THE RIGHT WRONG CUSTOMER
Shyp’s CEO knew his product was perfect for
small-busniess owners.
So for two years, he ignored them
Kevin Gibbon had a serious
side hustle in college: eBay Powerseller. “I’d buy products and sell them for
profit -- jewelry, clothing, sports equipment,” he says. But as business took
off, he was stuck fulfilling orders in his parents’ garage for hours. “Nearly
50 percent of my time was spent packaging and shipping. Remove that and I would
have been a lot more successful.”
Nine years later, in 2013,
Gibbon created Shyp, an on-demand service that picks up, packs and mails
anything on a customer’s behalf. No more post offices, ever. From his own
experience, he knew this could be a transformative resource for small-business
owners. In fact, he expected businesspeople to make up the bulk of his
customers. But when he launched Shyp, he did something that seems
counterintuitive: He ignored that audience entirely. Instead, in both the way
he built and marketed Shyp, he targeted consumers --just regular, everyday
people mailing stuff.
Why? Because sometimes, the
perfect customer for tomorrow isn’t the right customer for today.
“Starting with consumers not
only allowed us to build a lot of operational systems but also gave people a
chance to check out that early product,” he says. Consider it: Shyp began as a
small company working with little volume. It couldn’t immediately handle 500
packages from a business, it needed to start with Aunt Sue in Ohio mailing
presents to her niece in Michigan. Also, because Shyp wasn’t big enough to
negotiate low rates with mail carriers, its costs weren’t yet competitive --
meaning small businesses likely wouldn’t be impressed anyway. But consumers who
wanted to save time on one-off shipments? They’d pay more.
“Turn that one-hour task into
minutes, and people will tell their friends about it,” Gibbon predicted. He was
right. Word of mouth drove steady 10 to 30 percent month-over-month growth for
the first two years. That helped him strengthen all the parts of his business
at a reasonable pace -- learning how to handle more and more shipments and work
with bulk orders of materials, and continually lowering the cost, all while not
burning through cash.
Eventually, Gibbon noticed an
increase in users who sent 20-plus packages at a time -- a sign that these
weren’t just birthday gifts. They were businesses, jumping in before Shyp was
ready for them. “Our product was accessible only via mobile,” he says. “Typing
in even 10 addresses on your phone? That probably took 20 minutes.” So he
started talking to this new wave of users, and in 2015, as consumer growth
started to level off, Gibbon decided it was time to make the long-awaited
shift. “We knew exactly what we needed to build, because the business customers
had already told us exactly what they needed.”
Shyp built a web-based
platform that would integrate with ecommerce services such as Shopify. And
thanks to the lessons learned serving consumers, its team now knew how to
simplify pickups to get couriers in and out in minutes. Damage rates were down
to .17 percent, well below the industry average of 1 to 2 percent. And because
Shyp had the time to build relationships with national and regional carriers,
it could offer fast, cheap shipping rates. “We could help our customers compete
with the Amazons of the world,” Gibbon says.
When the new platform launched at the end of 2016, response was swift.
“Nearly 60 percent of our shipments are now from business owners, and by the
end of the year, businesses will account for 90 percent of our volume,” Gibbon
says, adding that revenue is on track to triple in 2017. Finally, he was ready
to serve the customer he wanted all along.
Sentence : But as business took off, he was
stuck fulfilling orders in his parents’ garage for hours.
Clause : But as business took off
Sentence : “Turn that one-hour task into minutes, and people will
tell their friends about it”
Clause : and people will tell their friends about it
Sentence : We knew exactly what we needed to build, because the
business customers had already told us exactly what they needed
Clause 1 : what we needed to build
Clause 2 : because the business customers had already told us
exactly
Clause 3 : what they needed
