Cloudflare TV

How I Launched This Company

Presented by Aliza Knox, Will On
Originally aired on 

How I Launched This Company explores the path of entrepreneurs and innovators in the Asia-Pacific region. From challenges faced to lessons learned, we will join them on their journey as they share how they got to where they are today.

Join us this week as we meet with William On, Co-founder and Joint CEO at Shippit.


Transcript (Beta)

So, welcome to How I Launched This Company on Cloudflare TV. I'm Aliza Knox. I run APAC for Cloudflare, and I am really privileged today to have on William On, who is one of the co-founders of ShipIt.

So, before we even get started talking about you and entrepreneurship and your journey, William, first, can you show us your t-shirt?

Because I really like it. And then, that's great. Get your ship together.

Careful, folks. And then, William, can you tell us what ShipIt does? Some people are on here from different countries in Asia, not everybody's on from Australia.

So, I know you had a big splash in the Straits Times this week or last week, and we'll come back to that.

But in the meantime, just tell us what your company does.

Yeah. Thanks, Aliza, for the introduction. We're a technology platform that connects e-commerce retailers to courier companies.

And effectively, what we do is we streamline the shipping process for our retailers using an algorithm that allows our retailers to save money and also improve their operational efficiency.

So, we take data from platforms like Shopify, e-commerce, warehouse management systems, and we have a matchmaking algorithm that chooses the best carrier.

And the best carrier is not always about price, because certain carriers perform better in different geographies, better at carrying different types of freight profiles.

So, our job is really to replace the chief logistics officer.

So, it's a really simple process to be able to choose the best carrier and book those shipments in.

And it's become even more important now as we're looking at e-commerce and that explosion.

And our system is really there to be able to help them support their further growth as they look to go into e-commerce.

So, how do you know when you said it might be that it's not the least expensive carrier that's important, it might be somebody else.

Where are those constraints put in? Are they in the system somewhere, or does your system figure it out?

How does someone know that this e-commerce player needs something specific?

Yeah, absolutely. So, we take data from e-commerce platforms, such as pickup and delivery addresses, the size of the parcels, what's inside the box, how fast did the customer choose, and we matchmake that against the carrier capability which is stored on our system.

So, ultimately, we store all the carrier rules, such as where do they pick up and deliver to, how fast can they deliver it from point A to point B, and how big are the parcels in which they can carry stuff.

And ultimately, our job is to take that thinking away by programmatically choosing that best carrier all the time.

So, we chatted a bit before to get ready for this, and I didn't prep you for this.

I'm putting you on the spot.

Are you able to tell us the biggest thing you've ever delivered?

Yeah, absolutely. I'm pretty sure we deliver everything from t-shirts to two-man-in-a-van installations of fridges and couches.

So, one of our biggest customers, Temple and Webster, they're a very big unicorn homewares and lifestyle retailer.

They do couches and TVs and cabinets. So, we do everything. So, because before we got on, I was asking you whether you could deliver me to another country since I came out of Singapore.

So, I think I'm slightly smaller than a fridge.

Yeah, exactly. It's possible. Although, if I keep eating during COVID, that might not be the case.

Just slap that fragile sticker on, and it'll be all good.

Oh, definitely. It at least goes on my feelings, so that'll be fine.

Accurate. So, this is pretty cool, but shipping's been around for a while, right?

We've had careers. So, what is different about your platform? Is it that you do the matchmaking?

Is it that it's easier to use? Because, I mean, e-commerce has come along.

Even before e-commerce, we had FedEx, DHL. I'm sorry if I'm offending anybody, but not using their brand names, TNT.

So, what, Linfox, what is exciting about shipping?

Yeah, so, the reality is logistics is a very thin margin game. We're talking about margins of 2% to 3%, and these are multi-billion dollar courier companies, and actually pay a lot of money in terms of capex, in terms of warehousing, and trucks, and all that stuff.

So, our job, from a system perspective, is because we've got the rules on the platform, ultimately, we're giving the freight that the couriers want to deliver.

So, by doing that, we're improving their margins because we are filling up the trucks, basically, and filling up the warehouses with freight that they like.

So, historically, couriers could say they could deliver everything to everyone, everywhere, but really what's happening in the background is they're handing these deliveries over to other courier companies who specialize in other areas.

So, what we're doing is we're digitizing that process, and we're choosing the best carrier for every route.

Ultimately, if you look at the last four months with COVID, e-commerce has exploded.

I'm sure you've seen the charts of five years growth in four months, and ultimately, these warehouses and these trucks aren't getting bigger.

So, our job is to increase the capacity and give access to the retailers, or give them access to courier companies that they otherwise wouldn't use.

So, our system is really focused on that customer experience piece, where we are focused on ensuring that deliveries get delivered when and where customers expect them.

So, if the trucks in the warehouses aren't bigger, and you're sort of optimized to fill, is the velocity greater?

Do you feel like are there more trucks going more often with more things now to fill this need for greater delivery, especially for our unfortunate friends and colleagues in Melbourne who are only allowed within a five-mile radius right now?

Absolutely. That's one of the things that we want to solve for, because there shouldn't be an instance where you've got five trucks going to the same building because they're from different courier companies.

Our job is to be able to optimize that selection and that process, and ultimately, our big, hairy, audacious goal is really how do we change the world in the sense that we can positively impact the environment and also reduce wastage by having one truck go to that building rather than the five trucks going to that building.

And we're seeing that now as we've got quite a bit of market share in terms of a number of parcels on our platform.

It's about 10% of the market, so we're getting into a position now where we can actually positively impact that.

Really interesting.

Now, I think you have a co -founder, right? Yep, Rob. Rob, so can you tell me a bit about what you did before Shippit, how you and Rob found each other and came up with this idea?

Yeah, absolutely. So before Shippit, so Shippit's five years old now, I started my career in management consulting.

So I'm a technology guy through and through, kicked off my career in Deloitte, got my stripes there, and then joined PWC as well.

But where the startup bug really bit me was I was part of a startup bank called U-Bank, which is NAB's direct bank.

I was in the launch team for that bank, and that was really exciting as we went from zero to 10 billion funds under management in the space of about three, four years.

So that was exciting.

And in terms of my co -founder, Rob, I've known him for 17 years this year.

So we met on the first day of uni, we locked eyes, and really what we, we formed a really great friendship.

And I went down the management consulting path, but Rob went down the consumer Procter & Gamble uni, school of FMCG.

So he kicked off his career in Singapore, actually, where you are right now, Elisa.

But yeah, when he came back to Australia from Singapore, like I bought something online and I had a really bad experience.

I bought a Dyson from a store called Masters, well, but now they're defunct Masters.

And it got delivered to my house, and there was no one there.

But I said to them, Oh, you know what, just drop it off, leave it around the back, no problems.

They said, Oh, no, this is too expensive. We can't do that.

So I said, Well, what are my options? Can you deliver at night? Can you deliver on the weekend?

It was no, no, no. And I said, Well, what can you do? And they said, We can redeliver it back to your office, meaning PWC at the time.

And I was like, Okay, but I don't want to pay for it.

And they said, No, not a problem. Masters will pay for it.

And that's when I started to realize that there was something wrong in the economics there.

Because the Masters couldn't have approved it in time.

It's getting redelivered to my office. It's wasting time for me because I need to drive into the city to pick up that Dyson.

And really, when I spoke to Rob over a couple of years, we were like, if ecommerce is going to continually grow and explode, then how is the logistics infrastructure going to keep up?

And that's where we put two and two together.

It was about six years ago, where we sat down over an Easter, just nutting out the problem, whiteboarding it out, like classic consulting style.

And we figured out really quickly that, like, the logistics infrastructure or networks are what we call closed networks.

And the way that courier companies are trying to meet the demand is buy more warehouses and buy more trucks.

Surely there's a better way. So we took cues from things like the airline industry, where they've got platforms like Amadeus and Sabre to give access to capacity.

And we're like, you know, it's something like that needs to exist in logistics.

So that's what we're trying to do now. To be the Amadeus or Sabre of logistics.

Absolutely. And which countries do you cover currently? So we ship everywhere around the world.

But in terms of domestic shipments, we're headquartered in Australia.

We ship in New Zealand, in Singapore, Malaysia, Thailand. It was only a couple months ago that we really put our feet into Singapore by setting up a team.

And that's been a really great journey. And I'm sure everyone knows about the e-commerce tailwinds that are happening in Southeast Asia and the size of the market.

E -commerce is huge for sure. And I think just from the Cloudflare perspective, the usage of the Internet overall is up 40% or more, which means a fair amount of that is being used for content absorption and the other is being used for, you know, e -commerce.

So it is enormous. So did I see in the Straits Times that you've done a deal with SingPost here as well?

Yeah, yeah, we have.

Is that their career or how do you see dealing with the national postal service, either Australia Post or SingPost versus, you know, DHL or FedEx?

Yeah, like the national carriers have coverage and it's important to ensure that you have a good partnership with them because it's a default option for retailers, right?

And as a result of that, we know that we need a partner with the national carriers because they're so important and they're so important to the e-commerce ecosystem.

At the end of the day though, what we're doing is we're giving our retailers options and at the end of the day they can choose to stay with their partners, they can use their own rates.

We're fortunate enough to have done a deal with SingPost where we've also got our own pre-negotiated rates.

So if you're a retailer that just wants to get up and shipping, you can plug ship it in in five minutes to your Shopify store and the courier can pick it up in the next day.

So it's the beauty of the technology that we've built. So, and are you focused on all of Asia right now or Southeast Asia?

What's your drive for entering the markets here?

Yeah, so we're fortunate enough to have landed in the market with Sephora and Cotton On.

We've been operating in stealth for about a year or so and then in the last couple of months we've decided that our technology is in a position where we can commercialize it.

So our landing markets are Singapore and Malaysia.

The technology is working well there, we've got the carriers on board and I anticipate by the end of the year we'll look to the Philippines as well.

English -speaking countries make it easier for us from a tech perspective and then obviously e-commerce booming is the key indicators for us.

And are you sending people up here from Australia and having them do quarantine?

How are you staffing all this? We're trying to hire, so if you're on the hunt or anyone here on the call knows anyone from a sales perspective, we are absolutely trying to get more people on the ground based in Singapore.

Hopefully nobody's on from Cloudflare or shipping, but yeah, okay, so they need people, that's great.

So you mentioned you've known Rob for 17 years and you also told me before you've been married for a year, how long have you known your wife?

I've known my wife for four years. There's a funny thing entrepreneurs tend to tell us about who they spend more time with.

Yeah, the running joke is we spend more time together, we talk more to each other than we do our partners, meaning our wives.

I've heard that more than once.

Yeah, the day usually starts with a morning call. We sometimes do the 6 30 a.m.

sms's, things that have gone through our mind overnight, and then it usually ends with a debrief at about six o'clock when we're walking our dogs.

Okay, and what kind of dogs do you have? I have a Shar-Pei, she's eight this year.

And what does Rob have? Rob has a pug. But you're not walking the dogs together, you're on the phone.

Yeah, we're on the phone, got our airpods in. The funny thing is the two Atlassian founders, Mike and Scott, they did the same degree as us.

They're five years ahead of us. They bought houses next to each other and I think they've got a hole in the fence for their kids to be able to interact.

So I'm wondering whether or not we'll get to that point.

That's pretty interesting. Well, and there's this other thing that they always say that as you get older, you start to look like your dog, which would be you guys.

But maybe given the time you spend together, you guys will start to look like each other.

Yeah, exactly. People do get confused between us.

I think we're the same height, that's why. Okay, so how do you actually split up the work?

So for the entrepreneurs out there who are watching, we've had some entrepreneurs on who are solo entrepreneurs.

We had Life on last week and they have a group of three, which I guess is handy.

It sounds hard, but on the other hand, you could vote and then you can have two against one, which you can't do with two of you.

So how do you divide up the work and how do you actually collaborate?

I would say that, well, in terms of what we look after in the business, I look after new product development, new markets, whereas Rob is more sales, marketing.

He looks at the product market fit. I look after the NPD part of the business.

And ultimately, I guess when we first started working with each other, man, it was tough.

It literally is like moving in with your partner.

You've just got different habits. And I guess I'm more of the person who consulting background, milestones, Gantt charts, like structured, organized.

Rob's the consumer customer strategy guy.

So he's got his, he's got his crayons out drawing things.

And I guess like what we figured out really early on was, you know, we are going to disagree with things.

And the key is around disagreeing, committing. So having each other's backs on decisions.

And even if we make the wrong call, it's about how do we like take a backward step together.

And ultimately, I think that's been super important in the first three, four years where we're in our formative stages.

But in terms of now, the deal breaker, the tiebreakers, the executive team that we put around us, COO, CTO, finance director, and really, we're trying to also ensure that the same philosophies happen across the business.

So there's not too many, and there's an Amazon quote around one way doors and two way door decisions, and there's not too many one way door decisions.

So everything else can be reversed.

So we, just being clear on the planning and the design and ensuring that you've got a structured plan has been super important.

And we're in this position now where we've got really strong leaders around us to help us tie break.

That's great.

Can you tell me a little bit since we're a tech company, and you guys in a lot ways are supported by technology, although in the end, you have a physical delivery.

What kind of technology did you use to build the business? What kind of development did you need to do, or were you able to outsource all of this?

Yeah, when we first started, the minimum viable product was built by an agency.

And I'm not a technical founder, but I know enough to get into trouble.

So we have a 50 page requirement spec that we did.

We RFP'd it out to the agencies, and we got it built on Ruby on Rails, that framework.

And then our founding CTO, who was employee number one, I've known him for 13 years.

So he used to work for me at Deloitte. And he was like, we just need to, given the software's mission critical, we need to take it in-house.

So we spent a good six months working inside the agency's office, off-boarding that product so that we could own it ourselves.

We originally hosted on Heroku, because it was easy at the time.

Spin it up, and off you go. But then there was a need for low latency, because we're mission critical software.

So we brought it all back into Australia, hosted on AWS.

More recently, we're moving our business across into microservices.

So we've got a new technology stack that we're building against right now.

And really, we're looking at frameworks like Node, React for our front end.

That's in regards to the app that we've built. But then as a business as well, obviously, there's a bunch of other tools that we have, Zoom, G Suite, all that stuff, which helps us in the environment that we're in right now, where remote is first.

So you're saying there's an app for this, so they don't have to be, they can be out and about and still control the logistics?

Yeah, absolutely.

Logistics, supply manager, whoever they are. And then, so tell me about the entrepreneurial journey.

I guess there are hurdles along the way. It sounds pretty good.

And I know you guys are growing well. And I read about you. And I know it's well thought of.

But there must have been some hurdles along the way, some things that were difficult.

And I think entrepreneurs who are listening, like to hear how people overcame challenges they might face themselves.

So if you have any, you can think of that are perhaps things that maybe you could have done differently.

And then maybe some ones like, you know, for some people, COVID is a challenge.

For you guys, it's probably a tailwind. It really helps. Other ones that have come your way that were unexpected, that were not of your own making, but where you've had to overcome them.

So any stories along those lines would be, you know, really welcome.

Yeah. One of the things that we got taught really early on was around people.

And we have a big focus on people. And trying to fast forward that recruitment process always ends up in tears.

Bringing the wrong people in the business really hurt us quite early on, because we were at a formative stages in the business where people didn't know who we are, who didn't know who we were, we didn't have a brand.

So we were really desperate at the start to try and get people on board.

And as a result of that, we went through that recruitment process too quickly.

And then once these people joined, there's that age old saying of high, slow, fire, fast.

And I would say that like a lot of the time, we didn't move quickly enough on people who just didn't fit the business that we had, the culture, didn't have the capabilities that we expected that may have oversold them during the interview process.

So I think that that's one of the key parts, because ultimately, in starting a business, it's about having a product or an idea is about 5% of the challenge.

95% of the challenge is execution. And when it comes to execution, it's having the right team in place, people who can move quickly, who are agile, who can face adversity.

So that's very much like one of the key callouts that even to this day, we're five days into the business, we've got 100 people, we are actually taking longer to hire people now in terms of rigour in the process.

So that's one of the key learnings that we had. In terms of I think other challenges that we've had over the last couple years as well is trying to be everything to everyone.

Like we were very much customer led in the first three to four years.

We've signed unicorns as our accounts, Sephora, Cotton On, Uniqlo. But we were getting into a position where we're just promising the world and not delivering.

So we made an active stance probably midway through last year 2019, where it's like, we just need to commit to delivering everything that we said we'd deliver, take a hold on the product roadmap until we got those things done, and then really focus on delivering what our strategy was.

So I'd say like that part of the, and every company goes through that, right, being customer led because someone needs to pay the bills.

But at the end of the day, it's over promising, under promising and over delivering is the other piece of advice that I'd love to give to people starting out, especially when you're trying to make good deals over the line with customers.

So where do you go for advice? It's great to get your advice for other people, but do you ever need advice and outside of you and Rob, and where do you guys go when you want some input?

So I was really, I guess like you mentioned earlier that there's solo founders out there and I'm really lucky that I've got like my best mate as my business partner.

Obviously, that's point number one in terms of go to for advice.

Over the last 12 months, I've brought on an executive coach.

And really, it's someone who's been there who's done that who you can bounce ideas off.

And it was actually one of the people in our board who recommended that we should bring one on.

So we have a shared executive coach between myself and Rob.

I actually had a session with him just an hour ago catching up over coffee about some of the challenges that we've got going on.

And then in addition to that, it's obviously keeping informal networks open as well.

So I've got a couple of mentors.

And the way I look at it is looking at businesses who are a couple years ahead, and they've gone through that journey as well and tying in connecting with those executives, because they tell you war stories, mistakes they have made along the way.

And at the end of the day, like, if I can shortcut a lot of those mistakes and like, I'm always Yeah, right.

Right. Um, is there anything that any of them have told you that you're willing to share?

Or maybe you've already given it as your advice, but any any nuggets from outside from your sort of advisors?

Um, yeah, like, even like the meeting, the catch up I had just then was the questions that I get asked are like, you, where do you set the bar?

And ensuring that you're steadfast on that, and that you have a quality standard that you need people to meet, because the business requires that and it's not a personal thing.

So that's like, like something that's super recent that I literally got an hour ago.

Because our business is growing. Like we grew three times over the last 12 months.

And yeah, it's phenomenal growth. But what that means is as a person, not only as an individual, but your team, you also need to grow three times, whether it's like capability, whether it's expertise.

So like, I guess the those pieces of advice and focusing on the organizational design is just as important as your product roadmap or just as important as your, your pricing strategy, for example, it's like, how do pieces of the puzzle come together?

And then how do you grow with that?

Really interesting. Um, so where do you where do you see e commerce and logistics going from here?

What are sort of the more fantastic like we've talked about growth, and I know there'll be fast growth.

And we've talked about the growth so far.

Is there anything towards the more extreme or almost sci fi sort of end of this where you see things going?

I know we talked about almost anything being shipped.

What what in your kind of crazy, fantastical versions of where this might go?

What do you see? Good? That's a really good, altruistic question.

You know, over the last couple years, e commerce has been growing a steady pace 20% year on year.

Southeast Asia, if you look at the Google Tamasec report, it's forecasted to be 40% year on year through to 2025.

And that compounded growth rate is like 700 million people in Southeast Asia, right?

And what we see, or what we want to see is we want to see like beacon tracks, like packages, right?

Like, the whole question of where's my parcel shouldn't be a question, right? And really, the old school technology, it's all based on scanning events by the carriers.

But like, what we want to be able to see, like know exactly, exactly where parcels are at any given point in time.

So that's a like, that's the 2025 vision that we want to aspire to.

And I guess working backwards from there. It's, as I was saying at the at the start of this call, it's like, there's a lot of wastage in the world right now with five trucks going down the same road going to the same building.

And we want to be at the forefront of being able to consolidate that and really start to make a positive impact on not only the community around us, but also the environment, right?

So that's our big carry audacious goal. So are you looking with some of the delivery companies at drones and other means of delivering that might be more efficient or?

Absolutely. Yeah, absolutely. And you know, like, why can't the delivery driver or the food delivery person also deliver packages?

Like, the key is getting it as close to the receiver as possible. And then creating that flexible network, I think is something that we see as an exciting future.

So you're you're B2B right now, right? You don't do food delivery for I mean, presumably large cartons of food, but I am not calling you to get my No, no, or not.

Not yet. Not yet. Exactly. Okay. Well, we're almost out of time.

It's been really great to have you on. Since you're not B2C, well, I guess there might be businesses on here.

So we'll at least thank you very much. Lovely to have you on.

Thank you so much, Aliza. Cheers.