How Shipit Reached $6M GMV in 2023 After Downsizing from 110 to 25 Employees (Interview with CEO Allan Guiloff)

Introduction and Company Overview

Nathan Latka

00:00Guys, there you have it. Shipit. They process in 2021 over $13,000,000 in volume from ecommerce sellers by helping them say, okay. Where do you wanna send that package of shoes? We'll pick the carrier. We'll send it. Their take rate was 25. Well, back then, it was 18 per 18%. Today in 2023, because of macroeconomic conditions in Chile, retailers, you know, higher interest rates, less retail sales, etcetera, they'll do about 6,000,000 in GMV. He did the hard

00:24work last year of downsizing from 110 employees to 25. They were burning 200 k last year. This year on track to profit 500 k, built to make 1,300,000 in terms of take rate on 6,000,000 GMV. Hoping to just buy additional time here as they continue to scale. 800 customers today because he lost 200 when he increased prices, but that's extra margin to the bottom line. He's bought himself more sustainability, more longevity. We'll see what happens next.

00:48Hey, folks. My guest today is Allan Guiloff. He's a commercial engineer from the University of Chile, experienced in business incubation and a passionate entrepreneur and sports enthusiast. He cofounded shipit, a successful business that achieved achieved over 12,000,000 in annual revenue with a team of a 110 folks operating in two markets focused on tech logistics for ecommerce. Allan, you ready to take us to the top?

Allan Guiloff

01:07>> Let's do it. Let's rock.

Customer Example: How Shipit Works

Nathan Latka

01:08Alright. Alright. Give me a customer story here. Name someone that's using you and how they're using you today.

Allan Guiloff

01:13>> Alright. So let's see. Today, we have a customer which is called Semoran, which is women's shoes, and they have their store set up in, I don't know, I think it's WooCommerce or PrestaShop, and they easily integrate with our platform like ourselves, shipit, to import their sales, and we'll automatically choose the best carrier company to fulfill their logistics needs. Either is it same day delivery, next day, or delivery for next week. And after that, we're gonna have

01:41>> two situations. We are going to either send the carrier company to pick up, or for smaller companies, we ourselves, we have a small operation. We call them heroes, where we pick up.

Nathan Latka

01:54Heroes?

Allan Guiloff

01:55>> Heroes. Yeah. They go to our cross docks, and then the carrier company goes to our cross dock and pick picks up there.

Heroes: In-House Pickup Operation

Nathan Latka

02:02Interesting. How so I guess how much have how much have you hired internally for this versus our external contractors? How many heroes are full time on the team?

Allan Guiloff

02:10>> At the time being, I'd say, like, 14. It's it's like a scalable we've tried to focus on a very scalable scalable operation. So at the at the beginning, they were, like, full time employees for us, but then we had them change to a like company contractors. Right?

Nathan Latka

02:29Yeah. Yeah. Yeah. I guess why did you make that decision? Just you wanna decrease your burn?

Allan Guiloff

02:35>> No, it's, I mean, Chilean laws and actually like South American laws are very like employer, sorry, employee focused. So it's actually very, very hard to have them your payroll. It's gonna be expensive,

02:55>> they also prefer to be as contractors.

Nathan Latka

02:58Yep. Yeah, just remind me, we've had like the Freight Forward CEO on, Freight Wave CEO on. They're they're connecting sort of shippers sorry. You know, ecommerce producers in mass with sort of carriers. You're you're really doing this on a at a brand level, more more detailed level. Would you would you agree with that statement or no?

Allan Guiloff

03:15>> What do you mean at a brand level?

Nathan Latka

03:17Yeah. So you just gave the customer example was a very specific brand. Right? You mentioned, I think, a shoe company. Right? And you're helping them, I think, find space on whether it's trucks, ships, planes to ship their e commerce goods. Is that right or no?

Allan Guiloff

03:30>> No, actually, we are responsible from the beginning to the end of what happens to that parcel, to that package. So we are going to choose which carrier company is the best according to the customer's

Nathan Latka

03:40specifications.

Allan Guiloff

03:42>> So the customer might sit on the platform, like, give me my best alternative in the shortest time span.

03:51>> And we're gonna choose and we're gonna be responsible. So actually, we're gonna connect those 12,000,000 in revenue. We're gonna connect the full parcel price, have our profit, and then pay to the carrier company. So, we actually have like a 25% gross profit. And actually, I called it GMV and then profit because it's a take rate of 25%.

Nathan Latka

04:13Yeah, so just to break that, that's very helpful. Thank you. Just to be clear, the brand you work with never actually picks their carrier. You just have your own internal network, and you're picking where to put that parcel of socks or shoes or whatever.

Allan Guiloff

04:23>> Exactly. Yeah. And I'm responsible of negotiating contracts with the carrier companies. So if they don't deliver in three days, they're gonna charge me for free and maybe I have a different SLA with the customer. Like fifth day, it's Oh, gonna be for

Nathan Latka

04:38what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out.

Allan Guiloff

04:57>> I'll show you how you

GMV History and Revenue Trajectory

Nathan Latka

04:58can access this in a second, but you log in, you connect your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because

05:22depending on who's doing the buying of your SaaS company, you're gonna get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here, Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold

05:44the whole thing outright. Now what's cool about this is this is not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a

06:09bunch that have been acquired the valuation and the multiple. Maybe you're going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna

06:34go back to the YouTube video here in a second. But if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform.

Margin Profile and Take Rate Explained

Nathan Latka

06:59I hope to see you there. Alright. Let's jump back into the interview and break down these margins. So I mentioned, you mentioned 12,000,000 GMV in your bio of the right?

Allan Guiloff

07:09>> Yeah. Mean, there has been some slight changes because Chile, I don't know if you know, but Chile has had a lot of political and economical conflict. So maybe like a scroll back, 2019 we're selling 2,500,000. 2020 we sold 10,000,000. 2021 we sold like almost 13,000,000, and $2,023.03?

07:32>> Yeah, 13. And then 2022, we sold 6,000,000. So, the hell happened? Basically, like I said, political and economic, the pension funds, the government approved four different withdrawals of the pension funds. There was massive inflation. With this inflation came along like interest rates, a surge in interest rates. Retailers saw a decrease in their sales and my sales depend on the retail sales. So basically, a lot of retails went out of business. A lot of them decreased their

08:10>> sales by half. And many of them had to cut costs and go and negotiate directly to their car company. So, this year, to be just completely honest, this year we're going to sell probably the same $6,000,000 we did last year.

Nathan Latka

08:27Mhmm. Mhmm. Well, let's talk more about that in a second, but I wanna break down the margin profile here for a second. So you did $6,000,020.22 last year. You're saying of the 6,000,000, 25% of that is your take rate or your bottom bottom line?

Allan Guiloff

08:40>> No. Take rate. Take rate.

Nathan Latka

08:41Take rate. Okay. Yeah.

Path to Profitability and EBITDA Target

Allan Guiloff

08:43>> And let's use this year as an example for so we're gonna sell probably the same 6,000,000. We have a take rate of 25%, so that's gonna be around 1.3. Right?

08:53Yep.

08:53>> And probably as an EBITDA, like bottom line, like you say, it's gonna be like 500,000.

Nathan Latka

09:02Look, it's impressive that you're in this market, it's impressive that you're profitable, you're planning to generate profits.

Failed $10M Fundraise and Term Sheet Withdrawal

Allan Guiloff

09:07>> I mean, it's a it's a long story, because, I mean, we were a team of one ten. We had operations in Chile and Mexico, but last year, we were raising funds. We had a term sheet signed with two VCs, and they withdrew the term sheet.

Nathan Latka

09:22What was what were the terms? How much were you raising at what valuation?

Allan Guiloff

09:26>> We were raising 10,000,000 at the 13 pre money valuation. And out of those 10,000,000, 5 were for, like, working capital and 5 were for to purchase a Mexican company.

Nathan Latka

09:38Oh, wow. So you were selling 40% of the company basically, right?

Allan Guiloff

09:42>> I know, I know. And I had a huge problem because my investors were like, where our pre money valuation is too low. And I was like, I've been for the past six months trying to raise money. This is the only term sheet we have. Is it or not? And it took me like four months to actually convince my investors to take it, And once I get to that point, the Chilean economy had sunk and BCs withdrew

10:11>> the offer, by that moment, we had accumulated a lot of debts. Like, I didn't realize. Probably At made a mistake

10:22>> the time being, I'd say, like, we have a $2,000,000 debt.

Nathan Latka

10:26Yeah. It's From a bank or what was the debt?

Allan Guiloff

10:30>> From the same suppliers. Like, my carrier companies were my my loaners.

Nathan Latka

10:35I see.

Allan Guiloff

10:36>> So I have some bank, some suppliers. And

10:42>> although a reasonable debt is gonna be like one to two EBITDA, which is because I pay in sixty days. So obviously, I have the opposite of accounts receivable, accounts payable, but it increased like 2.2 to 2.5 times because I extended this with my suppliers. It was like, yeah, the money is coming. The money is coming. Yep. It never came. And I had to increase the team from one ten to 25 guys.

Debt Accumulation and Supplier Negotiations

Nathan Latka

11:16Tell me how you did that, Allan. That's really, really hard to do, but you did it.

Allan Guiloff

11:20>> Just imagine August fifth last year, like fifteen minute call with 40 guys at the time.

11:29>> Was horrible. I probably spent the next two months, like August, September, October. It was horrible, horrible. And we had to agree to pay their how do you say the when you fire someone? You fire someone, have to pay them some money. Like, we had to agree with them like, guys, I don't have any money. I need to pay this in the following six months. Because at the time being, we're burning like 200 k a month, and

11:53>> it was kind of reasonable. The VCs didn't have any problem with that.

Downsizing from 110 to 25 Employees

Nathan Latka

11:58But And how much cash was in the bank at that point?

Allan Guiloff

12:02>> None. We're we're just playing with money, entering money leaving. And and at some point, I I went to my investors. Actually, this is like kind of a sad story. I went to my investors the day the new VCs withdrew their term sheet. I went to my investors and was like, Hey, guys, we have a problem. We don't have a term sheet anymore, but I made out a plan. I need 600 ks to do all the changes

12:31>> I need. I need to close Mexico operation. I need to fire people, pay their money. So I need around 600 ks. And my investors were like, sorry, not gonna happen. You should probably bankrupt the company. I was like, I'm sorry, I mean, this is a company we have thousands of customers. At the time being, we had over 1,000 customers, recurring customers. And I was like, I'm not gonna bankrupt the company. And actually, went against all odds

13:03>> by myself with no money. I had to push every debt, every payment, and negotiated with the carrier companies and told them, hey, guys. So bear with me. We've been working together for the past seven years. I know I owe you a lot of money, but if I go bankrupt right now, I'm not gonna be able to pay any of the debts I owe you, but instead, let me pay you day by day so you don't increase

13:27>> your liabilities. Like, every day I'm gonna pay you for the services I use, and that's the way I've been able to go through, and since the changes, I went from negative 200 ks to a positive 40 ks per month. Probably

Nathan Latka

13:43Well, that's not easy. Thank you for telling us that story. I mean, there's so many CEOs that had to go through that are going through it right now, but no one talks about it. So they always think they're the only ones doing it, and it's just not true. A lot of founders are doing this right now.

Investor Conflict and Buyout Attempts

Allan Guiloff

13:55>> It's horrible. I mean, I've heard so many companies go bankrupt, and I've seen this on other logistics company in Chile, in Mexico. Like now, July, they're telling me, so, Allan, I have a problem similar to yours in like, you had in August. And I was like, boy, you're eight months late. You should have seen this coming. Yeah. Happy to help, but you're kind of late. I don't know if there is a way back. Yeah. But

Nathan Latka

14:20So let me ask you a question. I mean, do you your current investors didn't wanna support you when you asked for 600 k. Do you turn the tails and say, well, then let me buy back all of your equity for a super discounted price?

Allan Guiloff

14:32>> I did. I did. I offer I actually had two times, but it's unbelievable because the same investor that didn't want me to take the term sheet of the $30,000,000 pre money valuation, was like, okay. So you don't wanna put money. You're okay for for the company to buy to go bankrupt. Let me buy the company. I'll take all the liability on the personal on my personal name. And they were like, no. I can't let you do

14:59>> that. And I was like, why not? You're willing to

Nathan Latka

15:01One or it's one or the other.

Allan Guiloff

15:03>> But it's something like some some ego. I I I don't want I I have no problem for you to fail, but I don't want you to succeed. Like, what the hell? And unfortunately, so that was the first time I tried in August last year, and I actually tried again like two months ago, probably, but unfortunately on the shareholders'agreement, we have the right of first refusal, right? So I actually made an offer, but I knew that

15:37>> this guy would want to take over the company from me. So I didn't actually, so I spoke to my co founder and told him, don't just agree to sell the company to me. Obviously, I had spoke to him, and let's wait for the ten days for the expiration of the other shareholders to actually put an offer over the table because I know this guy hasn't read all the bylaws on all the shareholders'agreement and stuff, so

16:07>> he's gonna make a mistake. He's gonna make an offer when actually my offer hasn't been approved yet. So, actually, the right of first refusal won't be applicable. And that happened. This guy, day nine, he made a $20,000 offer for the company. I was like, I just knew it. I just knew it. And at the time being, I'm stuck with these investors. I

16:34>> don't have the right incentives. I've gone through a lot by myself, but, you know, water on the bridge. I mean, not both.

Nathan Latka

16:42You and your how much do and your cofounder own today?

Allan Guiloff

16:46>> Probably around 49%.

Nathan Latka

16:4849. Okay. I see. I see. Interesting. Well, I mean, are you seeing anything at a macroeconomic level in Chile that gives you confidence that maybe 2024 will look better for the company in terms of retail sales, inflation, etcetera?

Allan Guiloff

17:02>> I'd say I'd say definitely yes. Because this year and last year, where there was a lot of uncertainty because the people of Chile vote for a new constitution, and the constitutionalists, the ones who were to write the constitution, were a mess, just a mess. It's not very PC, but they were a mess. They were all left wing, extreme left wing, and it gave the economy a lot of uncertainty. Basically, constitution, it wasn't approved, and the new

Macroeconomic Outlook for Chile in 2024

Allan Guiloff

17:39>> constitution to be rewritten is like super right wing, and so, you know, that's pro economy, so probably next year, although we have a left wing government, the new constitution is gonna be like the one we have at the time being or right wing. It gives so much confidence to the market. So I hope it's gonna

Nathan Latka

18:00be better for business.

Allan Guiloff

18:01>> It's gonna be better for business. So hopefully, 2024 is gonna be better. Not much better than this year, but we're not gonna have, like, the biggest recession we've seen in in throughout history, but it's not gonna be get worse than this probably.

Nathan Latka

18:15Yep. Yep. Yep. Interesting. Well, this is a heck of a story. I mean, many customers of the thousand do you still have today?

Price Increases and Customer Churn

Allan Guiloff

18:22>> Well, when I actually, last night, I probably saw a video where

18:30>> surging prices is something like, ah, yeah, actually, it was from a live presentation from a VC of your interviews where raising prices is something founders are super scared of. And actually in January this year, was like, okay, so what's killing me is my cash flow. So what if we turn into a completely SaaS business? So I went, I did an interview to all of my customers and my customer said, No way. I mean, I like what

19:01>> you offered me. I

19:05>> like the value proposition. And I was like, Okay, so if you like it that much, I'm gonna increase my prices. And I did. And actually, my take rate went from probably eighteen, nineteen to a nice juicy 26%, which is almost a 40% increase. And that's because I searched my prices probably a 10% for my customer, which actually means like more gross profit. It's just neat income with no additional costs. Obviously, I had to do some discounts,

19:38>> but I went down from 1,000 customers to probably 800, and I had a churn of probably like 7% revenue. So, overall, it was super positive.

Nathan Latka

19:50That's great.

Allan Guiloff

19:51>> You need to have some guts and just Go dive for it.

Managing Personal Well-Being Through Crisis

Nathan Latka

19:56Very cool. Very cool. How did you, I know you're a fitness guy, how did you manage just your physical well-being? Just your energy levels, your sleep, your food, your gym time while you're going through all this pain?

Allan Guiloff

20:08>> Sleep and sports. That's like, and one mistake I did, a horrible mistake, was not talking enough to my wife. Probably in August, I came one day and I said, oh, man, the company might go bankrupt. She was like, what the hell? How

20:30>> come you didn't tell me anything of the process, right? And I was like, you're right. And I had to stick with all this burden myself. So my biggest recommendation is gonna be talk to your spouse, to your wife, to your whoever, to your best partner.

20:49>> Don't be afraid of talking these things that shit happens, you know? And sleep at least seven hours a day. I try to sleep eight. So I wake up, I start working at 7AM, so I try to go to sleep at tops 10:30 in the night. I do gym after work, and I do it with my wife. And we're both very sporty, so we have a very, and she's a consultant, so we have a very strict day

21:20>> in regards of work, then we go to sports together, we eat together, and then maybe we work a little bit more together. So it's a nice balance. We've been together for ten years and it works.

Nathan Latka

21:32That's amazing. That's Well, okay, take us home here. Last famous five. Number one, favorite business book?

Allan Guiloff

21:39>> Probably my mantra today is monetizing innovation.

Nathan Latka

21:43Number two, is there a CEO you're following or studying?

Allan Guiloff

21:50>> I I I probably like a lot what you've done, so Nathan Latka might be the name.

Nathan Latka

21:56You watch you you you watch a couple of the interviews?

Famous Five: Books, Tools, and Advice

Allan Guiloff

21:59>> Yeah. Probably, I'm gonna copy your business like you just like you told me.

Nathan Latka

22:04You're in a you're in actually in a very good position to launch a embedded fintech company based off how you sit in the payment flows. We can chat more about that later. But

Allan Guiloff

22:12>> Okay.

Nathan Latka

22:13Alright. Number number three, what's your favorite online tool for building shipit?

Allan Guiloff

22:17>> Online tool for shipit must be Slack.

22:20>> Yeah. Yep.

Nathan Latka

22:21Number well, actually, we we know situations. So, Mary, do you have any kids?

22:26>> No kids.

22:26No kids. And how old are you?

Allan Guiloff

22:29>> 33.

Nathan Latka

22:3023.

Allan Guiloff

22:31>> Wait. 33?

Nathan Latka

22:3233. 33. Okay. Yeah.

22:33Yeah. Got it. Got it. Okay. So 33. And then last question. Something you wishing you back when you were 20, Allan.

Allan Guiloff

22:43>> I used to work in an incubator from the center of Chile, and there was this motto, money over the table, take it. That not always applies. Choose carefully your investors. I mean, rather be alone with that company. So, I'm suffering this right now. So, choose wisely and

Lessons Learned: Choosing Investors Wisely

Allan Guiloff

23:04>> always, always hear your spouse because my spouse told me, she told me, Do not take money from this guy. And I was like, You don't know him. He has good intentions. Yeah. Right.

Nathan Latka

23:17Guys, there you have it, shipit. They processed in 2021 over $13,000,000 in volume from e commerce sellers by helping them say, Okay, where do you want to send that package of shoes? We'll pick the carrier. We'll send it. Their take rate was 25. Well, back then, was 18 per 18%. Today in 2023, because of macroeconomic conditions in Chile, retailers, you know, higher interest rates, less retail sales, etcetera, they'll do about 6,000,000 in GMV. He did the

23:41hard work last year of downsizing from a 110 employees to 25. They were burning 200 k last year. This year on track to profit, 500 k. Built to make 1,300,000 in terms of take rate on 6,000,000 GMV. Hoping to just buy additional time here as they continue to scale. 800 customers today because he lost 200 when he increased prices, but that's extra margin to the bottom line. He's bought himself more sustainability, more longevity. We'll see what

24:04happens next. Allan, thanks for taking us to the top.

Allan Guiloff

24:06>> Nice. Thank you.

Nathan Latka

24:08One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live, and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

24:33Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button, and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

24:55fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up

25:17for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We

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