Having a nimble culture is a requirement when you want to have a fast-growing company. A nimble culture is one where people move fast, break things, and challenge the old way. Being nimble becomes a way of doing everything. Fast decision and quick pivots are natural. Today I am talking to Jan Bednar, Founder, and CEO of ShipMonk. ShipMonk has exploded in growth to reach 29th out of 5000 on the 2018 Inc list. Jan shares with me how to internalize the core elements of a nimble culture. Discover the mistakes that you have to embrace the journey of a nimble culture.
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Jan Bednar: The Transcript
Target Audience: Jan Bednar is a founder and CEO of ShipMonk. ShipMonk is currently helping over 1,000 ecommerce companies to deliver over million of their amazing products every month to their customers around the world. In just a little over 4 years, Jan led ShipMonk from $0 to over $60,000,000 in annual recurring revenue, 4 locations around the world and over 400 exceptional, full time employees. All without external funding.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
Jan Bednar: Where every time you triple in size, the infrastructure that you need to run the business changes dramatically. And that’s kind of what we’ve experienced last year, because we went from $10 million to $30 million revenue, and kind of started actually putting some organizational infrastructure in place.
Gene Hammett: I’m Gene Hammett, I’m the host. This is formally known as Leaders in the Trenches, but we’re interviewing people that are in the front line, the trenches, so to speak, of the business, growing really fast. We’ve focused on Inc. 500 level leaders and today’s interview is with Jan Bednar. Jan is with ShipMonk, and really this company has been on fire, because they went from 15 employees to over 380 recently. They went from just almost nothing to a few million, then to $10 million, and then to $30 million, and this year they’re going to be doing $60 million. Think about that form a trajectory of growth. So, what do we talk about today? Well, we talk about the importance of having a culture of nimbleness. If you want to create a fast-growing company, you want to really embrace people that are nimble. And you want to hire them that already come in with that. You can’t make them into nimble people.
Gene Hammett: We talk about the specifics of that today in the interview, but what I like most about this conversation with Jan is really just talking about some of the things that, really important to them as far as the ownership that they must take as employees. My research really aligns with this, because I’ve talked to over 400 leaders of the Inc. 5000, and they say that creating leaders that allow or inspire a sense of ownership in every employee is really critical to their growth. So I’m really excited, about to share this interview with you. It’s Jan Bednar with ShipMonk. So here’s the interview right now.
Gene Hammett: Jan, how are you?
Jan Bednar: Hey, Gene. Doing pretty good. How are you?
Gene Hammett: Tell us a little bit about your company, and what you guys do.
Jan Bednar: Yeah, absolutely. So we’re an order fulfillment company for e-commerce, fast-growing e-commerce companies. We focus on small to medium-sized businesses and help them get the enterprise-level infrastructure that they normally would need to be able to distribute their products all around the country or all around the world.
Jan Bednar: And we provide it to them in an easy package where they would basically just ship the inventory over to us, we would do all the integration work, provide a technology to them that automates the entire process from receiving an order from their website or marketplace, all the way to getting the order to their customer’s door. And we’re trying to leverage our scale by enabling them to get two-day shipping for a very economical rate, to compete with Amazon and other big retailers.
Gene Hammett: Well, I imagine Amazon’s had a huge impact on the whole e-commerce business. Is that causing you to rethink technology, rethink processes, rethink marketing to compete against Amazon?
Jan Bednar: Amazon has been the largest e-commerce player ever since we were in business, I mean long before us. So when we kind of entered this arena, we’ve never really looked at Amazon as a competitor of ours. It’s almost impossible to compete with them, so the way we’re just competing in the market other than Amazon. Obviously what they’ve done with the supply chain and customers’ expectations has affected greatly the expectations of consumers, and getting packages in two days, and now kind of pushing towards one day, has affected the way we design our supply chain and the way our customers expect their packages to be delivered.
Jan Bednar: But I think the one interesting thing is most of our customers sell unique products. They’re not Clorox that you were going on Amazon and buying, and you really need it in one, two, because our customers sell unique products that people typically do a discovery buy for. So it could be a cat toy, it could be a subscription box for beauty, it could be any of these things, and most of our customers’ customers don’t necessarily have very dramatic expectations on delivery times. So, although they would love to get the product in a day, it’s very hard for a small business to be able to support getting an order delivered in a day for a reasonable price. So most of our customers are bringing a lot more value to the table and their products, so that you and consumers don’t necessarily have one-day delivery expectations. And then not typically losing customers for it either if they don’t offer that one day delivery service.
Gene Hammett: How many employees do you have Jan?
Jan Bednar: At this rate, we have close to 380.
Gene Hammett: Okay, and you’ve grown pretty fast, so give us an idea of over the last three years how fast you’ve grown.
Jan Bednar: So about three years ago around this time I think we had like 15 employees, so it’s been kind of a nice little growth. We started actually in a little bit of a different business, and logistics, pivoted in 2016 to order fulfillment, and have been growing ever since. From basically zero to, we’re going to do about $60 million in revenue this year, and we’re shipping close to a million packages a month right now.
Gene Hammett: Wow that is just impressive on many levels because there’s a lot of moving pieces to what you’ve created, and that’s the opportunity, right? Because there’s a lot of technology and people involved. I am curious, with that level of fast growth what’s been one of the things that’s most important to you as a leader to be able to handle that kind of growth?
Jan Bednar: So I think there’s one of the most challenging things is the jumps from a small business to, it’s still relatively a small business, but the incremental jumps from $3 million revenue to $10 million revenue, and then $10 million to $30. It gets, and it’s actually there’s a theory it’s called rule of three or something, where every time you triple in size, the infrastructure that you need to run the business changes dramatically. And that’s kind of what we experienced last year, because we went from $10 million to $30 million revenue, and kind of started actually putting some organizational infrastructure in place.
Jan Bednar: And none of us really, from the founding theme, had the experience of running, or even being part of a bigger company, so it’s been kind of a challenging process to truly understand, okay well the infrastructure that we had a year ago doesn’t work anymore. Now we have to hire these people to basically, just another layer of management, or supervisors, or whatever it is. So that’s been pretty challenging, but kind of a fun learning process. To go through it and really build the infrastructure to support the growth for the next year or so. And we’re going through it again this year, and we’re going to be going through that again next year. To truly understand what does it take to operate a $60 or $100 or $200 million company, because it’s a very different business at every stage. It’s almost like you have to reinvent it all over again every time.
Gene Hammett: You know I know you’ve probably heard this before through your advisors, the people are mentors in your life, but sometimes the people that got you there aren’t the people who get you to the next level. And it’s one way that you’re saying, and it’s not just people, it’s processes, and technology, and you’re going through all of that. It sounds like you’ve got to have a very nimble organization. Is that true?
Jan Bednar: Yeah 100%, and I think one of the most important aspect that when we’re hiring leaders for our organization, is being nimble, is one of our core values and things that we look at. One of the main values that really we have on the wall is getting shit done, is kind of a… you know it sounds funny, but it’s really one of the most important values that we have as a company, because what that truly means is that if there was a need to do something, just get it done. Don’t try to put it on other departments, on other people, or try to overthink it, because at this stage the only way we can be better than anybody else is to move a lot quicker. And that’s what really allows us to… If people had that mentality of, okay let me just take care of this myself instead of trying to take weeks to figure it out, we can be successful.
Gene Hammett: So, that’s one of the core values, how do you reinforce that when you’re hiring these leaders?
Jan Bednar: So I think a conversation about their comfort level, I mean the background is the most important thing, right? If somebody’s been in a company that hasn’t been growing, or just been more corporate structure, unless they have that mentality about them, which is rare in those situations. You already know that, that’s probably not the right fit, right? But if you’re hiring somebody that’s worked in startups, in fast growing changing environments, somebody that embraces change, and is not afraid to do things one way week, and then just completely switch around and do them a different way the next week.
Gene Hammett: I wanted to break in here for a second, because Jan talked about embracing change. Embracing change is really something that you want your team to do, and in fact you must have them embrace change. Because if they are a fixed mindset versus a growth mind set, then they will resist all the change coming your way. They will fight you, they will cause stress, not only for themselves, but also for you. So you want to hire people that are embracing change.
Gene Hammett: One of the things you can do behind that is really have your hiring structure, the way you actually interview them, to uncover how they approach and see change. And how do you do that? Well, you’ve got to ask the right questions. It’s not as important as what their skill is on their resume, I mean those things are… you’re not going to be looking at people that are outside that category, but you want to make sure that when you’re hiring people they are embracing change. Change is not going away. Now back to the interview.
Jan Bednar: Those really are the people that we’re looking for. Somebody that is not afraid of change, somebody that embraces change, and doesn’t get upset because things change so quickly. And it’s not easy to hire people for those kind of roles. I mean startups in general have that kind of a… You need to have a certain personality to fit into a startup culture, and into a fast-growing startup like what we’re dealing, it’s even more of a crazy level than you would think, because people are too used to having their complete robust structure that you can’t get out of, it’s typically not a good fit. So having that conversation and almost presenting them the different examples, so what we’ve gone through, and being like, “Hey, is this something you would be comfortable with? Because if not, you’re probably not the right guy for the job.” And we try to avoid having misunderstandings when we’re onboarding employees, and we try to be pretty upfront because ultimately we believe that it’s better for everybody if it’s clear that the candidate is not a right fit for the job.
Gene Hammett: Would you say that it’s good to be comfortable being uncomfortable in the kind of growth that you guys have?
Jan Bednar: Yeah 100%.
Gene Hammett: When you think about growing the business, I’m sure you’ve come up with some types of emergencies, or things that just didn’t go your way. Does something come to mind that you could share with us around how employees kind of rallied to really support what you were doing, or what you were going through?
Jan Bednar: Yeah absolutely. I mean there’s countless examples, unfortunately, of what happened over the last couple years of when things went unexpectedly wrong, and the team got together, and solved it. The one thing that comes to mind is one of the most recent one, which is also one of the most brutal thing to happened.
Jan Bednar: About a year, well six months ago, during Black Friday, which is the busiest weekend of the year for us, where we process almost 10% of our yearly volume in that one weekend. We’ve been getting ready for it, we’ve being staffing, and recruiting, and hiring, and getting all of our facilities ready to be ready for that weekend. And the Thursday before Thanksgiving, which was right before Black Friday, I get a call at two in the morning from one of my managers of the building who tells me that where somehow the power went out, and nobody knows what’s going on. And so I’m like, okay, well I’ll try to call an emergency electrician. This is the day before Thanksgiving, so nobody’s available. It took us, I think, over almost the next morning, I think it was.
Jan Bednar: So we had to let everybody go home, the next morning the electrician came in and said, “Hey guys, the transformer burned down. There’s nothing we can do, and everything is closed until Monday, so I’m not going to be able to get you a replacement.” And we’re like well we can’t be closed till Monday, we’re going to be out of business, we’re going to have so many orders, if we’re not processing, it’s just not possible.
Jan Bednar: And so all of the management team basically got together on Thanksgiving, which was unfortunate, and we had to come up with a plan of how do we solve this? What do we do to figure it out? And anything was an option at that point, it was our life, our business life, was on the line in a way. And so we all got together, and we ended up basically going to all the department stores, or like Home Depot like stores in the area. Ended up buying a couple thousand feet of, tens of thousands of feet of extension cords, and ran them from on the warehouse nextdoor basically to our facility to supply power to the lights, the internet, the package stations, the everything. I mean it looked ridiculous in the warehouse it was thousands of cords everywhere, but it was the only way, and it took us like the whole night on Thursday night, to get this done.
Jan Bednar: And then we started operating on Friday morning and got, although we did get a one day delay, we were still able to get all the orders out and the operating [inaudible [00:14:11] a little bit of capacity, but it was still something that, what had we not done that? If we had the typical team where they were like my shift’s over, I’m going home attitude, we wouldn’t be here. And those are the kind of people that you need, is like the guys, the people, that just stand up if there’s a problem, and they come, and they help, and they put their brains to work, and come up with the best solution for the business.
Gene Hammett: You know a lot of organizations have to go through certain things like this, but Jan you just described to me a very difficult problem, or challenge, that it took not just your brain to solve it, it probably took a lot of people. How do you encourage people to think for themselves and really take a chance by sharing those ideas?
Jan Bednar: So I think one of the things, we use, okay, ours as our leadership tool, or kind of alignment among different levels of management, which allows us to align people to what the overall value, or goal is for the company. And as long as they understand where the company is going, we give them lot of freedom to operate within their own little box. So instead of us micromanaging and trying to figure out exactly what they’re doing, we give them the objective, so what the big goal is for the business, and then overall give them the guidance on, okay, well this is where we’re all going, and this is where whatever decision you make, just make sure it’s aligned with your objective. And so giving them that freedom and opportunity to make their own decisions, I think drives that behavior by nature. And also, obviously, you’ve got to be hiring people, that are capable of doing it themselves, and they don’t need handholding to get this stuff done.
Gene Hammett: So I know that’s easily said, like hire people that don’t need handholding, but is there anything specifically that you do that you could share with us?
Jan Bednar: I mean I think you know soon enough. We tend to delegate a lot of tasks or projects on kind of a broad spectrum, and give people the ability to show what they want to do, and work with them a lot, depending on the importance of the project, and the expertise level of whoever’s managing the project, we get again more involved or less involved with the project itself. And if it’s something where we maybe… we allow people to fail as well. So we kind of watch how they’re doing it, what are some of the things that they’re taking to get it accomplished, and then make sure that it’s aligned with what the ultimate goal is.
Jan Bednar: I don’t think there’s a silver bullet solution saying, “Okay well, these are the exact people that we’re hiring to get this done.” I think it takes a little bit of trial and error. And I don’t think that we’re perfect in this either, but I think the most important thing is just have people buy into the mission and the vision of the company. Communicate what that is and then huddle around whatever that is and then make sure that people act on behalf of whatever that vision is for the business. And you can very early on tell whether somebody’s following that mindset or not.
Gene Hammett: You have probably not that familiar with my work, and I speak on stages around one particular topic, and it’s really about how you inspire employees to take ownership of their work. All the things you just mentioned, like being okay with failure, make decisions for themselves, and really just get shit done, is really about them taking ownership even if they don’t have a slice of the pie, or profit sharing, or what not. Would you agree that taking ownership is a real key factor to your growth?
Jan Bednar: Yeah 100%. And we kind of talk about it with my team a lot, I think that it gets harder and harder the bigger the organization get, is to communicate and make sure that it gets transferred to all the pieces of the organization, so it’s not just on the management level, but it’s on the individual, in our case, an associate level in the warehouse understands why we’re doing it, and what we’re doing it for. And it’s easier said than done. I mean it’s definitely a complex subject to maintain a culture, and make sure that everybody knows exactly where the company’s going and why they’re doing what their doing.
Jan Bednar: But I think it’s… I definitely agree that having, like knowing what those things are that make people care, make the organization preform much higher than if people are just going in and out, to punch in and out.
Gene Hammett: Jan just talked about ownership. I asked the question, but he followed up with the need for people to feel like owners. Now I want you to really think about that. I choose those words wisely, because they need to feel like owners. Another way to look about this is they need to feel like that you’re encouraging the entrepreneur spirit. You want them to feel like they can be resourceful, and add value. That they can think for themselves. It’s okay to fail. You don’t want them to play safe, and not take the risk necessary for them to grow the business, and share the things that are going to grow the business, because that will keep you from growing. You want to encourage the entrepreneur spirit, you want you encourage that sense or feeling of ownership in everything you do. If you want to get more information about that, I want you to find an infographic that I created. Just go to genehammett.com/infographic. It’s from the study I did about 16 months ago, where I was interviewing 53 executives of Inc. 5000 level companies, just like you, to figure out why are they growing so fast. What are the core elements? And I organized that in the data, so it’s in one page. Go to genehammett.com/infographic. Now back to the interview.
Gene Hammett: You wouldn’t have been able to grow to where you are if you just had the kind of people that just punch in and out, and work their quote, unquote, job, right?
Jan Bednar: Right. Yep 100%.
Gene Hammett: When you think about leadership, is there anything that you do that you notice might be a little bit different or counterintuitive to what others do in leadership that has allowed this kind of growth?
Jan Bednar: Yeah that’s a good question. I think the one thing is I try to, and I don’t know if this is a good thing or not, but when I started the business I tend to be… I try to be very friendly with the employees, and I try to talk to everybody in the business, not just the people that report to me, but I try to walk around and talk to individual employees, and try to understand the problems from within the organization, not just the information that gets passed over to me. And I try to maintain an image of an open… like a person that everybody can feel like they can come to me with any kind of problems, or where if they feel like we’re not doing something right as a business, then they cam communicate it to me.
Jan Bednar: We have a lot of open channels of communication, and feedback from our employees to understand that if they feel like there’s a problem, or they feel like we’re not doing something right, we always try to know. Because it does get, obviously, harder and harder to know every employee, and find the time to speak to everybody. So I would say that’s one of the things that we’re doing.
Jan Bednar: We’re also doing a lot of… We’re trying to build a great community of employees and just create a really fun culture. So we do happy hours a couple times a month, we have a trampoline, we have a ping pong table, we have billiard, we have a ton of different activities. We throw events for our employees. And when you put people in a non-work environment with their coworkers on weekly basis, or monthly basis, we feel like it sparks conversations that maybe people wouldn’t otherwise be comfortable having.
Jan Bednar: So somebody who really wants to complain about something, but they’re just too afraid that their boss is going to see them going into somebody else’s office, there’s ways in this less formal settings, people are more likely to share their concerns and worries, than if it’s like a one on one scheduled meeting sometimes. So I think that’s been working pretty well for us, because people love to work here, and people love to be part of these fun events, and that just makes them closer as a team, and makes them close to us as their managers and supervisors.
Gene Hammett: I want to zero in on that piece around giving space to actually share what’s on their mind, their problems they may be going through, or the experience. Is there anything specific that that has generated, that has changed the way you guys create culture, or operate the business?
Jan Bednar: So in general we have… So we’re using companies, like Slack has been a big part of our communication strategy as a company, and so we have a lot of different channels that are very special for focus on whether it’s issues from customers, or whether it’s issues from employees, and sparking the conversation and asking people on regular basis like, “Hey, if you were to pick one product feature that you could build tomorrow, what would that be and why?” Sparking that conversation, having people, giving them the freedom to think about it, and giving them the ability to contribute to the overall product road map, I think has been a pretty significant value to us.
Jan Bednar: Because everybody knows that just because… There’s a lot of things that I’m not doing on a daily basis that somebody in customer support might do, so I’ll never see that issue, or error, or customer complaint, but if we give them the platform to present and give feedback, which they do through Slack, or Asana, or any other tools that we’re using, I think that creates… It gives us a better understanding of what’s going on inside of the business, and it gives them the feeling like they’re actually contributing to the overall product vision, or whatever the other issue is, whether it’s an issue with the product, or the customer, or their coworkers, it’s a pretty open platform to share whatever they feel like.
Gene Hammett: I want to wrap this up with maybe just looking back at a mistake that you made in the fast growth that you could share with other leaders, and then how has that transformed the way that you think about growing the business?
Jan Bednar: Yeah, I think that the biggest mistake I made was I didn’t hire senior executives early enough. So there are certain executives that maybe are not at, especially for our business, because we’re so operationally heavy, like everything we do is operations, the warehouse, it’s just a lot of operational things, and we haven’t hired a senior operations executive until now basically.
Jan Bednar: And I think that’s been one of the challenges, has been the fact that we didn’t really have anybody that knows how to manage a 300 or 400 person organization. And if I could hire them a year ago, it obviously would have been a lot more expensive, because we wouldn’t have the money that we have now, but it would have prevented I think a lot of the scaling issues that we’ve gone through, and they probably could’ve thought of a lot of ways to prevent the situation, for example, that happened during Thanksgiving. So I think those are little things that… having the right infrastructure in place early enough is something that I probably would’ve done if I could do it again, is just hire the people that you feel like you need earlier than you actually need.
Gene Hammett: I appreciate you sharing that with us. I wanted to say thank you for being here, sharing your insights around growth and leadership, so Jan thank you so much.
Jan Bednar: Thank you, I appreciate the time.
Gene Hammett: Wow what a great interview. I really love talking about fast-growth companies and seeing how they think. And I don’t know if you saw the wheels turning there, I was scribbling down notes because a lot of the things we’re really smart as far as how they’re growing, and how they’re really creating leadership inside the organization. I don’t know if you picked up on it, but one of the things that I really want to shine a light on here is they really have people that go beyond just the 9 to 5, or beyond just their core job responsibility. They’re willing to share their ideas, they’re willing to get real, and really that’s what helps them grow, so that kind of leadership is really something to admire.
Gene Hammett: If you want to continue to get these kinds of messages right inside your phone, or right inside your website, then make sure you go to growththinktank.com, or you can subscribe at any of the platforms that are right for you depending on your type of phone. You can always go to growththinktank.com, and you can always share it with someone that you feel like would really benefit from these types of conversations. So I really appreciate you being here apart of this, continue with this down this journey, to be a better leader, to create more leaders inside your organization, and to lead with courage. We’ll see you next time.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
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