Buying and resuscitating a dying business

Today’s guest bought a business that was at death door step.

He brought it back to life–back to profitability. But then he discovered an even bigger problem. We’ll talk about how he used software to solve it.

Jeremy Bodenhamer is the founder of ShipHawk, smarter shipping software.

The podcast is in all major apps, just search for Mixergy.
You can also use our RSS Feed RSS feed.

Jeremy Bodenhamer

Jeremy Bodenhamer

ShipHawk

Jeremy Bodenhamer is the founder of ShipHawk, smarter shipping software.

roll-angle

Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. Joining me is a guy who, you know, in a small town or frankly, even in a big town, when there’s something you want to mail out, you go to these, um, pack and ship places.

Well, Jeremy bought one of those years ago. One that was nearly how close to closing down was it.

Jeremy: Right at death’s doorstep

Andrew: We’re talking weeks away from being closed, right?

Jeremy: probably. Yeah.

Andrew: The guy buys the business. It’s called packing posts, turns it around, turns it into a profitable business and discovers an even bigger problem, which is that nobody knows what it costs to ship anything. And he said, you know, if people don’t know what it costs to ship anything, I think there’s a business in here.

I could create software that would do this for them. He turned it into a company called ship Hawk. Nearly, I feel like that should have gotten destroyed a few times too, especially, uh, when he hired his first developer. And we’ll talk about it in the interview. What happened when he hired his first developer, he goes to tech crunch, disrupt the conference.

He makes a mistake that I think a lot of people do, or maybe I feel like maybe they kind of take advantage of some entrepreneurs and they set them in the wrong spot. He goes, I’m in the wrong spot. I got to get to the right spot. He finds a way to get on stage. The guy fricking nails, his presentation for ship Hawk.

He explains the difficulty of figuring out what it costs to ship products. He explains how he solving it. It was an amazing presentation. Did you get a lot of, uh, investment opportunities after that? Did you take any of them?

Jeremy: Um, I don’t remember if I took any that were directly from that, but we definitely filled our seed round shortly thereafter.

Andrew: Because it was such a nailed presentation. And then he starts building this company up. Were you aiming at first for like small businesses? People like me who have individual products, that’s what you’re aiming at. At first

Jeremy: Yeah. I think you’re, you’re giving me too much credit to say that I was aiming at anybody. Uh, but yes, we were. We were going for the small guy out of the gate.

Andrew: it was more like, Hey, pack and post is getting a lot of calls from people who need to know what it costs to ship stuff. We’re going to create software that makes it easy for people to figure that out. And then the world will take care of itself or we’ll figure out the business behind it. You did figure out the business behind it.

And the problem is with who, who, who has the biggest problem right now?

Jeremy: the problem today is, is the people shipping products that are trying to scale their businesses. They are, they’re moving from Shopify and you know, their garage. One, one, man, one woman show into a warehouse and trying to figure out how to scale it. When you’ve got Amazon breathing down your neck.

Andrew: Meaning somebody like Catherine, who has the best self journal, she might’ve sold a few on her own. Then she starts to make more and more sales on our Shopify store. And Amazon is delivering same day. How does she compete with that? They’re delivering within two days. How does she compete with that? From her one warehouse?

That’s who you’re going after the person whose voice you just heard is Jeremy Boden hammer. Jeremy will not tell me how much revenue he’s doing with ship Hawk, but it’s big. Is it over $10 million? What will you say? Well, give me a bound. It doesn’t even have to, I don’t want to, I’m not looking to be your CPA, but I want to get a sense of how big the business is.

Give me anything that you can tell me.

Jeremy: we are processing millions of shipments a year and we have hundreds of customers. and we are, um, we are a growth stage business

Andrew: In the millions of dollars in revenue.

Jeremy: in millions of dollars in revenue and, uh, And we’re not profitable, uh, when we were venture backed. Uh, so it, it, regardless of what tech crunch says, I still think profitability is, uh, an evil word in the VC community.

They want fast growth.

Andrew: How does that sit with you? You’re like a small business owner at heart. Does it bother you

Jeremy: It does, as you know, I can’t say that it always has, because I didn’t really know what I was getting into when I jumped into the belly of the beast. Um, but you know, I like things that I can wrap my arms around and getting that small business up and running, you know, being able to have FaceTime with all my customers, understanding what I’m doing right.

And wrong and being profitable. I slept a lot better at night. So even if you had a lot of money in the bank, but you’re still losing money, there’s always a little bit of that. That’s just kind of picking at you.

Andrew: And one of the things that I’ve noticed, Jeremy, I haven’t talked to you and gotten to know you for a very long time, but one of the things I noticed about you is you get fired up. When we talk about the problem with Amazon and a few other companies, incredible power over the shipping infrastructure. Uh, yeah, you’re nodding.

As I say, this, Jeremy wrote a book to deal with this it’s called adapt or die. Your survivor guide to get this. This is what he wrote a book about your survival guide to modern warehouse automation. It’s actually doing really well. Who cares about modern warehouse automation? How are you finding so many people who care about it?

Jeremy: Yeah. I read an article the other day where these, this woman was writing in about this conversation with her and her friend. And she’s like, can you imagine three years ago, um, that we would be talking about shipping over cocktails tonight. And like everyone’s talking about shipping with the pandemic and, you know, wanting stuff delivered and getting it there safely and quickly, it’s become a major, uh, point of, uh, both focus and contention in our society today.

Andrew: We’ve it’s one thing for a small business, or even a big business to figure out how to market to us, to figure out how to get us to buy. And they spend a lot of time creating product, creating the right marketing. But if they tell you that it’s going to take two weeks to arrive, you may not want to buy.

And if there’s any question about where it is, you’re going to be resistant and it’s strange, the faster something comes, the more of an impulse buy it is the less we think about it. It’s just going to be in our hands fast. That’s what you’re seeing. And you’re starting to see businesses care about this and individuals who are buying from online businesses.

They care about this.

Jeremy: It’s becoming a key to people’s livelihoods, right? Small and midsize companies, feed families, they build communities. And if you cannot deliver on the expectations set by the giants and by the giants, I’m talking about the Amazons and Alibabas and Walmarts of the world. Um, there is a real risk of you not existing in the near future.

The pace of change is just too fast.

Andrew: And you think that the small business owner can compete. Amazon’s got their truck drivers in front of my house, 50 times a day. Right. And they have my garage, you know what, here’s the amazing thing. They have the clicker to my garage in their, in their phone. So they could just open my garage, put things that you think that the small mom and pop can compete with that

Jeremy: That’s what the book’s about. I think there, I think there are, are, uh, tools, uh, that the small mom and pop need to use to, uh, to just table stakes, right. Just to enter the game. Those are the warehouse automation tools. And I think that they have some secret weapons that they’re not necessarily all taking advantage of.

Andrew: So here’s my goal for this interview. Number one, I want to find out about what you did to turn that first small business around. Cause I relate to that the pack and post, how did you buy a business turnaround? Um, and then I want to understand about the evolution of ship Hawk. That’s more in line with the types of interviews that I’ve done, but I am kind of interested in what you think, mom and PA.

I hate calling mom and pop businesses. Cause they’re not, they’re fricking fiery the fact that they didn’t get to a billion dollars in sales and maybe there are $10 million doesn’t mean that we should consider them these small operators. Right? What, what the hell can they do, dude, Jeremy? Well, actually wait.

Let me first say this interview is sponsored by two phenomenal companies that will allow me to take my time to get to mentioning them the first, if you’re hosting a website, including if it’s e-commerce there’s host Gator, go to hostgator.com/mixergy. The second SaneBox just want you to know you should email me andrew@mixergy.com cause I’m with SaneBox.

My messages are organized and they’ll get to me, Jeremy, what that w if, if Amazon is delivering into my garage, gimme one, tip one thing that a small business owner, smaller business owner can do to compete with that.

Jeremy: Well, okay. Delivering it to your garage. And one thing a small business owner can do or should do are very different topics, right? Uh, because delivering your garage is like going from zero to a hundred and we’re not tonight trying to take the independence, like all these, these, uh, small and mid-sized companies, independence or Indies, they’re independent merchants.

I, I’m not talking about taking them from zero to a hundred. I’m talking about taking them to zero to one and from one to 10 and slowly

Andrew: they do? Give me a step forward that they can take.

Jeremy: that board first absolutely start developing. Operations goals and metrics by which you can measure progress towards those goals. No sales organization on the planet is running without pipeline, metrics and goals.

Andrew: Okay. So you’re saying when it, when it comes to how an ad is performing, they know all the numbers, they know, even whether the color red is better than the color green and the Facebook ads that they have. Okay. You’re nodding at that. Great. Give me, give me a goal that they could have when it comes to shipping.

If they want to get,

Jeremy: It was in the warehouse. All of a sudden specifics are generalities. It is more faster, cheaper, right? So what is your average order? What’s it costing? Um, what’s it costing by carrier or lane or region, right?

Andrew: you want them to know what it costs to ship by carrier for each

Jeremy: Or by region. So if you have a customer, think about this, let’s pretend you, we have a shipper that has one warehouse, only one we’re taking someone that’s fairly small and they’re shipping all over the country. The cost to New York is very different than the cost to LA. And how, what if we’re selling them the product for the exact same price to both consumers?

How do I control that now? Can I control if I can’t control the price? How can I control the delivery times and the delivery service promise that I’m offering my customer. It’s going to be there in two days is going to be there in a week.

Andrew: So you’re saying, make sure that you tell somebody who’s in a different people based on where they are, what their, what their, uh, arrival expectation should be.

Jeremy: Yeah. I’m saying every brand is having to make delivery promises in today’s world. Right? Even if they’re long delivery promises, we’re promising something two days, three days a week, ground express, we’re promising something, but if they’re gen, if they’re generic, then we’re actually delivering a poor service to our customers.

We need specific. We need to know what does it cost to deliver a product to Andrew in San Francisco? What does it cost us? And how fast can I get it? There?

Andrew: Okay. So you would give each, each of your customers, each of your, your users, you give them a dashboard so they could see all that. Right?

Jeremy: Correct.

Andrew: What else?

Jeremy: What else? So there’s one big thing, right? As we go on to, uh, carriers, to working with carriers, FedEx ups, these the tariffs, which is the contract, the carrier has with the shipper is purposefully made to be so complicated that it’s impossible to manage manually, meaning you can’t have a person at a workstation in your warehouse saying, Oh, for this one, I’m going to ship it FedEx ground.

And for this one, I’m going to send it priority mail. You have to use software to utilize those contracts, to make sure that you’re realizing that the discount that these carriers are promising you.

Andrew: Okay. Got it. So no individual can decide which of these shippers to use for each item. It’s not even a, the right decision to say we’re only gonna use one, one of them. We’re only going to use ups or FedEx. We need software to tell us for each individual order, which labels should go on, print the label and put it out in.

Got it. All right. What else?

Jeremy: In fact, we had some data, we ran, I think, three quarters of a million shipments from prospects, people that were coming to us just saying, Hey, here’s some data. Tell us how we do. And out of those three quarters of a million shipments, one greater than one in five, almost one in four shipments were miss routed within the one or two carriers they already worked with meaning they could have met their delivery promise and paid less money.

Andrew: Uh, okay. Let me ask you this though. I get it. I see how we’re improving, but this seems like such incremental, uh, progress. Aren’t smaller businesses, always going to be at the mercy of FedEx and ups, which do not innovate. They do not innovate and, and simple thing like let’s copy the leader and give a clicker to each one of our people so that if a box gets delivered in a big city from FedEx or ups, it doesn’t get stolen.

Right? This is such a such a common thing that there’s a phrase for it. It’s it’s porch pirates, right? If they can solve that by copying the competition, is there any hope for them and their customers until somebody comes and steals their business? It feels like all this is incremental improvement.

Somebody needs to either beat them or we’re going to, we’re going to be at their mercy and their failures.

Jeremy: Great points. So two things, one incremental improvement. Absolutely. Every business owner should be looking for incremental improvement. There is leakage everywhere on the operation side of the business

Andrew: okay. You’re saying don’t be so dour. If you’re using them, just keep making improvements just because you can’t get to the ideal world. Don’t give up on it. Keep getting better and better. All right.

Jeremy: Yep. Prioritize them one at a time. Knock them off because keep in mind, Amazon’s been prioritizing distribution for decades now, and we’ve not, we meaning all the independents have not. It’s been an afterthought, it’s been a backroom business. And now all of a sudden we’re waking up saying, Oh, look, there is opportunity and supply chain.

Maybe I should start paying attention. So we’ve got to make up some ground. So yes, there’s leakage everywhere, but there is a lot of innovation going on in the world, outside FedEx and ups. And a lot of it is driven by the behavior of FedEx and ups. I wrote a short article that a couple of weeks ago about what I’m calling the success fee, the success surcharge.

FedEx and ups came out and said, or FedEx came out and said, Hey, if you’re shipping more than 30,000 packages a month, we’re going to charge you extra for everything over 30,000. And I was like, are you kidding? So if I’m successful, I get to pay more for being successful. I mean, there’s all this stuff is happening.

So there is a lot going on in the regional parcel game. The U S P S the postal service has really stepped up their game. There are a lot of new emerging products coming onto the market,

Andrew: give me an example. What can you, what what’s, what am I not aware of? That’s creative. That’s innovative and shipping.

Jeremy: I’m not saying it’s from a carrier perspective. I’m not saying it’s creative and innovative. I’m saying it’s different. It’s another alternative end of the

Andrew: an alternative.

Jeremy: we’ve got to get the product, a regional carrier.

Andrew: Tell me about that.

Jeremy: Okay. There are regional carriers all over the U S there’s consolidators. Uh, DHL e-commerce is a consolidator.

Pitney Bowes has a consolidated products.

Andrew: What’s a consolidator.

Jeremy: someone that picks up, they will handle the, the first mile and the final mile, and they will consolidate for the line haul to get it across the country. And so they drive down costs that way. So if you’re looking at regional side-by-side with FedEx and ups and maybe the postal service, you can actually build a network of carriers where you have a lot of cost controls, but you can’t do it.

If you don’t take a granular approach, first your relationship with FedEx or ups, because most people can’t exist without them yet. And they may never be able to.

Andrew: Do you think that it’s going to be, that we’re going to start? I think that one possibility is that Shopify is going to realize that they can’t give a good end user experience unless they can manage the product too. And I think at some point Shopify is going to is going to by FedEx or ups or something like them, and then integrated into their, into their software and modernize it.

Don’t you

Jeremy: Yeah. So I tell a story in the book about, um, automotive robotics and how, the only reason we have robots that make vehicles today is because GM stepped up as a, as a leader and said, Hey, all of my suppliers as GM, you need to use robots. To drive down costs, improve efficiency and increased speed. And all of a sudden robotics were adopted.

And what I see as Shopify, hopefully, you know, counting my lucky stars. I’m hoping that Shopify is acting as that leader for the independence today, not just for robotics, with their purchase of six rivers and through Shopify shipping and everything that they’re doing there. But I hope to continue to see those types of investments.

Exactly like what you’re talking about, but the benefit is that Shopify is doing it for the merchant on their behalf because they see the need. Right. And so that will benefit everybody. If that happens.

Andrew: And you’re saying, look, they don’t have to, by FedEx or ups, their increasing power could mean that they could require FedEx and ups to make some advances. I get it. I see it. I, um, I also like that, what you’re going to enable is more of these smaller startups who have ideas for how to get products to consumers faster.

You’re going to allow them to be on your platform and then be another ship Hawk, alternative to ups and FedEx. Am I right?

Jeremy: Correct. And I’ve done. I mean, just in the last two months, I’ve had multiple startups come to me who are networking regional players with software to create a national player, another national carrier. And they’re trying to have their own DCS where they can do consolidations and, and farm out the, uh, the packages.

Andrew: What does that mean? I imagine what it means is I live, I live in San Francisco still. I see that there are people who are, who are makers out on the West side of San Francisco, right there. They’ve got supplies. If I buy from them, they still have to put their product in a ups truck and get it to me in two days.

I imagine that there’s that they could that there’s room for smaller operators to say, we’re just going to be the guys who drive out. We, we know we can go to the place. We know we could pick up the box. We know we can get it to Andrew. Andrew doesn’t need it within 30 minutes, the way he does with the GrubHub meal.

But he’ll take it within 24 hours. We’ll just go and make off, make those drop-offs right. But how do we get to the consumer? I imagine that’s a ship hoc, uh, connection, right?

Jeremy: Yeah. I mean, you’re right. The only thing that FedEx and ups have really is the trucks and the hubs to Rob run a hub and spoke model. They can get the product from the West side to wherever it needs to go. Right. What ship is doing is helping utilize whatever relationships. That shipper has with whatever carriers to make sure that the right carrier and service is being selected to meet the delivery promise at the lowest possible.

Andrew: all right, let’s get to into how you got here. The thing for me, that’s interesting is you start with the pack and post. I had to check in with you to make sure I was looking at the right thing. You bought a place in Santa Barbara, one of these stores. Why did you buy a store instead of coming up with your new, with your own business?

Jeremy: So super unsexy. Um, so when I was in college, I put myself through college. So I had multiple jobs and one of them was at this little executive services firm in Montecito is upper village. And we did FedEx ups, postal, like nothing crazy, just little small pack stuff. I graduated putting my wife through grad school, down the street here at UCFB, and I see this package ship store come up for sale.

And it caught my eye because of the work I had done in college. And the listing disappeared came back up disappeared. Uh, finally I went in to talk to the broker, see what was going on. This thing had fallen out of escrow with five consecutive buyers. You asked me like, how, how close the death’s doorstep were they?

Right. They were right there. And I went in literally begged, borrowed, and stole, put every penny I could get in an envelope. So I literally have an envelope full of cash here. I walked in, I looked at the broker, it was like low 10, that low 10 thousands. And I walk in, I put this envelope in this guy’s hand and it’s way below what they’re asking.

And this guy looks at the envelope and he looks at me, he goes, I assume this is your first offer. And I said, right now, this is my only offer. And I turned and I walked out very risky, but I got a call the next day from the owner saying, this is a little odd, the way you’re handling this, but I accept your offer.

And in my mind, I’m thinking, of course you do. You just lost a deal with five buyers and this guy walks in with cash. Now you got to give me the cash back. If you say no, when people don’t like giving cash back. And so I bought myself a failing business. Um, and the day my wife graduated from school, I went and started working in the store.

And this guy walks in with this life-size wooden rocking horse. It was the depths of the great recession, 2008. He had lost everything, selling all this stuff on eBay to pay his bills. And he said, Hey, can you ship this? And I didn’t know what freight was. I didn’t know what freight brokers were, but I sure as hell said, yes, And so he gave me the job and I learned a lot of really hard lessons as FedEx or not.

FedEx ups tried to charge me 4,000 bucks to ship this horse. Um, ended up getting it for like 1200. And, um, anyway, one thing turned to a next, until I’d built this small store into one of the top performing stores of its kind in the U S and my phone was literally ringing off the hook with customers asking me one question, what is the shipping cost?

All of this movement into e-commerce all of these items being sold online, and no one knew what the cost was. And the whole industry was still running on quilts.

Andrew: Okay. So one of the things that I saw that you said at the tech crunches rep was, he said, look, I’m going to speak up here. And there’s going to be some guy in the back who says, but I can pull it up on FedEx right now and see the price. What is the problem with going to FedEx right now and getting a price

Jeremy: That that price is, is dependent entirely upon your inputs. And your inputs may be very different than the actual billable criteria that FedEx is going to use to assess how

Andrew: What does that mean?

Jeremy: It means that you, I tell you I’m going to sell you this shirt for 10 bucks and that I give you the shirt. And then I send you a bill for 20 bucks because I gave you an extra large shirt instead of a sure.

Andrew: So wait, wait. But if I put in the right weight, the right box dimensions, they give me a price. They’re going to stick with that price, right?

Jeremy: If all that information is correct, but how many packages are prepacked and pre weighed, especially in an e-commerce setting, right? They don’t have these things sitting on a shelf. They’ve got products sitting on shelves that then have to be put into boxes or packed on two

Andrew: you’re saying, look, once you find the box that it goes into, it ends up being bigger or smaller than the one that you anticipated, the weight ends up being more or less than what you thought it would be. And now, so then the problem is the input.

Jeremy: The input. Yeah. That input was especially back in the early days. A lot of these, uh, e-commerce vendors are getting a lot better about their data now with these WMS, which is a warehouse management system, the new software that’s coming out well, back in the day, no one had any data. You have a widget sitting on the shelf.

No one knows how much it weighs. No one knows what the measurements

Andrew: Got it.

Jeremy: And so they’re just guessing. So everything’s static

Andrew: What did you do to get that guy? A lower

Jeremy: it be more

Andrew: from 4,000 to 1200? What’d you do?

Jeremy: that’s crazy. So I call ups and I, and this woman gets on the phone and she says, how can I help you? And I said, well, I got, I need to ship this rocking horse.

She goes, okay, what are the dimensions? And I pull out my tape measure and I tell her, and she starts laughing. And I was like, okay. Uh, so can you help me? She’s like, there’s no way we can take this. She goes, maybe someone at ups freight can help you. So she transfers me to ups freight, another woman. She starts asking me the same questions.

What are the dimensions? I tell her, she goes, uh, what’s the weight. I don’t have a scale. I can fit this thing on. So I just make something up. And she’s like, what’s the freight class. I was like, I don’t even know what freight class means. And so she talks me through it and she goes out, it’s going to be like 4,000, $200.

And my jaw drops open. I’m like, there’s no way anybody’s paying that much to ship things like this. And she goes, well, if you open a new account, I can give you a 68% discount off some Tara from like 1995. I was like, I still have no idea what you’re talking about, but I’ll take it. And I started learning about the game of how all these things are priced.

Andrew: And so just by figuring out the price from ups, you were able to take ups is price for four, from 4,000 down to 1200. Got it. Okay. So you do that and then you go to your client and the client says, okay, fine. I’m willing to do it. That’s when they pay you. That’s not what you built your business on though.

What is it that got you to take this small pack and post store in Santa Barbara and within what? Three years? Four months from what I saw it, turn it around.

Jeremy: Um, the truth, the simple truth, and there’s, there’s not one answer, but the simple truth is I got rid of everything that wasn’t shipping. If you walk into your local ups store or, you know, mom and pop in the store, you’re going to see key chains and greeting cards and a million other things all over the place.

They’re, they’re nothing and everything to everybody. And what I did was just specialized in shipping. So everybody in town, and then soon people out of town were calling me because they knew they could get answers to shipping and shipping was becoming so important, big, small, fast, slow. It didn’t matter.

Andrew: Because people were selling on Amazon, they were selling on Etsy and that’s what they cared about.

Jeremy: Everything I had, I mean, I was doing, uh, building crates for government contractors who were building antennas. I had a customer that was, uh, made art for, um, uh, Hilton hotels and was sending out hundreds and hundreds of pieces of artwork. Um, I mean, everything you can imagine, uh, companies big and small, they still had the same problem.

Andrew: You know what, um, I’m looking at photos of the store on Yelp in 2016. This is what four years after you sold the business, they put in a cooler with Coca Cola and a couple of other drinks that is completely not like you, you, you did not want that in the store.

Jeremy: We wanted the customer to see us as shipping, only shipping, shipping, shipping.

Andrew: And then, all right, so now you’re focused on, well, what’s the problem actually. Why not have Coca-Cola I see that they also have greeting cards. Why not have greeting cards? I see they’re selling notebooks or they

Jeremy: Yeah, there’s no,

Andrew: What’s the problem with that?

Jeremy: there’s nothing wrong with, with selling those items. The problem is in your customers, how your customer is thinking about you. Let me give you another example. In front of the store, we had a handicapped parking spot and I went to the landlord and I asked the landlord to relocate it and change that into a loading zone.

And I started building all of our pallets, all of our crates, every big shipment I would build in front of the store. Like it was a show and I got so much business from that one woman was walking by. She was in a salon next door and she walks over. She goes, I didn’t know, you did big shipments. And she hired me to ship her orchid collection to Wyoming.

I mean tens of thousands of dollars off that one transaction, just because I was making a show of what we specialized in. I was trying to get in their mind that we do one thing. This is what we’re great at. We’re not great at greeting cards. We’re great at shipping. We’re great at packing.

Andrew: And you’re taking me more. You take a store more seriously when they’re that focused on shipping and not on greeting cards. You also, then you told our producer, we got really good at doing online marketing. What type of online marketing did you do? And how’d you get good at it?

Jeremy: It was all just content. Um, and there were just, and you know, at that time, even as, as the web was a, you know, had, had taken off and there was a lot of stuff there, it was not highly targeted and highly focused. So for some keywords, I mean, in our region, I wasn’t just the first result on Google. I was the one, two, three, and four.

All for that keyword. And so it really helped by just pushing a bunch of content out there about what we did and specialized in and not pushing content about the stuff that I didn’t want them to call us

Andrew: Like what, what most local stores don’t do content at all? What were you doing? What, what’s an example of content that you are proud of?

Jeremy: wrote articles, posted photos of shipments, wrote articles on shipping, antique shipping, you know, uh, creating, um, you know, anything you can imagine art shipping and just put it out there.

Andrew: And so was it you learning how to do content marketing?

Jeremy: Absolutely. I even went to content marketing world.

Andrew: What is content marketing world

Jeremy: It’s a, it’s a trade show for content marketing in the, all the people that specialized in that were like, you know, big celebrities to me at that time. Cause I didn’t know anything about it. Just started listening and writing.

Andrew: did you, um, by the way, I’m going over to the, to SEMrush, to do a search, to see what kind of content marketing and they do. There isn’t any content marketing. Now the site was Santa Barbara pack and post.com, right? Oh, let me see. Actually, maybe, maybe I’ve got it in wrong here. Maybe we have a

Jeremy: Yeah, they have a blog.

Andrew: that’s it?

So they, they are not doing that anymore, but this was the pride of the business. This is what brought customers in,

Jeremy: Oh yeah,

Andrew: as you were getting bigger and bigger, what types of customers were coming in because of all this content marketing.

Jeremy: it was. I mean, I had customers from all over the world. Uh, I give you another example. I, I shipped some native, uh, Californian plants to a Saudi princess in Kuwait.

Andrew: Wait. So they’re calling you saying I’ve got someone who has plants in Santa Barbara, or they’re saying I’ve got someone who has plants anywhere in America. Get it to me. How would you do shipping outside of Santa Barbara?

Jeremy: I call other stores like mine and find until I can find one to do the job and I just acted as a middleman.

Andrew: Ah, got it. And so this is you literally sitting down and making calls all day.

Jeremy: Well, I had some people that worked for me, but not a lot. I mean, I think at our peak, I still only had like three employees. This is a small business, a small local businesses. Wasn’t, you know, a big one.

Andrew: Do you ever get frustrated? Like I’ve seen people like you who are really good, but they’re playing in a small field and they’re way too big for the small box that they, that they’re in. Do you ever feel like I’m I know all this stuff. I’m not building big enough stuff. I’m not building a big enough company with everything that I know.

Jeremy: Oh, the opportunity to scale that business brick and mortar. And I just thought it was a bad idea. And I had looked at other places to either buy or build. And I, I, there were at the time, I think just with ups stores and FedEx offices alone, something like 11,000 locations in the U S not to mention all the other brands, it just seemed like a fool’s errand, which is one reason why I sold the business and decided to start Shiprock and try to solve the problem with software.

Andrew: All right. Let me take a moment and talk about my first sponsor and then come back into it’s actually, my first sponsor, someone that I think you’d have some feedback on it’s HostGator, a lot of people are building you’re smiling. Why are you smiling about HostGator? Do you know

Jeremy: Because I think I’ve been a host Gator client at some point I may even be a HostGator client today.

Andrew: I think you are actually, but I couldn’t confirm it.

So I didn’t want to say it, but I’ll say this HostGator allows people to create simple sites like WordPress based websites, but it also allows them to create e-commerce sites. You’re somebody who’s seen lots of stuff being sold. If you started over today, Jeremy, you had nothing but a HostGator account.

And let’s say because you’re in the e-commerce space, we would tell him, I told you you had to install WooCommerce so that you can sell products. What’s the product you’d come up with today to sell, having seen so much.

Jeremy: Oh, I don’t know. That’s a good question. I don’t know that the product I sell is as important as the story.

Andrew: Really? What do you mean

Jeremy: Um, one of the suggestions I give in the book, one of the secrets that I think that the, the independence have over the giants is what I call authenticity. Um, and let me tell, let me share a story with you.

So most people are familiar with the shoe company, Albert Allbirds now. Okay. So the Allbirds founders are on CNN and the host hits them with this question. So what are you going to do about the nearly identical, um, product, not wool runner, but it’s sold as a wool runner. That’s on Amazon. And what do these guys do?

They write a letter to Jeff Bezos. Dear, dear Jeff, we will introduce you to our third party manufacturers. We will give you all of the specs that you need, all of the data so that you too can make a sneaker. That’s good for the environment because that is the entire purpose of our business. But please, if you’re going to copy us, copy our approach to sustainability that act in and of itself blew up.

I mean, this is a company that’s refused to sell on. Amazon wants relationships directly with their customers, and here they are making a big deal about what’s important to them with it, which is that sustainability element. And of course, customers are going to buying direct from them, right? And that is something that the, that the, these big, these giants are never going to be able to do.

Andrew: All right. Let, let me, let me ask you this. So in a past interview, my guests said, Andrew, what you need to think about is things that are small and have high price points. I threw out in the interview. How about spices? I have a real problem. I love crushed red pepper. Crushed red pepper does not taste spicy because most people don’t like spicy, but I feel like we need a good crushed red pepper that is spicy.

Imagine I said, I’m going to do that. Mixergy is going to be my main business still forever, but I got to create this thing. How do I create a story about it? That’s as good as the Albert story that you just told. That’s that’s some creativity. Where does that come from?

Jeremy: I mean the, the easy way is people care about transparency. So how is it, how are you sourcing your, your, your pepper? Where is it coming from and how are you treating the people that are producing it for you? And if the answer is I’m sourcing it from someplace that’s honorable and I’m treating people well, there’s your story?

And you broadcast that from the mountaintops. Now, if you’re not doing those things, it’s a little harder to find your story, but people care about those things today. And if you tell them they’re not going to buy their red pepper on Amazon anymore. Cause what are you saying about how they treat people?

Andrew: Or from the frickin grocery store. All right. You know what, you’re getting me all fired up because you know what, the thing, the thing that’s coming to my mind is crushed red pepper is not spicy my, to my kid. When he was two years old, was able to eat it. It was nothing. It was just like a show that would, that would shock adults, but it was nothing.

What if then you do a pizza challenge, you bring all the crushed red pepper, right. And from the store, you let somebody try it, see if they can handle it. If they can handle it right then it’s like nothing. You see it on video. It’s it’s, it’s, uh, it, I’m not talking clearly, but it’s interesting. And then when they try mine and it hurts their mouths a little bit, but it tastes good.

Now we’ve got a store. All right. That’s what you’re talking about. Listen to me, people. Whether you take my idea or come up with one of your own. I want you to go to hostgator.com/mixergy. Because when you do this, especially in March are going to give you 70 up to 70% off, really lock in those discounted prices with them and get started and build up your store.

I like HostGator a lot because if you don’t love them in the future, you could take your store and move it on. Jeremy doesn’t even know if he’s still hosting with HostGator. The beauty is it doesn’t freaking matter. You get started with them. They’ll do hosting, right? And if they ever disappoint you, you pick up your site, you go to somewhere else and let them host it for you.

You own your site, you and your relationship with your customer, you own your ideas. You own the platform. All the HostGator does is makes it easy for you to get started inexpensive and holds your site upright. Go get a great price from them. If you use my URL, you’ll get an especially low price, hostgator.com/mixergy.

And you’ll also get us standing behind you because we always stand behind people who listened to my podcast, especially if they use my URL. Right. hostgator.com/mixergy. Yeah. You’re an entrepreneur. I love that you dig entrepreneurship so much. I wonder to find out a little bit, because I’m always curious about what entrepreneurs are like growing up.

You told our producer at 12 years old, you got started in business. Tell me about the business that you started at 12 years old. Jeremy, what was,

Jeremy: My family, um, w we were poor that no, no, no way to skin

Andrew: what does that mean? Give me a sense of what poor meant. What couldn’t you get?

Jeremy: Um, well, I mean, our cars were repossessed. Uh, our electricity was turned off. I remember going to the fridge and there was no food in there. There’d be one can in the pantry and I’d leave it. So my sister could have something to eat. I mean, every

Andrew: angry were you angry at that? Or was it just a way of life?

Jeremy: What’d you say that again?

Andrew: Were you angry at that or is that a way of life?

Jeremy: I mean, I, I, uh, I mean, I think there was, I think there was some, uh, some frustration and anger there. Um, I don’t think it was something I ever accepted because it wasn’t like that my whole life, it was just at that point in time. And we had moved into, um, what if in effect was this new subdivision, this place where they were just pouring all these new houses in.

And what I noticed was after they build a house, it would sit there. And so first I went to the general contractor and I said, Hey, people are going to want to buy these things. If they look a little nicer. So why don’t you let me do all the construction clean up. I’ll pick up all the trash you guys leave and I’ll take care of these newly landscaped yards.

Cause you’re letting them die because you think you’re going to sell right away. And then I realized that investors were coming in and renting a bunch of these places. And renters did not take care of the houses. And so there’d be, and this is an up in Portland, Oregon. And so there would be a forest of weeds on these things when people moved out.

And so I got them to hire me to do all the landscape maintenance between residents and

Andrew: years old, you had the guts to call up these adults and tell them they should hire you.

Jeremy: Oh yeah. That’s, that’s never been, uh, that’s never been my challenge. We all have challenges that wasn’t mine. Um,

Andrew: Sorry,

Jeremy: I mean, my challenge is more focused and slowing down, you know,

Andrew: like add type of personality. Okay. Got it. So you got them to pay you to weed.

Jeremy: Yeah. To weed, to water, to Mo to basically do landscape and clean up on these properties. And I was making enough money to have some money for myself and to give to my parents to help pay the rent and the, you know, the utilities and stuff like

Andrew: You weren’t resentful that you have to take care of your parents, that they, their job is to take care of you financially.

Jeremy: Sure. There was some of that at that time, like I said, that was a stage. It wasn’t my entire

Andrew: What happened? That set you guys back like that?

Jeremy: Um, we moved. So my dad, um, uh, was a, a business owner and he, um, had a good reputation where we, where we lived. I was born in Southern California and, um, everybody knew him and he did well. And my family got tired of Southern California and picked up and moved to Portland, Oregon thinking it was, you know, the grass is greener literally with all that rain.

And, uh, it was not, no one knew my dad, his small business crumbled, he couldn’t get work. Um, and, uh, Oregon was just not a good place for, for my family. Um, so my mom ended up as a, uh, Starbucks assistant manager. I think at the time she was making $2,300 a year or sorry, $23,000 a year. And our rent at our apartment.

If I remember correctly, it was like 1300 bucks a month. So you can do that, man. So I, long story short, just started trying to hustle on my own and make ends meet

Andrew: How’d they get out of it.

Jeremy: moving.

Andrew: All right. So then you were entrepreneurial, you talked a little bit about your college experience actually, before we go in, I’m curious, how did you become entrepreneurial? I’ve interviewed a lot of people who said, I didn’t even know the word entrepreneur. I didn’t know this path existed. How did you discover it?

Jeremy: Yeah, I think, you know what I’m wondering that almost takes offense, that the fact that these, uh, you know, college does offer entrepreneurship as a class as if it can be taught. Because for me, entrepreneurship is about being a catalyst it’s just about starting and being willing to start a risking to start whatever the case is.

It’s different for everybody, but there’s, some people start things and are willing to do it. And some people don’t. And so to me, being an entrepreneur and entrepreneurship is just about starting.

Andrew: I, I don’t know about that. I, I think it’s great. The colleges are teaching this stuff because I think a lot of people have it inside them, but they don’t know it. They don’t realize that these things that they thought was bad because some teacher told them to stop selling candy is actually a real path in life.

And if you just say, look, here’s the thing. They’re much more likely to embrace it. And if you tell them a couple of mistakes that other people made, they’re more likely to avoid those mistakes. What do you think, Jeremy? I feel like I’m persuading you, but maybe you’re just being nice.

Jeremy: I think there’s a lot that goes into what we tell people, what people tell us and whether we believe that or not. So I think that part of the argument is very true at the end of the day, some of us are risk averse and some of us are not, and I’m definitely someone that has taken huge risks and, you know, catalyze things.

And sometimes it’s worked in some time.

Andrew: what’s the one risk was buying this place with cash. Did you literally just give him the envelope and walk away, trusting them with it? You did. You trusted them with the cash.

Jeremy: Correct.

Andrew: Okay. So that’s a big risk you then say, Hey, look, this business going well, life is good. I could just continue with this store. Do brokerage my whole life.

Maybe train a couple of people to do it for me so that I can hang out on the beach, but no, the next risk was selling the business. Right? You get good money from it. Hundreds of thousands of dollars. Okay. And so then you have this idea. I’m going to make it easy for people to figure out what it costs to ship.

So they don’t have to call up stores like mine anymore. You then go and you find a co-founder and a developer, the co-founder how’d you find that

Jeremy: He bought my store. that bought back and post was a kind of a, a quiet closet genius. And I found that out over time and how smart he

Andrew: him a genius. How did, why why’d you want to park? Why did you want to partner up with him? I know how the story unfolds. I know what he was able to do, but how did you, why did you want to partner with him?

Jeremy: I wanted to partner with him cause he was just a good guy, real Mo mild-mannered easy to work with, easy to kind of spitball ideas and figure things out. And he was a good co-founder because he’s a good problem solver. Like you really need. I mean, with the difference between buying something that’s broken and starting from something from scratch, you start something from scratch.

You don’t know what doesn’t work or what works with something that’s broken that you buy, you know, it’s failing at least, you know what doesn’t work and it’s easy to, you know, and faster to change it. So you really need really quality problem-solvers on your team. And he’s, he’s great at that.

Andrew: How did he get the money to buy the store?

Jeremy: Um, I don’t know the answer to that. Whether his family, I don’t know. Yeah.

Andrew: Okay. All right. So then you partner up with him and you need a developer. What’d you get this developer who built the first version of ship hock.

Jeremy: So a friend of mine said, Hey, I use this software. It’s amazing. I know the developer because I talked to him. Cause I think the software is so amazing. So let me introduce you. So he introduces me and I don’t know anything about software and we had raised a little money and so I made a deal. I interviewed a bunch of developers chose this guy, cause my friend knew him.

So obviously that makes it a good idea. And um, he, he gets to work and uh, you know, meanwhile, I’m trying to think, thinking about how to launch this business. And I wasn’t in the startup ecosystem. I was too into the small business and shipping world. So I didn’t know about tech crunch at the time or any of that.

And I discovered disrupt problems. I discovered disrupt truest a couple days too late and I couldn’t apply for the battlefield, which is really why you want to go disrupt.

Andrew: So, so talk about the difference between what’s the battlefield and what’s the other one that they, that they,

Jeremy: So the alley was, was for suckers like me. That’s where you spend money to have a booth.

Andrew: Can I tell you something? So Jason Calacanis was the co-creator of this event that became the tech crunch of disruptive and his whole frustration was that entrepreneurs need to pay in order to show their new thing. So he was going to let them speak for onstage, for free. And that’s being that’s on stage.

What is that one called

Jeremy: The battlefield.

Andrew: the battlefield. Then I think they said, you know what? We need another way for other entrepreneurs to come in. And they started selling these tables. Which in all due respect to him, they’re selling access. You’re rolling your eyes. Even to this day, you’re frustrated. How much money did you pay to get a booth?

Jeremy: I don’t remember, but it wasn’t cheap. And as a startup nothing’s cheap, but it wasn’t cheap,

Andrew: And what’s the, so you go in there and you say, I’ve got my booth, my developers going to create the first version exactly. As I asked for, this is a friend of a friend. Um, the first, when you go into the booth, what do you realize is wrong about the booth.

Jeremy: Nothing was wrong about the booth we went to, to disrupt in New York, we didn’t do the San Francisco one because the New York one was sooner. So we fly in and we’re going to meet the developer to take possession, to see that the app to take possession of it. And we meet him in times square at one of those huge restaurants there.

And we’re like the only people in there, it was real weird. Um, and so we go in, he pulls up this laptop, we’re sitting in a booth and he opens it, dials in the URL and the thing doesn’t work. And he might, we are at disrupt like this is the morning of the day that we’re supposed to go and start hosting and showing people this demo.

And when I say it doesn’t work, I mean, you click buttons and nothing happens like the goo, the gooey is a mess. Like everything is just, it just doesn’t work. He doesn’t have an answer. He doesn’t, he’s just kind of like hemming and hawing and just saying, well, you know, uh, we need more time and there’s no way to get this right.

The first time.

Andrew: I’m amazed that he would even show up that he wouldn’t just say, look, there’s a problem with the airline. I can’t make it over. He shows up though, at least

Jeremy: yep. No, he showed up and then we were sitting there and we’re like, crap, what do we do? And so we had this big, big screen iMac on our table and we just had to come up with a plan and we came up with a plan to, you know, you could say fake it till you make it type plan where, but really our, our plan pivoted from how do we show people what we’ve done to, how do we get on stage?

Andrew: because you realize, look being on stage is the number one thing. That’s where the that’s where the investors actually see you in the alley. Do they walk around and see you?

Jeremy: They do. We met a lot of people in the alley, but not as many, like most of the investors don’t only some did at that time. I don’t know today. I mean, I’ve been to tech crunch a few times and it doesn’t seem like, it seems like the investors are pretty, pretty occupied in there. Their time is taken elsewhere.

So if you, if you came up, um, but we really went in and so one of our, our, our kind of tricks or secrets was, you know, I had. I had my, my speech dialed. I knew what I was going to say. We knew how we were going to get votes so we could get on the battlefield. Like we knew everything before we even walked in.

So our product may have been terrible, but we had a plan that we were going to execute and we went in and executed the plan and enter the second day, you know, there were, we’re getting all a little nervous. We’re like, Oh, we don’t know what happened to this work or not. And this, this like a, you know, PA guy comes up and he’s got like microphone in his ear and clipboard.

He’s like, could you be ready to speak in 30 minutes? If you, if we needed you. And I said, absolutely. He goes, okay, come with me. And he takes me back to the green room.

Andrew: How did you get, how did he, how did you get him to say yes to you? Well, how did, how did that happen? Why did he come to you?

Jeremy: I think he came to me because we got the most votes. The votes were

Andrew: acknowledge that you had the most votes.

Jeremy: He didn’t say anything at that time, he just said, come with me and take me to the green room. And I, and it was inferred. It was like, obviously something’s happening here. And he goes, okay, you’re going to be on after this, you know, whatever the next, these two are that are up before you.

So I sit in the green room for a little bit, and then, um, he takes me over, uh, to the back back of the stage and the, the team that was on before me and keep in mind, these teams had, uh, supposedly I didn’t, I wasn’t involved in it, but supposedly they had mentors and you know, VFC advice and they had plenty of prep time.

And the team that was performing, it was just really struggling. The audience was asleep. Um, they, they was just, they were having a hard time. And so I get up and lucky for me there, the BMC gets up and says, okay, everyone give this guy a break. He just learned he was coming up here. He hasn’t had time to prepare.

Right. So he’s, he’s like basically telling everyone, I know this was boring. This last one, but this day is going to be even worse. I get up and, you know, I usually, I usually, I have three little boys and my wife always talks trash on me. So I usually tell a joke about my wife’s trash talk or my three little boys.

And I stop, I start with that and audience is just, I mean, snoring, like no one, no one says anything and I just keep pushing through. And, um, by the end I was like, yeah, that, that went really well. And then Deval started nailing me with questions and.

Andrew: I didn’t, I didn’t hear that in the presentation. I guess they edited that joke out, but you did a really good job explaining the problem. Then you went through the solution. You anticipated people’s objections. As I said earlier, you anticipated that the objection would be, Hey, I can go to FedEx right now and on their website, get a price.

And then you described the whole thing. Nevada didn’t think nailed you so much. As I thought, what he did was. He added on. He said, I, I wish you could do this. He wanted you to be able to come to his house and pick it up and rabbit con the investor. Right. Okay. And so that tells me that. And he said, you spend too long on the problem that tells me he was really engaged and he was buying into it.

And when he suggested I’d like a task rabbit to come to my house and pick it up, you said we don’t use them specifically, but we’ll use someone like them. So you anticipated his needs. You wowed them. You come off the stage. People are now interested in investing you’re off and running with your business.

That isn’t what you ended up building, building. Let’s talk about how you built the first version and how you took it from what you did then to where it is today. But I first got to, I’ve got to talk about my second sponsor. It’s a company called SaneBox. How insane Jeremy is your email inbox? What are you drinking?

Jeremy: Um, that is diet Dr. Pepper,

Andrew: Uh, I was hoping it was a whiskey. It looks like a nice glass and

Jeremy: not this early, not as early. It is a nice glass. I’m tricking myself,

Andrew: What’s your drink of choice when you’re drinking?

Jeremy: probably a margarita.

Andrew: Uh, mine is a rye whiskey lately. Not so much. Scotch. Scotch is a little bit too light these days, but I don’t drink much. Now that we’re in COVID lockdown. I like drinking with people, not on my own.

Um, alright. How insane is your inbox? All right. Tell you what happened to me. I got so nuts that I wasn’t responding to people. Even people who were working for me, people who were buying from me, I wasn’t responding. It was going crazy. And I hated my day. I actually went back and looked at my old journal entries recently because one of my guests, uh, Ady painter said that he looked at his journal and started journaling more and it helped him.

It’s helped me a lot. And I also started to see how much I focused on my frustration with email. What I ended up doing was asking my assistant, Andrea, here’s my access to my inbox, go into my inbox and go clear out, clear out the stuff that’s junk. And then let’s sit together and clear out the rest of it together.

And that helped, but she was in my inbox and I thought it’s sometimes she’s not getting to it as early as I am. Sometimes during the day I need more help. And I found this thing. SaneBox Jeremy Weiss, our previous producer mixer G texted me and said, this is amazing. I sign up for it. It is amazing, dude, Jeremy.

What they do is automatically they organize my email stuff. That’s just like news. They bucket into news stuff. That’s from people who I don’t look at the automatically bucket into that. They just organize the whole thing. And all I see is stuff that matters. And if I send some email, like, I don’t know who I’m.

Uh, some, some friends sub stack email into what they call the black hole or, or spam into black hole. They get trained automatically. Um, SaneBox does it automatically sends future messages from them into what they call a black hole? So I don’t have to get bothered with it. Now my email went from over a hundred a day to about 10 in the morning, 10 email in the morning, I can handle that.

That’s the beauty of SaneBox. I’m going to talk about it all day long and people will not understand it until they try it for themselves. They’re letting you, if you’re listening to me, try it for free right now. All you have to do is go to sane box.com/mixergy. You get to try it for free, but more than that, what I want you to know is yes, go sign up for them.

But I am benefiting so much from them that I’m going to give you my email address right now and recommend that everyone was listening to me. Email me, please. Even if it’s just to say hi email, here it is andrew@mixergy.com and let’s see how good SaneBox is at helping me get through all my messages from people who are listening to me.

Thank you, sandbox. All right. First version. Did you ever get your money back from the developer actually?

Jeremy: No, no, that was a, I think right around a quarter million dollars down the drain.

Andrew: Done. All right. You start from scratch. Who writes the next version of the, of the software.

Jeremy: Yeah. So we go back, we go back to Santa Barbara and we’re looking at, you know, we, when we left that, that a stage, it was a whirlwind. I mean, my cell phone just blew up. We’re in taxi cab, the taxi cab going from, you know, well, most calves at the time and not most Uber’s, um, going from, um, investor office to investor office.

It was great, but we get back and we’re confronted with reality, which is we don’t have a product. And lo and behold, um, you know, I go to sleep that night and trying to figure out what to do. My co-founder just goes and teaches himself Ruby on rails. And within like a month, he had rebuilt the entire product himself.

And I was, I was like, Hey Aaron, why couldn’t we just do that the first time? Uh, but the he’s super sharp. So he just figured it out,

Andrew: This is him learning Ruby on rails, creating the very first version which did what.

Jeremy: which did nothing other than tell a shipper what the cost was for the item they wanted to ship and then told them which carrier would honor that price. They couldn’t book it. They couldn’t get paperwork. Couldn’t track it. Nothing else.

Andrew: But they would, how would it know it was, was he actually pulling data in from the sh from the shipping companies?

Jeremy: No, that’s our secret sauce in how we work and how our, how our algorithms work. Um, so I don’t want to divulge all the details, but, um, we look at items and item details, not generic boxes and pallets. So most of our competitors, if not, all of them ask you to say, Hey, what are the dimensions of the box?

What’s the way to the box. And what we look at is that person just bought a yo-yo and a book and, you know, some pimple cream, like what are the actual characteristics of those items and how should those be treated?

Andrew: Ah, you know what? I’ve done that I’ve sold a few things on eBay. What I end up doing is I don’t know what my old sports watch ways I’ll go to Amazon and see what it is. I don’t know what size box then I start to estimate, but you know, to go back and see what it weighs, you know, the dimensions and then you have box dimensions that you can somehow figure out.

Um, okay, so you get the first version up and running you then start selling it to who, who was using it.

Jeremy: Yeah. So our initial or initial market was online launches and marketplaces. We, uh, anyone selling used goods online and we did very well out of the gate, like just took off

Andrew: People who are selling, how many items a month would you say?

Jeremy: I mean, smallest, uh, smallest shippers were selling, uh, sending, uh, dozens of biggest shippers were spent sending thousands, maybe tens of

Andrew: How’d you find them

Jeremy: They found us because the need was that great to answer that

Andrew: that they were just starting to Google and you were using, I imagine some SEO.

Jeremy: a Google SEO, we, you know, around that tech crunch event, we had a bunch of, um, a bunch of, uh, media attention. I can’t tell you how many people came because they saw that tech crunch video that, that presentation, and they just said, Hey, we saw this, we need this. So out of the gate, it was great. And we were acting as like a broker at the time.

So we’d make a margin on the freight. And then we transitioned to a, more of a SAS model. And at that point went and tried to sell to the broader market, which is the people selling new goods and it just crashed and burned.

Andrew: Who would it be? What do you mean? People selling new goods.

Jeremy: So the people selling used goods are very different than the people selling new goods.

So if you go to Amazon and you want to buy a book, you know, you know, most of the time that book is new, that’s coming, right? You go and buy, you know, most of the stuff we buy is new, but these auctions are selling used stuff. They’re selling old stuff. And the people selling new goods, the way the warehouses work, the way we were pricing and packaging and messaging, the product just didn’t work.

And so we basically dove headfirst into Geoffrey Moore’s chasm and swam there for about, you know, I don’t know, 12 to 16 months until we figured out how to sell the product we had built to that, that broader market.

Andrew: the broader market, meaning somebody who has, um, a new product, like a fish tank or Allbirds, they’re selling it from their own warehouse. You want to know how to get to them and the challenge getting to them. I still don’t understand why it was so hard to get to them.

Jeremy: It wasn’t hard to get to them. It was, they, they were not digesting our sales messaging

Andrew: Oh, because if you’ve got something that’s used, it’s different product sizes, different weights, different boxes. Got it.

Jeremy: And it’s almost impossible to, to send it if you don’t can’t price it.

Andrew: Right. Versus if you’re selling something brand new, it’s so consistent. You don’t think you have a problem. You’ve got a price from ups. You accept the price maybe from FedEx and you’re done. What did you do to convince them,

Jeremy: Yeah. Or it may just not be a big enough problem. Right. Maybe the other problems.

Andrew: The bigger problem is how do we get more customers? Not how do I shave a few bucks or how do I speed up by a day?

I just accept that that’s there and now I get more. Okay. So what did you do.

Jeremy: So we, um, we basically ripped our ideal customer profile apart and we started and rebuilt it from scratch exactly how we, how we looked at our customers, how we targeted them, how we talk to them, what w what they thought was important. And we PR we ignored that old profile.

Andrew: Why, why would you do that? You told, I think you told our producer, this was hellacious for me because you had to let go of majority of the people who worked for you. Right. Why, why did you let go of the past before you figured out the future?

Jeremy: Because we didn’t, I mean, uh, you’re the cash in the bank is your, is your lifeblood

Andrew: were losing money on them.

Jeremy: We’re losing money on, on everything. We weren’t burning cash. Cause we were trying to grow fast and we had scaled to, to keep up with the growth in that first market, which was great. It was just a false start. So we scaled back radically. It was one of the, you know, incredibly painful, terrible time. Uh, but then as soon as we S as soon as we rebuilt that ideal customer profile, everything started to click.

Andrew: What did you, what did you do? What did you learn?

Jeremy: Um, what, that’s a good question. I’m trying to think about how to answer this without telling all my competitors, how I find all my customers. Um, what we learned was, well beforehand, we thought that if someone sold furniture, for example, that that was that we knew enough about their, their problems and their pains to be able to help them.

And that was wrong. We had to look at different elements of the profile and prioritize those.

Andrew: So it’s not what they’re shipping, but it’s who they are. The

Jeremy: Who in the business who the business is and how all their systems work and work together and where the holes in their systems are, was more important, radically more important, what they sell, what they ship. Most of us look at you look at shipping and you’re like, well, what are you shipping? A book or a couch, right?

It’s like, that’s how we think about it. And that was the absolute wrong way to target.

Andrew: And your pro profile instead is not what they’re shipping, but who they are. And so who is it? What size businesses are you working with or is it warehouses?

Jeremy: Yeah. So we, we target mid-market companies, retailers, manufacturers, distributors, who are on an ERP, right? They’re not, maybe they sell a Shopify or a enterprise resource planning software. So as you’re, as you’re scaling your business, as you’re going from, you know, one Shopify or WooCommerce store in your garage, up to the next, the next step, you’re getting a warehouse.

You start approaching those low single digit thousands of shipments a month. Can’t keep managing all that in your e-commerce backend. You have to start transitioning to. A product that’s going to help you scale into the tens of thousands or hundreds of thousands of orders a month. And that’s where the ERP like a, like a NetSuite or an Acumatica come into play, and then you need shipping software to support that.

And so that’s what we started started noticing. And we really help customers usually who are shipping somewhere between 5,000 and a million orders a month is our sweet spot

Andrew: do you have a customer that you can, that you can tell us about?

Jeremy: customers. I can tell you about, um, one that I love to share. The story of is actually based up by you is Grove collaborative, uh, Grove collaborative sells a natural and clean, uh, home products and personal care products. Uh, they’re actually a direct Amazon competitor head to head when they, when we met them, they were very small and they’ve since scaled radically, their last evaluation was over a billion dollars.

Um, and they’re delivering things like Meyer’s soaps and, you know, green home cleaners and then personal care products do a direct to people’s homes.

Andrew: I see them right now, grove.co and they have their own warehouses.

Jeremy: Yeah, they sure do.

Andrew: Ah, got it. Okay. And so they need to find it and they could compete. I could, I’m looking at their site right now. They’ve got seven generation. I think I could get that from Amazon. They could compete with Amazon on prices and delivery.

Jeremy: Correct. And not only that, we do go back to our story about authenticity. Um, they are so fanatic about their mission. They, one of their current campaigns is beyond plastic where they’ve committed to having no plastic in their supply chain. By 2025,

Andrew: uh,

Jeremy: they’re doing great things and the companies, their results are showing for it.

Andrew: I didn’t realize how much of an issue this was, but literally this morning driving my kid to school, he says, uh, I had to put some lotion on my hand cause I’ve run so much in the cold weather here in San Francisco. My hands are cracking. I put it on. He says, you know, dad, you shouldn’t be using plastic.

Where are they getting it? And I don’t know. I didn’t want to ask him and make him feel, um, Uh, self-conscious about it, but it could have been anywhere. It could have been, as school could have been afterschool. It could have been, his friends could have been, uh, the podcast that we play at night for him, it’s coming in from any one of those places or all of them.

And they cared that much. Got it. And so Grove is saying, all right, we’re going to take care of it. We’re not just going to, and that’s going to be part of who we are. It’s not going to be a part of it. It’s going to be the part of what people know about us. All right. And then you wrote the book. I wouldn’t have thought that somebody in the shipping space should be writing a book.

That there’d be a big enough audience, but there is a big audience you’re doing a lot of these podcasts. I’m imagining to help promote it.

Jeremy: Absolutely.

Andrew: Podcast is helping

Jeremy: Podcasts. Yeah, it’s great. Getting the word out. I mean, the reason I wrote the book was to get the message out, right? Small and mid-sized companies, feed families, build communities, and they need the tools to be able to compete against the giants. And so that’s, that’s why I wrote the book to set the landscape and then hopefully give them some information and get them a headstart there.

Andrew: All right, 10 years from now, we do an interview. What’s your ideal world look like when it comes to shipping?

Jeremy: My ideal world. Oh, when it comes to shipping, is that independence have just as much power collectively. As the big guys, the Walmart’s Amazon’s Alibaba’s do it when they’re close supply chains, right. They’re building, these companies are building closed supply chains. And if you don’t take part in their marketplace that you can’t take part in, so you have to sell your soul in order to, to pay the price of admission.

And I want to see the independent merchants have just as much power outside of that because they’re working with platforms that aggregate their independent volumes.

Andrew: And you know, when I think about the benefit of that, the one thing that comes to mind is the packaging that a box comes in. Really, it helps set the stage for what you think about the product. When you get stuff delivered from Amazon, from these other companies, it just looks the same and it takes away the specialness of the opening.

And instead gives it to Amazon. You’re thinking that could be as special as the box could be a specialist what’s inside of it. Right?

Jeremy: Absolutely. And I think in 10 years, I’m hoping that won’t even be a box.

Andrew: You mean the product itself might be coming into my door. And

Jeremy: The product is stuffed with some other packaging that’s protective that, uh, degrades or, uh, can be recycled or reused. There’s a bunch of startups working in that space to solve those problems, but I’m hoping it’s still not the same plastic wrap and all wrapped in cardboard that we’re using today.

Andrew: I hope that too, you know what my ideal would be is. Um, fast delivery from any merchant, they should all have access to same day delivery. If not 24 hours, they should all have access to my garage or some box in a safe place. And like you said, I don’t want the, I don’t want the extra boxes and things like that.

And, and I’m, I’m less concerned about the environment that I care about. It I’m much more concerned about my day-to-day life. I basically have like a shipping station here in my house where, when Amazon delivers the boxes of the bags of groceries, we have 50 different boxes. It feels like in our house because I guess they don’t have to pay the California 10 cents per bag fee.

So we get flooded. They will take one item and put it in two boxes, no joke. And two bags, no joke. And then if we get stuff delivered from Amazon proper or from someone else it’s box with bubble wrap, Oh, Olivia just got something delivered yesterday for, um, in case of emergency from a company called June again, another box that we then have to do something with.

It’s just insane.

Jeremy: I’m with you. We have the same problem you put that recycling can out on the curb at my house. And every week it’s just overflowing with cardboard, even on the weeks that I think we didn’t buy that much.

Andrew: That’s exactly. That’s exactly the problem. And I wouldn’t think it’s a problem, but the, the garbage people will tell us that they won’t accept it if it goes, if it overflows the garbage. All right. So the website for anyone who wants to go and check you guys out, it’s ship hawk.com. I really liked that domain.

I want to thank the two sponsors who made my interview happen. The first, if you’re hosting a website, whether it’s e-commerce content, anything else? Go check out the prices at hostgator.com/mixergy. They will make it easy for you to compete and grow your store and sell, and basically just create hostgator.com/mixergy.

The second, my email address is out there all the time. Andrew, at mixergy.com and I’m grateful to everyone who emails me and I’m grateful to SaneBox for making it easy for people to email me, go to sanebox.com/mixergy. If you want a free trial of their software to experience what I’m experiencing and finally, over shoulder.

I see Jeremy’s got that book adapt or die. You’re good storyteller, man.

Jeremy: Thank you.

Andrew: All right.

Jeremy: Appreciate it. Thanks for having me.

Andrew: Congratulations on the book. Thanks for being on here. Bye bye everyone.

Who should we feature on Mixergy? Let us know who you think would make a great interviewee.

x