Shipbeat, the startup focusing on making shipping easier and better, has filed for bankruptcy. The startup, founded by Kenneth Svenningsen and Joachim Rørbøl, aimed at enabling e-commerce companies to lower there shipping costs and making the solution easier. Making what Klarna has done with payment, but for logistics.
“Logistics is costly for online retailers. About 8-15% of the revenue goes to cover logistics cost. Secondly, logistics is key to the customer experience and key reason for shopping offline. Yet the logistics industry (the largest industry in the world) remain as one of the most conservative, in-transparent and in-effective services from a customer viewpoint.” Kenneth says.
So there obviously was a market, and every e-commerce company had the problem, as well as ned users. On top of that, the team had experience from startups, and Kenneth had himself worked with Rocket Internet and launched e-commerce stores for them on the other side of the world. Sounds like a perfect team and a sweet spot for building a company! However, it was turned out it wasn’t. Kenneth has just made a post-mortem blogpost about what went wrong. You can read it here. In it are reasons why the startup failed:
“We expected resistance from the carriers, but it took us more than a year to get a shipping agreement with PostNord [largest carrier in DK]. Even then and throughout the lifetime of Shipbeat, PostNord tried to prevent Shipbeat from re-selling their services. This was unexpected as PostNord paradoxically is required by law to sell some of their key services to anyone.”
Kenneth writes in the post, before continuing:
“Our plan was to build internally a broker/marketplace business for logistics. That required hiring entrepreneurial minded people with logistics experience and network to build relations at C-level with the carriers. That proved virtually impossible to find. “
He also writes about strategic decisions they took, and what led to the final decision, so close the company.
“Our best option was to get a shipping broker or similar on board as investor or acquirer. One who could provide a competitive logistics setup that we could power up with the Shipbeat software. That could have led leap-frogging the competition and ultimately deliver on our value proposition widely. After a good process with meaningful dialogues, but with no deal reasonably insight we [founders, board, and investors] could not justify taking more money into the company.”
The startup had raised a little over € 1 million in funding and loans. If you are interesting in the challenges of building a startup, and how it can go wrong even if almost everything is aligned, you should read the entire blogpost.
We wish the team and entrepreneurs all the best in their next venture!