How Shipmonk CEO Jan Bednar grew to $225M revenue and 1K customers in 2024.

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview all right jan yeah so take yeah take me back to day one how did you get your first hundred customers so we uh you know it was a challenging considering we were competing with a lot of uh a lot of bigger much bigger companies and we didn't have the economies of scales like they did um so it was really me just going to different trade shows and kind of selling them on this concept of technology and fulfillment all in one um it was a lot of you know selling the dream while we didn't really have that much uh to offer but it was a really high level of server beginning a lot of manual work and you know eventually once the first 10 came in and then the other 10 and then the other 10 we really started building a really good product and a really good technology and it's allowed us to then make it a lot easier to did you find you know in any specific place a trade show a website a forum yeah it was mostly trade shows a little bit of cold calling so you know went to ces was uh was a big one for us because you know our customers are uh e-commerce um or physical products companies so they typically tend to go to we see as is definitely a good one that was the first one i went to um a lot of cold calling just trying to find companies that were local at the time and you know giving them a call and be like hey let's you know we'll get rid of the operations headache for you we'll take that all in and we'll we'll make this happen and um and the first couple customers just really liked the fact that they didn't have to deal with all this you know nonsense of fulfilling orders and having warehouse and employees and that's what that's really helped us you know bootstrap and get started because once you get one it's a lot easier to get the other so help me understand today when you look at your entire customer base are we talking like small e-commerce brands like big ones what's the average customer paying you per year to use the technology [Music] uh well so it really depends i mean there's there's the small ones and there's a big one so our biggest customer is 200 million dollars in revenue that what they do um what they pay us it's about a 30 million dollar deal for us uh but keep in mind it's not just the software fees right they're paying us for fulfillment for shipping for transportation so it's um so the sas b itself is probably going to be more like 10 and 20 of that yeah um but yeah there they so they range from complete startups that literally just you know do 10 orders a month to people that do 300 000 words a month yeah so when you look at like 10 of that 30 million deal would be like 3 million just on the sas product when you just look at the strength of your sas product i mean is that like a 10 million ar kind of business what's the general size of that um that's yeah so i mean we're going to do about 80 million this year in revenue um so i would say probably 10 percent maybe 15 percent of that is sas so yeah about about 10 yep and then when you i mean what does growth look like so if you're going to do 80 this year what did you do last year last year we had 30 uh the year before we did 10 uh the year before four and then one um and we're we're you know we're we were projecting originally to do about 55 this year right now it's looking more like 70 80. um so we're probably gonna end up the year with with somewhere around there and then we're you know still trying to figure out what next year is going to look like but it just changes so quickly that it's really hard to uh to predict or project at this point yeah why did you i mean with with revenue in that range why did you need to do a 10 million dollar secondary why not just pay yourself 5 million out of cash flows yeah well it was uh well it was the two things right i think as a founder uh you know i've always had this dream of taking this business to a specific point and selling the uh uh selling the business and i think it's just when when you're profitable it doesn't keep you disciplined as a founder and if you bring partners in you now have somebody else that you got to actually report to and they bring in a lot of experience from um you know not just building companies but selling them and building great companies and i think that's what really uh i i had a really good friend of mine that did the same exact thing and you know when i heard the deal and i heard out changed his life i just i just figured i would do the same like i could eventually pay myself the same amount it would take a longer period of time because you know as you can imagine with this type of growth like it's not just that easy to take that much money off the table from the company and so it's it's something that we're um you know this has really enabled me to do things that i would have not been able to do and took a little bit of stress away as well um and yeah it's really about the partnership like you know the people that are on my board like i have a board which i didn't have before so it keeps me accountable uh keeps me uh it's uh there's a couple different funds but uh adventure the small smaller guys um that i actually like better than bringing on the bigger bigger ventures because they just uh i just didn't get a good vibe from them this was uh more of a you know they're a smaller 200 million dollar funds but they just these guys really know what they're doing they know logistics they know uh software and it's and they're just more personable and and you know a little more available to me and that's what truly has been you know a great kind of turning point for me just having these guys available and like making me think bigger because before this it was just me and you know some of the mentors i had from before but nobody really like having that much experience working with bigger businesses and being in south florida there's not a huge startup community you know where you get access to a lot of people that have done this so it's it's just been great so jen what's your what's your team size today how many people well so we've got about 450 people um you know different roles different areas uh our engineering team is about 35 people the rest is you know operations customer service um hr finance do you have a lot of inside sales folks how many like quota carrying reps do you have yeah we actually don't have that many sales people we have about seven now um so we've been able to build this business with a pretty good like we're pretty efficient in the way we do sales a lot of our leads are inbound so we don't do a huge shout down you know calling to people uh most of the people that come to us just find us online and then um we can just kind of take them through the sales process and and bring them up to uh bring them in to um and how many how many customers are you working with today a little over a thousand a little over a thousand okay now so okay so some of these you put touch on obviously a 30 million dealer you're gonna put a lot of touch on um you know the average customer are you happy like what are you paying to get them on boarded uh like according to you by itself or like an average uh customer acquisition average cache like fully weighted cache sales people direct marketing spend everything yeah yeah about i think we're about 12 or 1500 right now okay and what does that mean you get paid back in how long well so yeah that's the funny question because in a sad in a sas world it's it's kind of crazy because because it's we get paid typically in less than a month um on that account but it's because it's not as just a service of service fees right so so yeah so the sas formula doesn't really work as exciting because like you know every everybody i tell this this calculation they're like oh well what the hell why don't you just go out crazy and acquire customers right but but there's a pretty significant carrying cost of every account um and it's you know we got physical constraints because we've got warehouses we got infrastructure we got people so um it's not as easy to scale like we're growing as fast as we can and we're you know expanding it's like amazon right like there's so many buildings you the constraints that we're hitting um but yeah like i mean our cost per acquisition and and how quickly it pays for itself is super quick it's typically less than a month yep now are you burning cash today are you profitable no we're profitable your product because you're profitable as you grow i mean are we talking like 10 percent even to margin or like 50 percent no no no well yeah our ebay is about closer to 10. uh yeah we're you know depending on like right now we're investing really heavily into growth and infrastructure so obviously that never gets a little lower um but uh we've been you know we've never had a single month where we've lost money and that's kind of been our biggest focus you know just just the mindset of bootstrapping has kind of allowed us to do that yeah i guess the i mean what i think of when i hear 80 million dollar in revenue 10 million it's 10 any bit to margin right so let's call it 8 million of the bottom line right you sold a portion of the company right 5 million dollars worth to these investors when it sounds like you could have just paid yourself out of the profits i guess what i'm hearing you say is these people add additional strategic value where it's it's worth it to you to do that yeah that's that's one thing and and second thing is you know ebitda is not necessarily cash flow so you know we've got we've got a lot of big investments that uh we pay for cash and and so you know we don't really end the year with 8 million in cash right like that would be a little bit of a different conversation but um but so it's so there's there's a couple different things that play into it but definitely having the partners in plays has been has been a huge value and also that was you know when we did the deal was a year ago um so we're in a little bit of a different place now also yep yep very good all right um any plans to sell the company uh well the opportunity presents itself you know always open um take me to fantasyland for a second what would be a number where you're like oh my god this would make me so happy i have to sell it'll be obviously very irrational but what is it yeah that's a great question when i started the business it's always been 100 million um that was like the number and then i've always wanted to i was like look i did the math and i'm like okay at 100 million i can just do whatever i want and now you know when we're kind of around that area and maybe even more it's just uh at this point like it's not about their number it's more about what i build and what i accomplish and what what i've learned along the way and you know i'm having so much fun and i meet great people and i get to work with amazing people and like see the impact that we have on not just the customers and the but the employees it's just it's not really like i can't really give you a number okay jim let me be maybe more specific let's say shopify wants to get more on amazon's level start competing more aggressively with them they need a physical strategy you have warehouses you're someone that they could buy let's say shopify offers you a billion dollars to sell the company so more than 10x you're 80 million do you take the deal i would probably do yeah yeah so say you're bored will probably i see you're married your spouse will probably kill you if you said no to that right that's true yeah and then you know i'm depending on the company to like the company would love to sell to them and work with them for for a while to build this uh into where we need to go right so um yeah i mean it's all about the circumstances but i'm not saying i wouldn't do it yep all right let's wrap up with the famous five number one favorite business book um favorite businessman that's a tough one uh you can say none none number two is there i've got a i've got a bunch of those and this one and number two is there a ceo you're following or studying um well i love um i love toby uh luke here from shopify he's a great guy and uh richard branson is one of my favorite guys number three what's your favorite online tool for building your company asana number four how much luck and slack yeah how many hours i sleep to eat every night eight okay and what's your situation what look like married single how many kids um no kids married no kids congratulations uh how old are you thank you uh 28 28 last question what do you wish your 20 year old self knew um don't be afraid to invest in people guys there you have it don't be afraid to invest in people ship monk launch back cotton 2014 did a million bucks in uh 2015 and 2017 broke 10 2018 30 million this year we'll do over 80 million in revenue last year sold a portion of their company for 10 million dollars they let some vcs in 50 that was secondary obviously makes a lot of sense for jan to take some money off the table there um to continue to be you know comfortable and keep building the company from 80 million up to many many many more multiples of that jan thank you so much for taking us to the top man thank you appreciate it these ceos rarely give these kinds of interviews i hit them hard i get the data and i want to do it more so if you want to get more of this stuff make sure you subscribe up here and then additionally go check out one of my other ceo interviews right now