?
Tommaso: Before Easyship . . . So I started working in investment banking for a very short time then I got to Lazada, that is the biggest e-commerce marketplace in Southeast Asia. So I wanted to leave like a corporate job that was very well paid and very structured to get my hands dirty and build something from scratch. So I joined them when they were only five months old and I flew from London to Singapore and then Malaysia. I spent one year there and then I got moved to Hong Kong.
Andrew: By the way, I’m sorry to interrupt but I went to their website, it’s lazada.sg. Today happens to be prime day. They’re capitalizing on it. On their home page, it says, “Get prime time sale right now for 48 hours.” So there’s like capitalizing on whatever buzz is going on. They’re going to sell steak knives, literally, on their website and etc., but this is an e-commerce site.
Tommaso: Yeah. It was bought by Alibaba last year for around $10 billion. There’s been a very . . .
Andrew: For $10 billion?
Tommaso: Though the amount is still undisclosed but it would be anything between $5 billion to $10 billion, yeah.
Andrew: Okay, and so now that I have some context on them . . .
Tommaso: It is the biggest in the region. So it is though China and North Asia like Japan, Taiwan, and Korea, in the Southeast Asia is the biggest. So now that Amazon is stepping in, so they open in Singapore beginning of last year then Alibaba is stepping up their game in the region.
Andrew: So you were working for them when they were how big? When you got started?
Tommaso: So I join after 5 months they started. So we were like 300 people and I left when we were around 6,000, 7,000.
Andrew: Got it. So this was a like a smaller company at the relatively speaking that grew big. You saw it and that said to you what? You got an idea from there that led to Easyship. What was the idea?
Tommaso: So taking a step back, when I was working there, my job, I was the director of marketplace in Malaysia and I moved to Hong Kong to be the director of the regional marketplace. So our job was to help Chinese and Hong Kong companies to sell worldwide, right? So if you see Hong Kong, Hong Kong is the best place in the world for trading. There are companies here that have sold online worldwide for the past 20 years. So, if they . . .
Andrew: Why? Why is it such a good place to sell online?
Tommaso: Because of many reasons. First is physical advantages, so there is no VAT in Hong Kong. So it makes it . . .
Andrew: The taxes for [inaudible 00:13:36]
Tommaso: There is no trading taxes. So, basically, it makes it a natural bonded warehouses, if you want. You can import here tax-free and use it as a base to ship worldwide.
Andrew: So if I get something shipped from Hong Kong to the U.S., you have to also pay taxes on it?
Tommaso: So, in this case, yes, because you pay as an importer in the U.S. But let’s say I’m a company and I’m manufacturing in China, India, Europe, what I’m going to do is produce there, ship to Hong Kong tax-free, stock my items here, and then from here distribute it worldwide.
Andrew: Why not keep it stocked in China or wherever is it they’re manufacturing it?
Tommaso: Because if you want to ship from China to the rest of the world, sometimes yourself to pay export taxes. And if you ship to Hong Kong, you can get your VAT back because it’s considered an export, but you don’t need to pay when you enter Hong Kong. So, basically, you can save a lot there and at the same time, you reduce all your cash flow.
Tommaso: Second part is one of the main logistic hub. So it is the biggest airports in the world in terms of passenger per year, so there’s a lot of flights going in and out. And second, also for the boat ports, so now like if you look at Shenzhen area, it’s bigger than Hong Kong. I’d say Hong Kong is like top three in the world.
Andrew: I had no idea. Okay, so what you’re saying is . . . I’m sorry, you were starting to tell me about how you came up with the idea for Easyship while working there, continue the story.
Tommaso: Yeah. So we basically . . . Well, the reason why we started the original marketplace office in Hong Kong is because the other access to all these traders that have been selling worldwide since 20 years ago, so they’re really experienced. And the idea is when we were going there, we were going after Amazon, eBay sellers, telling them, “We saw you there. Why don’t you sign up on our platform? We’re going to have to increase the revenues.”
And they were telling us, “Yeah, why not? It’s more revenues for us. But how do you guys do shipping?” And we were like, “We don’t do shipping? We’re a marketplace. We will help you sell and then for the shipping, you figure it out.” And they were like, “Okay, great,” but not sure about it, “I don’t know how to ship to Malaysia, Thailand, Vietnam, and so on.”
So what we did is we started building the logistics here and did a lot of research and building very manual Excel macro to basically be able to give these tools our merchants and they could just like input their catalog there and our Excels were basically just like computing all the tax and duty, finding the best company and put it there. So it was very quick and dirty. It did the job but it was not scalable.
At the same time what we realized was, “Hey, wait a second, this is great but it’s only for certain countries and is only for certain kind of sellers.” If we look online, we were looking for a tool that we could give our merchants and we couldn’t find anything like Easyship.
Andrew: So we’re talking about, this is when you were working at Lazada. This company that’s a multi-billion dollar business.
Tommaso: Yeah, correct.
Andrew: Even though it was a multi-million dollar business, they had trouble with all their sellers being able to ship internationally.
Andrew: And so why didn’t they just say, “You know what? Tommaso, you’re smart guy. We hired you as our employee, you go solve it. Build the department to solve this problem.” Why couldn’t they solve it themselves?
Tommaso: I think that eventually . . . So, first, the marketplace doesn’t really want to get into this, they want to keep their focus on what they are best at, that is marketing and customer experience for the final buyer. It’s the same reason why, you know, a lot of marketplace back then didn’t do payment solutions and so on because they’d go out of their core competencies.
I think then back after they found other . . . they build up teams today but this solution that are only available for their own merchants. So if you’re a merchant doesn’t sound as though, you cannot use the solutions. So, we wanted to build a platform that is available for everybody.
Andrew: So is that when you said, “I’m going to go out on my own, start my own business, and this is the problem that I’m going to start solving?”
Andrew: Okay. Let me take the moment then and just talk about my first sponsor and then come back. Now, that we know what your business idea is where it came from, let’s figure out how you grew it.
The first sponsor is a company called HostGator and you know what? I don’t talk about it much but people can on HostGator install something called WooCommerce that will allow them to turn their website into a store, and WooCommerce is built on top of a WordPress, right? In fact, it was bought by Automattic. You guys have an example of a store that, I won’t say the name because we didn’t get permission, but they sell what, using WooCommerce?
Tommaso: So one of the clients we have is a producer of eyelash extensions and yeah, they use WooCommerce.
Andrew: Okay. So you know what? Let’s talk about, if someone in my audience has this idea that what they’re going to do is they’re going to sell, say a journal. Journals seem to be selling really big these days because I know my audience may not be selling eyelashes and these people have got a good market. Let’s say, you know what they say? “I want to sell journals. I know how to get them manufactured. It’s a solvable problem. There’s someone on Alibaba who could print them up exactly for me. I’ll have then shipped to my house at first, to my garage. I’ll go to hostgator.com. I’ll install WordPress. I’ll install WooCommerce. I’ve got my store up and running.” Why would they need you?
Tommaso: So the idea is without us, they would have to go to every shipping company out there, so the top tier like USPS, FedEx, and UPS. Need to find [inaudible 00:19:31] the sales team, opening an account, pay a deposit . . .
Andrew: Okay, you lost me already. All right, so that’s the headache? Okay.
Tommaso: . . . and will get the discounts.
Andrew: And so you guys have plugins that plugs into WooCommerce?
Tommaso: Correct. Yeah.
Andrew: Great. So they install WordPress, one-click install on HostGator. They install on WooCommerce, one-click install on the WordPress platform, and then they install you guys by just adding an Easyship plugin and creating an account on your site, and boom, instantly, they could sell their journals to internationally.
Andrew: Put a pin in this and just say to anyone was listening to me, we used obviously a journal as an example. He has examples of companies like this eyelash company. They sell eyelash makeup here as far as I could see, that just sells it and ships it internationally. Whatever it is that you’re building, if you want to create a WordPress site, obviously, you know how to do it. But if you want to create a WordPress store, you should know that it’s easy to do by just installing WordPress and adding WooCommerce.
In fact, HostGator will make it easy for you to do all that and all for free. And then if you want to ship internationally, connect to Easyship. All right, all that and so much more is available to you if you just go to hostgator.com/mixergy. When you go there, I was just talking to Sachit Gupta, the guy who sold the ad on HostGator, he confirmed for me that he has got the best price on HostGator out there.
So if you go to the URL, I’m about to give you, you’re going to get the lowest price and frankly don’t do it because that because you never know. Maybe they’ll end up with someone else having a penny less and I don’t want to fight on price. I want you to know that when you’re using my URL, first of all, you’ll get a really good price, and second, you’re going to get a connection for me, which means it if you have an issue with any of my sponsors, I’ll be there to stand behind you.
So here’s URL, go to hostgator.com/mixergy, sign up, you’ll get up to 62% off and you’ll start creating content, go to the website for your business or creating an e-commerce store, hostgator.com/mixergy. I love when my sponsor works with the guests. It makes it easy for me to talk about them.
All right. You had your idea and then look at this, I highlighted this because I want to use your word. You told our producer, Ari Desormo, when she asked you, “What did the first version of your business look like?” You said, “Garbage.” Why did you say garbage?
Tommaso: Well, I mean, the functionality were okay but the design and whole were experience was terrible. It was really like early 2000 kind of website. It was very simple.
Andrew: That was the site that was garbage. What about . . . or at least let’s say not as beautiful as you’d want it to be. You can say garbage about your own stuff but for me to say garbage about your product that makes it look bad in your eyes, and then I’d lose you as a guest. I’d lose your attention.
Tommaso: You already said I was boring. It’s fine.
Andrew: I know, I know. I looked at you as I said that it was like, “What? What do you . . . I saw in your eyes something and I was like, “This is . . . I’m a guest here.”
Tommaso: No, logistics is not the sexist thing in the world. I’m aware of that.
Andrew: It’s not, but it should be.
Tommaso: It should be.
Andrew: It should be, I’m telling you.
Tommaso: [inaudible 00:22:24]
Andrew: How many times did you study the FedEx story in business school?
Tommaso: Yeah, we did.
Andrew: Right? So I get that the site didn’t look the way that you’d want it to look but what about the features of it? The ability to ship internationally, the ability to hit prices, the ability to serve that up to a site, how much of that existed in the beginning?
Tommaso: Very little, you know, the point is that it takes like three years to build what we have now and in logistics, you can’t really fake it till you make it. Nobody will start shipping with you if you don’t have a full product is working.
Andrew: So what did you have? What did your product have at the time when you first started selling the first 100?
Tommaso: At the beginning, we only started doing domestic shipping, so we integrated with a couple of couriers and with maybe like one courier for international. We didn’t have any integration with any commerce platform. We didn’t have any . . .
Andrew: Domestic for the U.S. or domestic for where?
Tommaso: Domestic for the U.S. and for some countries in Asia.
Andrew: Got it. So you had a handful of countries that you work for and you would only allow them to ship to clients within their country?
Andrew: But then what was the advantage of using you? If the full advantage that you have, which is international shipping wasn’t there, what was the big benefit he were able to get them?
Tommaso: So we were giving them access to very good couriers with very good rate. So at the beginning, it was only a price discussion. Then, later on, we started to build more features to move the conversation not just on price perspective but also from service perspective.
Andrew: And then where you were able to get in the lower price than using FedEx directly is because you would aggregate the customers? I’m using FedEx as example. No, I saw what you just [inaudible 00:24:09].
Tommaso: Yeah. It was not FedEx but it was other tier two couriers for example.
Andrew: Okay, for example?
Tommaso: So, for example, here in Asia you will SF Express that is a massive Vegas [SP] shipping company in China.
Andrew: SF Express.
Andrew: Okay. So if I were to just use SFX . . .
Tommaso: [inaudible 00:24:30] USPS with, like, its standard CPP rates for the consumers, so like already very discounted rates.
Andrew: I see. SFX presses in Shenzhen and Guangdong, China. And so if someone were to use them by themselves versus just using them through you, what’s the advantage of using it through you?
Tommaso: So, for example, in Asia, we were one of the first player to integrate with them by API. So all the other clients would do it, were filling in documents manually because their API was private. We’d ask they could they could like start like upload, like, files and then later they could download orders from their e-commerce platform and have everything automated. But during . . .
Andrew: What did the APIs allow you to do? You directly connect it to SF Express to . . .
Tommaso: Yeah. So, at the beginning, they were not the thing like you could count on one hand the number of players that were integrated with them and we were one of them.
Andrew: Okay. And because you integrated with them, what would you allow your e-commerce clients to do?
Tommaso: Basically, download the label automatically. So, instead of like creating one shipment one by one like pen and paper or [inaudible 00:25:36] line by line, they could do buy by just one click.
Andrew: And were you guys on Shopify, or WooCommerce, or what at the time?
Tommaso: At the beginning, we were not. So we launched it in Shopify like two years ago and . . .
Andrew: So it was just integrating into people’s . . . into their home-built websites.
Tommaso: We had an open API but we started with eBay, Amazon, this kind of integration. They were [inaudible 00:25:59].
Andrew: And so if I sold on Amazon, I could take all of my orders send them over to you, you would print me the labels directly and that was one big advantage.
Andrew: What else were you offering that was a big advantage?
Tommaso: That’s it. At the beginning . . .
Andrew: Was printing out labels a big issue because it didn’t seem like it when you were working?
Tommaso: You know, I mean, it’s not the main issue but is the first thing you have to build a shipping platform. So, you know, at the beginning is super tough because in order to build an advantage, you need to spend three years at least to build something that is great.
Andrew: I heard that the first 100 customers were really tough. Considering now that I understand how little you built, how did you get the first few customers?
Tommaso: So it was mainly through our network of clients since we were working before in an e-commerce platform, so we had the access to clients.
Andrew: All the Lazada people, you went back to them?
Andrew: All the Lazada people, you went back to them.
Tommaso: Some of them. Some got introduced to me, so the hosted platform was referring us clients, because they saw that the service was very limited but it was solid. Also, imagine and when I’m saying at the beginning we didn’t a feature, I’m talking about the first five months. So then we kind of like build solution. I think . . .
Andrew: Okay, but let me spend a little time on that for first five months because I think it’s fascinating that despite that, you still were able to get customers. Despite the fact that you had fewer features and that’s your big role, right?
We didn’t talk about your co-founder yet, but you do have a co-founder. Your role with the business is always to be the representative, the salesperson. When you talk to a customer or a potential customer, you said, “What I can do is make it easier for you to print your labels.” Was that an easy conversation to get a sale from or what?
Tommaso: It was a really difficult conversation. They couldn’t care less of the idea of printing labels.
Andrew: So how do you close them?
Tommaso: You need to work on a personal level, I think. It’s important to let them know that, first, you just started, you’re going to keep adding feature and if they start at the beginning, for example, what we did is that we promised them discounts forever. So, basically, this clients still today are ones that pay the least even if maybe they don’t have enough volume is because it’s a price for loyalty. Right?
Andrew: So you told them, “At some point, here’s vision for the business, you’re signing up now, you’re getting the lowest price, you’re getting a feature that’s helpful but it’s not going to rock your world. You’re not going home to your husbands and say, “This is what I signed up for,” but you’re going to grow with us.
Tommaso: But then there was also a lot of other things, for example, you know, when they were having, like, spikes season and, like, special offer, we were going there and help them to pack and ship for free.
Tommaso: Yeah. I mean, I got to do whatever I could to, like, keep my clients happy, right? So they were doing it because they were, like, “Okay, fine.” On a shipping perspective as of today, maybe these guys are not, like, changing my life but, you know, they’re having with this. If there is an issue with custom, I call them, they give me advice.
If I need to understand what are best platform to sell, I call them, they help me out. So they were calling us for everything and I love that because it gives me leverage to then ask them to ship more, right?
Andrew: Okay. And so you’re doing this, despite the fact that you don’t speak Chinese. Was that an issue?
Tommaso: So it doesn’t help, obviously. But of course, the fact that I was already working in Asia for a couple of years and then I was representing a big company before and I had them to sell a lot before, you know, kind of, like, helped to win their trust.
Andrew: Because you worked with Lazada, because you helped these big customers sell on Lazada, you had credibility and trust with them. Is that right?
Tommaso: Correct. Yeah, you know, it’s really about credibility. Like, it’s our . . .
Andrew: Tommaso, were you able to take your customer list from Lazada to start your own business?
Tommaso: No. No, I never done that.
Andrew: It was just your friendships? Whoever it is that you build a friendship at Lazada you were able to come back to them. How’d you get some people . . . ?
Tommaso: Well, the platform was referring clients to us. The platform was actually telling their merchants, “Oh, you need to do this? Why don’t you come to these guys at Easyship.”
Andrew: Oh, okay. Got it.
Tommaso: Yeah. As a matter of fact . . .
Andrew: Because they were, referred people. I’m talking over you so much. I’m fascinated by you, by the way. I introduce you like a potentially boring company but think about this, when you get embedded into somebody’s business, first of all, you’re hard to drop. As long as you do well, you continue to grow with the companies that do well. I feel like these types of businesses are super exciting. Like, you think about, let me give people a software example, Zapier. Zapier is now . . . Do you use Zapier at all
Tommaso: Yeah, of course.
Andrew: Right. It’s embedded in your business. It’s not the kind of business that you think about as sexy. There’s nobody who was saying at a bar, “See that guy, that’s Wade. Wade is the founder of Zapier,” right? The way that they would about the founder of Snapchat, for example, but Wade has got a great life building a business that, look, you smile when you talk about it, and it’s embedded in our businesses and it’s fantastic.
But we don’t think of them because you don’t grow up reading about them, because people aren’t saying, “Look at this great entrepreneur.” No one’s whispering about them. The wannabe entrepreneurs don’t know who they are. Anyway, I’m getting more excited by your business right now.
Tommaso: No, it makes sense. I’m so sorry that when we started that, we said that the infrastructure still plays a massive role and we were blown away by how many companies, I’m not selling worldwide just because shipping is complex. You know, there have been . . . For example, if you look at payments, like payments, I always look at because when there is a shipment there’s also payment.
Companies like Stride, PayPal, Braintree, and so on, they made very simple to accept payments from anywhere. So now if you buy from overseas, you don’t think about it but actually, you’re doing an international payment, and it’s super easy. So why doesn’t exist a platform, basically, like a PayPal or Stride version for shipping everything?
Andrew: Why do you think people ignored it? Is it because they weren’t talking to hundreds of clients the way you were at Lazada?
Tommaso: I think they ignore it because it’s super complex. So it’s not something that you wake up one day and say, “Oh, I’m going to build a, you know, worldwide shipping platform.” We did it after [crosstalk 00:32:21] years in that and still, we keep learning new things. So it’s extremely technical and, I think, some companies have tried and it’s really hard.
So, you know, you need to, like, really be very good at, like, streamlining processes and having the . . . You really want to go into technical stuff and map tax and duty, map delivery area. So it’s not the most exciting job in the world.
Andrew: I’m going to talk about the complexity in a moment and continue with the story. Let me take a moment to talk about my second sponsor. It’s a company called Toptal. They took another issue that people thought, it’s just super-tough. How do you find a developer? In fact, how do you find developer, not in months and years, but how do you find them in days? And so their idea was, “We’re going to get a network of developers. Anyone who needs to talk to us and we’ll introduce into the developer from our network.”
Let me ask you this, as part of this ad for Toptal, give me one bit of advice that you have for hiring a developer? You’ve had some issues. Hopefully, we’ll have some time to talk about them. What’s one advice do you have for someone who’s listening to me about how to hire a great developer?
Tommaso: So the way we did it here, we use, obviously, used LinkedIn, AngelList. We run [inaudible 00:33:33] to basically get closer to the community, but it’s definitely, it’s really tough.
Andrew: So it was really tough. You have no tips to offer?
Tommaso: Probably my co-founder Paul Delpon, is our CTO, is more experienced than me. What I saw is that they work a lot in terms of, like, tasks and this kind of things to assess their skills but I’m not really experienced with that.
Andrew: But by the way, all the different things you said, first of all, you’ve got to have someone like your co-founder, which I accept. You absolutely need someone who can help that to get, to help the developer pull all different sites that you have to go to in order to hire a developer. The idea behind Toptal is, we don’t go to sites. You people at Toptal, you do the work for us.
I’m going to hit the big button on the Toptal website. I’m going to get a call with somebody at Toptal who’s a matcher, and then I tell them exactly what I’m looking for, and then Toptal will go and place their ads. Let Toptal go and test them, let Toptal do all the work and then they just should bring me one or two people, and then I get to talk to those people, and if I like them, I get to hire them and get started with them right away.
I say this over and over again, my guests are the ones who end up signing up to work with Toptal. I think even more than more even than my audience. Because now I’ve done retention here, you’re obviously the point where you want to hire. I think, Toptal’s idea is genius. “Andrew’s going to talk about it. Forget the audience, the guest is going to sign up.” And you can see [crosstalk 00:34:59] ended up calling them up.
He’s got a new cryptocurrency business. He said, “I need someone.” He went to them. There’s another person, Derek Johnson heard me talk about them. He signed up for Toptal. It just goes on and on and on. If you’re out there listening and you need to hire a developer or a team of developers, you should go to the company that a lot of agencies are using. They don’t have all the specialties, so when they need someone who specialized, they immediately go to Toptal and Toptal helps them hire the best person and then they bring them to a project.
So the agencies that you’re hiring, if the dev shops you’re hiring end up using them, you should consider them too. Here’s a URL where you’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no-risk trial period of up to two weeks. If at the end of the trial period you are not 100% satisfied, you will not be billed. Go to this URL for details and to take advantage of this offer. It is toptal.com/mixergy. That’s top as in top of your head, tal as in talent, toptal.com/mixergy. Of course, Mixergy is M-I-X-E-R-G-Y
All right, the complexity. If I were to listening to you right now Tommaso and saying, “Oh, yeah this is brilliant. There’s got to be more than the number of customers of Tommaso has. I’m going to copy him.” What are some of the complexities that I’m going to be confronted with that I will be shocked by, if I copy you?
Tommaso: So, you know, I think, that it’s extremely hard to, like, integrate with the couriers because they have a number of different APIs and requirements. Second, it’s extremely hard to map all the courier pricing, because, you know, we don’t just allow clients to link their own courier but we also provide our own accounts and we map all the costs for them.
So we map all the financial areas of charges, remote area, surge fees, taxes and lean, and so on. So it’s, you know, there are like millions of combination in our databases. And you are on the risk to lose a lot of money because if, you know, imagine that a customer, like, buy a shipment from us, from the States to Brazil, and we’re going to do tax and duty. And then we make our math wrong and we ended up paying couple of $100 more in taxes, I can’t go back to my customer and bill them. I got to take the hit.
Andrew: So you have to get all the different taxes into account and get them into your system?
Tommaso: Correct. For every kind of problem, every value, every destination.
Andrew: How do you charge it when it changes locally?
Tommaso: I change daily.
Tommaso: Every day I ask them to update.
Andrew: I live in Argentina. I feel like things would change every freaking second. How would you take that into account considering how many countries are in the world?
Tommaso: So there is, like, a formal change when actually the custom changer and regulation and does an announcement, you can find the material online and that’s great. But then there is also a de facto change. The idea means, you know, I read the documentation of a custom and I see that to order cotton t-shirt in Argentina, the tax is 17% input duty. But this was updated, like, last year, and then I ship, but in reality, I don’t pay 17%, I’d pay, like, 35%. Why? Well because in the end of the day the custom, you know, they can charge extra cost. And I took Argentina as a random example. I’m don’t want to [inaudible 00:38:27].
Andrew: Yeah, yeah.
Tommaso: [inaudible 00:38:27]. So what we did is, we also, like, keep analyzing our daily transaction to update the database. So in case, the custom regulations say a percentage but that in reality, the amount is different, we’re going to pay this amount and show our real amount. Right?
Andrew: So just to be clear, if I buy GoFish Cam, send it to Argentina, you guys will give me a price. Let’s suppose that it’s $40 in taxes because Argentina are nuts. That’s the price you quote me. I pay the extra $40 in taxes. It arrives there and it turns out it’s $60 for it, because Argentina decided the cameras need to be charged extra and you misread it, you will then have a feedback loop to adjust the data for the next time I buy a GoFish or someone else does, or someone else buys something with the camera.
Tommaso: Yeah, so is not it’s not just for one transaction because this would be statistically significant. So we analyze, if it’s just like one error, we just monitor it. But then when we start adding, like, an increasing number of errors, then we would update it. So we will take the fault for all this because [inaudible 00:39:37].
Andrew: How many countries did you ship to then? I know how many countries you’ve shipped from. You kept it small. How many countries did you allow people to ship to?
Tommaso: Worldwide, every single country in the world.
Andrew: And FedEx didn’t have . . . I keep going to FedEx because I keep using them as an example but the shipping companies didn’t have all this data available for you? They couldn’t tell you up front, “Here’s how much you’re going to pay in customs?” No?
Tommaso: No. What we do is, some couriers, they give you an estimation, but nobody guarantee that.
Andrew: And you decided you’re going to be the first people to guarantee it or one of the first?
Andrew: So I guess what happens is when I go to FedEx and I ship internationally, tell me if I’m right, I put my credit card information on the shipping label, they then charge me once they know?
Tommaso: So it depends what kind . . . you can choose whether you want to prepay the taxes and in that case, they will send your bill end of the month telling you all the costs that they had and you got to pay that no matter how it is. Otherwise, you can decide to have the taxes paid by the buyer, by the consignee, and in that case, the buyer is going to receive a letter, receive calls, saying, “We got your package. Now you need to pay this much if you want it.”
Andrew: All right. I’ve had that actually. I’ve shipped internationally. It is a pain. It’s such a burden because it’s not just that. Sometimes I have to go to the post office to pick it up and pay for it in the local post office. So it’s not even the amount. You could say, “Here, take my money,” but take my time is a tough thing to do.
All right. You had first 100 clients though in three months. It’s all because of these friendships, all because Lazada would introduce you, all because of people you knew, that’s where it came from?
Tommaso: Well, I hope it was a little bit more than that.
Andrew: What else is there? Yeah, I want to know what else is it? How did you get to 100 clients in three months? It took more than 3 months to get 100 listeners of the podcast.
Tommaso: Yeah. I think, at the beginning once you don’t have the features that will sell the product by itself. Again, it’s a lot about hustling. You need to find other way . . .
Andrew: Be more specific, tell me what other hustle stories that you remember. What are the other hustle stories?
Tommaso: I think one of the best stories was this client that didn’t want to use us. So we started in January 2015, and this was March, so after three months. We barely had the website online by then and didn’t want to use us. And then I remember this day when he told me, “Okay, I did a flash sale, selling Amazon Kindle, and I sold 3,000 orders. Do you guys can help me ship?” And we’re like, “Yeah, of course. I mean, do you need help with shipping? We have these couriers. We didn’t have much couriers back there. They were like “Yeah, yeah, that’s great, but I also need help. You guys do the packing?” And we were like, “We can.”
So I remember us renting a minivan, going to their offices at 7:00 p.m. after hour, loading the traded minivan with, like, 2,000 Kindles, bringing to our office, and pack it overnight by 6:30 a.m. So we didn’t sleep all night. And then at 7:00 a.m. giving to the courier. So we got everything, big pack shipped by the courier within 12 hours.
Andrew: All right. I guess that’s the kind of thing also that forever, everyone at the companies is [inaudible 00:43:03] at, this is how you take our . . .
Tommaso: They started shipping with us because they realized that, you know, that we were a good security both, right? And then later, it was different. Then, of course, you build features so you say, “Hey, by the way, we just launched a new feature. Now you can integrate with these platforms and save three hours a day. Wow, this is a game-changer.”
But you need time to build stuff. You can’t wait to get the features in place to get clients. Otherwise, you won’t be able to have to make revenues, to raise money, to hire people, so you need to you need to find ways.
Andrew: How did you find it? You have two co-founders, right?
Tommaso: Yeah, correct.
Andrew: How did you find these two guys?
Tommaso: So one co-founder, Augustin Ceyrac, was my colleague in Lazada. And he was taking care of logistics, so he was kind of the logistic expert. And the second co-founder, Paul, comes from . . . he’s doing technology, is doing development. So he’s been teaching the development and doing its self for the past eight to 10 years. And he was a friend of friends. So we met through like very randomly and we were looking desperately for a very strong technical partner, and then it was just meant to be. So, I started . . .
Andrew: So you said he was doing what for 10 years?
Andrew: What was he doing for 10 years? Sorry.
Tommaso: [inaudible 00:44:32] towards developing, so he was teaching development and he was developing himself for us.
Andrew: Because he was with General Assembly, I think, Royal Bank of Scotland. Am I right?
Tommaso: So he started more than 10 years ago as a banker and then he changed, and he wanted to do into development, so the switch he started from zero and, yeah, then he learned things and he started teaching as well.
Andrew: At some point you raised money?
Andrew: What was the first round that you raised?
Tommaso: So we raise money eight months since we started. So around in August, September 2015 was the first round. We raised very little money. We raised around like 1.5 million U.S.
Andrew: Oh, I can’t tell based on Crunchbase.
Tommaso: Yeah, we don’t . . . We were kind of quite, like, secretive about it.
Andrew: Why? I get that, but why are you guys secretive about it?
Tommaso: Because they see that a lot of companies that, like, they use, they like to brag about how much money they raise. For us is the opposite. Like, actually every time I raise money, we’re not happy.
Andrew: Because it means what?
Tommaso: It means we’re giving away equity, you know. In a real business side, for example, when I was working with my with my father, if my father would sell a part of the company, we’d not celebrate, right?
So, in general, we still do it because, of course, we need to get resources to keep growing as we are growing because we could stop raising tomorrow but then it wouldn’t mean that we have to hire less people and be slower. That is not an option.
At the same time, you know, I don’t think we should represent our company by how much money we raise. We should present our company by the features that we develop. And we always try to raise a little as possible to remain [inaudible 00:46:29]
Andrew: Sometimes the name of the investor adds a lot of credibility, and you guys aren’t even revealing that.
Tommaso: Correct, but we prefer to, I think, use other ways to express our credibility and our reputation. For example, if you look on Shopify, we’re one of the top shipping app there.
Andrew: Which I find you guys have five out of five stars, 126 reviews.
Andrew: It’s only three people who gave you guys one star, one and no one gave you two stars. One person three stars, four people, four stars, the vast majority have five stars and it’s because you guys don’t have ongoing fees and it’s just price per . . . And you also save people money by helping them figure out which shipping company is going to be the cheapest.
Tommaso: Yeah, we integrate with more than 100 different shipping options. So with us, it’s, kind of, like, a Sky scanner approach. You can input your data and the system is going to compare all the couriers and help you find the cheapest, the fastest, the most reliable, whatever you’re looking for.
Andrew: Okay. Let’s talk about that first developer that you guys hired because I know that was an issue. Senior engineer, key hire. I don’t want to mention the person’s name. What happened as you hired them and then what happened when the person left?
Tommaso: Yeah, I think, this was one of the biggest problem we faced at the beginning when we started. So one senior person to leave the team and, I think, we were really concerned suddenly because, you know, maybe probably . . . I’m not saying it was a massive problem but when you’re a small company and you prize yourself of being like a very good environment for to work. Everything is very personal. And you have a person leaving, you start questioning your management style. You start questioning whether the company that you’re trying to put together . . .
Andrew: Let’s do the postpartum here. Why do you think the person left? What is it about your management style in the company that you think didn’t work at the time?
Tommaso: So we asked him what was the reason, but it was very diplomatic. And kind of said, “Oh, you know, I just, like, want to go back home.” and so on. But we never thought that was the case and I did the internal analysis to understand what do we think was the problem. We believe that it was because there was, not this person basically was joining a startup back then to have exposure.
And maybe we didn’t have in place the mechanism and the management structure to allow him to have more responsibility and decision making. So what we did is we started . . . we take advantage of this opportunity to change the structure and introduce basically the management layer. So the idea is, you know, when you leave our corporate. You join a startup. You don’t wait for money. You merely do because you want exposure, right?
You want to get responsibility. You want have the right to have an impact and it’s our job to make that happen. So we introduced this new function, and we basically got to the top people promoted to this role, and this means that they can hire their own team, they to decide their bonuses, they do performance evaluation, and in general, we have a, it’s basically, like, an inner circle. So we do, like, weekly meetings together and, of course, now they take most of the decision. That, I think, has been a game changer for us.
Andrew: I want to close it up by just understanding of two things. I know that we’re late, so we’ll do as much as we can. The first is, now how do you get customers? I’m trying to figure it out. All I see by looking at SimilarWeb is search traffic is really big for you guys and direct traffic. And I can understand it because you’re on the Shopify platform and Woo Commerce, that they’re sending you a large number of customers, right?
Tommaso: Yeah, we also do a lot of events, and we do a lot of, like, content. So we don’t spend much money on online marketing. We keep it as organic as possible. So for example, like, this year, we were exhibiting at Shoptalk in the States, IRCE, Magento Imagine in Vegas.
We’re organizing a big conference next year in March for all makers for crowdfunding and we’re going to host it in March. We organize events with Shopify, Stride, Google. In Asia, we got, like 300, 400 people attending. So we really try to work with our partners a lot.
Andrew: Tommaso, when you guys do an event it’s, like, your own personal event?
Tommaso: So we all sit, we organize it with different speakers, sometimes I speak myself, sometimes my team speaks.
Andrew: Where do you do it in Hong Kong?
Tommaso: We did it in Hong Kong, in Singapore. We’re going to have the next one in Australia, and we had the one in March in New York.
Andrew: And then how do you get people to come to New York to the event?
Tommaso: You mean for our team or . . . ?
Andrew: Oh, no the attendees? The people who would potentially become customers?
Tommaso: So, in this case, we do a little bit of advertising for this, and then also, like, sponsors and partners that are going to talk at the event, they obviously share it with their clients as well.
Andrew: You know what, I saw Toptal do that for an event. They partnered up with two or three other companies, they said, “Bring your clients in. We’ll talk about how Toptal does this, and you guys talk about how you do that, and then we’ll have drinks and food and talk.”
Tommaso: Yeah, it’s very similar. So we come up with the same thing.
Andrew: Make sense. Okay, and then to figure out the features, what’s your process for going to customers and understanding what you should build next?
Tommaso: I think we talked a lot with our clients, like, for example, the events are a great way to get in touch with them. Also, in general, our account management team has a very strong connection to our clients. They get in touch very often. So clients, they tell us what they want. They tell us, “Hey, you guys do this.” And we’re like, “No.” And when we start hearing that, like, a couple of times, our account management team start bringing up a meeting say, “Oh, you know . . . ”
Andrew: A couple of times I think that you guys wouldn’t have thought of on your own but because you guys are talking to your customers you discovered?
Tommaso: I think it was the shipping notifications. Just asking us, “Can you send a notification to my customer when a shipment is shipped with a link to tracking their package real-time?” And now it’s done. It’s been live for a couple of years.
Andrew: And you just wouldn’t have thought of it on your own?
Tommaso: Yes. You will think, I mean, eventually yes, but not as a priority, right? Because you have, like, so many things on your roadmap and you only have that much time. Another one has been the resume functions. For example, we have a function to create get quotes really fast just for one single shipment and then a couple of clients say, “Oh, you know what, sometimes what I do is I click here, I input my shipment, I get the rates, and then maybe I change, I go to the settings, I come back and I want to ship the package, and I need to input the information again.” So we do that with the resume functions, like, something, like, “Hey, do you want to ship this one? You can just one click retrieve your shipment.”
Andrew: All right. Well, easyship.com is a website but I don’t think people going to go straight to Easyship. I think, whatever software they’re using right now to handle their e-commerce site, they’re probably going to be able to go in there and then test out the plugin. And I don’t think it cost anything to install, so anyone can go and check it out directly, right? And then once there you start using it then the costs come into play.
Tommaso: Makes sense.
Andrew: [inaudible 00:54:14].
Tommaso: Sorry, say it again?
Andrew: How do you guys charge a percentage or . . . ?
Tommaso: Easyship is free. The courier give us rebates for everything. So it costs nothing from the client’s side and we [inaudible 00:54:30] and you can sign up in less than 10 seconds of an axis when I go forward to 100 shipping companies.
Andrew: All right. Tommaso, thanks. I’m checking to see what time it is where you are. It’s now 8:12. So that means you and I started this at 7:00 a.m. your time, right?
Tommaso: Yeah, correct.
Andrew: I’m really appreciative that you came on . . .
Tommaso: I’m leaving in Hong Kong and I’m back to New York.
Andrew: I’m glad that you do this here. Thank you. I really appreciate it and getting to look a little bit over your shoulder to get a sense of the environment there. It’s cool to see people come in this early in the morning.
Tommaso: Thank you, Andrew.
Andrew: It’s easyship.com for anyone who wants to check it out. And of course, want to thank my two sponsors for making this happen.
The first is a company that will help you hire your next phenomenal developer. Frankly, it also helps to have Toptal there after you hire them. If you have any issues with the developer, if need the way that happened with Tommaso, you don’t have to try to figure it out for yourself. You know Toptal say listen confident, not confidential. Between you and me can you go find out why this person didn’t work out, give us some feedback, as a team so we improve, and you have that intermediary.
Or, “Hey, you know what? You guys introduce us to this developer, I feel like we’re not communicating well. Can you help out? And then have that intermediary help you do that. I found that actually with the finance person I worked with. I had a few questions and I went to Toptal and they gave me feedback about how I could work with them a little bit better.
All right, so if you looking to hire a developer, a designer, or finance expert, go check out toptal.com/mixergy. If you want to get your website hosted right, maybe you hate your current hosting company, maybe you’re starting something brand new, go to hostgator.com/mixergy. All right, thanks so much for doing this interview.
Tommaso: Thank you, Andrew.
Andrew: Thanks. Bye, everyone. All right cool. We’re going to send it over to the editor and as soon as stuff we’ll send you a link. This is phenomenal, I loved it.
Tommaso: Thanks a lot, Andrew. Yeah, I really enjoyed that. I was wondering, like, you know, we can give a special offer to your audience as well.
Andrew: You know we’re still recording if you want to say to the audience go ahead. I would have said it earlier but I think it’s still good to say it now. The only thing is I can’t take a kickback for it but if you want to offer them something go ahead.
Tommaso: Yeah. So we’re happy to give to Mixergy audience $20 to use as a free shipping for your next shipment. So you can go ahead and sign up for free and have free $20 voucher.
Andrew: Okay, how do they that?
Tommaso: It’s basically going to be a link on Mixergy. Just by signing up on that, they automatically get $20.
Andrew: Can you create a link on your site?
Tommaso: Yeah, I can.
Andrew: Or just like the URL, thinking about right now like easyship.com/mixergy. Do you want to do that?
Tommaso: I need probably couple of . . . I need to ask my team to do that but it can have it in a couple of . . .
Andrew: Give me the link and I’m going to make it work. It’s going to be mixergy.com/easyship and we’ll just redirect automatically to them to get the $20. As soon as you give the link, I’ll create a redirect in WordPress for it.
Tommaso: Yes, excellent.
Andrew: Cool. All right, Tommaso. So it’s mixergy.com, mixergy.com/easyship, for anyone wants to get 20 bucks. Cool, thanks.
Tommaso: Thank you.
Andrew: You bet, bye.