From a Garage to Its Own Warehouse, How Boxed Grew Fast
Introducing our new podcast, Problem Solvers with Jason Feifer, which features business owners and CEOs who went through a crippling business problem and came out the other side happy, wealthy, and growing. Feifer, Entrepreneur's editor in chief, spotlights these stories so other business can avoid the same hardships. Listen below or click here to read more shownotes.
Chieh Huang knew he was upsetting his neighbors. He’d launched an ecommerce company out of a garage, and now trucks were constantly coming and going, and boxes full of product were strewn about the lawn and driveway. “The neighbors either thought we were selling drugs out of my garage, an ecommerce company, or starting a band,” he says. “I was like, ‘We’ve got about 30 days here, boys and girls, before they call the cops on us.’”
Huang didn’t want to be operating out of this garage, of course. He had founded Boxed, an ecommerce company that functions like a wholesale club. (Think of it this way: It’s the web version of Costco, selling large quantities of items at lower costs, but everything is shipped to your door and there’s no membership fee.) He wanted to be in a giant warehouse, with an automated shopping system that would help his company reach its true potential. But at the time, he didn’t have the money or customers for that.
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He’d need to get all that, though, and not just to appease the neighbors. It was the only way his company would survive.
But some business ideas only work at a large scale. Spotify is a perfect example; the only way to get the music is to enter into costly contracts with music labels, and the only way to make money on top of those contracts is to get many many many millions of people to pay for the service. A new social media service is another great example. It either goes big, and is so populated with people that communities form inside of it, or it’s small and empty and nobody sticks around.
These kinds of businesses face an enormous challenge, because although they must become big, there’s no way for them to start big. Like everyone else, they must start small -- and then endure a long, gaping middle point when they’re running their business at a size that inherently doesn’t work.
Related: What to Do When Your Product Goes From Beloved to Hated on Amazon
Today, only four years after opening in that garage, Boxed is well on its way to achieving its goals. Huang raised $150 million, and this year moved into its dream facility, a 150,000-square-foot space with an automation system designed just for Boxed.
How did he scale that fast, and what did he learn about how to grow a business to the size it needs to be? We get into it all in this new episode of Problem Solvers.
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