Life wasn’t easy for business founders during the pandemic, and it turns out the road after COVID-19 is, unsurprisingly, not all smooth sailing either.
Rob Hango-Zada, co-founder of Shippit, knows this first hand. Yet he counts himself as one of the lucky ones, considering the pandemic spruiked home deliveries so much that his own delivery-tech service was suddenly responsible for millions of package a month.
But the shifting consumer and societal focus to online retail ultimately ended up bringing more questions than answers to Shippit, especially considering it was founded with one single goal: to solve the problem of misdeliveries.
It all started in 2014 in Surry Hills, Sydney, via a conversation between long term mates Will On and Rob Hango-Zada after On had experienced a misdelivery of a vacuum cleaner.
It was that simple experience that led the the two friends to found a business with the aim to “kill the misdelivery card”, as Hango-Zada tells SmartCompany Plus.
Eight years on, the two-man team has grown to a more than 200 person-strong business with offices in Sydney, Melbourne, Singapore and Manilla — a team which works with thousands of retailers across Australia and New Zealand to send more than 40 million deliveries a year.
Over time and, as a result of this growth, Hango-Zada acknowledges that Shippit’s purpose has “changed quite a bit”.
“Now the purpose of Shippit is to reduce waste in the logistics industry, and to do that we want to bring goods to people in the cleanest way possible,” he said.
In May this year, Shippit tripled its valuation to reach $300 million, following its $100 million valuation achieved in 2020.
And its not just owed to the pandemic. Hango-Zada says the growth comes down to some key actions: partnering with the right people (even after an initial rejection), and by focusing on keeping employees — rather than solely customers — happy.
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Hango-Zada can’t share specific revenue figures from the last 12 months, and he says Shippit prefers to think of growth as ‘pre-pandemic’ and ‘post-pandemic’ anyhow.
With that, Hango-Zada explains that since pre-pandemic, Shippit has seen 300% growth in its valuation — leaving very few words to describe the startup’s journey other than ‘rapid growth’.
That’s especially considering that six years ago, Shippit had “rocked up to the Uber office to try and convince them to be a delivery provider online”.
“Uber had other things that were more important at the time,” Hango-Zada laughs.
But last year, that important thing was indeed a partnership with Shippit — where Uber was the one reaching out to the startup to discuss ways the two businesses could team up.
“Effectively, we both wanted to do things a little bit differently,” Hango-Zada explained.
“Usually it’s just about integrating a carrier onto the platform, but it was really important for us to find a partner that can help us develop the industry.”
And Shippit believes Uber is the right partner for that. The collaboration sees Shippit customers offered an Uber delivery option at checkout, including data such as delivery times, tracking, and estimated delivery costs — bringing an ‘UberEats for everything else’ kind of service to retailers.
The partnership grew out of Shippit’s goal to have a quarter of all deliveries delivered in the same day as they are purchased within the next five years. Hango-Zada says at the moment it’s around one in 10 purchases at best.
“So in order to drive that growth, we were looking for a partner that can help develop the market with us,” he said.
“It takes a lot of merchant education to do that”, and merchant education is what Uber has in spades.
Since the partnership, Shippit has seen a “significant increase” in conversion rates for customers, along with delivery times dropping to as little as 20 minutes from purchase.
In the world of instant-delivery startups like Milkrun and Send, bringing that “demand nature of purchasing across to the retail sector” has been an answer to consumers’ growing appetite for convenience and has helped drive the success of the partnership, Hango-Zado acknowledges.
But the Uber partnership isn’t the only big win for Shippit in the past 12 months.
The startup also acquired last-mile tech company Premonition in March, closed a $65 million Series B capital raise in May, and revealed plans to significantly scale its southeast Asia operations.
Dealing with a change in strategy, a large increase in headcount, growth in customers and a global pandemic are all things that would challenge a business when occurring in isolation — let alone all at once.
It also all happened at the same time as the ‘Great Resignation’ movement, which Hango-Zada says Shippit was affected by.
“But on top of [the losses], we’ve had big growth numbers to follow,” with the leadership team looking at better onboarding processes in order to find more team members — and retain them, he says.
“It’s taken a toll on our leaders across the business, in terms of trying to be present and trying to be available; trying to work with people and onboard them into the business; and trying to find the best outcomes and also support our customers as well.”
“I’d say it’s probably the biggest challenge, because our customers are going through such turmoil themselves. They also needed as much help as possible.
“What it has built within our team is a new level of resilience and camaraderie.”
That camaraderie can be difficult to build with a growing — and often changing — team, and Hango-Zada doesn’t shy away from the mistakes Shippit may have previously made in that arena.
“Historically we’ve just looked at throwing people at the problem,” he said, a tactic that wasn’t quite as practical during the pandemic.
But the pandemic served up some important lessons, including one from Steve Jobs: working from home showed the Shippit founders we no longer get those ‘water cooler conversations’ that Jobs said are the key to collaboration.
“So we’re trying to get people back into the office to facilitate [that in-person collaboration], not to keep an eye on people,” Hango-Zada said.
“For us, the most important thing is investing in that employee experience. And we haven’t lived true to that promise over the last few years,” he admitted.
“But we’ve shifted our focus to that: how do we better enable them? How do we better equip them? How can we make sure they have fun while they’re doing it?”
For Shippit, the answer has been found in more social events, weekly team lunches, more in-person collaboration and four summits each year where staff members around Australia are flown in to meet, mingle and align on Shippit’s strategy together.
After all, “happy employees mean happy customers”, Hango-Zada says.
Hango-Zada looks at Shippit’s resilience — at a personal, team, and organisational level — as a real sweet spot to ensuring success, but he also believes “rapid experimentation” is the right way to move ahead.
“Finding what works, and then killing things that don’t work very quickly and being able to move on,” is the method Hango-Zada says Shippit has been using to grow its business.
And for the next few years, Shippit’s focus is clear: maintaining its growth trajectory, but doing so in a way that’s sustainable for the industry.
Its ambition is to pair 200 million deliveries without waste, up from the 40 million it delivered over the past 12 months.
“It’s a very big job that we need to unpack: we look at carbon emissions; the kilometres traveled for parcels; and also the sustainable practices of the retail and logistics industry.”
And as the co-founders have already experienced, this growth focus may result in more hires, more changes, and more additions to the duo’s initial philosophy. But both Hango-Zada and On plan on sticking around for the ride.
“Will and I are building this business for the absolute long term,” Hango-Zada said. “There’s still so much to do.”
“A lot of times we get asked: ‘what’s the exit strategy?’ But we don’t have one.
“We’re having too much fun solving the problem.”
Sophie Venz is a freelance writer and editor working remotely from wherever she can get an internet connection. You can find her bylines in Forbes, SmartCompany, Mamamia, Punkee and many more.
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