April 2, 2018 3:00 PM, EDT

On-Demand Shipping Firm Shyp Calls It Quits

Kevin GibbonGibbon at TechCrunch Disrupt NY 2015 (TechCrunch/Flickr)

Shyp, a Silicon Valley packaging and delivery startup that promised to make shipping almost anything anywhere around the world as easy as two taps on a smartphone, has shut down after four years in business.

Founder Kevin Gibbon announced the closing in a blog post March 27, blaming the company’s demise on the failure to shift from a singular focus on consumer shipments and expanding too rapidly into new markets.

Shyp launched in 2014 as an on-demand shipping app, charging a low fixed price to package and ship products using local couriers and parcel-delivery firms.

“Based on the frequent, overjoyed feedback we received from customers, it felt like we’d accomplished the impossible: making shipping cool again,” Gibbon wrote. “Then, things changed. Consumer growth slowed. People close to me and the business began to warn that chasing consumers was the wrong strategy. After all, how often do consumers ship things? I didn’t listen.”

Trusting his engineering instincts, Gibbon said he tasked his team with expanding geographically and coming up with more innovative features to penetrate the consumer market.

When that didn’t work, Gibbon attempted to shift gears, suspending operations in all markets except San Francisco and partnering with eBay to help online sellers with shipping services.

Although online sellers and other similar small businesses soon accounted for half of revenue, and operations in San Francisco had reached a break even point, Gibbon said it proved to be not enough to sustain the business.

“Unfortunately, our earlier mistakes had left us with too little runway and insufficient resources to continue pursuing the new direction,” Gibbon explained in his blog post.

Gibbon also offered an apology to those who helped get Shyp off the ground.

“I am sorry to the world-class team who joined me on this journey,” he said. “I am sorry to the hundreds of thousands of customers who validated our idea by shipping enough packages to circle the earth half a million times over. I’m sorry to the investors and partners who have always rooted for us and whose advice I sometimes ignored.”

Satish Jindel of S&J Consulting


The failure of Shyp also suggests that there are limits for startups seeking to replicate the success Uber Technologies has had in providing on-demand transportation services, according to Satish Jindel, owner of SJ Consulting Group in Sewickley, Pa.

“Money and a smartphone app is not enough to create a viable business,” Jindel said. “The Uber model that is working in ride-sharing can’t necessarily be applied to other forms of transportation. There’s a lack of domain knowledge.”

Shyp raised $62 million in funding during its four-year life, according to CB Insights, a research firm based in New York that tracks investments and new business startups that utilize new technology.

Notwithstanding the failure of Shyp, Jindel said he still sees a free flow of investment into technology for transportation.

Gibbon, however, sees his experience in a little different light.

“While large, established companies have the financial freedom to explore new product categories for the sake of exploring, for startups it can be irresponsible,” Gibbon noted in his blog post.

But, while clearly disappointed with the outcome, Gibbon ended his blog post on an optimistic note.

“With all the learnings from building Shyp under our belt, I have no doubt the team will go on to do amazing, impactful things,” he wrote. “I’m excited about what the future could hold. To that end, I can’t wait to see what we do next.”