By Lori Hawkins – American-Statesman Staff
Matt Chasen got the idea for uShip 12 years ago, when his mom had an impossible time trying to ship an heirloom dresser from Ohio to Houston.
“The large moving companies didn’t want to do such a small move with one piece of furniture, and the quotes she did get were prohibitively expensive,” he said. “She finally gave up, and that planted a seed that there had to be a better way to ship large items.”
Several months later, as Chasen was moving from Seattle to Austin to attend business school at the University of Texas, another shipping issue arose. Although he had reserved a 9-foot rental truck, he got stuck with a 20-footer because it was all that was available.
“As I was driving this huge, half-full truck, it hit me that there must be a lot of empty trucks on the road and a lot of people needing to move goods, but there was no way bring them together,” he says. “I spent the whole drive thinking about the need for an online marketplace to connect the two.”
In the more than 10 years since, Chasen’s idea has turned into a multimillion-dollar business. Austin-based uShip now has a Central Texas workforce of 170, its revenue grew 70 percent last year, and it’s considered by industry experts to be one of the region’s most promising software companies.
And in doing so, says one of the company’s investors, uShip has created something that was lacking in the shipping business: “a true marketplace.”
‘uShip as a case study’
Chasen’s dream of using the Internet to make the shipping process more efficient really began to become a reality when he teamed up with fellow University of Texas MBA students Jay Manickam and Mickey Millsap to pursue the idea.
They spent the two years at McCombs School of Business working on a business plan, pitching their idea at venture capital competitions and getting advice from professors and tech industry mentors.
“We used uShip as a case study in every class they would let us,” Chasen said. “I incorporated the company in 2003 while sitting in the back row of one of my business classes.”
Shortly after they graduated in 2004, they launched the uShip site, which hosts online auctions for shipping services. The site matches customers who need to move large items — cars, boats and freight — with thousands
of transport companies that can take the load.
Consumers and businesses post their shipment listing into uShip’s auction-style format, similar to eBay, or name their price, similar to Priceline. Then transportation service providers, including truckers, movers and brokers, bid on the jobs or accept the offer price. The service is free for users; uShip takes a cut of the total shipping cost.
Since its founding, more than 355,000 transporters have registered on uShip and placed 13.5 million bids. The amount of money spent on shipping services on the site was $100 million in 2012.
A typical customer is Cullen Rodgers, a Nashville, Tenn.-based product marketing consultant who uses uShip to transport the arcade games he collects.
When Rodgers bought a 16-foot-long bowling ball machine in Kansas City, commercial freight liners bid $600 to $800 to move it. After listing the job on uShip, he got it done for $300.
“These trucks are already on the road, they’re making the trip anyway, so if they can pick up something for a few hundred extra dollars, that benefits them and the buyer,” Rodgers said. “I wouldn’t have bought 80 percent of the games I have if it wasn’t for uShip.”
Although uShip doesn’t disclose financial information, Chasen said revenue grew 70 percent in 2012 over the previous year. That growth has led to a hiring surge — the company has added 70 new employees this year, bringing its Austin workforce to 170.
It’s continuing to add software engineers, mobile developers and support staff at its downtown headquarters in a renovated former general store at Third and Brazos streets.
Meanwhile, uShip has raised its profile as the unlikely focus of a popular reality TV show. A&E Network’s “Shipping Wars,” which debuted last year, follows independent truckers whose livelihoods depend on transporting bulky, out-of-the-ordinary items — including a 4,000-pound steel horse, an oversized Venus Flytrap and an old English phone booth — listed on uShip.com.
‘Long-term sustainable company’
Its track record has made uShip a closely followed company by Austin high-tech dealmakers, who consider it a candidate for an initial public offering down the road. That is if it isn’t bought out by a bigger player. In the past, analysts have said the company could be a natural acquisition for a company like eBay.
Chasen declined to comment on whether the company has gotten any offers, but said uShip is being built to remain independent.
“Our goal is to be a huge stand alone, self-supportive, long-term sustainable company,” he said. “It has taken us a fair amount of time to get where we are. We’re going to create more value with our business in the next three years than in the previous nine years.”
Prominent Silicon Valley venture capital firm Kleiner Perkins is betting on that next wave of growth. The venture firm in December invested $18 million in uShip to accelerate its expansion plans.
Maritza Liaw, a partner with Kleiner Perkins, said she was looking to make an investment in the logistics and transportation space when she came across uShip.
“Shipping is a slow to change industry, and what Matt and the team have done, not overnight, is really deliver a unique service that changes the way the whole process works,” Liaw said. “It’s a very democratic way for shippers and carriers to meet. It’s been applied to other industries, but a true marketplace is rare in shipping.”
While uShip has online competitors, they are primarily smaller niche players that specialize in a certain type of freight, such as cars or boats, Liaw said.
The funding will allow the company, which previously raised $10 million from Silicon Valley firms Benchmark Capital and DAG Ventures, to triple the size of its mobile development team over the next two years and rewrite its apps from the ground up.
It also is pushing beyond the consumer market into the $300 billion U.S. truckload freight market, and is accelerating its expansion in Latin America and Europe.
In an industry that relies heavily on word of mouth, the company will also continue to invest in building relationships with shippers, some of whom have taken to the Web to complain about the company’s brokerage fees and other policies. (The company’s social media team tracks and responds to many of the complaints, Chasen said.)
For Victor Gil, a Californian who ships motorcycles cross-country, uShip’s auction service has been the best way to land jobs. “Using a laptop and WiFi, I get a notification whenever someone lists, and whenever anyone else bids,” said Gil, who stumbled across an online uShip ad two years ago. “I look for a place I want to go — Florida, San Francisco, New Orleans, and I bid on jobs that will get me there. It’s a good way to travel.”
Protecting the ‘mojo’
Its fast-paced hiring is creating a new workplace challenge for uShip, which prides itself on a strong, close-knit company culture with generous perks. Among them: Two chefs cook a healthy lunch in the company kitchen Monday through Thursday, and breakfast is served on Fridays. Employees’ dogs are welcome to roam the headquarters, which includes an upstairs game room with ping pong, video games and shuffle board.
On the first Friday of every month, the offices shut down at noon and employees take part in a company-sponsored activity, such as tubing down the Guadalupe River.
But the company has outgrown its 18,000-square foot headquarters, and recently leased 8,900 square feet of additional office space at Third Street and Congress Avenue.
“Every day I walk down the hall and there’s someone I don’t know,” Chasen said. “It used to be that everybody by osmosis would know exactly what the company is focused on and what our goals are.”
Now, the company holds monthly all-hands meetings to go over quarterly plans, and when hiring it puts as much emphasis on cultural fit as job skills. If a new employee isn’t working, action is taken quickly.
“If they’re not a good culture fit, they’re not going to be productive and they’re going to bring productivity down for lots of other folks as well,” Chasen said. “We try to get to know people well in the interview process, but if you make a mistake you have to let people go really quickly before it spoils the mojo.”
Veteran software developer Shaun Martin joined uShip two years ago because it offered the ability to solve challenging problems with a development team that is open to new ideas. He said that environment is what will keep him at uShip at a time when the job market for engineering talent is hot.
“If you work for a larger company you might work on a small piece of a massive project. Here you have a direct impact on code that is being used by thousands of people on a daily basis,” Martin said. “It’s also about having your work valued an your ideas considered. Lots of software companies talk about how they work in small teams, but organic collaboration is something that’s really hard to come by. That’s what we have here, and it makes you motivated to get the job done.”