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Summary:

Viral growth for a web startup is great — as is getting to 15 million users in a year — but it is possible to grow a profitable business slowly and see it ramp up after a few years, as I learned from uShip’s founder.

Matt Chasen, CEO and Founder, uShip

Six years ago I attended a business plan competition where I watched a couple of guys explain how they wanted to streamline the process of shipping bulky items across the country by linking folks up via the Internet. The social web was starting to heat up, but I liked how these guys and their company, uShip, were trying to take the web and use it to bring people together, not to swap songs or photos but to take advantage of empty space in moving vans. uShip will hold a panel at the upcoming South by Southwest conference explaining how to build a profitable business, so in the meantime, I decided to check in with the company to see what the founders have learned.

uShip, which provides a matching service that connects people who want to send things across the country and those who happen to have space in their vehicles as they drive across country (and also offers an alternate revenue stream for  professional shippers) is now profitable, thanks to commissions the company takes when it matches shippers and shippees. The Austin, Texas-based company brought in between $5 million and $7 million in sales during 2009, double that of the previous year.

uShip has raised $7 million in outside capital from Benchmark and DAG Ventures, and has helped broker more than $140 million in shipping contracts — with about 85 percent of those occurring during the last two years. Last week, it received its 1 millionth listing on the site. So I asked founder and CEO Matt Chasen for a few lessons he learned as part of building uShip and he offered up via email the following tidbits:

  • Know Thy Revenue Streams. “Focus on proving out how you will make money. It is critically important to build a unit economic model that shows how much it costs to acquire a customer and the metrics around how much you can earn per customer.”
  • Avoid PPC Addiction. “Don’t be overly reliant on paid search marketing. It’s okay to use search engine marketing to seed a business, but have plans in place for how you will grow the business with search engine optimization, word-of-mouth and other free channels.”
  • Launch the Minimum Viable Product. “For internet-based businesses, don’t wait until your product is “perfect” before launching, because you will likely just end up changing it. I’m a big fan of the Minimum Viable Product (MVP) concept – build and launch only the bare minimum that is necessary to get customer feedback and data. Sometimes this may even only be a landing page describing your product and value proposition – with AdWords you can inexpensively test entire business models and start understanding your customer acquisition cost before you even start building your product.”
  • Stay Lean. “Continually revisit your budgets, assumptions and strategy. Focus on niche markets that are big enough to build a profitable businesses – but that also have very large adjacent opportunities.”

Related GigaOM Pro Research (sub required):


This article also appeared on BusinessWeek.com.

  1. A legal Transporter Friday, March 5, 2010

    Before you write a new story about how GREAT USHIP IS did you do any research about this COMPANY? If you did you will see that they have mostly ILLEGAL CARRIERS on their site transporting people items without the INSURANCE REQUIRED to do this and the LEGAL AUTHORITY from the FEDERAL GOVERNMENT which is required. Dont take my word for it do a GOOGLE SEARCH for the words “USHIP SCAMS” and you will see the thousands of people that got scammed from that site and USHIP DID NOTHING TO HELP. Maybe ask USHIP’s CEO WHY he lets this go on and does nothing about it? ALL THEY WANT IS YOUR MONEY and then they HIDE, they dont even have a phone number you can call to talk to anyone about anything what does that tell you, STAY AWAY FROM USHIP THEY ARE A JOKE.

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  2. uShip was created to empower consumers with information and bring transparency to a transport industry that’s historically lacked accountability. Carriers that operate for hire across state lines are indeed required to be licensed by USDOT, yet this license does not necessarily equate to high customer satisfaction. Plus, customers hold some responsibility in their transporter selection — and that’s how uShip helps. Unlike other venues (i.e., phone book, Craigslist), uShip provides free resources such as DOT compliance data, carrier profiles, past reviews and feedback scores (similar to eBay) and fraud prevention guidelines to help consumers make wise decisions. From our point of view, it’s working: 98+% positive feedback, 26k customer stories, 1000s more on Facebook (facebook.com/uship), 1M listings and more. Unfortunately, online fraud does exist – and transport and moving are not immune. That’s why we created 24/7 fraud detection, and when it does occur, our dedicated Fraud and Customer Service teams work closely with law enforcement and assist with investigations. Plus, with our “Ship with Confidence” guarantee, we stand behind every transaction on the site. uShip’s customer service number is 800-MY-USHIP (800-698-7447) ext. 2 or online at uship.com/support. Dean Jutilla, Director, uShip.com dean@uship.com

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  3. A legal Transporter Sunday, March 7, 2010

    This post by USHIP is nothing more than LIP SERVICE, if YOUR SO CALLED GUARENTEE was so great then how come their are HUNDREDS OF POSTS on CONSUMER WEB SITES of COMPLAINTS of PEOPLE that have had their items STOLEN, DAMAGED and the worse service they have ever had? Also tell me then WHY DOES USHIP REMOVE EVERY POST that is posted on the USHIP MESSAGE BOARD of people that have had a problems with a CARRIER? Why are you hiding the TRUTH. How can you sleep nights knowing that you are not telling the truth? I also challenge you to post how many times has USHIP PAID OUT on that GUARENTEE that you talk about? I bet not one time but I can if you want show people & you the hundreds of transporters that have scammed the HUNDREDS OF THOUSANDS of DOLLARS of money from PEOPLE and USHIP DID NOTHING, one shipper got scammed for $70,000.00 on a boat shipment. AGAIN all people have to do is do GOOGLE SEARCHS for USHIP SCAMS or USHIP RIP OFFS and the truth will be told so STOP trying to sugar coat the truth, also show me or name one carrier that USHIP helped the FMCSA catch operating as a ILLEGAL CARRIER? Plus all people would have to do is click on the BLUE DOT NUMBER in the so called carriers profiles on the USHIP WEB SITE and more than HALF of them are either REVOKED, SUSPENDED or EXPIRED. Get your FACTS straight before you toot your horn because their are thousands of pages of scams about USHIP on the internet that people can find.

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  4. [...] Austin’s uShip Profits Off Slow Growth – GigaOM A legal Transporter Friday, March 5 2010 [...]

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  5. This post is to inform not only the trucking industry but also the general public
    and various law enforcement agencies of the existence of unregulated
    individuals, brokers and companies operating in interstate and intrastate commerce.
    There are many small hotshots, owner operators and so called trucking companies that
    traverse the nations highways without the proper insurance, and who also fail to follow
    mandated regulations set forth by FMCSA.
    These companies we believe also contribute to the unreasonably low freight rates which
    all have been experiencing.

    Numerous times uShip has been informed of the carriers that are acting illegally and
    turn a blind eye even censoring attempts from legal carriers to inform the shippers of the laws
    and authority required to transport in a “FOR HIRE” capacity in their forums and in the
    load question and answer sections. Many times compliant carriers have been suspended from
    their website for the same actions of trying to inform. Their continued use of illegal carriers
    also creates a safety issue on the roadways. These unregulated drivers do not follow the laws the
    rest of us must and their equipment is not inspected as the rest of the trucking industries are.
    Also these illegal carriers almost always request cash payments from the shippers and do not report
    income to the IRS.

    The reason they can offer that is their use of transport service providers (TSP’s)
    who are unlicensed, uninsured and unregulated by the agencies that over see interstate
    and intrastate commerce. Now there are some carriers on there that have complied with
    all government regulations, but the majority of their carriers are not compliant and uninsured.
    In fact anybody with a truck and trailer can sign up there and start bidding on loads.
    uShip does not screen or pre-qualify carriers for compliance. They utilize a reverse auction
    format for the loads posted and this helps to drive the freight rates way below industry standards.

    Rrunning illegal is a crime and uShip aids and abit this crime spree. Meaning to help and encourage, in the commission of a crime.

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  6. MY WIFE AND I FOR THE PAST SEVEN YEARS HAVE BEEN PICKING UP
    NEWS PAPERS IN SAN ANTONIO AND BRINGING THEM BACK TO CORPUS.
    HOW WOULD WE FIND BUSINESS THAT COULD USE OUR SERVICE?
    WE DRIVE NIGHTS.
    ANY ADVICE FROM YOU WOULD BE GREAT.
    THANK YOU
    NORMAN SMITH
    NORM”S DELIVERY SERVICE

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