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Taming A Massive Market Through an API with Shippo’s Laura Behrens Wu

By Siri Srinivas and Christopher Steiner  •  Oct 19, 2016

Laura Behrens Wu co-founded Shippo with Simon Kreuz. The platform provides businesses with an API to ship anything, anywhere while optimizing on costs and speed. It was one of the first solutions providing a modern API across all of the disparate shipping options available to ecommerce companies. The company recently closed on a $7 million Series A round of funding, led by Union Square Ventures.

Laura and Shippo have an interesting backstory, one that’s touched on across the conversation she shared with FundersClub’s Siri Srinivas below. Laura outlined how Shippo, now 28 people, sprouted from what was originally a plan to start an ecommerce business. She and her co-founder Simon Kreuz found selling things online to not only be difficult—competing with Amazon always is—but they also found the entire process around shipping to be far more muddled and confusing than they thought possible. They had assumed somebody had come along and made shipping through numerous couriers for a single ecommerce site rather simple, but the reality was that only Amazon and the biggest online stores had figured this out—most of them with proprietary solutions.

So Laura and Simon set off to create a platform for shipping that any businesses of any size can use. In doing so, they abstracted disparate APIs and shipping conduits into one modern, easy-to-integrate API. Getting the product to this point, Laura stresses, has required a lot of patience and persistence—traits that all founders should seek to emulate.

 

Here are some of the highlights from FC’s conversation with Laura:

  • Pivoting to opportunities uncovered by executing on the original idea can prove fruitful—it's how Shippo came to be.

  • As a founder, being passionate is important. Although, in Laura’s case, shipping isn’t something that she grew up dreaming about doing; she is passionate about eliminating inefficiencies in the real-life industries. The fact that she found such a large market so rife with opportunity is what got her excited.

  • Putting out MVPs that seem to feel “unfinished” is okay—as long as you're acting quickly to learn from it and then iterate.

  • Taking on the expectations of investors and employees gave Laura a feeling that success was now an imperative. No longer was it just her and her co-founder's life that would be affected by failure.

  • At some point every founder of a growing startup has to step back and learn to delegate. Recruiting becomes a big job, one that you have to be putting as much as a third of your time toward.

  • Unlike some places, most investors and people in the Bay Area take first-time founders seriously. They've seen enough success from these kinds of people that they no longer pay attention to a person's age or their resume.

 

An edited version of the full conversation:

 

What was the key insight that drove you to start Shippo?

I came to San Francisco for an internship during my masters. But moving to SF, I realized that my expenses were very high and as an intern, you didn’t make a lot. I was looking for a side gig and I naturally looked to e-commerce, which has always been an interest of mine. People are able to shop online and buy from stores from every different country, they don’t have to care if the store is located in the US, Europe or Asia. Online shopping takes away all the different boundaries.

As I was building my online store, I realized that shipping is expensive. Even more, Amazon has trained customers to expect free and fast shipping, and free and fast returns. But I wasn’t able to offer that shipping experience with my ecommerce store. When people reached checkout and there’s additional shipping cost, they just abandoned cart.

While coming to that realization, I also learned that shipping on a whole was really broken. I couldn’t find a tool to help me understand shipping rates, understand the differences between DHL, FedEx, and UPS. It’s so opaque and fragmented, I thought a business that could simplify it would make a big difference.

My cofounder and I started building an API to connect ecommerce stores to a network of different shipping providers to help them figure out which carrier and service level to use for every package.

One of the things that makes Amazon so successful is that they’re able to work with a lot of different shipping providers. They work with everybody, from regional shipping providers, to national shipping providers, to their own shipping providers. They leverage every kind of shipping possibility out there to find the cheapest and the fastest option.

Small ecommerce stores don’t have that kind of knowledge or resource. It takes a lot of time and effort to connect with multiple carriers and support them, so merchants end up just using one. But even though it’s easy, it’s not the most cost-effective solution. That’s what Shippo does, we power shipping for businesses. Our shipping API connects businesses of any size to multiple carriers from one place to help them compare shipping rates, buy labels, and track shipments. In addition to that, we pass along volume discounts brought through economies of scale from the 10,000 merchants we work with.

My co-founder and I didn’t grow up wanting to be in the shipping industry. We were really passionate about ecommerce and that’s how we came to build our shipping solutions. We built them from the standpoint of an ecommerce business. What does an ecommerce store really need to be able to get better margins for their items and to sell more? They need access to a simple shipping solutions.

 

When you started Shippo, what was day one like? Was there a clear day one or a transition period?

At first, we were unsure whether the two of us could ever be passionate about shipping. We had a big discussion about that because we’re strong believers in wanting to go to work every day excited and happy that we can do something great. But shipping sounded boring.

Then we started doing research on the space and found so many inefficiencies and problems that we could fix. That was exciting! We realized there was so much that could be done to make things run smoother. That idea was very satisfying to us. That was really Day One—when we realized that.

But there have been a lot of Day Ones. There’s a lot of big moments in a startup.

The next Day One was when the first customer used the product and when we were able to talk to a real human about what we had created and get useful feedback.

 

How far apart were the two Day Ones?

We tried to get customer feedback really fast. We had an MVP a month after we came to that first realization, and that MVP was terrible. We were a little bit embarrassed, but seeing how the customers saw the value in it made us excited and push forward.

 

How did you get early feedback?

The first iteration of Shippo was a Kayak or Expedia for shipping - meant for consumers. But when we talked to the customer, it turned out that she actually rarely shipped packages.

That made us realize that we needed to make this tool accessible to ecommerce stores. But they needed it to be more automated. So we focused on building an API to power it.

We built a very simple homepage with a sign-up form and live chat. I would respond to everyone signing up or chatting with those who were just surfing.

 

What was the major turning point?

The big turning point was when we raised our Seed round. We felt more responsibility. It wasn’t just my time and Simon’s time that we needed to account for anymore. We now have money and trust from really good investors. We need to live up to all the promises that we made while fundraising. This is not just Simon and I coding in a windowless room.

Even before that, it was when we hired our first employee. There was someone’s livelihood and income depending on the success of our idea. We needed to manage responsibilities with our employees and our investors. That was the turning point.

I sold other people on our mission and our vision. Believing is not enough anymore, we needed to translate that into actions. I can let myself down but I can’t let down others who trusted us.

 

What about the business then keeps you up at night? What is the biggest source of anxiety?

System stability is most important to me and the company. Shipping is an essential part of our customers’ business. Any sort of downtime means money lost. Websites can’t generate shipping rates at checkout, warehouses can fulfill orders - operations stop.

Our engineering team has recently revamped our on-call process to make sure that that doesn’t happen. We also make sure to communicate system health metrics very clearly and in real-time.

 

In your own writing, you wrote things that apply to everyone. You spoke about for instance about the cultural difference between Europeans and the culture of Silicon Valley. Your advice was to “be bold”. How did you come to that?

I think Europeans are more humble. At least in Germany, people don’t want to talk about their achievements. Coming to the US, I felt that people are more confident, and it’s seen as good to be able to talk about your accomplishments. People can and should be bold about that.

 

Specific experience?

Fundraising. You have to talk about what you’re doing with confidence to investors who see so many startups every day. I’m more comfortable being bold when what I’m saying is backed by data. Instead of saying, ‘Hey, Shippo is awesome,’ I would say, ‘Shippo grew from X to Y,’ and that speaks for itself. With strong numbers to back me up, I don't have to say that we’re awesome. It’s there in black and white and it’s the truth.

It’s my confidence hack. Instead of using empty words, using real numbers and metrics to back me up helps me be confident when talking about how great Shippo is.

This is also related to something you wrote and I thought it was a great line: “Build a painkiller, not a vitamin”. Talking about Shippo where it is today—you’ve now done a few million packages—how do you keep scaling the painkiller?

Vitamins are nice to have but painkillers are something that you cannot live without.

What I meant there was that make sure you’re solving a real pain-point. Especially with a B2B business, people are willing to invest time and money to solve their problems for the long-term. It’s also easy to improves your product since you know exactly what the problem is.

When we started building Shippo, we thought, how can people ship cheaper and smarter? Then we started learning about the nuances. What does it actually mean to ship better and ship smarter? It’s not that straightforward. There are many different use cases so we scaled by enabling a diverse set of customers to use Shippo to learn about where we can grow, our product and where we should partner with other businesses to make a full end-to-end solution.

Right now at Shippo, I’m proud to say that we’re able to power shipping no matter what size of business you are. From an individual manually inputting an order to connecting with a platform like Shopify, all the way to VC-backed marketplaces using our API to warehouse management system - Shippo can help you with shipping.

 

Let’s talk about your international background. You were born in Germany, you grew up in China and then you moved back, and then you went to Switzerland and now you’re in the US.

I moved around and lived in each of these places for at least two years. My dad works for the German foreign ministry and it gave me a great opportunity to live and experience so many cultures. It was a huge privilege, and very responsible for who I am today.

Now being in the United States—I think this is the best place to start a company. The raw amount of talent and people to talk to, to bounce ideas off is unmatched anywhere else. Capital is easier to come by here too. Bay Area investors take first-time founders and young founders a lot more seriously. They don’t look at your age or your experience. They look at how hard you work and the execution.