CitizenShipper

Pivoting from a Ph.D. to Pet Shipping and Making $1M+ in Revenue

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Richard Obousy

Founder, CitizenShipper

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CitizenShipper

citizenshipper.com

from Austin, TX, USA

started July 2008

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Hey there! I'm Richard Obousy, Founder/CEO of CitizenShipper, a marketplace for transporting pets and precious items. Our main focus is long-distance pet transportation, and we make it easy for customers who want to transport dogs and cats by connecting them with a feedback rated, background screened, transportation professional.

We have a wide range of customers, and the use cases vary. However, one typical scenario is when people purchase new pets from out-of-state. Imagine falling in love with a puppy online after seeing it on a pet adoption site, only to find out that the puppy is several states away! That's where we help. Customers can transport their pets with peace of mind through us because we have worked hard over the years to make the platform safe and provide an optimal pet transportation experience.

Some of the things we offer for peace of mind are a $1,000 pet protection program, ID-verified drivers, 24/7 televet access for all drivers, and a range of additional safety verifications, including insurance, USDA registrations, and background screening.

I'm so proud of our team, who have been dedicated to building the CitizenShipper platform. We have now grown to become the largest pet transportation marketplace in the US.

What's your backstory and how did you come up with the idea?

I was born and grew up in the UK and moved to Texas in 2002 to work on a PhD in Physics. While I was in my final year, I started thinking about the idea of making some extra money by shipping items in my car for people who needed things transported but didn't want to do it themselves.

I loved traveling and exploring, and it seemed like a great way to earn a little extra money and cover gas expenses. I never actually ended up shipping things myself, but it got me thinking about how many millions of people had extra space in their vehicles and could ship items for others. I launched a basic MVP back in 2008 and graduated a few months after the launch. Because I had finished grad school, I was able to focus solely on the idea of "CitizenShipper".

I didn't have any experience as an entrepreneur, couldn't code, and had no business experience whatsoever. However, I believed I had a great idea and was dedicated to seeing how far I could grow the company.

Pivoting away from physics and moving into entrepreneurship felt right to me. I loved, and still love, physics. However, being the master of my own fate is very important to me, and I didn't believe I could live that reality by following the academic path.

The typical path for a physicist after obtaining their PhD would be to complete two, maybe three, "Postdoc" appointments where they would continue their research at another university. Each Postdoc takes approximately three years to complete, and salaries range from $30k to $40k per year, close to a poverty-level salary for almost the next decade of your life.

Not only that but given how competitive Postdoc positions are, there would be little choice in where to do a Postdoc. Usually, you would have to go wherever you were accepted, so you would have little to no control over your geographical location.

After completing your Postdocs, the next step would be to try to obtain an Assistant Professorship at a university. Salaries for that position are not much higher than Postdocs, and there's a similar level of competitiveness that leaves little room for choosing where to live. You would go wherever you were accepted.

None of that sounded very appealing to me at the time. I was proud of what I had accomplished during my PhD and even had a chapter in my dissertation on a theory I had worked on relating to Faster-than-Light travel (think Star Trek!), which had been a dream of mine since my teenage years! I felt happy with what I had achieved in physics, proved to myself that I could do it, and was frankly ready for a change.

I remember everyone being very supportive of my decision, and I also remember the transition being easy. While the nature of the problems is different, both physics and entrepreneurship are about solving difficult problems, so I was still involved in what I fundamentally loved doing.

With that said, I maintained close contact with the physics community between 2009 and 2013 and was deeply involved in projects related to interstellar travel (travel to other solar systems). I co-led a project called Project Icarus, which was an effort to conduct a multi-year physics and engineering study on a nuclear fusion-powered starship design.

Additionally, I was the co-founder and president of a 501(c)(3) called Icarus Interstellar, and we were involved in some very exciting projects related to interstellar travel that had a positive impact on the field. By 2013, I realized I couldn't juggle leading a non-profit and a startup, so I stepped down as President after two years of service, allowing me to focus on CitizenShipper.

Going back to 2009 and the early days of the company I remember a few months after the launch, I decided to monetize the site by making it subscription-based. Drivers would be asked to pay $25 per quarter to access the platform. It was in March of 2009 that our first subscriber paid that initial $25, and that was the moment I knew that CitizenShipper was something people would be willing to pay for.

The idea has evolved a lot since those early days. We began focusing on pets around 2016 and also transitioned to a more traditional marketplace business model, where the demand side pays to connect with the supply side.

Investors aren't looking for ideas; they're looking for people who are executors. People who can take ideas and, with limited resources, bring them into reality.

Take us through the process of building the first version of your product.

The very first version of the platform was self-funded on a credit card. I found a freelance developer from India on a platform called guru.com that connected people with freelance jobs with workers from around the world.

I had no experience at all in UI/UX, and my description of CitizenShipper was just 2-3 pages of text describing the idea and how I envisioned it working. I don't think I even used PowerPoint slides to get the ideas across, just text. I didn't know the difference between a front-end developer and a back-end developer and had no clue about hiring product designers or UI/UX engineers.

The first version was buggy and ugly, and you can still see the homepage on waybackmachine.com from when it was first launched. But it was the seed that was healthy enough to grow.

I used Craigslist to advertise for drivers for the platform, while CitizenShipper was still free to use, and received several hundred driver sign-ups within the first few weeks. I then asked a friend to list a shipment. He listed a small package of books to be transported a few miles from his apartment to mine.

The listing received several bids and he chose a driver to do the job. The driver picked up the package from my friend's house and shortly after, I received a knock at the door and a smiling guy was standing there with the package! I think I paid him $10, maybe $20 for the job.

At the time, it amazed me that I had created a platform that accomplished what I had envisioned it could do, and that was enough for me to validate its functionality! My friend and I conducted a few more tests together and shared feedback on the experience, but it was enough for me to realize that I had something that, in principle, worked!

Of course, the CitizenShipper of today is primarily focused on long-distance pet transport, but those early days of shipping a small package a few miles across town gave me the confidence I needed to continue!

A few months into CitizenShipper, I secured the first round of angel investment of just $60k. While modest, it was enough for me to pay myself a small stipend to keep the lights on and focus full time on CitizenShipper. It also paid for a full-time developer and allowed me to get my first PPC campaigns up and running. A good chunk of that also went on getting the legal stuff taken care of, creating the Terms and Conditions, and ensuring that we could offer this service.

In terms of how I raised the money, I paid a PR freelancer back in 2008, just after the launch, a few hundred dollars to write some articles about CitizenShipper. One of her articles got picked up by a tech/startup review blog.

A Denver-based angel investor liked the idea and found my number, and we talked a little bit before arranging to meet in person in January 2009. We got along well, and he was excited about CitizenShipper and agreed to invest some seed capital into the company. This was pre-revenue, so it was a real leap of faith from the investor.

The important lesson here, for any entrepreneurs out there looking to raise some capital, is the importance of an MVP. Investors aren't looking for ideas; they're looking for people who are executors. People who can take ideas and, with limited resources, bring them into reality.

Another important lesson for me was that I wasn't actively looking for an investor. I was doing what I enjoyed, creating something new! I wasn't focusing on the money; I was focusing on the innovation.

Here’s a screenshot from August 2008! This is the earliest version of the site as it looked just after launch.

Describe the process of launching the business.

The launch was a really exciting time, and I remember showing the site to my colleagues with whom I shared an office at Baylor Grad School. There wasn't much of a strategy if I recall. Back in 2008, I had the 'build it and they will come' mentality, which proved to be completely flawed.

But the wonderful thing about entrepreneurship is that it tests the boundaries of an individual's creativity, innovation, and willpower. You allow yourself to become obsessed with a thing, and it occupies your waking (and unconscious) thoughts. I was able to prioritize what I thought were the next logical steps in the growth of the business, and one of my strengths is execution. I don't get paralyzed by overanalyzing, and my mantra to the team is 'done today is better than perfect tomorrow'.

It took years to build any momentum with CitizenShipper. We generated $8k in the first year, $16k in year two, $65k in year three, and then for two years we hovered around $10k per month before dropping down to less than $50k per year by 2015.

At one point, it looked like we might have to shut the company down, as we had no capital and little cash flow. But we made a few changes to the business model and started focusing on pets, and that's when the growth started.

In the early years, we were exclusively subscription-based on the supply side. However, we then transitioned to being fee-based on the demand side, which was premature and led to an awful performance in 2015.

I decided to move to a hybrid model where the supply side was monetized on a subscription basis, and the demand side on a fee per transaction basis. Ultimately, this saved us as drivers were willing to pay us a monthly fee to use the platform, generating enough cash to hire someone to continue building the platform.

I had to take a year of leave from the company in 2015 as there wasn't any money to cover my salary. So, I worked for another startup as their Head of Marketing for a year. During that period, we could only afford a single part-time customer support agent.

There were some discussions with our investors at the time about shutting down, but I never stopped believing that the company could be successful. So, we kept it going, and I'm glad we did; otherwise, we would never have grown to where we are today.

I’ve been working on CitizenShipper for fifteen years and one thing I’ve learned is there is no silver bullet.

We crossed the $1M per year net revenue milestone in 2019, and drivers made about $5M that year. We've been consistently and aggressively growing ever since. Crossing the $1M per year milestone was exciting for me, as it's something only a handful of startups manage to do.

It took us 10 years, but we persevered and we made it!

Currently, the business is privately owned, and we've taken no institutional capital. In terms of lessons learned, I think the biggest one is that if you try to be all things to all people, you end up being nothing to everyone.

We started off offering shipping across a wide range of categories, including boats, motorcycles, cars, furniture, pets, apartment moves, and heavy equipment across the entire US. In retrospect, that was ridiculously optimistic for a company with virtually no cash and no experience in the space.

In 2016 we decided to make our main focus into pets. This meant that that’s where our marketing dollars went, and that also directed the product experience. Validation of this came quickly as we saw immediate and sustained growth in our core KPIs.

Since launch, what has worked to attract and retain customers?

We have two main categories of customers on CitizenShipper: the Driver and the Shipping Customer.

On the driver side, two things attract new drivers. The first is the ability to make money on their schedule, and the second is the sheer awesomeness of being able to travel the country, meet new people, and hang out with pets for the trip! For a lot of people, that's a lot of fun! In terms of retention, it just boils down to providing them with a sufficient flow of customers willing to pay for their services.

On the shipper side of things, what attracts them is the peace of mind that CitizenShipper offers. We've been in the space for fifteen years now, so we have built up a vast amount of experience in terms of customer satisfaction.

We have so many trust and safety features in place that it helps customers when making the difficult decision to entrust their pet to someone they've just met online. In terms of retention, by offering them a delightful experience, we ensure that if they need to ship again in the future, they'll come back to us.

Couple that with our great customer support team which handles any questions that come up quickly and efficiently, and we've got a formula that leads to very happy customers.

In terms of specific strategies, we’re obsessed with metrics and I’ve invested a lot in a data science team and the creation of dashboards and a knowledge base for us, full of reports on data aspects of the platform.

Our growth channels have been ones familiar to your readers and include paid marketing, SEO, affiliate marketing, email and SMS marketing, and partnerships. We are also obsessed with testing and are constantly trying out new things to increase various KPIs.

Growth during the lockdown period was steep, as people were looking for comfort and companionship and finding that in pets. The knock-on effect was that more people were buying pets and using our service.

We virtually doubled our revenue overnight. Other than that it’s been a slow and steady grind. I’ve been working on CitizenShipper for fifteen years and one thing I’ve learned is there is no silver bullet. Growth is hard and it can also be extremely disappointing when you invest a lot of time, money, and energy into something you’re convinced is going to help, and it ends up doing the opposite.

How are you doing today and what does the future look like?

CitizenShipper is in a strong position to continue growing and dominating the pet transportation space. We have numerous innovations in development that we believe will help streamline the customer experience while making things easier for drivers to "win" shipments on the platform. We've focused on hiring talented, hardworking, and creative team members and have an exciting product and marketing roadmap!

In terms of headcount we've got about 30 full time team members right now, and we can cover all our costs without taking on additional capital.

Through starting the business, have you learned anything particularly helpful or advantageous?

Probably one of the most valuable insights that I've learned is to focus on niche audiences. Do one thing and do it well. We focused for far too long on trying to grow a transportation marketplace for so many different types of shipping categories, and that was a mistake. We should have focused on just one area.

Another hard-learned lesson is the realization that some acquisition channels will simply not work out the way you expected. We invested a lot of resources into a specific acquisition channel over several years, but the ROI was terrible. We should have pulled the plug after a few months of not seeing success, instead of dragging it on for three to four years hoping we'd figure it out one day.

Another valuable lesson I've learned is to stay very closely involved in product development. As entrepreneurs, we're generally very good at figuring out how to monetize, grow, and optimize things, and that can only be fully expressed in the platform itself. I think a founder must remain intimately involved with every element of the product until it has reached an extremely mature state.

What platform/tools do you use for your business?

We use a lot of software at CitizenShipper. Zendesk for Custom Support, Slack and Zoom for team communications, Jira for project management, Mixpanel, and Power Bi for dashboards and data analysis.

We use Checkr for background checks, Sendgrid for emails, and Twilio for SMS. On top of that, we have 20 more or so software subscriptions used by various members of the team including Zapier, Airtable, Retention Engine, Figma, and Loom. I typically use Angel, Upwork, and LinkedIn for recruitment.

What have been the most influential books, podcasts, or other resources?

One fantastic resource has been a forum called Everything Marketplaces which is a great community of marketplace founders. I’ve met some great folks there, and some of those meetings have developed into substantial partnerships.

I also got a lot out of Zero to One by Peter Thiel and The Alliance by Chris Yeh and Reid Hoffman which helped me think about the relationship between employees and the company and led me to institute some changes that I think have helped a lot with employee retention and satisfaction. A classic back in the early days of just starting out was Don’t Make Me Think by Steve Krug, which is a great primer in creating intuitive platforms.

Advice for other entrepreneurs who want to get started or are just starting out?

My biggest advice is that ideas are a dime a dozen. Execution is everything. Walk into any bar or university campus, and every other person has a ‘great idea’. But ideas are empty without a force driving them into reality.

I don't think entrepreneurship is for everyone, and if you're looking to get into it, be prepared for many long years of hard work and many disappointments. Do you have the character to take those disappointments as learning opportunities, or will they demoralize you to the point where you throw in the towel? I remind myself daily that it's a marathon, not a sprint.

I think a lot of people get into entrepreneurship thinking that their idea will become an overnight success (I was guilty of that when first starting out!), but the reality is a long, hard slog with never-ending problems to solve.

Are you looking to hire for certain positions right now?

We are always on the lookout for talented engineers and digital marketers who can help us grow. Shoot over a cover letter and resume to our Head of HR [email protected].