Founded date: 1st July, 2013
Closed date: 27th March, 2018
Company description: Provides shipping services that ranges from picking-up the package to delivering it to the destination.
Crunchbase profile: crunchbase.com/organization/shyp
Location: San Francisco, California, United States
Total mount raised: $62.1M
Last Funding Type: Series B
Founders: Kevin Gibbon, Jack Smith, Joshua Scott
Number of Employees: 11-50
Founder Twitter: @kevingibbon
Reason for failure: Wrong target audience
Submitted failure story: I Can’t Wait for You to See What We Do Next by Founder
(original post on linkedin.com/pulse/i-cant-wait-you-see-what-we-do-next-kevin-gibbon)
Today, with a heavy heart, we are shutting Shyp down, ending operations effective immediately. I stared at a blank screen for more than ten minutes before I could even write that sentence. This is hard for many reasons, but first, some context on how we got here.
In 2014, we launched Shyp to make shipping items anywhere around the world as easy as two taps on a smartphone. Almost immediately, it was clear the idea resonated. We couldn’t keep up with the growth. Customers were pouring in and shipments were pouring out. Our service took everything people disliked about shipping—from finding a box to waiting in line at the post office—and eliminated it. Based on the frequent, overjoyed feedback we received from customers, it felt like we’d accomplished the impossible: making shipping cool. Turns out people are passionate about how much they dislike shipping. Who knew?
Along with the initial explosive growth came the comparisons to Uber—from investors, customers, the media, even random people on the Internet. From a growth standpoint, who wouldn’t want to be compared to Uber? In a handful of years, Uber had transformed the way consumers thought about transportation. We could do the same, I was told. And I believed it. The numbers told a story and I became fixated on that story.
Then, things changed. Consumer growth slowed. People close to me and the business began to warn that chasing consumers was the wrong strategy. After all, how often do consumers ship things? I didn’t listen.
At the time, I approached everything I did as an engineer. Rather than change direction, I tasked the team with expanding geographically and dreaming up innovative features and growth tactics to further penetrate the consumer market. To this day, I’m in awe of the vigor the team possessed in tackling a 200-year-old industry. But, growth at all costs is a dangerous trap that many startups fall into, mine included.
While I did heed the advice eventually, I can say with certainty not doing so sooner is my biggest regret. It’s easy to be drawn to the allure of stories where founders didn’t listen to advice and benefited from it, and I was definitely guilty of that. It clouded my judgment.
About two years ago, we reallocated resources and shifted our focus to a more profitable customer cohort: small businesses. But, we decided to keep the popular-but-unprofitable parts of our business running, with small teams of their own behind them. This was a mistake—my mistake. While large, established companies have the financial freedom to explore new product categories for the sake of exploring, for startups it can be irresponsible.
Eventually, a different set of numbers presented themselves that changed my mind: the frequency at which eBay sellers were using Shyp. So, we partnered with eBay and launcheda first-of-its-kind integration. Before we knew it, online sellers and similar small businesses were accounting for more than half of our revenue. We made major movement on unit profitability and increased revenue per transaction by 150 percent. But it wasn’t enough.
Last summer, long after many other people affiliated with the business, I realized that dramatic changes needed to be made if Shyp had any hope of surviving. We suspended operations in all markets except San Francisco, our largest and most profitable. We narrowed our focus entirely to business customers and shut off any part of our business that wasn’t generating revenue. To be clear, this seemingly obvious decision was still difficult. It was disappointing to many, adversely impacting our employees, customers, and partners.
Within a matter of weeks, the health of Shyp’s business did a complete 180. The more changes we made to the platform and features we launched for our small business customers, the better the numbers looked. By December of 2017, we were generating real revenue in San Francisco, effectively breaking even from a bottom line standpoint. The team worked relentlessly, proving that the new direction was uncovering a massive market opportunity. We fought tooth and nail and did everything we could. The progress was exciting, thrilling even, to everyone involved with the business—if only we’d made it sooner. Unfortunately, our earlier mistakes had left us with too little runway and insufficient resources to continue pursuing the new direction.
This brings us to where we are now: out of time. My early mistakes in Shyp’s business ended up being prohibitive to our survival. For that, I am sorry. I’m sorry to the world-class team who joined me on this journey—together, we boxed so many shipments that we could’ve blanketed San Francisco with cardboard 4.5 times. I’m sorry to the hundreds of thousands of customers who validated our idea by shipping enough packages to circle the earth half a million times over. I’m sorry to all of the investors and partners who have always rooted for us, and whose advice I sometimes ignored. I am grateful and humbled to have met and worked with you all.
In looking back at the posts I've written since starting Shyp, there's a theme of me ending with, "I can't wait for you to see what we do next." Even with this announcement, that sentiment remains the same. With all the learnings from building Shyp under our belt, I have no doubt the team will go on to do amazing, impactful things. I’m excited about what the future could hold. To that end, I can't wait for you to see what we do next.