Logistics: An Interview with Laura Behrens Wu, Founder & CEO at Shippo

Laura Behrens Wu is the Founder and CEO at Shippo, a multi-carrier shipping API and web app that enables ecommerce businesses, marketplaces and platforms to connect with multiple shipping carriers.

Today, Shippo has grown to nearly 300 employees and over 100,000 brands and is valued at over $1bn following its most recent $50m Series E in June 2021.

On a mission to “enable every business [that is not Amazon] to ship at scale,” the company has its eyes set on international expansion powered by its marketplace and ecommerce platform partners which include the likes of Shopify, Magento, Woo Commerce, Wix, Amazon, eBay, Mercari, OfferUP and many more.

Looking forward, Laura predicts that “logistics technology, or logistech as we’ve decided to call it, will become the next fintech.”

We’re very excited Laura will be joining us at the Marketplace Conference on November 16 and 17 (more details below), but we couldn’t resist chatting with her in advance about her entrepreneurial journey at Shippo and how the recent changes in consumer behavior and expectations come into play in defining the future of shipping. 

Check out our chat below.

Let’s start with you and your interest in entrepreneurship. What was your attraction to being an entrepreneur?

Though entrepreneurship ran in my family, I never grew up envisioning myself as an entrepreneur. I became one by happenstance after experiencing first-hand the shipping challenges and complexities small businesses face every day. As MBA students, my co-founder and I decided to launch an ecommerce store, and after spending too much time standing in line at the post office and trying to compare rates between carriers, we realized there had to be a better way to handle shipping. Shippo evolved from there.

“Build a painkiller, not a vitamin,” is a piece of wisdom that was hugely influential to you in your entrepreneurial journey at Shippo. Why the focus on shipping and how did Shippo come together?

This is exactly right – I first heard the phrase from my former boss and LendUp founder Sasha Orloff and it became a guiding principle in the creation of Shippo, as well as something we continue to embody nearly a decade later. At its core, the idea of building a painkiller speaks to the need to sell something that fixes a true pain point rather than selling a nice-to-have.

For my co-founder and I, the focus on shipping was born more out of need than desire. In managing our own ecommerce store, we recognized that shipping is essential for ecommerce to exist, yet it’s predominantly an offline process – not to mention an enormous pain point for SMBs. It’s an industry with massive inefficiencies that was ripe for digital transformation. We saw the pain point and we identified a painkiller that could solve that.

Shippo is an API that connects our customers – ecommerce stores, marketplaces and platforms – to a network of different shipping providers. We help them compare rates between carriers, make and print labels, and manage the end-to-end shipping experience. Not to mention, we give SMBs access to the carrier relationships, rates and expertise that might otherwise be unavailable to a business of their size. In short, we take the pain out of shipping for businesses and turn what was once a cost center into a competitive advantage.

What was your approach to scale and win over big enterprise clients when talking about something as important as shipping operations. How has your approach changed over the years? 

With shipping, there is no one size fits all approach – that’s what makes it complicated. Plus, as free and fast shipping becomes the norm, better access to shipping becomes a competitive advantage. Shippo lowers the shipping barriers for businesses around the world.

When we first started the business in 2013, we were targeting large enterprise companies that could leverage our API solution, but quickly learned that those larger, more operationally sophisticated companies already had complex shipping tools and expertise established. Those early experiences solidified the SMB need for a tool like Shippo. They were the merchants more sensitive to costs; they were the ones struggling to sort out the right options; and they were the ones still spending hours of wasted time standing in line to ship packages. 

By refocusing our customer acquisition strategy early on by pausing enterprise pursuits and turning to the small-medium business market— going against the common wisdom of landing blue-chip clients before focusing on the long tail, today, we serve over 100,000 business of all sizes that rely on Shippo to make their business successful.

Today, we still view SMBs as our sweet spot, but our split platform strategy allows us to support multiple business sizes. Through our Direct-to-Merchant approach, customers can plug in directly through our web app or API, and with our Platforms business, Shippo powers back-end shipping for platforms, marketplaces, and other ecosystem players.

What do you think about shipping in this current environment and what was your biggest learning due to COVID-19? Has your mission at Shippo changed as a result?

While the last 5-10 years have shown a steady acceleration from offline to online purchasing, COVID-19 drastically accelerated that growth and drove more adoption of ecommerce in three months than had been seen the previous 10 years. At the start of the pandemic, we saw an influx of offline businesses scrambling to figure out their online presence. It became an all-hands-on-deck situation as we worked to keep up with new customers trying to navigate shipping for their first time. In addition to our core product, we focused heavily on developing resources that provided guidance to new customers learning the ropes.

If covid taught our team anything, it is that shipping is essential to the successful adoption and rollout of ecommerce businesses, and that our mission to make shipping accessible to businesses of all sizes is more important than ever. Additionally, covid brought to light the ease with which the supply chain can be disrupted – a current reality many are still trying to solve. Through all these challenges, our retailers highlighted the true meaning of resiliency.

As physical retail continues to return to a sense of normalcy, ecommerce growth has steadied, but there’s no denying it will continue to grow. We are a digital world, and consumers will expect their favorite retailers will be available to them in multiple channels. With that growth, merchants will continue to need an affordable, streamlined and easy way to ship their products to consumers, and Shippo is ready to support. 

How do the changes in consumer behavior and expectations come into play when talking about shipping?

Amazon has completely altered consumer behavior when shopping online, particularly with the continued adoption of Amazon Prime. A recent Shippo survey found that one-third of consumers will only purchase from online brands that offer free shipping, and nearly 20% want same or next-day delivery. 

Today’s customers don’t care about the multiple hands that an order must pass through to reach their doorstep – they have come to expect fast and free shipping, and it is incumbent on the retailer to ensure this happens. From a shipping standpoint, that means that the retailer needs to have tight integrations between their ecommerce platform, warehouse and shipping carriers to ensure the order can be processed, picked, packed, and shipped quickly. 

I’d be remiss not to also mention the critical importance of maintaining a positive customer experience through regular relationship building. The reality is, things are bound to go wrong – supply chain challenges, carrier capacity issues, and driver shortages are causing all kinds of delays right now – but a lot can be forgiven if your customer feels like you are being open and have invested time in building a relationship. 

What are the most interesting developments you are seeing in shipping and where do you see the biggest opportunities and challenges in the next few years?

Despite being a critical aspect of modern ecommerce, shipping and logistics have been grossly overlooked by the majority of people until this year. Now, thanks to broken down supply chains, increasingly long shipping delays, and major shortages within last-mile delivery, more people are beginning to understand the complexity within the system. There’s a growing recognition that the supply chain and logistics industry is ripe for disruption, and I believe we’re going to see major technological advances in this area in the next 12-18 months. 

In fact, I predict logistics technology, or logistech as we’ve decided to call it, will become the next fintech. By this, I mean that as more people experience the pain points of the supply chain, more money will be invested in identifying innovative and scalable solutions. Every fund will have a thesis about this and supply chain providers will be increasingly viewed as connectivity providers. As part of this process, every step in the supply chain will need to be modernized to align with the needs of the 21st century commerce experience.

One other consideration as we look at industry growth is the fragmentation in last-mile delivery. Though necessary to solving carrier capacity issues, the expansion of carrier networks to include more regional and national providers is creating an increasingly fragmented space that can prove particularly challenging for merchants to navigate. This is especially true for SMBs that may lack deep shipping industry expertise. In that way, shipping technology platforms like Shippo become even more integral to a streamlined experience. Merchants can manage multiple carrier relationships through a single platform, and leverage our industry expertise to help navigate a regularly-evolving market dynamic. 

Are you interested in hearing more about the boom in marketplaces?

For a deep-dive into different marketplace models, trending topics, interviews with marketplace operators and investors like Bremner Morris of Rally.io and Pete Flint of NFX, and how to scale a network effects company from zero to infinity, you do not want to miss our 2021 Marketplace Conference on the 16th and 17th of November. Logistics is one of our focus themes and we’ve got an amazing lineup including:

• Laura Wu Behrens, CEO Shippo
• Bremner Morris, CEO Rally.io 
• Sukhinder Singh Cassidy, ex-President StubHub
• Eric Demuth, CEO Bitpanda
• Felix Ohswald, CEO GoStudent
• Elmar Broscheit CFO Gorillas 
• VCs from Battery Ventures, Bessemer, Lightspeed, NFX and more…

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