How Shyp Sunk: The Rise and Fall of an On-Demand Startup
fastcompany.comToo bad, they were pretty convenient for consumers. Made selling stuff online super snappy, as you never had to worry about packaging, dragging something to the post office and waiting in line during lunch rush hour. Any chance a still-alive competitor exists?
I remember thinking that the business model did seem tricky. Early on, when they just started, they let me ship half of my already boxed apartment for $5 + whatever USPS shipping costs. They had to bring over a truck, and I think about 3 guys to pick up the boxes over maybe an hour or so. I don't know if I was the person who had shipped the most stuff ever with the company at that point.
That was an interesting hands-on experience with watching a company deploy VC capital on early product discovery.
Anyone who is still waiting in line at the post office to ship something seems like they would not be tech savvy enough to use an app like shyp. Almost any online marketplace let's you print a shipping label right off their site. Then you can drop it in a blue box or just swing by the post office, skip the line, and set the ready to go package on the counter.
In the case of UPS or FedEx, there is usually an option for them to come by and pick it up for free or a few dollars. I get enough packages from USPS that I can just leave an outgoing package on my porch with a sign for the carrier to get it.
Shyp just seemed to be a solution looking for a problem.
Shipbob seems to be alive and kicking. They switched their focus to businesses early on.
I don't know if they operate in wherever you're located.
If there's no demand at a true-cost price point, it means there's no demand.
You can artificially inflate market interest by selling $20s for $10, but don't take that to mean you can later increase price to $30 and reach profitability.
Your second sentence is the clearest way I've seen unit economics viability summed up, nice.
CEO Gibbon talk sums it up. - prematurely scaled, charging deep discount price of $5 with the help of $65 Million VC money.
Looking back, Gibbon says that “the investment we took, everything we got, wasn’t warranted for where the business was at. And I think that really hurt us. The expectations were way too high. We had a lot of capital. We had to deploy it. And I don’t think we were ready to do that. We prematurely scaled.”
"charging deep discount price of $5 with the help of $65 Million VC money"
Your comment reminds me of the pizza company in the most recent episode of Silicon Valley.
Except Sliceline, in the HBO show, was inspired by real-life Slice, which makes a shocking amount of money.
https://play.google.com/store/apps/details?id=com.slicelife....
Slice is here in New York and I've been to their office and I know many of the programmers who work there, so I know they are surprisingly successful.
It's a completely business model, though. Slice just provides online ordering for existing pizzerias. The marginal cost of each pizza sold is very low, so they don't have to make a lot off of each pizza to eventually be successful if they have high enough volume.
Sliceline was doing things with high operational costs like repackaging and delivering pizzas, so their marginal costs for each pizza were very high. That means they have to make a lot off of each individual pizza no matter how high their volume gets.
It's not any different from Uber, as well
I didn't even really know they existed. I mean, we have a package sitting in the closet with Shyp tape on it, and I guess I was vaguely aware that the person who sent it had a service package it up, but that's about all I knew. I never bothered to investigate, I never heard about them from friends or folks on the internet, but I would have LOVED to have used their service. Shipping things is one of my least favorite activities ever. It's such a hassle for so many reasons; even though I live 2 blocks from a post office it still takes 30 minutes every time I ship anything due to lines, the fact that I forgot the one thing they don't have (tape or pens or something), it's impossible to figure out which shipping vendor will be best for an unboxed item of a given size (and trying to figure out what size box to use under which vendor for which price).
I go through periods of frequent shipping, and I find it pretty easy. I bought a small scale and the USPS website is pretty solid for giving price comparisons and allowing you to buy/print postage and drop it in the mail. You can order flat rate boxes and they send them to you. I've almost always found UPS/Fedex to be more expensive so I simply stopped comparing. If it's local, I'll use a courier. I'd rather just work with what I know even if it means rarely overspending a few bucks. Saves a lot of time, money, and hassle in the long run. I guess I don't understand how others seem to overcomplicate or overthink this to the point that something like Shyp existed for as long as it did.
Worth noting that UPS/FedEx/USPS each has its own shipping niches.
YMMV, but I've generally found that FedEx for home delivery of larger packages is cheaper than UPS and USPS, who each charge a surcharge for residential delivery vs commercial delivery. If you need to ship things overnight, FedEx's air/express prices are a competitive advantage.
USPS is very price-competitive if you are able to use their standard sized packaging, their "flat rate boxes".
For shipping larger items via ground, UPS still generally has that niche. Worth noting that if you do large volumes of smaller items, say the size of a book, UPS Surepost combines UPS's speed with USPS last-mile delivery.
I think their whole approach was off - why even have warehouses, custom packaging, etc? Why not charge what it actually costs to ship something, plus a little more?
All they need is a bunch of vans that drive around and have a bunch of boxes and tape, basically ubers. They show up, package my thing up, and take it to the closest fedex store - enough said.
No custom boxes needed. No warehousing.
They made money through discounts on retail shipping as well as fees. Concentrating pick-ups to a small number of warehouses while doing the specific packaging and labeling and palletizing requirements of the shipper increases the discount.
If they just charged retail plus a little more the product would’ve been even more expensive.
Picking up things without the boxes allowed them to use bike messengers and/or foot messengers rather than vans, which is a lot more efficient in urban areas (no traffic issues, parking problems, etc.) They'd just put whatever you gave them into a bag and then into their messenger bag. Then they'd hand off to a truck located at a central location that served multiple messengers.
I used them a few times, it was pretty cool and if you didn't have the box for something could save a bunch of time. Unfortunately I think most consumers don't ship things often enough (aside from returns where you already have a box and a label) to be worthwhile serving this way. Small businesses were better but many of them already get discounted rates from UPS if they ship a lot.
It seemed to me that shyp's market was simply too small. One of those juicero like ideas that only seem great in SV.
There seem to be two primary segments. Those that sell a lot online or at least rather frequently. And those that are very infrequent shippers.
For the frequent shippers, it's simply not cost effective. Especially considering that most online marketplaces, like eBay and Amazon have easy shipping label printing and you can request that ups or FedEx come pick up the package. So except for the hassle of finding a box and tape, I'm not sure why you would use shyp. (And most always have Amazon boxes lying around now).
And if you are simply a very infrequent shipper, it's still probably easier to just swing by a shipping location like mailnmore. Plus, if you are infrequently shipping, you probably aren't trying to find a service to make it that easy. It's not enough of a pain point.
Those that fall between those two groups would seem vanishingly small.
I was dumbfounded everytime shyp raised more money. But I assumed they had some great growth numbers that the public weren't privy to. But maybe not.
Every experience I had with Shyp was flawless. Very sad to see them go.
Ditto! I agree it's something needed, sorry to see it shutdown.
It’s too bad, I looked into them a few years ago when I needed to ship a couple hundred items out over the course of a week or two. Ultimately it made more sense to spend 150 bucks on a label printer and clobber together a workable system to do it ourselves. They were focusing on consumers at the time but had they provided a scalable turn-key solution to small business at the time I think they could have made it work.
thats what they did a little later, pivoted towards serving physical shipping needs of small businesses but looks like picking up, packing and shipping out for just $5 per package would not cut it.
Here is Gibbon's post about Shyp shutting down:
https://www.linkedin.com/pulse/i-cant-wait-you-see-what-we-d...
All I remember about Shyp is when TJ Miller called a Shyp employee a "bitch" at the Crunchies:
https://www.youtube.com/watch?v=ZZ1qcD6isI8
Sorry for the gossip.....
"'Shyp' It's like FedEX, but spelled wrong."