ShipHero’s Journey to $12B | Aaron Rubin, Founder and CEO

The Peel with Turner Novak

Turner Novak

Technology

4.6 • 11 Ratings

🗓️ 22 August 2024

⏱️ 77 minutes

🔗️ Recording | iTunes | RSS

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Summary

Building an enterprise-ready SaaS app? WorkOS has got you covered with easy-to-integrate APIs for SAML, SCIM, and more. Start now at https://bit.ly/WorkOS-Turpentine-Network. Aaron Rubin is the Founder and CEO of ShipHero, a warehouse management system for brands and 3PL providers. We talk through Aaron’s journey building ShipHero, starting with what is now the largest Jiu Jitsu apparel brand in the US, which he almost went bankrupt running during the financial crisis. He shares how that business led to ShipHero, takes us inside the early days, explains why warehouse robotics and 4PL’s are overhyped, and discuss the rapid rise of TikTok Shop, Temu, and Shein. Timestamps (00:00) Intro (02:01) The USPS shipping label scam (07:10) Starting the largest Jiu-Jitsu apparel brand (09:46) Narrowly avoiding bankruptcy in 2008 (17:08) Why ecommerce is so hard (21:16) Starting ShipHero to manage their own warehouse (28:00) Powering Shopify’s early fulfillment network (30:59) How 3PL’s are still solving basic problems (34:02) Why warehouse robotics is overhyped (41:48) Where drones fit into logistics (44:55) Aaron argues why the 4PL model doesn’t work (55:40) TikTok Shop is the fastest growing US ecommerce channel ever (58:42) How Temu and Shein leverage the 321 program to avoid tariffs (1:02:49) Why Temu and Shein are slowing US ecom growth (1:04:17) Topgrading: The most boring, most valuable hiring strategy (1:11:29) Business lessons from playing poker Referenced ShipHero: https://shiphero.com/ Topgrading: https://www.amazon.com/Topgrading-Hire-Coach-Keep-Players/dp/094400234X Where to find Aaron Twitter: https://x.com/AaronandML LinkedIn: https://www.linkedin.com/in/aaronandml Where to find Turner Twitter: https://twitter.com/TurnerNovak LinkedIn: https://www.linkedin.com/in/turnernovak Newsletter: https://www.thespl.it

Transcript

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0:00.0	When the growth stopped, we thought we had a profitable business and it turned out.
0:04.0	It wasn't profitable and we had a lot of debt.
0:06.0	We were going to go bankrupt in a couple of months if nothing changed.
0:10.0	Welcome to the PEO, where we explore the world's greatest startup stories.
0:14.0	I'm your host, Turner Novak, founder of Banda Capital.
0:17.0	Today's episode with Aaron Rubin, founder and CEO of Shiphero, a warehouse management system
0:22.2	that processes over $12 billion in volume for brands and 3PLs.
0:26.3	E-commerce is hard because you got to build them into it.
0:30.0	So the structural issues with inventory are when you make a profit, but you have no cash.
0:35.4	And then you also pay tax on your profit, not your cash. The business
0:39.1	only paid enough for the taxes and the inventory that was killing it. I had to build this
0:45.9	business to pay back the debt. We dig into e-commerce business models, plus the initial insight to
0:50.4	start Shapiro. If you're a brand owner, the check you write to your 3PL will be more than the check
0:55.3	that you take home as you profit.
0:57.3	It was a total belief in that that was going to be the differentiating factor and no one
1:01.0	you care.
1:02.0	Aaron explains why robotics and warehousing is overhyped.
1:05.0	The state of robotics today is not nearly worthy hype of the robotics.
1:11.6	Why the 4PM model doesn't work.
1:13.6	It works for every single person in the ecosystem other than the customer.
1:18.6	We also discuss the rapid rise of TikTok shop.
1:21.6	That's the Amazon, Facebook, fastest world e-commerce channel in the United States ever.
	...

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