Keepers Meets Martin Bysh, CEO, Huboo
Keepers: Thanks, Martin for joining us today, would you start us off with an introduction to you and your career so far?
Martin: Thanks for having me! I started off as a games coder for many years, way back when it was the Spectrum, Atari ST, etc, but I saw that the industry was changing in the late 90s with the advent of huge teams. I moved into the web, started launching products, and I actually launched one of the UK’s very first dating sites. After selling that in 2009, I carried on working on software-focused businesses which led to Enthuse. Enthuse is a fund raising & payments platforms for over 4500 charities, which I’m still on the board for. I then launched a SaaS market research tool in 2017. When I was running that I realised that I was getting very bored of doing the same stuff, which ultimately led to Huboo.
Keepers: Being from such a varied background, how did you end up founding an eCommerce fulfilment platform?
Martin: The thread between everything is technology. I’m the CEO and my co-founder Paul is the CTO. He heads up the technology side of the business while I’ve been involved in the commercial side, as I have done in most of the companies I’ve founded so far.
Huboo was really Paul’s idea; he’d been playing around with a few approaches to fulfilment. His background is an engineer, but he’d spent 20 years working in technology & logistics and one of his remits was to save the company he was at £500 million a year on logistics. This made him think a lot about how so many companies could make significant cost savings in this area through streamlining their operations.
He had some ideas on how to do it himself, so he put together a little lab in a safe store in Bath which, obviously, is not intended as a place to run your business. Paul played around with lots of ideas and came up with the ‘hub model’ to improve how logistics was done. What he hadn’t done was either programming or running his own business before, so he was looking for a co-founder. Paul wrote every piece of code that drives the technology, and now we have a team of 50 developers, and I came in to run the commercial and sales side of things.
Keepers: How has the journey in the last 3 – 4 years been?
Martin: Paul started playing around about 4 years ago and I joined him 3 years ago. We honed the idea, took to market in November 2019, and got our first client in the December. After that the first 60 clients just appeared out of nowhere as it was the easiest thing in the world to sell.
The key was that we were doing something different. It wasn’t just another fulfilment company - we built a system that not only made it possible for us to sell fulfilment at a lower price but one that allowed us to deal with smaller clients. We’ve built a SaaS dashboard where you can sign up using only that, which has reduced the cost of traditional fulfilment companies who use phone-based client managers. We’re the only service where you can sign up without a single conversation, apart from Amazon FBA.
As well as streamlining the sign-up process and reducing the cost of having client managers, we’ve reduced pretty much all costs with the hub model. Whereas most fulfilment companies are innovating around the idea of humans being expensive and removing them, we’ve designed the system around humans. If you innovate around human beings, then you can build the best product that delivers the best service.
Keepers: You’ve manged to build the team to over 300 people in Bristol, and you’ve expanded abroad. What has the traction been?
Martin: It’s been great from the start. We managed to bring on 60 clients in 6 months in our spare time while still being bootstrapped and being in our full-time jobs. Most fulfilment companies struggle to bring on more than a handful every year.
Just after that we realised we actually had something here, so two years after Paul and I quit our jobs and got funding. In April/May 2020 we had the two of us and two members of staff in safe store in Bath. We had 60 clients turning over around £25k a month. Now we’re 350 people with over 1000 clients, with four warehouses in Bristol, one in Eindhoven, one just approved in Madrid, and other European expansions planned later this year. It’s a model that’s proved to be very attractive to the market.
Keepers: How does Huboo compare to other fulfilment centres?
Martin: One of the big differences is our use of technology. We’ve built everything ourselves with a SaaS platform that enabled people to sign on incredibly quickly and without the need for us to rely on third party providers.
In terms of the direct experience, the client has SaaS dashboard to manage their account, and this allows them to automate many processes. It’s much more cost-effective than other fulfilment companies because we did a full-stack model. Building everything in the backend, and optimising it for the front-end, has resulted in a very high-quality product that’s cheaper than every single other option.
One of the big differences is that you’re working with a hub and what this means is that the human in the warehouse is not a picker or packer that is walking around doing tedious repetitive tasks, they are a hub manager who manage a micro warehouse space of between 1 – 30 clients doing the inbound and outbound communications while acting as the first layer of support. If a client wants to speak to us about anything, then the ticketing system sends them directly to the person responsible of their packing. This direct connection to the operational staff doesn’t exist in any other fulfilment centre anywhere. People love this model so much that some hub managers have even received presents from clients!
Keepers: Does it create a happier environment for the staff? I have friends who have worked as a packer in an unnamed fulfilment centre brand who say that it’s been awful with super high turnover.
Martin: It’s interesting that you mention that as it’s a huge problem for this industry. One of the excessive costs for fulfilment companies is the cost of mistreating human beings which creates massive churn of staff; some warehouses turnover staff by up to 205% a month, which is breath-taking. What this means is that they fall back on expensive agency workers, which can mean, in some warehouses, 90% of the staff are agency.
This results in a situation where you can’t afford to train staff because you’re not going to keep them for any decent length of time, while paying 20% more. You can’t build a business on those economies as it results in having to sell a more expensive product.
There’s an incredible advantage in treating people decently - they stay and it means that you’re not paying constant hiring costs. We can afford to train our people and give them more opportunities. Once someone leaves you lose the value of their training so what we do is offer a three-week training process for each of our hub managers which is unheard of.
Keepers: How have you managed to grow so quickly to 350 in a short amount of time?
Martin: We’ve been well funded, and we are revenue generating which makes it a lot easier but it’s really important to put processes in place, especially if you’re looking at bringing in lots of new people.
One of the first things we did was bring in an internal recruiter. James McNama has been incredible and has saved us £100,000s that we would have otherwise paid to agencies. He works with us closely and knows the business inside and out. It’s his intimacy with the business that makes a huge difference and he’s involved at every level, from software engineers and hub managers to salespeople and managers.
The second thing we did was to hire in L&D. We wanted to make sure that the staff were trained properly. If you’re hiring at pace then you’ll end up with lots of people that are poorly trained; we made some of those mistakes early on and realised that it just wasn’t working. We had people who might have been the right person but didn’t have the right skill set because we hadn’t given them the development opportunities that they needed.
Those are the two pieces, fundamentally, that allowed us to do it. We are fortunate that we took that route as sometimes it’s not possible to do this in a start-up. We went in with the mentality of trying to get rid of the crazy and put in a process and structure early on, so we were able to deal with lots of issues when they arose as we were scaling quickly.
Keepers: As a founder, you’re going to, naturally, be less involved with the recruitment process as the business scales. At what point do you think a founder needs to step away personally from the recruitment process and trust the people below you?
Martin: That’s a question that has come up for another business I am on the board for. They have that problem because the CEO is still involved in every single hire.
The broader question is ‘at what point can you rely on the staff that you’ve hired?’ and if you can’t then you probably haven’t hired the right staff. If you, as a founder, think that you’re doing a great job of hiring then you’ll be able to let your team make decisions about subsequent hiring fairly rapidly.
Keepers: It’s an interesting point and I think it’s something that most founders struggle with at some point as they see their start-up as their baby. It can be difficult to trust others with the hiring for your business.
Martin: Absolutely, I don’t think this is something that I’ve struggled with, but I can see why some founders struggle with trust.
I get involved in some hires even now but it’s on a case-by-case basis where I can add value. I think if you're involved in every single recruitment process, you won't have time to do anything else. For some hires, where you can jump in and add value, it does make sense though.
Keepers: What are the plans in the next 12 to 18 months, which is in a relatively short to medium term.
Martin: We have recently started another raise which should give us everything we need for the next couple of years. It’s been going very well. I've got a lot of interest, lots of growth, and Series B VCs visiting the warehouse, which is particularly good. Once we've raised, we can really start pushing throughout Europe. This year we've done the Netherlands, we're finalising Madrid and we have 10 EU companies planned over the next year. This won't mean every European country of course, but it will mean that we feel that we have reach across every country in Europe - either because it has a centre or because it has a very close, large adjacency that will make us the largest fulfilment network in Europe. Layering value add services, as transaction multipliers, we can help our businesses and the businesses we work with grow. As they grow, we grow. It's really simple.
Keepers: You had the Series A only last year, with 14 million announced in September. Would you be able to tell us a little bit about the round? Why those investors etc, please offer some advice around how you raised the round and how you approached it.
Martin: Sure. We raised around £4 million in the seed round, having invested around £100,000 of our own money to get to that stage. Then £14 million in the Series A and then this current series that we’re undergoing currently.
Series A in this country is typically around £5 million, whereas we did £14 million. We got lucky - a friend of a friend introduced me to Episode One who were our first investors. They loved it and three weeks after our first conversation, we closed that round.
We took £1million thinking it would last a year. I think we were about four months in before we'd spent it. Episode One gave us another million which apparently they never do, which took about another four months to spend. Then they cut us off, which no one could blame them for. And that's when ADA and Mercy stepped up.
We ended up with four investors and a couple of angel investors to do the £4 million. And it lasted another six-to-eight-month period, mostly because we were spending more money than we intended to. The reason everybody was quite sympathetic to the amount of money we were spending was that we were growing way above the pace that we had said we would grow. We were just doing so well that it really didn't create any issues around raising.
Series A was a drawn-out affair. It was during COVID so I didn't have one VC meeting face-to-face during the whole thing, they were all done on Zoom. It was literally seven or eight hours a day sitting on Zoom, where I spoke to something like 90 VCs. This is a bit of advice for anyone reading this thinking getting investment, lots of people will waste your time because they're excited by your product, even though they don't normally go near that.
Seed funds are typically not huge. They might have a 60 million fund but if they've already done 28 million of that fund, they'll typically keep half of it to follow on the Series A. In which case, are they going to be able to help you if you run into trouble a few months later? You need to find out, what the size of the fund is and how much money is left in that fund? Do they follow on in Series A?
Series A investors want to see your seed investors invest. We did 6 million from our seed investors in our Series A. The reason I ended up here is because your source of Series A, B, C investors are your previous investors. If your seed investors don't have a fantastic reputation, and a great network, they're not going to be able to deliver a lot of value when it comes to the Series A as ours did. They had a phenomenal network and were able to introduce us to some of the best Series A investors in the world.
Keepers: You mentioned a little bit about the next 12 to 18 months in terms of expanding into Europe, blue sky thinking is a worldwide venture. Would you tell us a little bit about where you'd like to see Huboo?
Martin: Yeah, I mean, we want it to be a household name across the US, UK, and Europe. It's about a £200 billion marketplace right now and huge chunks of that are entirely uncontested. And then with the additional services, we're going to be eating into software adjacencies, consuming verticals that aren't really our natural place to play, but they increase the moat, the margins of the business and the revenues.
So it's definitely a global play. It's much bigger than fulfilment. Our position during the Seed and Series A was that we were end-to-end fulfilment. We now see ourselves as being e-commerce delivering a much broader range of services. Fulfilment is a platform, and we are going to construct on top of that so it's a multi-billion dollar business, with our sights set on the whole of Europe within two years and then we'll take a look at the US.
Keepers: Perfect. Final question. If there's one single piece of advice that you'd give to a first-time founder that you wish that you were told when you started, what would it be?
Martin: It's difficult to come up with one thing but then I thought about this and realised it's just so blindingly obvious. Raise money and raise as much of it as you can from the right people as quickly as you can.
And then that will give you all the manoeuvrability that you're going to need if you're going to become an entrepreneur.
Keepers: Thanks Martin!
Find out more about Huboo: https://www.huboo.co.uk/
By Lloyd Griffiths