Capital Efficient Startup, Venture-Scale Growth: ShipMonk CEO Jan Bednar (Part 6)

Sramana Mitra: You think the unemployment pay from the government is preventing people from looking for jobs?

Jan Bednar: 100%. People told us that on the phone. We called people from our database. Their mentality is, “Why would I work if I can make more money not working and I’m safe?” It’s a tough argument. You can’t blame them for not wanting to work.

It was just completely skewed. It always should have been based on whatever people’s previous salary was. It completely disincentivized the people that are making less than what the benefits were. We have temp agencies. We requested a hundred and they would get us 10. That was the best case scenario. 

Sramana Mitra: Is it safe to work at your warehouses?

Jan Bednar: It definitely is a huge concern. We’ve done a lot of great things to keep people safe. Obviously, everybody is required to wear masks. We do temperature checks. We tripled the size of our facilities. We spaced out people throughout the building. 

Sramana Mitra: Have you had infections in the warehouses?

Jan Bednar: In the last three months, we’ve had two in our Florida facility.

Sramana Mitra: What kind of margin hit did you take in this process?

Jan Bednar: Pretty significant. Your labor cost increases fairly drastically. Plus you lose productivity. Right now, we’re really evaluating. it’s not like things are going to go back to normal anyway. 

Sramana Mitra: You’re going to need to operate like this for 18 months and then it will start shifting possibly.

Jan Bednar: I think the cost of operations is not going to go down significantly. This has been our plan for a long time – investing more in automation. We’re putting a lot of automation in our building to be less reliant on labor. 

Sramana Mitra: In doing that, what are you finding? Is robotics technology available?

Jan Bednar: To a certain extent. There are a lot of companies with top engineers that are trying to solve this. There are some that do a pretty good job. It has not been deployed on a large scale yet.

When I say fully-automated, I don’t mean completely where there’s not any people in the building. It’s more for moving products around the warehouse. We’ve implemented some robotics. There’s a lot of existing automation out there that you can utilize, but it might not necessarily be robotics.

Sramana Mitra: Do you have enough capital on your balance sheet to be able to finance this kind of robotics investment?

Jan Bednar: We’re leveraging a bank. 

Sramana Mitra: Fabulous! By every measure, it’s a superb growth story. How big is the operation now?

Jan Bednar: We’re at 850 right now. 

Sramana Mitra: This is just Florida and California?

Jen Bednar: We opened in Pennsylvania last year. We also have our engineering office in the Czech Republic.

Sramana Mitra: Excellent story. Thank you for your time.

This segment is part 6 in the series : Capital Efficient Startup, Venture-Scale Growth: ShipMonk CEO Jan Bednar
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