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Shyp Co-Founder: 5 Lessons on Expanding to a New City

This story originally appeared on FOX BUSINESS

Shyp is on the move. The San Francisco startup, which picks up packages and ships them for users, is expanding to New York City this week.

Shyp, which was founded in July 2013 and has raised over $12 million in funding, launched in San Francisco in March of this year. Since then, CEO and Co-Founder Kevin Gibbon said the company has sent over 25,000 packages from San Francisco, 70% of which are coming from e-commerce businesses. The rest, Gibbon said, are gifts or returns to e-commerce sellers.

Going bicoastal after just six months of business is a big decision – and one that Gibbon said he didn’t take lightly. Here are the five tips he’d give another entrepreneur considering expanding to a new city:

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1. Make sure your current customers love you.

Gibbon said customers’ repeat usage helped him realize that Shyp had found the right product-market fit.

“It was about people continuing to use it over and over again … and over time, people started shipping more items as well from their eBay stores or their Etsy stores. They started selling more since using the platform, so it was a key indicator we were on to something,” Gibbon said.

2. Know what characteristics you need in a city.

New York City may seem like a no-brainer for startups looking to break into the major leagues, but Gibbon said the Big Apple also had the right factors in place for Shyp to succeed.

“Just the overall population in the areas we’re starting in, in Brooklyn and Manhattan … our service works in denser areas, so we’re able to do more pickups per hour with the same drivers,” Gibbon said. He added that the high concentration of artists, makers and small businesses made NYC a prime target.

3. Dip your toe in first.

Before announcing the expansion, Gibbon and his team launched a private beta program in New York City for four weeks.

“We looked at the pickup times, and then started expanding to more zip codes,” Gibbon said. (Shyp promises to pick up packages 20 minutes after orders are placed.)

Gibbon said that here, they realized that they could use more people on bicycles to cover areas more quickly and efficiently.

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4. Stagger your expansion plans.

Gibbon said Shyp will expand to Miami in November, giving the company time to get used to the New York City market. As with New York, the decision to open up shop in Miami was strategic: According to Gibbon, Miami has the greatest number of e-commerce sellers per capita in the U.S. Additionally, the launch will occur right before Miami’s Art Basel festival – just in time to ship those paintings and sculptures to buyers’ homes.

5. Find the right people.

When you’re launching in a new city, it’s important to make sure you’ve assembled the right team, Gibbon explained.

“We look for a lot of experience and for people willing to take on a lot of risk,” Gibbon said. “We are mildly successful in at least one city … but we want people who are going to make it their mission to [grow] this company.”

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Gabrielle Karol

Written By

Gabrielle Karol is Web reporter @FOXBusiness covering technology, startups and more.