Shipitwise → Speys

My father and the other founders knew international shipping from their own businesses. A wooden horse we could not bring home from London gave us a very familiar problem to solve: an item that did not fit the standard parcel process, with packaging and transport too difficult to arrange separately.

We wanted the customer to request the whole service in one place. We would use existing providers for collection, packaging, transit and delivery, combining their services around each order rather than running our own fleet.

Our choice of customer changed repeatedly. We started with individuals, moved towards businesses outsourcing their logistics, returned to travellers through airlines and travel agencies, and eventually offered software to carriers. I understood the frustration early on. It took me much longer to understand which customers would buy often enough to sustain the business.

We served our first thirty customers through a website form. Anna helped build the logistics network while our designers and engineers developed the software. I helped get us into Startup Wise Guys, took over marketing and worked on explaining the service to customers and investors, including through our Funderbeam campaigns.

The first fundraising campaign involved over 100 investor meetings, preparing offers and following up with people who had expressed interest. We reached €221,000 in investment indications and closed €176,200 in cash from 135 backers. I learned to track interest, accepted offers and money in the bank separately. In November 2016, we closed a second Funderbeam campaign for €181,196.60.

Our next product was still mainly a better data-input form. It collected what our operators needed before calling the customer; for its first six months, it did not produce automatic prices. We then added instant pricing for defined items and routes. By December 2016, we had seven such routes, and in January 2017 we added leisure-equipment routes between Latvia, Lithuania and Western Europe.

Our engineers had to turn carriers' Excel and PDF price lists into usable pricing logic. They built a tool that combined providers into a shipping chain, initially for our own quotes. In March 2017, we completed API 2.0, allowing other systems to create a shipment, request a price and retrieve shipment data. I worked on explaining that capability to potential customers and partners.

We added credit-card payments, automatic invoicing through an accounting integration and an affiliate portal where partners could see traffic, orders and revenue. At the end of November 2016, our 13 full-time employees covered engineering, logistics, support, sales and marketing. I helped onboard our first three international teammates. As the team grew, keeping our work focused on the same customer became increasingly important.

Across the four years to July 2019, we raised around €550,000 and handled more than 5,000 shipments. Those totals include the period after I left the operating role. Alongside the accelerator and crowdfunding money, we received €25,000 in private investment during spring 2017 and a €107,000 convertible bridge that August. The funding gave us time to build and test while we looked for a sustainable business model.

In December 2016, our 143 shipments represented €52,000 in shipping value. We called this GMV: the full price charged to the customer, including the amount owed to logistics providers. After those provider costs, our revenue was €9,597. For 2016 as a whole, GMV was around €194,000 and revenue after provider costs was around €31,000. Salaries and other operating costs still had to come out of that €31,000.

Our service was on Nordica's website by November 2016, and shipments started coming through that channel in February 2017. We completed FedEx pricing integration in March. By April, our white-label solution was ready on airBaltic's website. In July, we went live on the Travelport Marketplace, where agencies could download our plugin; the first had already done so. Each integration gave us access to customers, but getting partners to actively sell the service took further work.

Our internal quoting tool let us prepare a global quote in a minute or less. After we halted Shipitwise, the software, people and customer contracts became part of Speys in 2019. I returned to help with that merger and continued with marketing and investor relations. The wider Speys business moved 12,437 shipments in 2020; that figure covers the whole company, rather than Shipitwise alone.

A manually coordinated shipment showed that someone needed our service and was willing to pay. We still had to find out whether we could fulfil it profitably and whether that customer would return. We had expected to reach 300 shipments a day by the end of the accelerator. We fell well short, and I had to rethink what would make the model repeatable.

In March 2017, we handled 42 shipments with €15,371.11 in customer payments and €2,745.25 retained after logistics costs. In April, customer payments rose to €56,573.35, but we handled only 21 shipments and retained €4,541.08, about 8% of those payments. Larger orders increased the total shipping value while leaving us with thin margins. Our ambition was a 30% shipment margin, which we had not consistently achieved.

We expected airlines and travel agencies to lower acquisition costs because they already had a relationship with the traveller. We still needed to train their teams, provide marketing material and help them explain the service. By April, we had 12 affiliate partners and 29 automated routes, while shipment volume had fallen. I learned to pay more attention to partners bringing in paid orders than to the number of signed agreements.

With 13 people on the team, payment timing mattered a lot. At the start of November 2016, we had almost no cash available and more than €30,000 in customer invoices awaiting payment under their agreed terms. Our monthly cash burn was around €30,000. I learned to look at when money would arrive alongside sales figures, especially when discussing hiring and further development.

Calculating a quote was only part of the technical challenge. We also depended on valid partner data and on those partners being able to use our software in their daily work. Some could provide usable price lists but struggled to complete an integration. I think we underestimated that coordination and made it harder by repeatedly changing buyers. At Speys, I also learned to look beyond the strategic reasons for a merger and understand how decisions and delivery would work afterwards.

I now spend more time understanding who pays for a service and who has to deliver it. At Shipitwise, the customer, distribution partner and carrier could all want different things. I need to understand those differences before assuming that a useful product will become a workable business.

When I look at a quoting process, I want to follow it through to a paid and completed order. I check who maintains the prices, how exceptions are handled and how much manual work remains. Our tool could produce a quote in a minute; the cost of fulfilling the shipment still determined whether the order was worthwhile.

I also keep fundraising plans separate from available cash. Our first Funderbeam campaign made that lesson concrete: €221,000 in indications became €176,200 received. I use the amount received when thinking about what a team can afford to commit to.