The Most Important Decision is Getting Started – Laura Behrens Wu
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Carolynn Levy – Hello, I’m Carolynn Levy, a partner at Y Combinator, and I’m delighted to introduce our next speaker, Laura Behrens Wu, founder and CEO of Shippo.
Shippo makes it easier and more affordable for e-commerce companies to ship goods. Laura and her co-founder started Shippo in 2013 and they currently process millions of shipments every month. Laura had her first experience with a startup while working as an intern at YC alumni company LendUp. She grew up in Germany, China, Ecuador, and Cairo, went to school in Switzerland and started Shippo in the U.S.
Please welcome Laura.
Laura Behrens Wu – Hi ladies. My name is Laura. I’m the CEO of a company called Shippo.
We power shipping for e-commerce. I am so humbled to be able to be here today. I attended every other female founder conference before this as a participant, and I would have never dreamt to be able to stand here on stage today to tell you my story.
My story in the last three and a half years, while it’s been a rollercoaster ride, there’s been a lot of ups and downs but there been a lot of good stories to share as well. Unfortunately, there won’t be time for Q&A after this, but this is my Twitter handle so feel free to tweet at me, and I have a couple of hours reserved after the speech to answer all of your questions.
My goal for today is to help everyone understand that there is no magic formula to entrepreneurship. There is no one single way how a great founder should look like. There is no overnight success. It’s a lot about hard work. It’s about being persistent. It’s about standing up again after you fall.
And I think the most important part about being a founder is making the decision to get started. But in order to get started, you have to have the courage, you have to have the confidence. And this is one of my favorite quotes, “Confidence was cash. You have to have some to get some. And people were loath to give it to you.”
I hope with this talk I can help you all get a little more confident by hearing my story. So what is my story? How did I get here?
I did not grow up wanting to be an entrepreneur. Back in 2013, I was stuck in a master’s program back in Switzerland that I did not enjoy. By pure chance, I ran into a YC alumnus, who is also a Silicon Valley investor. And when he offered that he would help me find a summer internship, I jumped on it. I really didn’t know what I was getting myself into. I had no idea what Silicon Valley was like. But it sounded exciting, it sounded like something I wanted to be a part of. So by pure chance, my CV got forwarded to a YC founder mailing list and overnight I had a bunch of interview requests in my inbox.
It was truly about being at the right place at the right time. And then not shying away from taking that opportunity. I ended up with a summer internship at a company called LendUp. They do a socially responsible payday loans. Back then, they were right before Series 8. And I was so in awe about the fast-paced culture that I was experiencing there. I knew that I did not want to go back. So I dropped out of my grad studies and I decided to stay.
I really wanted to start something by myself. So I reached back out to my now co-founder Simon. And together we decided to work on an e-commerce store. It was a curated marketplace for emerging designers and artists from all around the world. We wanted to tell their stories. This was something that’s been done before. It wasn’t very innovative, but we didn’t care. We just wanted to get started working on something, anything. And I think that is the most important decision that a founder can make, the decision about getting started. There is no need to overthink it. You don’t need to come up with a grand idea, just start working on something, on anything, and eventually, you’ll find the right problem to solve.
With the e-commerce idea, I approached my CEO back then, Sasha from LendUP, and I had asked him for his feedback, for his advice. And one of the things that he shared with me that I remember very clearly is to work on painkillers and not vitamins. What he meant by that was, to find an idea, to work on a product that people can’t live without, that’s also a real pain point. Don’t build something that is nice to have, but not must have, like a vitamin.
The e-commerce store we were working on back then was for sure a vitamin, not a painkiller. But while working on the e-commerce store we discovered how much of a pain point shipping is to e-commerce. We realized that shipping rates are intransparent, that they’re hard to compare, that shipping eats into the margins of e-commerce store owners. We also realized that shipping technologies are difficult to integrate, that they’re old and outdated. Working with the shipping Technologies was a very different experience compared to working with the technologies of Shopify or Strype. And we were surprised that there was no Strype for shipping. So that’s what we set out to build.
Shippo is an API that connects our customers, who are e-commerce stores, marketplaces, and platforms, to a network of different shipping providers. We help them get access to that network, we help them optimize providers, we help them get shipping labels, get tracking numbers. In short, we take the pain out of shipping. We turn shipping into a competitive advantage instead of a cost center.
Now that we had an idea that we thought was worth working on, we had to get funded. Both my co-founder and I were first-time founders. We didn’t have any savings, so we had to rely on outside capital to make this work. I guess everyone here in this room is either seeking funding now or will be seeking funding at some point in the future. So let me share my fundraising story with you.
My fundraising story is a lot about rejection. We applied to Y Combinator and we got rejected. We applied to 500 Startups and we got rejected as well. We applied another time and we got lucky and got into 500 Startups Batch 8. The reason why we wanted to be part of an accelerator, is to get access to their network of investors we could raise a series seed. For this series seed, I pitched 125 angels and investors and I heard 115 no’s. In the end, we raised $2 million from 10 investors. That’s a whole lot of no’s to go through before we got the $2 million together.
To be honest, we pushed a lot of the wrong VCs. We pushed VCs that weren’t the right fit, either because they weren’t the right fit for the stage that we were in or for the space that Shippo was in. But I don’t regret pitching all of these investors. Practice really makes perfect. At the end of pitching all these people, I had my pitch nailed down. And when we finally met the right investors, I knew exactly what to say. All investors tend to ask the same kinds of questions. So at the end of this, I knew the answers to all of these questions by heart.
While going through that fundraise, unfortunately, we had to go separate ways with our third co-founder. And that’s the kind of situation that can kill a deal easily. In that situation, I also, for the first time, learned about the power of being transparent and straightforward with prospective investors. We communicated that change right away up front, direct and honest. And we also set the expectation right that this was the kind of communication style they would be expecting us moving forward if they do decide to invest. And in the end, we were able to close around from the same investors despite the change in the founding team.
Leading up to the series seed, we were growing our business 40% week over week, and that was in terms of shipping volume. And I think one of the most important pieces of advice we got back then was to focus on one single KPI, to find one KPI that defined success for your business best and to focus on growing that one instead of like getting overwhelmed by all the other metrics out there. Today, of course, we’re optimizing a bunch of other metrics as well but shipping volume is still our main KPI.
For the series A, we did a lot better. We were able to get 30 warm introductions to investors. We were able to set the timeline and drive the timeline ourselves instead of having investors drive it. That means that we said one week up for first meetings, a second week for second meetings, one week for partner meetings, and then another week for due diligence. It was important for us that we had everyone lined up at the same pace. So at the end of this process, we would be able to get to competitive term sheets. And at the end, we raised $7 million from Union Square Ventures.
From the outside, it looked like a really tight run and smooth process. But behind the scenes, a lot was going wrong again. We again, had to go separate ways with our back then most senior technical leader. And guess what? We got our first bullshit lawsuit during due diligence. One back, yeah. We got our first bullshit lawsuit during due diligence. Who would have thought? Like that was really crazy.
We were able to use that bad situation and turn it into an opportunity to build trust. Build trust with the prospective investors by communicating clearly thoughtfully and directly. And I think, like you’re going to build a long-term relationship with that investor. Investors are like employees that you can fire. There are going to stick around until there is a liquidity event. So you better turn the table around and do due diligence on your prospective investors as well because you want to be able to expect the same kind of integrity from them. Investors, while they’ll be fast to offer you references, but make sure that you also do backchannel references and that you’re able to talk to people, to founders, that have worked with this investor when they failed. You wanna know how the investor behaves when things go wrong.
From pitching all these people my most important takeaways are, be authentic, be passionate, and be honest. And I think the one thing that us female founders are really good at, is to under-promise but to over-deliver. And that’s a great characteristic to be known for.
Then there are some situations while pitching that are just totally out of your control. Weird things happen but they make for great stories to tell later on. One of my favorite stories to tell is how I went into a partner meeting at Kleiner Perkins. Well, a lot of the Kleiner partners were attending, including John Doerr. All the Kleiner partners were at one side of the table and I was at the other side of the table as the only person there. I sat right across the table of John Doerr, we had our super engaged conversation, I felt great about it. It was intense, it was a lot of back and forth but I was excited. I felt like I was able to answer all of their questions very well.
At the very end of this conversation when we were starting to wrap things up, John Doerr leaned forward, he pushed forward his notepad and pen and he said to me, “Laura, draw me a picture of your team.” And I was so confused. I did not know what he wanted for me. I thought this could be some sort of psychology trick question where he’s going to look into, you know, if I draw myself bigger than all my other team members. That could mean that I’m egocentric. Or maybe if I draw myself gender neutral that could mean that I’m not confident in my own skin. So I decided to draw a little stick figure girl complete with a dress, long hair and a smiley face. And I was just about to start drawing my other team members when I realized people in the room were laughing. I looked down and John Doerr was smiling at me. He was like, “Laura. All I was looking for was an org chart.” Yeah, that happened, it’s a real story. I felt like a complete moron. And then afterwards whenever I go into the Kleiner office there, they know me as the stick figure girl.
Stuff like that happens and happens to anyone and these make for great stories to tell. Don’t worry too much about it when stuff like that happens to you. So today we are 70 people, all working out of our San Francisco office. We have six…thank you. We have 16,000 customers and we’ve been able to triple our business in terms of shipping volume every single year since we started. We’re still growing. We’re still hiring. However, I still don’t have everything figured out yet. And I think when people tell you that they have everything figured out, they’re lying. However, there are a bunch of really great learnings that have impacted my life for the better in the last couple of years. And I want to share a couple of my favorite learnings with you.
First of all, it’s a marathon and not a sprint. In fact, I think it’s more like one of these crazy 100 mile races that only insane people sign up to do. It’s going to be a lot of ups and downs. And sometimes these ups and downs happen from one hour to another. One hour you receive a term sheet, the other hour you receive a lawsuit.
During these ups and downs, it’s important to keep in mind that your company worth is not equal to your self-worth. And I think that is easy to forget here in Silicon Valley because whenever you go out and socialize people are going to ask you, “What is your company? How much money have you raised? Who are your investors?” And then they’re going to judge you by that. But keep in mind that you are more than your company’s success. Don’t let that define you.
While going through all of these ups and downs, it’s important to remain persistent. However, persistence does not mean being stubborn. I think it’s important to be persistent about the right things and what has worked for us really well is to be persistent about the goals, but to be creative and flexible about the tactics of how to get there.
There will be times when you think that you are failing. When a failure happens to me, what I like to do is to take a step back and look at the big picture. I like to treat that one point of failure as a piece for a big puzzle and then try to see what the big puzzle will look like. Sometimes, that takes a couple of years before you’ll be able to see the bigger picture. But I think failure leads to new opportunities, opportunities that wouldn’t have been there otherwise. For example, I was super devastated when we got rejected by YC back then. But I’m still standing on stage here today and everything that happened in between was great. I wouldn’t have wanted it any other way.
My second point is all about you. Be unapologetic about who you are, be authentic, be yourself. There are so many expectations about what the perfect founder should look like and what the perfect female founders should look like. I used to try to be like Steve Jobs or Mark Zuckerberg but that’s ridiculous and impossible because I’m Laura, and I’m proud of that. And I think it’s completely fine not to be great at everything but you need to know your strengths and your weaknesses, and then you’ll be able to hire for complementary skills.
Being unapologetic also means that you won’t be able to work with everyone. Having clicker problems, yeah. That you won’t be able to work with everyone. And again, that’s completely fine. Better a hole in the organization than an asshole in the organization. This is your company that you’re building and you’re defining company culture. Don’t end up building a company that you’ll hate working at five years from now. You can be completely unapologetic about the kind of culture that you want to build at your own company. That also means to hire slow and to fire fast.
My next point, again, is about you. A lot of people think when you start a company you need to sacrifice everything for your company. And I agree. It’s about a lot of hard work. It’s about being persistent and all those other things. But you need to take the time to take care of yourself because taking care of yourself is taking care of your company. At the very beginning, you are your company. Make sure that you know what gives you energy and what drains you and then do less of what drains you. There is no bad boss that you can blame for being miserable. It’s up to you. If you’re not happy, you’re the one who can drive that change.
Taking care of yourself also means it’s completely okay to ask for help. In fact, it’s smart to ask for help. I’ve been fortunate that I have a great group of investors that are super supportive, that I have an amazing executive coach, that I have an amazing group of friends that I can relate to. I love hanging out with other CEOs and founders because hanging out with them teaches me that the struggles that I’m going through are completely normal, that they’ve gone through the same struggles as well, that these struggles aren’t unique to me but that they’re just part of normal startup life.
On a more personal note, last year I made this great decision to adopt this grumpy looking cat. She’s really the grumpiest, that’s her everyday face. And when I come home from work and things aren’t going that well because we’re not shipping enough packages, I see her face and everything is a little better again. More important than my relationship with my cat, is my relationship with my co-founder, Simon. Sometimes we fight but we never get hurt permanently. My co-founder Simon, well, he’s 100% complementary to my skills. He’s able to do all the things that I can’t do or don’t like to do, and he does them really well. I wouldn’t be able to be here without him. So find yourself a partner in crime. For me it’s a partner in shipping, to share the burden of running a company with you.
Simon’s been supportive through the ups and downs, both in my work life and in my private life. Simon’s the one I called when I was going through a bad breakup. And he was the one who brought me a bottle of whiskey. He was also the one who remembered to take the bottle of whiskey away from me when he left. And that is important because next morning at 7:00 a.m. I had a recorded podcast interview where I was supposed to tell how awesome it is to be a founder. And I do think it is awesome to be a founder. However, it also means that you’re going to be one of the few females in a male-dominated industry. And given that we’re at a female founder conference today, I think it’s important to acknowledge the brave women that have been speaking up in the last couple of months to drive change into this industry.
I’ve been lucky that I’ve never experienced direct sexual harassment like that. However, I’ve gotten used to being one of the few females in the room especially B2B CEO dinners. Somehow they’re not that many B2B female founders. And many times when I’m outside of the office and people ask me what I do for Shippo, they’re surprised to hear that I’m the founder and CEO. And I never quite understand why. What did they expect the founder and CEO of Shippo should look like?
There was one time when I was pitching a male VC for my series A. And after the pitch, his first comment was, “This is a cute little business you’ve built.” And there is really nothing cute about a shipping API. So I used to hate talking about being a female founder. I used to hate being put into that box. I dislike being part of these female founder lists because the market really does not care if this company is run by a female or not. Customers choose to go with a product that’s best. And I wanted Shippo to be the best. Period. Independent of my gender. I used to live by the mantra, “To be so good that they can ignore you.” And in the last year, my attitude to that has changed a little. I realized it’s naive to believe that if you work really hard you won’t be discriminated. I realized that it’s not always on the women to prove themselves. It’s a problem with the system. And good news is that we, everyone here in this room, is able to make a difference. We can make a difference by starting companies and building company cultures that women enjoy working at. We can make a difference by being role models for the next generation of female entrepreneurs. And we can make a difference by generating outstanding returns for the investors that have placed a bet on us. And I’m excited for everyone here to help us make that difference.
I could keep talking about this endlessly, but I’m running out of time. And there is still so much to do, so much to learn. I want to leave you with one final quote, “If you’re following your calling, the fatigue will be easier to bear. The disappointments will be fuel, the heights will be like nothing you’ve ever felt.” And I hope that you find your calling, and I hope that when you find your calling you take that opportunity. So best of luck everyone. And feel free to tweet at me with any questions that you have. Thank you.