Matt Semmelhack

In today's episode, I speak to Matt Semmelhack, the co-founder and CEO of Boox, reusable boxes, and shipping bags, eliminating single-use plastic and cardboard from eCommerce shipments.

The rise of eCommerce has been massive in the last few years and further accelerated by the pandemic. We'll dive into some of the most sustainable options to reduce the negative environmental impact of shipment.

EPISODE HIGHLIGHTS

• [01:00] Matt's Personal Journey (How he started Boox)
• [08:09] Comparing the environmental impact of Boox to other solutions
• [09:41] Boox's initial market segment
• [12:33] How does Boox work? (Customer Experience explained)
• [14:39] Boox's value proposition for the retailer
• [19:16] Key strategies Boox uses to increase box return rates
• [23:23] Matt's biggest entrepreneurial lessons
• [29:22] Founding vs Operating - Where are you on the spectrum?
• [32:40] Boox's 10-year vision

KEY LESSONS & QUOTES

• “Part of my entrepreneurial journey is finding something I really love to think about and & will outlive me” [01:42]
• “One of the special things about restaurants is that you get to see the customer's reaction to your product in real-time. I’m trying to apply in most of what I do ” [04:43]
• “Getting real-time feedback is a pretty unique angle into product development.”
• “There's ~200 billion shipments globally every year. If our solution works correctly, we have the potential to reduce the overall environmental impact of that shipment by 70% or more” [8:25]
• “When I was a kid, it wasn't cool to be sustainable. People weren't seeking out brands because of it but now they are” [11:48]
• “Switching to Boox improves your bottom line because of customer retention, acquisition, and loyalty.” [12:11]
• “If you approach a brand with an environmentally friendly solution but it drastically affects their bottom line, they're gonna say no; it’s just a reality of business today” [15:35]
• “Getting consumers to shift behavior is probably the biggest challenge we've had and will continue to have” [18:23]
• “An important thing about working on an impactful challenge is that we see other companies like that as partners, not as competition. Unless we all win, none of us win” [22:30]
• “Take care of your employees. There is no other greater resource that you have as a company” [24:13]
• “When you start to think of employees as expenses, your priorities are in the wrong order” [25:04]
• “As a startup, make decisive actions. You don't have to solve the future state yet. Just get over the next hump. [32:00]

TRANSCRIPT

[00:00:00] Maiko: In today's episode, I speak to Matt Semmelhack, the co-founder and CEO of Boox, reusable boxes and shipping bags, eliminating single-use plastic and cardboard from eCommerce shipments. The rise of eCommerce has been massive in the last few years and has been further accelerated by the pandemic. I for myself, can definitely say that I have got crazy amount of boxes arriving at my flat, which always makes me feel a bit guilty because there's a lot of cardboard and plastic landing and waste unfortunately.

So we'll talk about that, and at the same time, even some of the most sustainable options in terms of clothing or food are often just available online. It's very difficult to find those locally sometimes that's my experience. So that leads to a big question, how can we actually eliminate the negative environmental impact that comes from delivering goods to our homes and all the packaging around them? So I'm excited to talk about that with Matt, thanks for making the time today and excited to have you.

[00:00:59] Matt: Thanks Michael, my pleasure.

[00:01:00] Maiko: Perfect, so let's start with your personal story. What I'd like to know, first of all, is how you got to become an entrepreneur and why do you do what you do, now?

[00:01:12] Matt: Yeah, this is something I think about a lot and I think broadly speaking I would say that, if I ever give advice to younger people or think about my own children, it's always around encouraging them to find something that really compels them to get up outta bed in the morning and go to work. I think in the US especially, there's this kind of challenge that work is sort of a negative, and I don't think it needs to be, I think people say, oh, I have to go to work, I have to go to my job and it's a little bit old fashioned, but if you can find something you love It never feels like work, in a negative sense. And so that's very much a part of my personal entrepreneurial journey is, finding something that I really love to think about and a big challenge that, they will outlive me, it's a challenge that will not be solved in my lifetime, and so it's something I can dedicate my life to and I think that that's, been a big part of it.

And I didn't have a very direct path there, but I think I've got there now and excited about what I'm working on and, that really does drive me to do what I do every day. The other big driving force is my children, and a very urgent and optimistic desire to leave the planet better than we were handed it. Right? And better than it's for them now. And I think that, what we're doing at Boox and a lot of different impactful startups and, businesses these days is finally, feels like the tide is turning to where, smart, young, hardworking people want to work for impactful companies, not just to make money, but they can also make money and be successful and wealthy and everything else. But when people ask, what's the goal? I think impact is a great word because it implies, like environmental impact, social. But also you could be famous, and like there's no doubt that that is, at least part of wanting to be an entrepreneur is wanting to have that recognition that you change the world. And so I do think that all those things come together and then very rarely do people say, I wanna get rich. But I do think that being extremely impactful, like if you could be impactful at a global level, you'll probably end up doing pretty well. And so like I think all those things together, for me fall into that word impact and it's very much what drives me every day. 

My chronology as I mentioned, is this kind of, a winding path but pretty soon after college, I started a restaurant and that was my first business that I started. Not the first business you should start for other entrepreneurs out there, it's extremely difficult and maybe that's a reason that I think it's led me down this path of wanting to own something and wanting to be the builder of a thing coz restaurants have all these different parts that need to come together and you have to be a jack of all trades. You have to be pretty good at a lot of things I was not the chef, I was the business person behind the restaurant and my chef partner is an expert at one thing, right? Which is making delicious, and so as, the restauranteur, you have to kind of learn, marketing and sales and construction and legal and HR and people management, you have to run a budget and you have to know finances pretty well, and that very much characterizes my own personality and my own life is I think I like to know a good amount about a lot of things, but I wouldn't say I'm an expert at one thing and I suspect that's probably the case for many founders of companies. 

And so I started a restaurant, I turned into, nine restaurants, eventually nine different ones, and this was all in the San Francisco Bay area and I think that was started to lead me down this path of just wanting to build stuff, right? And honestly looking back, I didn't really love operating the restaurants, I really love starting the restaurants and there's this flurry of activity, you know, you get this kind of dream up a concept and then see it come to life, raise money, you know, build Something, you have it launch right? Just like a tech product that you open the restaurant and then it starts running, and then you have to maintain it and you have to optimize it much like any other tech product.

You have to market it, you have to, have customer service. And so all these same skills were happening in the restaurant, but in a very different way, in a very personal way. And I think one of the really special things about restaurants, which is not as true for a lot of technology products, is that you get to see the customer's reaction to your product in real time as they're sitting there in the restaurant eating their food. And that kind of, product that you're putting out in real time is incredibly valuable, right? And now we're trying to apply that to our efforts now. But only in retrospect can I say this, but looking back. it was a really, Amazing opportunity to kind of iterate something and change it quickly and get customer feedback and the next day, right? We could change the dish that you're eating in the restaurant and we could say, oh, well, nobody liked that dish yesterday, so let's make something else today. And that's pretty special, and it's a pretty unique angle into product refinement and product development.

So I was in restaurants for about 10 years, and then I went to work for a company called Fisell which is a plant based meal delivery subscription company, that are mouthful literally. I was in operations for that company. This is my first role where it really felt like there was a mission. A stated mission, like a written mission behind the company. In that case it was focused on, reducing climate change by helping people eat less meat, and it was a really fantastic, driven bunch of people and the two founders who are husband and wife were really focused on this idea that they could have an impact and actually reduce climate change. 

And that one of the best ways to do that would be to help people eat less meat, which I think is well understood to be maybe the number one change that most individuals could make. And the approach was to provide convenient, delicious and accessible meals that were mostly plants. And so it was not, you have to stop eating meat immediately, you know, it wasn't impossible foods it wasnt ones of things, it was just like, well, if we just made it delicious to eat vegetables that will help people eat less meat. And so they've been very successful, while I was there, I saw that a large percentage of our customers that were receiving these meal kits or finished meals, to their door were disappointed in the amount of waste that came with them.

So they would say, you know, I signed up for Fisell in order to help me eat more plants and to reduce climate change, but I'm getting all this stuff in the mail, I'm getting a box or a bag, an insulation and an ice pack and single use containers and all these things and they were saying, Hey, this doesn't really add up, I don't feel like this is a good thing for the planet and you said you were gonna, help me reduce climate change and I think that the reality was then that and still true to, some extent, there just was another option, if you wanted to deliver a fresh meal it had to be in plastic, there's not really a good way to dispose of it, if you want it to be cold, there has to be an ice pack, if you wanted to, not be exposed to the elements, there needs to be a box or a bag and insulation. 

And so these are just kind of infrastructure and logistics challenges of today or seven years ago, and so I, left and started Boox to try to solve this problem and, I think initially the idea was to be more focused around food containers, but we found out pretty quickly, and I know some, other guests of yours have talked about things like this too, that it's extremely difficult. There are so many challenges with single use food containers that we took a step back and thought, okay, well we know that reuse and circular economy is the right direction, but maybe let's not start with the hardest possible product. And so we said, well, if we could develop the system of reuse with a simpler physical product, then we could then apply that in the future to all sorts of reusables, right? And so we set about, with my co-founder Bob Walton, we set about to launch Boox and the first product we called Boox Box, or just a Boox and it obviously intended to be a little play in the word box, and it's a reusable box and it's really designed to replace. Single use cardboard shipping boxes. So it's not all packaging, it's very specifically targeting cardboard boxes.

[00:08:09] Maiko: Got it ,yeah, can you talk a bit about the environmental impact of, let's say, whatever the average solution out there, let's say cardboard boxes or plastic bags versus your solution looks like, what's the comparison in terms of environmental impact?

[00:08:24] Matt: Yeah. So, there's roughly 200 billion shipments globally every year. Cardboard boxes are, the vast majority of them, plastic polybag are gaining traction in a lot of places, but really boxes are necessary for things that are fragile or need to be protected. Our solution, which is that you can return a boox box so it can be reused again, at scale, and when it works, importantly, and we'll get to this challenge soon when it works correctly and people do it, we have the potential to reduce the overall impact of that shipment by 70% or more. And the reason that it's or more is that there's all sorts of different kinds of cardboard boxes. Some are better for the environment than others that could be made from recycled product that could not be. And then the number of times that you return a boox box and the number of times it ultimately gets reused means that we could continually reduce the overall systems impact, right? So if we get them back five times, but then they reach end of life, or if we get them back 20 times end of life, there's a different result on the impact. 

Today, I think we're just getting started, and so this whole idea of circular economy is new to most people, I don't think that will ever get to the point where a 100% of these things will be returned and reused, it's just impractical for all sorts of reasons but we hope to get to 80% or 90% and that would be, I mean, if it could be applied globally, if Amazon started doing this, this would be an incredible reduction in overall impact.

[00:09:41] Maiko: Got it, and what's your initial segment? You said you started from the idea of, okay, can we use this for food being shipped, is there any specific segment that needs this the most and that you're starting with right now in terms of using those boxes?

[00:09:54] Matt: Yeah. So again, this was not in the original pitch deck but we ended up having the vast majority of our clientele today, the brands that chip with Boox boxes are in beauty, so cosmetics and wellness products. And I think the reason that is, again, kinda in retrospect is that there's tons and tons of brands that are shipping beauty products, the products themselves are small, often plastic packaged things. And there's this kind of general feeling from consumers that that's bad, right? But there's billions and billions of things shipped every year and so, I think that there's a certain amount of kind of marketing and perception of sustainability that these companies are seeking, and a lot of them are digitally native, you know, they don't have stores or maybe they sell in Sephora or Orta or some other brick and mortar retail stores, but most of em just sell online, direct to consumers. 

And so the first time you receive a product, like the first time you interact with a product from one of these brands, Is when it lands on your doorstep and it comes in a box, and if that's a cardboard box, that's pretty normal, it wouldn't be surprising if it's a booxs box, there's this moment of, oh, what is this? what is this thing that's on my doorstep? They look very different in cardboard boxes.

And so there's this little moment of pause that's very critical for us which is, oh hey, this is special and as you mentioned at the top, and this is true at our household too, we probably get, seven to 10 cardboard boxes a week, there could be a little pile of cardboard boxes on your doorstep if one of them looks different, it's very important that it stands out from the crowd. 

My daughter was six at the time that she said this, but it was like the most genius marketing, thoughtfulness, I was explaining her, dad's gonna be starting this company and we're gonna make a box, it's gonna look just like a cardboard box, but it's gonna be reusable. And she said, why should it look just like it? It should be rainbow, or it should be bright pink and she was a hundred percent correct, and that like kind of this little moment for the consumer when they say, hey, this is different, is so critical to our existence, to our marketing efforts, to our growth. And so we found that these cosmetics companies were really eager to differentiate their brand and I'm almost 40 when I was a kid, it wasn't cool to be sustainable, right? People weren't seeking out brands because they were green or because they were more sustainable, now they are.

And so these cosmetic companies are thinking like, hey, how can we distinguish our product? Our physical products are maybe similar to this other company, but we could be the cleanest one, right? Or the greenest one, and so Boox is a tool to reduce your impact, but also to differentiate your brand and critically, we're now demonstrating that switching to boox actually improves your bottom line because of customer retention and acquisition and customer loyalty. And so, like, that's a very important point, it's not just like, here's a premium service that's more expensive, but it's greener and there's a trade off, now we can say this is good for the planet, good for your customers and good for your business. And that's absolutely good, like we had to get to that point, like we knew we had to get there somehow, and we're finally getting there. 

[00:12:33] Maiko: Got it, amazing. I'd love you to talk about logistics and customer experience behind this, right? So, if I order from one of the partner retailers that you work with, I'm likely to get one of those nice boxes, then I, take my stuff out, maybe I decide to return some stuff, in which case I assume I return the box with the stuff I'm returning. But then if I want to keep everything, do I have to then ship it back to the retailer? Do I ship it back to you? How does it work?

[00:13:01] Matt: Yeah, great question, and so this was part of our kind of early R&D. The theory was, okay if, we give you something and it's reusable, consumer receives it, it has to be pretty convenient, because, you know, in, in the US if you throw something away, you put in a bin, somebody comes to your home and takes it away, right? So can't get too much more convenient than that. In the UK and in the EU and, elsewhere in most places, tell me if you disagree, but consumers are used to taking their trash or their waste somewhere else, right? So you don't always have curbside or, home pickup. And so it's, a slightly different challenge depending on the market, but in both cases, the consumer is asked to take their used Boox box, they fold flat in kind of a nifty way, kind of an origami like way and you can drop them off. There's no rush, and so there's no urgency to do it, but we just wanna know that you're not throwing it away. 

And in the US we have a partnership with about 8,000 retail locations where you can drop it off locally and it's, there's a QR code that the cashier scans and you're done as a consumer, nothing else to do. In the UK we have a partnership with a smart locker company. So you walk up to a smart locker, scan the QR code, a little door pops open and you stuff it in and you're done. I think there's something like 6,000 locations in the UK alone, so it's pretty dense coverage there.

And the idea is to make it just as convenient as getting cup of coffee or, if you're on your way to work and you're catching the train, you can return your reusables at that moment. So it is very much, building this system and this platform to enable the reverse logistics, as you mentioned which I think is more critical than the actual physical product. And although we did develop our own physical products, the future for this is we hope not to, right? We hope to operate the network, and then anybody that has any kind of reusable could live on that network and move things around.

[00:14:39] Maiko: Got it, and then let's zoom in on, the value proposition for the retailer. You already mentioned 'that beyond just the sustainability argument, it's also just kind of standing out from the rest, I mean, especially the early adopters, half my deliveries are Boox boxes already. So at the moment it's the chance to be a pioneer and stand out and customize the box to stand out as well. But I guess the question is from a cost point of view, I assume the Boox boxes would initially cost a bit more, obviously they reused, so the more they reused the lower the shipment costs are, so talk us a bit through as much as you can share on like the cost and return rates, like you always have to get the customers to actually return it eventually, how does that work?

[00:15:22] Matt: Yeah, so we looked at a few existing examples of reuse systems and tried to develop a business model that actually works today for our brand partners and actually makes financial sense. So I was in operations and fulfillment previously, if you go to somebody, to a brand and say, this is gonna reduce your impact, your customers are gonna love it, but it costs 10 times more than what you're currently doing, they're gonna say no, I think it's just a reality of business today. There are some companies that will, spend a premium to do the greener, more sustainable thing. 

It's usually because they believe, at some level that they'll recoup that investment, right? And so you, can't expect a company to just switch just because it's the right thing to do, if it affects their bottom line, you know, especially if it's a public company and they have shareholders and they have things to be focused on. So we knew from day one, that this has to make financial sense. It can't just be, oh, you have to do it, cause it's for the planet that's unfortunately not enough to get companies to switch. 

So just recently, as of January of 2022, we hit our own economies of scale where we are now directly competitive with the costs of branded cargo boxes with Boox which is super exciting. It made our sales teams jobs a lot easier, cause they could go to a company and say, you're not gonna increase your costs at all, these work, these plug right into existing supply chain, no changes from operations. And we'll take care of it after you ship. 

And so the way that our model works is a little bit different than, how some others work where you might purchase upfront these reusables, right? And have an initial investment that then you slowly recoup after many uses. We treat it more like you could call it a rental model where you're just paying a fee every time you ship and that fee is comparable to buying a cardboard box, if that makes sense. So you should be paying roughly the same as what you're currently paying per shipment. There's no penalty if, a Boox box is not returned, so we shoulder that burden, right? We take on that risk. And So unlike I think, again, some other examples of companies that do this, we are very incentivized to encourage your customers to return the Boox boxes because it saves us money in the long run, right? So a lot of our efforts around consumer education and marketing to, prop up the brands that are shipping with Boox so that we get more returns back because it's good for our business.

[00:17:26] Maiko: Got it, amazing, and so basically the retailer has pretty much nothing to do with the returns process, you're handling that for them, I assume you may in some cases have to remove like old labels from the boxes slightly polished them or before they can be reused again, right? How does it work?

[00:17:42] Matt: Refurbish is the right word, yeah. So we do this kind of triage exercise when they come back to our warehouse, which is that some have reached end of life, right? Some have been run over by the UVS truck, and they're done. We design them very carefully to be extremely recyclable when they do reach end of life. So the same, the boox material is a hundred percent mono material, it can go right through, be processed mechanically not chemically and be turned back into another Boox box. And that recycling process is something like 95 or 98% efficient which is much more efficient than a cardboard box recycling.

So at every stage of its life, it is, has the potential to be better for the planet, but as you pointed it out, people have to do it, right? Consumers have to participate, and so I think back to like, what have the challenges been, getting consumers to shift behavior is probably the biggest challenge we've had and will continue to have, in that there's 50 or, maybe even a hundred years worth of consumer behavior, which is that you buy a thing and you throw away the packaging and you keep the thing and that, simple idea is very hard to change at scale.

It's happening and I see a future, you said, today it would be rare to get a Boox box, which is absolutely true, there's a future where it's not necessarily just Boox boxes, but where, every package that you receive comes in some kind of reusable packaging or shipping packaging, and you're starting to see it in very progressive countries that they're gonna outlaw single use products, right? And so like, it's just a matter of time. I think that we're pretty early in that, arc of getting there, but there's gonna be a moment, this inflection moment, right? When enough big companies switch, that it just becomes the way that you do it, right? It's no longer like, here's a greener way to ship. It's just, this is how shipping works. and that's, certainly what we're working towards. 

[00:19:16] Maiko: Got it. So, beyond obviously the regulatory side of things that keeps pushing the agenda on sustainability, and that could work in your favor in terms of your environmental mission and your company as well, my question would be a bit around what else kind of the key levels for you to get customers to return the boxes. Is there any sort of rewards, incentives or communication? what are you working on to make sure that you increase those return rates and you get more and more boxes back? 

[00:19:44] Matt: Yeah, good question, so all of those things are correct, in fact, and we're experimenting with a variety of them. One of the more exciting ones that, that really aligns the incentives on the whole circle is that we've now done a few kind of AB tests and experiments where the brand that's shipping, so let's say you order from REN Skincare is one of our partners in the uk they're owned, company owned by Unilever, if you order something from REN Skincare, it shows up in a Boox box, and what we're starting to think about is what if, they gave you 20% off your next purchase when you returned your boox box? And it's an incentive and we have to fiddle with exactly, what the right exact amount is, that makes sense for everybody that's involved, but the reality is that those types of incentives usually lead to additional purchases, customer retention and engagement at some level. And those are extremely valuable, right? Those things are worth a lot more than the 20% discount.

And so if we can align those incentives with the environmental goal of reusing, now, it's a, win-win, right? Everybody wins in that circle, and so we're starting to do that. The other one that's, pretty exciting that we're doing in the US and is that you're gonna start to see, when you go to Boox Box that Boox the company is going to be encouraging you to send back used clothing, in your boox and so this, idea was, how do we incentivize the return and also monetize the return process? 

And So you have an empty container sitting in front of you, you know, you just bought a pair of sneakers or shoes or whatever, and you kept them, and now you have an empty box, you could put stuff in that box. And we've started to see what types of things people want to if we say declutter your home, reduce waste, keep things outta the landfill and all this type of messaging, and it turns out that people find this to be a very valuable service, right? Everybody's got a pair of jeans or an old shirt or something in their closet that they don't really need, 50% of those items end up in landfills unfortunately today and textile waste is a huge challenge, we don't want to tackle too many things, as a startup, but these all kind of tie together in the idea that if you can keep things outta the landfill, extend the life of products and packaging we can really make a pretty big impact.

And so now we're starting to say like, what else can you put in this boox box when you return it? And in that case, we can even pay you, right? So instead of it being an inconvenience to have to do this additional chore now you are getting a valuable service out of it. we've started to do it at very early stage, but it's already showing signs that it'll part of process in the future.

[00:21:58] Maiko: Amazing. Yeah, I talked to a founder yesterday actually that's running, a startup in the Netherlands called Buy a Waste, and their business is solely that element of you just mentioned in terms of getting people to ship their old electronics clothes, any kind of items that could be refurbished or recycled etcetera, so... 

[00:22:18] Matt: Yep. 

[00:22:19] Maiko: it's quite a compelling, value prop as well, but I mean, same thing with the discounts as well. So, yeah, good luck with those experiments as well, and sounds like a good value proposition to people. 

[00:22:29] Matt: I was just gonna add on that note that one of the more important things about working on an impactful challenge is that we see other companies like that as partners not as competition. And I think that's so important because, we have venture capital investors, like we need to beat the competition in most cases, but we also have this feeling, we're a B Corp, we're a mission driven company, we have this feeling that if, unless we all win, none of us win. You may have heard this slogan, and it's not meant to be this, doom and gloom, we're all gonna die when the planet explodes kind of attitude, but it is one that like, unless we all work together to solve this massive problem nobody's gonna solve it. 

And so, I'll just put it out there. You know, we're always looking for partners like that in, new markets where we can combine our services and make the whole thing more impactful, and so I'm sure your, listeners and also your other founders there's often ways to work together on a big problem like that.

[00:23:19] Maiko: Amazing. Big call to action to get in touch if you are running one of those startups.

Yeah, and I'd like to shift gears a little bit into your entrepreneurial lessons learned. When you introduced yourself in the beginning, you mentioned a few things that I'd like to pick up again and talk about.

The first thing that you mentioned is actually your kind of first business running a restaurant, and I'm keen to learn about like, what are kind of the biggest entrepreneurial lessons you've learned from that experience? You said at times it was maybe quite painful to, you know, some painful lessons learned, it seemed between the lines. So, I would love to learn like what's been some of the hardest challenges there or even in the current business that taught you a big lesson and that others can use?

[00:24:04] Matt: Yeah, for sure. I think one of the things from restaurant life and that were very much, even for other companies I worked for and that we're very much applying at boox now, is to take care of your employees. There is no other greater resource that you have as a company, than the people that are working on this problem. And if they're not, confident in their job, feeling supported, feeling like they have all the tools they need to be successful, they won't be, and you won't be. And I think it's, so critical, especially in the same and age, to give people good benefits to make them feel heard, to make sure there's an open door policy on, I'm not happy or I have a question.

And restaurant industry, it's very hard. If anybody out there is running a restaurant, labor is a huge part of your expense. There was, I think in a sombre way that kind of the moment that I knew I had to leave the restaurant industry, is when I was looking around the room on a busy night, and, you know, these people that I had worked very closely with for a long time that were friends and I was seeing dollar signs, it's oh boy, like we gotta cut labor over here and this is a big expense and we have to reduce payroll. 

And when you start to, think of people as expenses, something's not right? Something about The business that's not working, or just your priorities are in the wrong order. And it's a challenge in restaurants because it's a huge part of your expense. Make sure that you're budgeting properly for the people that you need, and I think in a strange way, the reverse is true, think if you can do more with fewer people, you should. And instead of having, 10 people on your team, have 7 and pay them all a little bit better, and I guarantee that the return on that, outweighs having three extra people.

And that, very much like an early phase startup thing, at some point you need all your team members and experts and whatever else. But I've heard so many, stories about people that went out and hired this giant team and just ran out of money in six months, and that's not good for anybody, right? Like, will those people find other jobs? Probably, but it's a big deal to sign a document and say you're gonna go work for a company. And I think, too often we don't treat that with as much respect as you should. It's can be life changing to switch your job, right? For somebody and their, for their family. And maybe you move for your job. And if it's not there six months later, then you've really shaken up your life so I think founders, CEOs, whoever, makes sure that you're trying your best and it's start up life, you know, you don't know what's gonna happen, but make sure you're trying to take care of your people and looking ahead and understanding that, you know, you might feel like your company could fail and that's okay, and you're gonna fail 10 times and then be successful, but like all those other people are coming along with you and it's, it should be a big honor for them to work for you.

[00:26:25] Maiko: I think its a very very, timely lesson that you're sharing here as a lot of companies have last year embarked on this hyper growth mission of like, oh, well always gonna access capital very cheaply forever, and we're just gonna hire like crazy, and now you have all these big layoffs, right?

With a lot of these companies where you sometimes ask yourself, why do you even have that many employees? rather than, Building a truly sustainable business that, every employee has a purpose is well paid and there to drive business outcomes, which then even if you go into a downturn, hopefully you won't have to let people go, right? 

[00:27:00] Matt: And this, is related and, I'm not suggesting that we're gonna be, wildly successful, I think we will be, but we'll see and we'll check back in, in a year or so and see if this has come fruition. But we, started boox just before the pandemics struck. Obviously could not have anticipated this and nobody did, and it's a once, hopefully once in a lifetime, a situation. But we were very frugal about hiring people and spending our money, and I do think that it will ultimately mean that the organization's much better off and our company culture's much better off for it.

There were times when myself and my co-founder were saying like, oh god, I wish we had three more people, you know, we're all doing, 10 jobs and we need an accountant and we need another engineer, and we need a designer and whoever else. But we were very slow to hire people and now we look like geniuses, right? It looks like, oh, that worked out great, couldn't have possibly predicted that. But I think, you never know when some world changing event is gonna happen, and there's been several, right? There's been three or four world, changing events in the past couple years, and just, be a little more conservative, I think than the previous era of startups was, related to that is, I think, and this might be an unpopular opinion, but like people will often say, oh don't, dilute yourselves too much with capital.

I've never heard of a startup that said, oh we raised too much money. That's never been a complaint, right? You've heard a lot of, like, we failed or we are under capitalized, you never hear yeah, we got too much money. So that's pretty tough, and this is like a founder, mental health thing also, it is, you know, when you have 20 people that work for you and their jobs and livelihood depend on the success of the company. It is very stressful to have to think about fundraising and think, oh, I'm not sure, you know, we have six months of runway or one month of runway or whatever it is, just take the money is my advice. If somebody wants to give you more money for your company, take it use it wisely, if you get diluted one more percentage point, the company has a being worth a billion dollars, you'll still be fine. And so that, you know, I think if that's what you're working towards it to be this high growth thing, take the dilution, take the money, and you'll be way better off for it.

[00:28:51] Maiko: Oh that's, some good advice and you've phrased quite a bit as well, and you've raised about 20 million so far, if I can't believe crunch base? 

[00:28:59] Matt: No, not quite, let's see, we've raised 11.25 to date. Yeah.

[00:29:03] Maiko: Alright,okay. 

[00:29:04] Matt: Still That's what I mean. Like, that's a huge amount of money, I don't wanna, suggest that it's not. And you see these companies that are raising, 20 million with no revenue and it's, wild time still. But those times will change, and I think the successful long term sustainable businesses from a financial point of view, will have been frugal and conservative when they should be.

[00:29:22] Maiko: Got it. The other theme that I'd like to explore during the last few minutes before we wrap up is what you mentioned. It may have been specific to the restaurant business, but you mentioned that you realized that you enjoyed starting the restaurant and you enjoyed starting stuff but not actually operating it.

Do you feel that was something specific to that or is it like a personality trait generally, because I find in a lot of founders actually, They enjoy this process of founding, starting new things, and they don't necessarily enjoy operating as much or, they may enjoy it, but they really depend on really building that team to be able to focus on starting new initiatives.

Where are you on that spectrum and if that's the personality trait for you, how did you still manage to build a successful company so far, without, losing interest on operations?

[00:30:10] Matt: Yeah, I feel like, I think the answer is yes, I really like doing new things, and that is, a very typical entrepreneurial trait, right? That you want to be trying new things and pushing boundaries and that kind of thing. And I think we found a happy medium where yeah, hire great people that can run the day to day successfully and be challenged and be excited about it, but also we still feel like at this stage anyway, that there's new things every day. And part of being in an industry that is, cutting edge in many ways, right? We're part of a circular economy, we're building this reuse system, we're getting involved in eCommerce and re, like, these are all pretty new ideas.

I think it's, very critical for boox that we stay at the forefront of all those ideas, and not become, just a logistic service or something like that we want to be demonstrating to other companies whats possible, we want it to be new and fresh all the time. I think that's interwoven into our company culture this point. And it means that we do new things every day. One of the realities of not hiring a huge team is that I'm still doing all sorts of things that, maybe CEO shouldn't be doing, but it means they're different every day. And it keeps me excited and interested, we have a long way to go because of the nature of what we're doing, where we'll be doing new things for quite a long time. So I'm still excited about it and, will continue to be for a long time.

[00:31:21] Maiko: Absolutely. It's definitely something that I've struggled with personally, or I still struggle off to some degree. I've been on the other side, on the investor side of things investing in companies, but I've never fundraised. I've always bootstrapped, but then also staying focused while bootstrapping, feeling the pressure to, okay, we gotta really figure out what works. So I'm like, inclined to start 10 experiments to all test everything, and then you get distracted very quickly and, yeah I'm definitely in that personality trait as well of like starting being a starter, so, yeah. 

[00:31:53] Matt: One, more note about that. I think do the 10 experiments, but after you get the results, make sure you go, with purpose in that direction. I'm not claiming that Boox's team is the best at it, but I think we're getting really good at making decisive, actions when necessary, and maybe this goes back to some of the advice too. We don't have to solve the future state yet, whether that's fundraising or some growth metric or a new market or something. That's where we need to get to now, and we'll worry about the other stuff in the future, right? We don't need to build the foundations for this future state yet. We need to just get over the next hump. 

And so many companies fail at this stage, right? And then we might, but that's an important thing, it's like be very focused on what's right in front of you and solving that until you get to a place where you're profitable or break even or something, and then you can start to think, okay, now how do we plan five years from now? Or what does the company look like? 

[00:32:40] Maiko: Amazing, one last question is if you imagine 10 years from now how does the world look like if Boox is successful? 

[00:32:48] Matt: Yeah, and so I mentioned my daughter Lily, I should also mention my other daughter Clara at the same time, so she's not left out, but my daughter Lily is 8 and the vision that we have and that really gets me excited is that this is a problem, I mean, the problem single use packaging or single use waste is truly solvable, at some level. It's not a hundred percent, but it's 80%, 90%. 

My dream is that when she has her own apartment or house or whatever it is, that she never gets a cardboard box to her door, right? And I think this is actually doable, I mean, at the pace at which things change it's a moonshot a little bit, but it's not totally crazy. By the time she's receiving packages to her own door, they're all reusable, and that's doable within 10 years. 

The utopian vision is that these things are now reusables that just move around the world constantly. They never get thrown away, you never need a new one, and there's a finite number. It's a lot, it's a billion probably, but there's a finite number of containers that could carry All the world shipments forever. And the amount of waste that would be saved and impact reduced would be huge, but really, yeah, I want to, see the look on my daughter's face when this has succeeded is definitely a driving force for me.

[00:33:50] Maiko: Can't wait for that and can't wait to catch up again, in the future, I should definitely catch up with you offline because there's been a few podcast guests that I think they're UK retail companies. They're like looking for packaging solutions all time, So let's catch up on that. But it was a great pleasure to have you on the show today, really good to have you and thanks so much for making the time, Matt.

[00:34:10] Matt: likewise, appreciate it.

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