Spotting Ecommerce Trends in Shipping Data – Laura Behrens Wu
Craig Cannon [00:00] – Hey this is Craig Cannon and you’re listening to Y Combinator’s podcast. Today’s episode is with Laura Behrens Wu. She is the CEO and co-founder of Shippo. Shippo’s a multicarrier shipping API, so that means that Laura knows a ton about shipping and we went over a bunch of that in this episode. One of the the fun facts is that you can ship a 20 inch alligator in the mail, which I had no idea you could do. If you want to read the transcript of this one, it is at blog.ycombinator.com and the video is up there as well. Alright here we go. How about we just start with a quick intro?
Laura Behrens Wu [00:31] – Cool. Yeah, thanks for having me. My name is Laura, I run a company called Shippo. We power shipping for e-commerce. What that means is, we connect our customers, who are e-commerce stores, platforms, and marketplaces, to a network of different shipping providers, and then we help them figure out which provider to use for which one of their packages. The reason why people care about shipping today is that shipping directly affects conversion rates. So it’s no longer just a means to an end to get your item from A to B, e-commerce stores, they need it to be able to be able to convert their customers, because customers are expecting free and fast shipping, Amazon Prime has taught them that, and whenever they see shipping rates at checkout that are unexpected or too high, they drop off and they go to Amazon to try to find the same things.
Craig Cannon [01:12] – Okay, and so how does your customer interact with Shippo, exactly?
Laura Behrens Wu [01:15] – It’s an API, it’s a RESTful API that they can integrate. Either they integrate the API or they use the dashboard that we’ve built on top of the API, both work. If you integrate the API, there’s more flexibility, you can do more with that. SMBs that are just getting started that don’t have developers in house, they typically just use the out-of-the-box dashboard solution.
Craig Cannon [01:36] – Okay, and so what’s a normal customer of yours like? Like what do they make? What do they sell?
Laura Behrens Wu [01:41] – A normal customer of ours, they’re an e-commerce store, they sell products that are differentiated, they have their own brand, they don’t want to sell their products on Amazon. They want to own their own brand experience, sell through their own e-commerce store, and ship typically either out of their own workshops or a warehouse, a 3PL that takes care of shipping for them.
Craig Cannon [02:05] – And so what’s a 3PL for people who aren’t in the game?
Laura Behrens Wu [02:06] – A 3PL is a Third Party Logistics provider.
Craig Cannon [02:09] – Okay, and did you know anything about this stuff before 2013, when you guys started?
Laura Behrens Wu [02:16] – I did not, and I would never have imagined that I now know all of these things. It’s been crazy. I started this as a complete logistics noob, and I got into e-commerce by pure chance when trying to build an e-commerce store on the side together with my co-founder, Simon. We built an e-commerce store using Shopify. It was a really easy solution, and it was just a fun thing to do on the side. And then when we tried to integrate or connect with different shipping providers, we realized that the technology experience provided by shipping providers was just so different compared to the technology experience provided by Shopify or Stripe. The shipping providers aren’t tech companies, so their API documentations aren’t as bright and intuitive. You have to be a logistics expert to be able to read the documentations. Sometimes you have to request API access, or it’s a SOAP API. It was just strange to us that everything’s been solved except for the shipping component. And it’s a frustrating experience, so we were like, why is there nothing comparable to Twilio or Stripe in the shipping industry? Let’s give that a try.
Craig Cannon [03:30] – Were there other kind of critical understandings that you didn’t quite get in the beginning, that now are obviously as integral to running a shipping company?
Laura Behrens Wu [03:40] – Yes. We were learning on the job. I mean, we didn’t know anything about shipping back then, and we tried to solve shipping from the customer perspective, and I think that was a good perspective to have. So we weren’t influenced by the restrictions coming from the shipping industry, we were able to look at it from the perspective of this is how an e-commerce store wants it to be, and this is what modern technology looks like. Let’s build it like that. I would say we, back then, I’d say underestimated just how different the different shipping providers are. Like, there is no standard across different shipping providers, not in terms of pricing, not in terms of technology, they’re all totally different, and building that layer of abstraction on top was harder than expected. But that’s now also a great competitive advantage to have.
Craig Cannon [04:37] – Okay, ’cause who are your competitors right now?
Laura Behrens Wu [04:39] – There are a couple of incumbents out there, like Stamps, Endicia, Pitney Bowes, and then there’s another company in this space called EasyPost. We would consider them our main competitors, or the most comparable companies out there.
Craig Cannon [04:51] – Okay, got ya. As I was listening to a bunch of the podcast interviews you’ve done before, I’ve heard you talk about many of the same things, because it’s obvious that you want to talk about shipping, and you’re excited about it.
Laura Behrens Wu [05:02] – Oh yeah, I’m super excited about shipping.
Craig Cannon [05:05] – One of the questions I kind of wanted to start off with, then, is what are you passionate about that you don’t get asked about a lot?
Laura Behrens Wu [05:12] – That’s a great question. I think what I would like to do more of is traveling, running, and reading. There is not that much to say about all these things. Okay, wait, when I go travel, I think leaving the Valley, as soon as I leave the Valley, I’m able to see, or look at things from a different perspective. I’m not in the nitty gritty details anymore, I don’t really care about how it’s being done operationally. I can think about the big picture and come back with great ideas. Then also just look at how people, like last year I traveled to a wedding in the UK, and there was no cell reception in that little village where the wedding was. People were still living there. They didn’t care. People were living in a village without cell reception. Helps me realize how things here in the Valley are not normal. They are maybe solving the problem for a small amount of the population, but that’s not how everyone thinks out there. We, for sure, want to build solutions that are for more people than just people living in the Valley.
Craig Cannon [06:22] – If you’re selling to small businesses, right, that are trying to differentiate themselves and not go on Amazon, how do you reach out to them if they’re not necessarily even that technical?
Laura Behrens Wu [06:33] – Yeah, so I’d say small businesses is one area that we’re selling into. We’re also selling into platforms and marketplaces, and then anyone who wants to compete with Amazon. It can also be a bigger business. One of our customers, for instance, is eBay that’s on the marketplace side. But we’ve learned that it’s really hard to sell someone a shipping solution if they’re not looking. It’s not something that other people are passionate about, right? It’s more an inside sales process. When people are looking, when something is wrong, something’s broken, too expensive, shipping is vital enough that they do pretty thorough research, and then they will find us at some point. When they find us, we want to capture them at their intent, and make sure that they’re finding what they want to find. So, like having the right keywords, having the right landing pages, and just handing them exactly what they’re looking for. But it’s really difficult to get someone excited about shipping when it’s not a need.
Craig Cannon [07:29] – Before we started, you were talking about people basically connecting all of these things together now. What are your thoughts on that? I mean, you said it wasn’t a fully formed idea, but what are you thinking?
Laura Behrens Wu [07:40] – I was thinking it’s easier than ever today to build your e-commerce store online. You don’t have to be a developer. There is less up front cost because you don’t need to invest into a physical retail location. Everything’s online and you get Shopify, you get Stripe, you get Shippo maybe, or another shipping provider, Facebook ads, everything is out there, you just connect it together and then you don’t have to build your own infrastructure anymore. All you have to do is find or make a product that is differentiated enough so that it’s not out there on Amazon or somewhere else where people can undercut you in terms of price, and then you need to build an emotional connection with your customer. I think e-commerce today is a lot about storytelling, it’s a lot about making sure that customers connect with you, and develop some sort of feeling or attachment for you, and then you use the channels like Facebook, Instagram, Snapchat if you’re like millennial, or GenZ, whatever those generations are called. Use the right channels to reach your audience, and you tell a personal story to them. And then people are proud to wear, I don’t know, Allbirds or to travel with their Always, whatever that luggage thing is called.
Craig Cannon [08:52] – I don’t know what that is.
Laura Behrens Wu [08:53] – And it seems like–oh, and then there’s the unboxing experience. Every part from when you ship the item to when the customer receives it, every step is carefully coordinated. You get the box, you unbox it. People film themselves unboxing it. And it’s a huge hit on YouTube. Or you, packaging is being designed to look pretty on Instagram, so that people can take pictures and share it with their followers. That was just my thought, how infrastructure is, how people don’t need to invest in building their own infrastructure anymore, it’s available out-of-the-box. And how, today, e-commerce is all about getting your customers to feel something for you, to feel attached to your product.
Craig Cannon [09:39] – I think we’re seeing a lot of companies like YC, like venture-backed and not ventured-backed companies that are really crushing it. Is there anyone out there that you think is doing it particular well? You mentioned Allbirds and this luggage thing. Maybe someone who’s less well known, that may be even your customer, that’s doing it really well that you can point to a reason why they’re successful?
Laura Behrens Wu [10:01] – I think Glossier is pretty well known as well. Should I talk about Glossier, or something less well known?
Craig Cannon [10:09] – I think they’re good. Not everyone knows about them.
Laura Behrens Wu [10:12] – Glossier is just a makeup company. And I think I know her story, Emily’s story, just from reading about it. I think she started as a blogger just creating a great following with unique content online. And then when she had that following and people were like looking at her as an authority in the beauty blogging space, she was able to launch her own beauty line. And on Instagram, the pictures are beautiful. It’s all, the packaging looks like it’s designed for Instagram. When I get the box, you open it, there are stickers in there, there’s a little pouch in there, so stuff that I didn’t order that she’s giving me for free, and I’m excited about it, and I see people posting about it. On Instagram, people are engaging with the posts and the comments, and she gives out referral codes, so people will keep talking about it and refer their customers, their friends, I mean. And then they re-gram, I’m not up to date with all these fancy terms. But they re-gram. If I post a picture of Glossier and it gets a lot of likes, they might re-gram it on their professional site, so I’m incentivized to post something so that I can get more followers if they re-gram it. I think they’re doing a phenomenal job just making sure that their followers are being engaged on the right channels, the channels that they’re active on, and that it’s not that corporate. When I look at their site, I don’t get a corporate feeling, I get the feeling that it’s a girlfriend telling me about makeup.
Craig Cannon [11:55] – So it’s working? Like you’re in the demographic and it’s working on you?
Laura Behrens Wu [11:59] – Oh, yeah. Oh, and the other thing is you can’t find it on Amazon. You can’t find it anywhere else except for on their site. And that’s the great part. If you sell a product that is too generic, someone else can sell it on Amazon and it’s easily replaceable or interchangeable. Then Amazon has some, you have Amazon Prime, so you save on shipping, it’s convenient, and you just get everything on there.
Craig Cannon [12:23] – I’m trying to think of a good example of someone doing well on Amazon and outside of it. Like, I don’t see a lot of that. I guess some mega brands.
Laura Behrens Wu [12:35] – What I’m seeing, or what I hear from friends who run e-commerce stores is they have tried Amazon as a channel, but it’s basically just cannibalizing themselves, and they’d prefer to keep their own brands or to be able to manage their own brands on their own websites to create that experience, to create the feeling and the loyalty.
Craig Cannon [12:59] – Yeah, that’s probably a good point. They don’t give you a lot of analytics around discovery. I wrote a book about shipping containers with my friend.
Laura Behrens Wu [13:09] – Oh really?
Craig Cannon [13:10] – Yeah, we did a Kickstarter a couple years ago, and Amazon’s been, we were immediately on there afterwards, ’cause we spent the extra Kickstarter money buying more books. It’s been super easy to sell. And I don’t really know if we would have captured fewer sales because we weren’t on Amazon? Because discovery-wise, I think it has less than 10 reviews. So I don’t feel like we’re getting sales that way.
Laura Behrens Wu [13:37] – Interesting. I see what you’re saying. So if it’s, like if you’re selling something on Amazon, the customer will also see other products that are comparable, which means that customers might get directed to your competitor’s product. And if it’s not something that’s heavily reviewed there’s no incentive for the customer to buy your product versus another product that’s been on Amazon for longer, that has more reviews. It’s interesting. I think Amazon is great for generic purchases, but it’s really, you don’t see Amazon making funny jokes on Twitter as a corporate account, you don’t see anyone tagging Amazon in their Instagram posts, it’s just that people, in their free time, don’t enjoy… It’s not a brand that people think about or talk about, it’s this generic, convenient, and pragmatic thing, but it’s not this emotional thing. At least, I’m not attached to.
Craig Cannon [14:32] – Do you think that Amazon will completely take over all of these prepackaged meal kits now? Is that thing that’s actually brand-differentiated? Or not?
Laura Behrens Wu [14:44] – Yesterday, I saw one of my friends post on Twitter that normally he would never make this peach-based sauce for dinner, but because Blue Apron sent him a kit with peaches in there and a recipe for whatever peach dish, he was making it, and he was loving it. That’s why he loves Blue Apron, because it gets him out of just cooking the same thing every day, and cooking something special in the same amount of time. I don’t know if Blue Apron is differentiated enough, but it seems like people get a homey feel from using Blue Apron products. I don’t know.
Craig Cannon [15:27] – I mean, look at all the copycats, right? They’re in every vertical. Maybe they’re just two different markets.
Laura Behrens Wu [15:34] – Like, personally, I am way too pragmatic. I just get my groceries. I cook what my mom taught me to cook and that’s it.
Craig Cannon [15:44] – Okay, so you might be there.
Laura Behrens Wu [15:46] – I might be the wrong target audience here. Oh, by the way, funny story. Blue Apron, when they send you stuff and it’s like one egg in the packaging, and the egg is labeled ‘egg’, and I’m like, I know this is an egg.
Craig Cannon [16:03] – Well it’s interesting.
Laura Behrens Wu [16:04] – I’m not stupid.
Craig Cannon [16:05] – It does make you feel a little gross. I think Trader Joe’s, for me, at least, is like the worst of them. Everything’s in a little plastic bag. And so I moved into an apartment a couple years ago and I had bought so much from Amazon that I was taking out the recycling that day, and I actually felt nauseous, as I was breaking down all these Amazon boxes.
Laura Behrens Wu [16:27] – But talking about recycling, the other trend that I’m seeing in e-commerce, is peer-to-peer selling. That seems to be on the rise again. People selling out of their own closets. If we look at PoshMark, Vinted, Makari, eBay, whatever those are called. Or even Facebook Marketplace, where stuff, especially it seems like young women and mothers selling used items and getting a lot of fun out of that, plus having the personal connection with a seller, so like selling out of their own closets, telling the story about when they bought this item, modeling this item themselves. Yeah, it’s funny. And then they put a handwritten card in there. It’s an interesting setting.
Craig Cannon [17:08] – So that is becoming more popular?
Laura Behrens Wu [17:09] – Yes, we have a lot of those on our platform, using Shippo to ship for their second hand marketplaces, and that’s a fast growing segment. I think it’s still a very small segment in overall e-commerce, of course, but it’s a growing one.
Craig Cannon [17:22] – What about all those box of the month clubs?
Laura Behrens Wu [17:26] – Ooh.
Craig Cannon [17:27] – Are those still a thing?
Laura Behrens Wu [17:28] – Yeah. I mean, there’s a box for everything these days. You can get, you name it, everything. I was surprised at… just Loot Crate, for instance, is a big one that we’re just looking at and it’s a gamer specific box. And then there are like sex toy boxes, like really everything. Anyway, I think it’s the convenience. And as soon as you subscribe to something, it is hard to unsubscribe. That’s the other component there. People like to be surprised. If you’re already paying for it, give them your credit card number once, and then you forget that it’s a recurring payment, and then you’re just getting the box every month. Making you so happy, all of that adrenaline and happiness, endorphine rush. Oh and then get one for your dog and cat as well. It’s crazy.
Craig Cannon [18:20] – I think a lot of those people are infamously known for you can sign up online, and then you have to call in to cancel, it’s like that kind of stuff. Are those on the rise, though?
Laura Behrens Wu [18:30] – And then they’re giving you the first box for free, but you have to give them your credit card number and then they charge you automatically afterwards.
Craig Cannon [18:37] – Classic, yeah.
Laura Behrens Wu [18:38] – I don’t know if they’re on the rise still. It feels like something that was on the rise two or three years ago, and now it’s dabbling. But it’s not… I don’t see it going away. But I am also seeing that some of these box companies, they’re also, in addition to the monthly box thing, they’re selling, having an e-commerce store where you can buy these items one-off.
Craig Cannon [19:01] – Okay. Are you noticing any other trends? ‘Cause now I’m just realizing that by being at the hub of all this, you kind of see what businesses are taking off.
Laura Behrens Wu [19:09] – Yes, so we saw all of these Segways being shipped late last year.
Craig Cannon [19:14] – Wait, Segways or hoverboards?
Laura Behrens Wu [19:15] – No hoverboards, sorry. Segways… Same thing for me. Yes, the hoverboards, we saw them being shipped, and then the USPS, or shipping providers actually had an extra regulation for hoverboards, not allowing them to be shipped anymore because they were dangerous and exploding.
Craig Cannon [19:32] – ‘Cause they were exploding.
Laura Behrens Wu [19:34] – We also saw a huge rise in vape companies signing up. That seemed to be a thing. Then there was this couple of months where people loved sending each other joke items. There was this when you open the package, there was glitter coming out.
Craig Cannon [19:53] – Oh, that was you guys? You were related.
Laura Behrens Wu [19:56] – We weren’t selling them, we were just shipping them. That was big. We even had poop in a box. I don’t know if it was real poop. We just see the name signing up and we don’t really care. And then that was a very smart idea, just financially, having a message on a potato. It was, I think $10 to get a potato shipped. And the potato would have your message written on top of it.
Craig Cannon [20:27] – What?
Laura Behrens Wu [20:28] – We had multiple of these stores.
Craig Cannon [20:30] – So it’s not in a box?
Laura Behrens Wu [20:31] – It’s not in a box.
Craig Cannon [20:32] – It just has a label stuck on it, and you guys do that, just like random size, whatever.
Laura Behrens Wu [20:37] – Whatever. I mean, so, we’re just providing the technology to print those shipping labels. They tell us size and weight and to and from address and you get a label. Whatever you want to ship, as long as it’s within the legal realm, we give you the label, you ship it, it’s fine.
Craig Cannon [20:53] – Have you guys gotten a bunch of money in the fidget spinner game?
Laura Behrens Wu [20:56] – Ooh, I think the fidget spinners are too small to make us money. Because you can put them in a letter. We want to ship something that is 3D.
Craig Cannon [21:08] – Oh, bummer. What about medical marijuana? Has that been a trend at all?
Laura Behrens Wu [21:15] – I think that is more like the on-demand delivery. We have a couple of stores on our site that ship like accessories for that. I think one of them is actually YC affiliated called Billowby. They’re pretty big, like the Nasty Gal for vaping. And other than we ship the accessories, but I don’t think marijuana’s allowed to be shipped, even in California. I think there’s on demand delivery for that.
Craig Cannon [21:45] – I was just wondering if that trend was going, like folks are lobbying now, to get it…
Laura Behrens Wu [21:51] – To get it?
Craig Cannon [21:53] – Within state shipping.
Laura Behrens Wu [21:54] – Here’s my favorite shipping fact. Out of some like past days, it’s still legal to ship an alligator with USPS, as long as it’s smaller than 20 inches.
Craig Cannon [22:09] – Okay, alive.
Laura Behrens Wu [22:10] – Alive, a baby alligator.
Craig Cannon [22:12] – Really? How do you package an alligator?
Laura Behrens Wu [22:15] – I have no idea, it’s not our problem. We give you the shipping label for the alligator.
Craig Cannon [22:20] – It doesn’t matter.
Laura Behrens Wu [22:21] – Yeah.
Craig Cannon [22:23] – Do you guys then, are you liable for anything? What is your problem?
Laura Behrens Wu [22:26] – It’s in our terms of services, what you’re allowed to ship and what you’re not allowed to ship. And as long as you stick to the terms and services, we’re fine, you’re fine. But our agreements with the shipping providers also are clear that we’re not liable for the things that our customers ship. So every customer is recognized as a separate customer with the shipping providers. But it’s our job to make sure that our customers know what the terms and services are provided by the shipping providers.
Craig Cannon [22:58] – And so the alligator is on there?
Laura Behrens Wu [22:59] – The alligator is maybe in the fine print. No, the alligator, it’s part of the USPS terms and services, the official ones, that the alligator can be shipped as long as it does not exceed 20 inches.
Craig Cannon [23:14] – Okay, that’s good to know.
Laura Behrens Wu [23:16] – I’m wondering what if it’s growing while it’s being shipped?
Craig Cannon [23:19] – It depends where it’s being shipped. It’s 19-and-a-half inches and it takes like five days.
Laura Behrens Wu [23:23] – I don’t know how fast alligators grow.
Craig Cannon [23:25] – Probably not that fast. Maybe if it gets lost, though? That’s really funny. What about all these other companies like– I once shipped my bike from Colorado to California. Are these companies doing it on their own? Are they just setting up basically just this front page and then they just ship with you? Are you seeing all these like basically SEO targeted shipping? Ship your bike, ship your camera dot com or whatever.
Laura Behrens Wu [23:54] – I see. There are two aspects to that question. Like if you ship something, let’s say from Colorado to California, I bet there are shipping providers that are focused on shipping from Colorado. For instance, in California, a regional shipping provider is called OnTrac. On the other coast side, a regional shipping provider is called LaserShip. Then there’s another one called GSO that’s here. So for each region, there’s shipping providers that are specialized on that particular region. And then there are also shipping providers focused on certain segments. In wine country, we have a lot of shipping providers that are just focused on shipping wine, and by having them on our platform, we’re also allowing our customers to discover shipping providers that they wouldn’t discover otherwise, because it’s such a niche product. It’s not only about the discovery, it’s also, yes, we’re shipping a couple, we’re having wine as one of our segments, but would that e-commerce store really want to go through the trouble of integrating a specialized wine shipping provider? And if they already have it, then they just need to enable it and are able to save money there. Your question about whether there are shipping providers that are specific for bikes, I think everything that’s less than 71 pounds, the normal shipping providers can ship. Then there are other shipping providers that are focused on less than a truckload. But it’s likely that these items, these SEO pages, are just giving the traffic to normal shipping providers.
Craig Cannon [25:26] – Oh, okay. Yeah, oh man, I got burned with that, too, shipping car tires. Total sucker for this stuff.
Laura Behrens Wu [25:33] – Well next time, you can just ask me. If you have more car tires that you need to ship.
Craig Cannon [25:38] – Like go upstairs. Do you guys deal with insurance, too? Is that a thing?
Laura Behrens Wu [25:43] – Yeah, we do. We have insurance on top of Shippo. And the other thing that is quite interesting about shipping is the tracking component. Because shipping affects conversion rates, it decreases cart abandonment if you have the right shipping options or the right shipping costs, but then after you ship your item out, it doesn’t stop there. Customers are wondering what is happening to their item along the way so they want to be engaged with tracking numbers, you want to be proactive about that, versus having customers write in, because if someone writes in, you need a live person to respond to that. If you just sent them push notifications with our webhooks about… Package has been shipped, package arrived at this facility, package will get to your house today. Like customers are going to think about your product whenever they get a notification like that. Then if you sent them suggestions about what else they could buy in your store in the same email, it could get them back to your website.
Craig Cannon [26:42] – Do you advise people on best policies for handling returns? I often find that all of those companies feel it’s their duty to innovate on new ways to have you send things back to them. It’s the worst.
Laura Behrens Wu [26:56] – That’s another thing that consumers take into account before they make a purchasing decision. They want to know if returns are possible and if return shipping is free. There are two perspectives to this. From the end customer perspective, it would be best practice to put a shipping label right into the box, and that shipping label most likely, like we provide scan-based return labels. That means unless it’s being scanned, the merchant is not going to get charged for it. You can print a shipping label free of charge, and when it scans we will charge you for it. But from the merchant perspective, you want to make the returns more difficult so that people are less likely to return their item, because once you return it, you need to figure out what to do with that returned inventory. There are these two different perspectives that are clashing. I would say to make it right, what I do admire about Amazon is whenever something is not right they will give you a free item, they will give you free returns and that’s made me very happy in the past, and I would just recommend e-commerce stores to do the same unless they’re seeing abuse of that on their website.
Craig Cannon [28:14] – I think the most famous one is REI. I guess. People were buying things off eBay from like 15 years ago and returning it REI.
Laura Behrens Wu [28:24] – Yes, exactly. If you’re giving people an opportunity to cheat the system, they likely will cheat the system.
Craig Cannon [28:31] – Okay, so you make it like a little bit difficult if people are abusing.
Laura Behrens Wu [28:34] – A little. You can also see if you’re converting the type of customers that are going to abuse the system, you’re likely converting the wrong type of customers. You maybe are going after the wrong target audience.
Craig Cannon [28:48] – Meaning like just too broad or just off?
Laura Behrens Wu [28:52] – Too broad, off, or maybe you’re having the wrong messaging on your website that is attractive to customers who are more likely to cheat the system.
Craig Cannon [29:01] – Okay, got you. So you guys are now what, four years old?
Laura Behrens Wu [29:05] – Three-and-a-half.
Craig Cannon [29:06] – And you’re like 60, what did you say?
Laura Behrens Wu [29:09] – 65-ish people.
Craig Cannon [29:10] – 65 people. How are you feeling?
Laura Behrens Wu [29:14] – Insane. It’s really unbelievable. I can’t believe it. We got super lucky that we found a space that is fast growing. Shipping is tied to e-commerce growth. It’s still very inefficient, the technologies aren’t great there, there’s not that much competition. It’s easy to innovate in that space, and to ride on the e-commerce growth wave. And then just in terms of people, I’m just… Walk into the office, there’s so many people there, I need to pinch myself. But it’s great. Working with, having the right partner has been super helpful. Someone who’s a partner in crime… I mean, we don’t commit any crimes.
Craig Cannon [30:05] – I get it.
Laura Behrens Wu [30:06] – Who’s like, who’s been working with me through this for the last three-and-a-half years. And then, of course, having the right supporters on the investor side as well, who can help me figure things out, who are also able to hire more senior leadership team last year, to put the operational experience in place.
Craig Cannon [30:28] – What are you working on personally improving?
Laura Behrens Wu [30:32] – I am always trying to improve, to be working on how to be a better manager. Me and my co-founder, we got an executive coach a year-and-a-half ago and are now working with a coach that’s been phenomenal. Understanding how to manage people, how to motivate people, how to give feedback in a constructive way. It’s all about communication, that’s the main learning from growing the team.
Craig Cannon [30:58] – Communicating how, right? Everyone will say that, right? Just like, be empathetic, and be nice, and listen to people, and all that stuff.
Laura Behrens Wu [31:06] – I would say the umbrella term for that is you need to be effective in your communication. And depending on what that person’s like… I like straightforward communication. I don’t like a shit sandwich. That’s effective with me. But then with other people, you might need to be more empathetic in your communication and understanding how to communicate to whom, and then remaining authentic and being able to be comfortable with that. That’s something I’m trying to learn and improve on all the time. The authenticity is the other important part. I’ve been trying to figure out what my personal leadership style is, how I’m most comfortable communicating and who I want to be. And then be absolutely unapologetic that this is who I am and I will walk the extra mile to this extent. But I can’t work with just everyone. It needs to work on both ends.
Craig Cannon [32:17] – When you’re hiring, executives, managers, do you kind of like divide teams based on how they take input from each other? Or do you just like, hey you’re not very good at dealing with people who can’t handle this direct communication.
Laura Behrens Wu [32:35] – I think what worked for me very well is to be very proactive about telling people this is how I communicate, and setting the expectation right, that this is just how I communicate. It’s not you, it’s me. And making sure that they know that I communicate like that to everyone. One of my flaws is, for instance, that I don’t celebrate wins that much. I’m always looking at the next milestone, and I’m quick to criticize, but I’m not quick to praise. That can be demotivating if people think it’s them. What I’m trying to tell people is, this is my flaw and I recognize it. If you’re not getting enough praise, please do let me know, because it’s not your fault, it’s my fault. I don’t want to put that weight entirely on me. I’m hoping that the senior leaders in my company can meet me half way and help me with achieving my goal of praising people more as well. When I’m not doing it, let me know and I will change, but please speak up and let me know.
Craig Cannon [33:46] – This comes out by having conversations with the coach, or do you journal this when you’re like here’s what I’m struggling with? What do you do?
Laura Behrens Wu [33:56] – The coach observes how I talk with my co-founder and we go together as well.
Craig Cannon [34:02] – Oh, they hang out.
Laura Behrens Wu [34:03] – Simon and I we go together to the coach, so we sit on that couch together. It’s like couples therapy but we’re co-founders. And then I am fairly self-aware about my shortcomings as well, and then I get that feedback from the leaders. We have 360 reviews and then we bring in those reviews to the coach to discuss. The most important part is that people shouldn’t be afraid about speaking up or like bringing in what they think could be improved, and making sure that they understand it’s being heard, and either that I acknowledge that this is a shortcoming and I want to act on it, or that I acknowledge that this is happening but I can’t act on it because it would be inauthentic for me to do.
Craig Cannon [34:57] – Inauthentic in that’s not how you would address that problem? I’m not sure what you mean.
Laura Behrens Wu [35:03] – If it doesn’t work with my personality and I need to change fundamentally who I am to be able to act on that feedback, I guess it would be… I just don’t want to pretend to be someone else at work every single day. Does that make sense?
Craig Cannon [35:19] – It makes sense, I just wonder like what is something that you would be like… I’m trying to think of a good example that doesn’t sound hyperbolic. Like I can’t be nice to that person because I hate them and this is inauthentic to me.
Laura Behrens Wu [35:30] – No, no. It’s, let me think about it… To stick with that example about praise. So I’ve been trying to hire people who are complementary to me, to whom it comes more natural to praise people, who have a more celebratory nature. And then with that, they’re able to balance me out. And we have people like that in the company and then instead of me having to always pop the champagne bottle, which would feel so awkward to me, have someone else do it. But I stand there, I clap, and I’m approving this.
Craig Cannon [36:05] – You just nod nicely.
Laura Behrens Wu [36:09] – Exactly.
Craig Cannon [36:10] – Do you read books or any of that stuff, has that been inspiring for you?
Laura Behrens Wu [36:15] – Yep, the favorite book that I just read a couple months ago was Shoe Dog by the Nike founder. That was, it wasn’t written by him, it was a biography about the founder.
Craig Cannon [36:28] – Oh, cool, okay.
Laura Behrens Wu [36:29] – So good, such a great book.
Craig Cannon [36:31] – I have to save that.
Laura Behrens Wu [36:34] – The best part about it, what inspired me the most was back then when he founded the company, there was no cloud, no internet, like communication was asynchronous. He had to write a letter to his manufacturer in Japan, it would take like three weeks to get there and he was sitting back in Oregon where he was based, and just wait for a response for an entire month. And it was mission critical and it took them a month to get a response. It’s a very interesting… Looking at it from a perspective of building a startup in a pre-internet time.
Craig Cannon [37:14] – Who are the other people that have inspired you?
Laura Behrens Wu [37:19] – I am German originally. I’m quite inspired by Merkel as well. She’s a tough leader.
Craig Cannon [37:26] – Is that why?
Laura Behrens Wu [37:27] – I’d say she has her principles that she sticks to. She just does not compromise on her own principles. The other thing that I admire about her is like she does not conform to the stereotypes of how a female leader should be like. She doesn’t feel like she needs to smile a lot or put on a lot of makeup or look anything like what the stereotype should be and she’s very comfortable and authentic with that.
Craig Cannon [38:00] – Yeah, do you enjoy talking about the female founder stuff?
Laura Behrens Wu [38:03] – Yes and no. I would like it more to be just a conversation about being the best founder or being a very good founder versus being a very good female founder, because in the end the market really doesn’t care if you’re a female founder or not, the market cares about your product. We could offer the best female-founded shipping company. If there’s a better male-founded shipping company, we’re not going to make it, right?
Craig Cannon [38:28] – It doesn’t matter.
Laura Behrens Wu [38:30] – Yes, so that’s the one side. I would love the conversation to be a little bit more about female accomplishments as well versus just being about the down sides of women in tech. Because there are a lot of great female accomplishments to point out, and they sometimes get under in these stories that are mostly harassment related. These stories need to be told, don’t get me wrong, they should be told, people should be held accountable for that, people should know what’s happening out there. But then I’d love to balance the conversation out as well by encouraging other women to join the industry. There are good stories that are happening as well.
Craig Cannon [39:14] – I think it scares certain people from even joining the conversation.
Laura Behrens Wu [39:17] – Exactly.
Craig Cannon [39:19] – They’re like, it’s always negative, I’m never going to comment. Yeah, cool. All right, so we’ve been here for like 45 minutes now, so what…
Laura Behrens Wu [39:27] – Oh, wow, time flies.
Craig Cannon [39:29] – Do you have advice for people? Like, just getting started? Like maybe even B2B like less-sexy startup stuff?
Laura Behrens Wu [39:36] – Yes, so I love the less-sexy space, because you’re solving a real pain point. You’re more in the background. It’s not sexy. At parties, people aren’t excited about my shipping stories, they’re like shut up, Laura. But still it’s mission critical to every business. And I just love building something that is solving a real pain point, that is a must have, not a nice to have, and you can actually charge for that as well. Every customer that we have on Shippo is a paying customer. There is no free trial, because it’s shipping. There is no free trial to shipping. The lock-in effect there is very strong as well. So I would say for founders just getting started, look at solving problems that are real problems that people can’t live without, where there’s an inefficiency that’s either causing people to spend too much time, too much money right now, and then any type of infrastructure business, I’m a big fan of that. On the more general side, I would say, now the logistics and the shipping space is becoming more interesting to investors. At the very beginning, people weren’t interested in the logistics space, and it was just a lot of remaining persistent and then not giving up, always tweaking the pitch, making sure that after every no you figure out another way to pitch it and find the next investor to pitch it to. I think we wouldn’t be here if we weren’t that persistent. It’s about remaining persistent but about the right things. Sometimes you need to know when to give up, but you need to be flexible about how you pitch things and who you pitch it to.
Craig Cannon [41:24] – Did you have any mental models you were using to figure out what was important? I think the more important thing is building the company, the raising money is kind of like tangential to a certain extent.
Laura Behrens Wu [41:37] – Oh, well if you can build a company without raising money. That’s phenomenal, too.
Craig Cannon [41:39] – It’s awesome, it’s a business. Everything doesn’t have to be a startup. But how did you figure out what was the important stuff to focus on?
Laura Behrens Wu [41:47] – At the very beginning it was mostly customer feedback. We were able to develop a bigger vision a little later in the process when we had the money to be able to sit down, take a step back and develop a bigger vision. At the beginning it was like this is the main pain point that our customers are facing and we want to solve this pain point for our customers. And we need to build x to solve it. And for that we need to raise x amount of money. And then we placed it in a bigger context like why is shipping important in the e-commerce context? So we were able to tell that story about the size of the market, the growth of the market, the growth of e-commerce to investors, to give them the big picture as well, of it’s a fast-growing space, there is a problem, customers are liking what we’ve built, and by the way, this is what we’ve built, and this is what we see the opportunity to be like in the big picture and this is how fast we’re growing.
Craig Cannon [42:41] – Okay, cool. Well then, I think my last question is, favorite place to go running in San Francisco?
Laura Behrens Wu [42:47] – Oh, okay so I normally run in Golden Gate Park. I live in Lower Haight, so from Lower Haight into Golden Gate Park, and then if possible, I do like running at Crissy Fields as well, but it’s more of a drive.
Craig Cannon [43:03] – Yeah. Okay. Are you training for anything?
Laura Behrens Wu [43:06] – No, that’s the one thing I do for fun and for fun only. If I sign up for a marathon or something like that, it would get into this competitive thing.
Craig Cannon [43:16] – Perfect, cool. Thanks for coming in.
Laura Behrens Wu [43:19] – Thank you.
Craig Cannon [43:21] – Okay, thanks for listening. So as always, please rate and subscribe to the show. If you’d like to read the transcript or watch the video, those are at blog.ycombinator.com. Okay, see you next week.