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Shyp Hires Its First COO as It Gets Serious About Business Customers

Apr 25, 2016

Like many other startups born during the heyday of Uber-style services, Shyp's “delightful” shipping services didn't exactly inspire confidence from everybody at the beginning.

But today, the San Francisco-based company is a full-fledged business that has raised $62.1 million in total funding, currently operates in four cities, and is focused on serving new kinds of customers. And to help it better navigate this new phase of its business, Shyp has recently hired Zeena Freeman as its first chief operating officer. The company's current vice president of operations will now report to her.

“I’ve never actually joined a company in a role that existed before I had that role,” Freeman told Fortune in an interview.

Freeman, who spent nearly a decade at apparel company Gap, followed by stints at Aeropostal, Aditya Birla Group, Sony, and Black Diamond, is the classic customer-turned-employee story. Like any San Franciscan constantly hearing about and trying out various nifty apps, she gave Shyp a shot and was immediately smitten with the experience.

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And that's exactly what Shyp's founders have always wanted. Since Shyp's debut in 2013, the San Francisco startup has set out to make shipping packages as painless as possible. It has a slick mobile app that lets customers snap a photo of what they want to ship and enter the destination. Shyp then dispatches a courier who picks up the item, no wrapping necessary, and takes it to one of the company's warehouses, where it's properly wrapped and shipped through the best and cheapest carrier Shyp can find. The company makes money by charging customers the retail price to ship their item while getting bulk discounts from carriers and keeping the difference. It also charges a $5 pick-up fee for up to 20 items.

But since its start more than two years ago, the company has grown not only geographically, but also in the type of customers and shipping needs it services. Today, Shyp doesn't just help the average Joe mail a gift to his mom for her birthday—it's also helping an increasing number of what it calls “high-frequency customers.” Most of them are small-business owners and frequent sellers on marketplaces like eBay and Etsy. Unlike the typical consumer, they need to ship packages multiple times per week or in large batches, and Shyp has been developing new services and features for them. For example, it recently integrated its app with eBay to let customers request a Shyp courier when they've made a sale.

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Figuring out how to best serve this growing category of customers is one of Freeman's main tasks at Shyp. Her responsibilities include operations, business development, marketing, and customer support—a tall order, but one co-founder and CEO Kevin Gibbon believes Freeman is right for.

“The search took a year and a half so it was just a matter of finding the right person,” he said.

According to Homebrew partner Hunter Walk, an observer on Shyp's board and whose fund is an early investor in the company, Gibbon first floated the idea of hiring a COO in mid-2014, shortly after Shyp raised its first institutional round. After it closed its second round in the spring of 2015, the search kicked kicked off, especially with co-founder Joshua Scott's departure that May. As a company whose business is operations, it became obvious Shyp needed to add a strong leader in that area.

But like any startup, Shyp's growth hasn't been all smooth sailing. Last year, just as a high-profile lawsuit over Uber's classification of its drivers as contractors instead of employees was beginning to make headlines, Shyp announced it was converting its own couriers to employees with benefits.

Then earlier this year, the company suspended its financially inefficient operations in Miami and laid off about 8% of its workforce, a move that “will empower us to invest in growing Shyp’s business sustainably,” as Gibbon described it in a post on LinkedIn.

But asked if a COO could have prevented the Miami shutdown and recent layoffs, both Gibbon and Walk said no. While Shyp originally sought to expand geographically, it ultimately decided that focusing on its main markets and serving more kinds of customers in them was the better route.

“They started to get pulled into depth of market instead of breadth of market,” Walk said of Shyp's shift in strategy.

And as it digs deeper into its existing markets, Shyp has set a goal an increasing number of fellow Uber-like services are reaching for as well: profitability. The company says it has already laid down the groundwork, but whether it reaches it remains to be seen.

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