How Shipwizmo CEO Craig Radford grew to $3.5M revenue and 35 customers in 2024.

hello everyone my guest today is craig radford he's a second time logistics entrepreneur going from zero to more than 10 million in revenue in three years with no money he's got 14 employees and a big believer in speed growth hacking and bootstrapping over raising capital he was able to win uh the canadian post office over ups and fedex with no money craig you ready to take us to the top i'm ready let's do it all right so shipwizmo and just to make sure i did get that right you put your bio zero to more than 10 million i assume that's 10 million revenue right correct okay good and when was launch year uh it was uh late 2015 and but our first dollar was made in actually late 2016. okay so 2015 launch first dollar in 2016. i was like asking this would you spend do you remember what you spent on mvp before your first dollar of revenue oh yeah it was brutal i i had about my partner i had about two hundred thousand dollars on credit cards and uh internet loans trying to put together an mvp product with software um and so it all worked out in the end but that's what we spent around 200 000. okay so between 2015 2016 200 grand into the product you get your first dollar revenue in 2016. and then scale up today you're doing what 10 million run rate today uh corrected the run rate would be about uh like forward earnings or forward revenue about a million a month at the moment so it's uh be around 12 million right now that's great and where were you exactly a year ago just we can calculate growth uh we were only half a million a month a year ago so it's uh more than doubled yeah yeah that's great let's get more into that in a second but first we kind of jumped the ship here what's the company do and how do you is it pure place sas uh no it's actually it's not a pure place sas um it's a little bit of a hybrid so um we do have a digital product it allows people to basically connect their shopify stores and other e-commerce stores um and create shipping labels uh in canada um and and produce postage and shipping labels they they might not have access to otherwise we're a one-stop shop for um e-commerce retailers so but we're actually picking their belongings up in person so there's a physical aspect to it sometimes they'll send it in using a courier and we're basically rerouting it so that it's a lower cost final delivery okay so so i mean are you a last mile delivery kind of transportation logistics company or are you more like how do you get your cost per postage stamp down lower to pass the savings on to your postal customers like what business model are you in uh technically it's called first mile logistics and it's something that has it's not been really around that long it's a little bit more established in the us but essentially when i used to work at ups it would be very expensive you'd be dealing with a lot of different carriers and a lot of different invoices and a lot of different account managers and i said you know that makes no sense let's have one guy pick up all your needs domestic international usa uh you're gonna get one bill one person to deal with customer service and we're gonna give you the kind of rates that basically amazon gets even though you're not amazon okay so how many well just to be clear so if you're if someone's this your customer someone who's selling on shopify someone purchases something that they're selling let's say it's a pair of leggings that they produce in kentucky you're gonna have someone in kentucky go pick up those leggings and take them to your centralized kind of system and then you put the postage on and actually ship it uh that that's the right idea but we're we actually just service canada so it would be let's say you're in vancouver or you're in toronto um we're obtaining your belongings like physically collecting them bringing them to our location and through um vault purchasing power we're routing them through our accounts and through different means and we actually work with post offices all over the world so not just um you know canada post for instance here very bureaucratic and clunky and expensive so we sidestep them and we go directly to the u.s postal service we cut deals with them we go to the royal mail and united kingdom go to australia post and we're just routing this stuff all over the world and we're doing it through our accounts and getting your costs way down and we're taking a small pass through i was gonna say yeah so your customers is the shopify seller that sold the leggings not uh you know the royal mail service correct correct yeah yeah okay so how many i guess how do you measure customers is it whoever sent at least one thing through you over the past 30 days or how do you measure that number yeah you know our database would have over 100 customers in it but only about 35 of those are uh daily shippers um and you know and from those 35 there's a bit of an 80 20 principle in terms of where the revenue is coming from so we definitely have some enterprise shippers who are um are hauling more than their you know fair share of our revenue um and then we have a segment of smaller shippers and you know they we have daily recurring revenue which is interesting because we got to ship every day um so on the smaller side you know it could be a thousand dollars a day spent on on postage and on the larger side it could be ten 000 or more in a day spent on shipping so just be clear 100 customers have connected in over your lifetime since 2015 shipped at least one thing through you 35 shipped daily and about four of those 35 customers make up more than 80 of your revenue uh i wouldn't say it's that concentrated at the top uh it's probably more like uh 30 70 or something like that but yeah we probably have a group of five to seven people who are making up you know a heavier part of the revenue and so we are moving towards a little bit more of a wholesaler model uh dealing with with the big guys and servicing them really well and give me a sense of quantity so daily about how many kind of units or have you measured how many things are you shipping or processing per day uh we'd have about 10 000 items uh plus going into the us on a daily basis uh two or three thousand are going through canada um and and we have two or three thousand international packages so they're like sixteen thousand total or ten thousand altogether uh no more like sixteen thousand in total yeah interesting okay so 35 customers today uh you just mentioned that you uh i believe you said you're doing about a million dollars a month right now i'm sorry come again that's okay you said you're doing about a million dollars a month right now in revenue correct correct yeah that's from 35 paying customers so that means each one's about 28 000 a month uh yeah but it's tough to use averages because it's really a dichotomy there's there's small customers and large yeah we've addressed that already though so people can understand that but just for the sake of the story right so so on that customer that's going to put 20 or 30 000 kind of spend through you per month is that all revenue that actually hits your bottom line or do you actually only keep like 10 of that because then you have to go pay the postal service and print print stuff and you have cost of goods sold that's right so we don't end up keeping you know that much of it it's just a bit of a service fee for pickup customer service billing and access to our network so um yeah it it you know it gets thin near the end no doubt there's a revenue a little bit of a smaller and and uh end game yeah yeah so when you strip out kind of your hard cost to goods sold not your soft variable like marketing's about your hard cost to goods sold are you taking like you'd say maybe 10 on the million each month or 5 percent or what is it uh well it's a it's going to depend on the the size of the customer but i'll go to almost nothing on a really large customer um just to obtain purchasing power uh to be honest with you it's part of like a growth hacking strategy i would say but on on a good retail customer it should be around 25 yeah okay got it so i mean is it fair to say in terms of money that you capture each month that is actually going your bank account that you can then use to hire and build the business you're taking out 250 000 a month on a million dollars through your system uh it's going to be less than that on the bottom line yeah okay like like a hundred grand or lower yeah somewhere in there in that range okay tell me more about the team um how many team members you have today 14 people okay 14 and are they all distributed or all centralized uh they're pretty centralized we have a small team in vancouver and then we have uh the brunt of it here in toronto so um got about four or five people in operations um a couple doing software um a few in customer service um myself the other partner here we're the sales the main sales people actually um so we do a lot of the enterprise selling ourselves still and then we've got uh you know one other sales guy and you're your bootstrap correct fully bootstrapped yeah so are you operating on my cashier positive today are you still burning no we're cash flow positive um that's the nice thing about shipping is people need it and you can make a little bit of a a little bit of a margin uh you know right off the top right away day one we were making some revenue i guess shy of all that money was spent on uh on software yeah yeah so i mean when you say profit i mean are you talking like 10 5 or what's actually going to the bottom bottom line net each month yeah it's probably going to be in the 10 range or or or less i mean we're dumping money back in the company we're not looking to hold cash right now we're looking to grow so i'm investing in people i'm investing in software you know very heavily i don't need to uh do anything for my investors i don't have any so it's all about growth so what do you pay fully weighted to get a new you know customer that's going to pay you again 30 grand a month or a million a year yeah it's expensive because you've got to put a sales person out on the road and it's going to be probably about twenty thousand dollars to acquire a good size large customer because you really just aren't gonna land that many if you're paying a sales guy 100 grand a year you'd be lucky if he if he makes five accounts in a year so we we have a long sales cycle around 12 months or more um on some of these enterprise accounts very high cost of of acquisition yeah but it sounds like you spend 20 grand to get them in and they're gonna put call it 20 30 grand through you monthly of which you keep call it three thousand so your payback period still like eight or nine months right that's manageable yeah yeah yeah how many of the 14 people are quota carrying sales folks uh three but you include myself and the other partner in that so we're probably going to ramp it up to maybe four sales people but uh right now still humble beginnings how do you measure churn um yeah people who either go out of business and are no longer paying us or people who have left for some other reason our turn is very high with smaller clients and it's basically zero with the large ones when you look at like revenue turnover the past 12 months across your entire base you know revenue trend is nice because it doesn't matter if they're big or small you're looking at just the revenue the size of the customer um what was revenue trend over the past 12 months uh well i could tell you like from a percentage would be maybe three percent or something like that okay and then the the customers you signed up exactly a year ago over the past 12 months have you expanded them account got them to pay more than an additional three percent to make up that hole uh correct and they're just organically expanding i mean if you have an e-commerce company that's doing well they tend to do really well uh you'll get some people who are growing five six hundred percent year-over-year and um i don't have to go win a new client right you know they're bringing it in for us and we've done nothing else to win that revenue so um there's a lot of uh like upside growth from organic yep you uh you stay in bootstrap keep in equity are you have any plans to raise capital to drive growth you know we get asked a lot from customers we get asked from vendors i we're going to keep it bootstrapped unless someone comes along as a strategic partner who can really buy into our future but just a person with money i'm not interested in giving any equity away if they're going to open some really interesting doors yeah we would look at in the next two years yeah if someone came to you and offered you know you're doing 1.2 1.3 million right now in terms of run rate and somebody offered caught four or five million bucks to all cash to buy the company would you sell no too cheap big future wismo yeah it's always a question about how you quantify the future right burning hand versus birds and bush yeah so what do you think your big future is that you haven't capitalized on already well we have a domestic product that we rolled out this year that i think is actually going to be huge for us right now a lot of the export products we do are somewhat niche these are people selling accessories online sending them all over the world uh it's all cross-border stuff what's more interesting is servicing the canadian market and approaching foreigners so we have people in the u.s high volume retailers now shipping into canada uh we're using a mixture of canada post but we're also using our own courier networks uh very similar to amazon prime uh or amazon flex model we're just a random you know person in a van we've we've established networks uh through brokers as well as some of our own for for delivering people's goods um and that's growing the fastest growing part of our business how are the how many contractors do you have that do that first mile pickup you have must have a massive network uh we try and keep it as small as possible because it's expensive to maintain too many small guys but yeah we tend to have like teams of people that are managed maybe we only have at the moment uh three um vendors doing that for us and uh underneath them they may have 10 people or so okay so you don't have full coverage in canada in other words you couldn't if somebody puts okay you you basically open up these teams where after you sign up the customer i'm happy to have you know canada post service the uh the remote areas where it costs a hundred dollars to deliver to a canadian igloo and uh i'll i'll just deal with the montreal uh vancouver and toronto yeah toronto alone is like 70 of uh of the market yeah all right let's wrap up here with the famous five number one what's your favorite business book uh the hard hard thing about hard things number two is there a ceo you're following or studying um you no no good answer number three what's your favorite online tool for building a company uh intercom number four how many hours you'll sleep to get every night six and a half and what's your situation married single kids uh married with a nine month old baby oh wow okay got your hands full how old are you uh 30. all right last question what do you wish your 20 year old self knew stop torturing yourself it's all gonna be okay guys there you have it ship wizmo again helping people ship faster especially in canada they handle first mile kind of pickup on these delivery uh these these shipper shipping so much so many goods over 35 customers use them about call it seven percent of their customers or seven customers make up more than eighty percent of their revenue they put over a million dollars to their platform each month they only keep though obviously about ten percent of that after all their costs are called 1.2 million in terms of run rate today scaling nicely they are bootstrapped 14 people on their team you know profitable to the tune of call at 10 20 grand a month depending on how aggressive they're being on growth spending 20 grand to get a new customer so seven eight month uh payback period craig thanks for taking us to the top thank you