The Fulfillment Platform of the Future
THIS COMPANY’S NEW TAKE ON WAREHOUSING AND FULFILLMENT ENABLES FASTER DELIVERY FOR BUSINESSES OF ALL SIZES
Amazon is synonymous with fast shipping, but many people don’t see or think about the company’s warehousing strategy. The key to one- or two-day delivery is not faster shipping; it is storing inventory in the right locations and quantities so it can get to the end customer quickly.
To facilitate high-speed delivery for merchants, fulfillment platform Flowspace built a network of warehouses and connected them with intelligent software. The result is one of the country’s largest warehousing and fulfillment platforms. With a single integration point and no capital investment, companies of all sizes can store and fulfill their products from anywhere, scaling up or down as needed.
The benefits of joining the network include monetizing underutilized space and leveraging updated technology for more efficient processes. Flowspace’s goal—to empower the entire warehousing ecosystem, along with its user-centric product development process and intelligent, future-focused software—earns it a spot on Fast Company’s 2020 Most Innovative Companies list.
SOLVE FOR WHAT YOU KNOW
Flowspace is the brainchild of Ben Eachus, CEO, and Jason Harbert, CTO. Over a couple of beers, the friends conjured up the idea to address the fulfillment and warehousing problems Eachus was experiencing firsthand at The Honest Company. Demand was growing exponentially, and Eachus was struggling to quickly find enough warehouse space to store products. Harbert, a software engineer who landed his first job at an Ohio distribution center, had experience with the challenges of using outdated software. The co-founders agreed their problems were prevalent and could be solved by creating a connected technology platform that would benefit both warehouses and merchants.
Two months later, the friends could not shake the feeling they were onto something. In May 2017, they quit their jobs and moved to Mountain View, California, to join Y Combinator, a startup venture capital fund and incubator behind some of Silicon Valley’s top tech companies. Less than three years later, Flowspace has built one of the largest tech-enabled fulfillment networks in the countr,y with thousands of warehouses and hundreds of merchants, all run by just 50 employees.
BUILT FOR TODAY AND TOMORROW
The team credits success to a few factors. They are solving real problems. They have an engaged and talented team. And, they have been obsessed with user experience from Day One, collecting feedback—and great ideas—directly from the people using their software via in-person visits, phone calls, and surveys.
Flowspace is growing fast, but Eachus says they are just scratching the surface. “Every day we realize there is even more opportunity and are more problems to solve that come along with getting products to your customers.”
Harbert sees a future in which other developers can build technology on top of the Flowspace platform. He also notes they are finding ways to use their data to make predictions and glean insights, such as products storage location and warehouse configuration. They are also preparing for a future in which one-day delivery is slow.
“When customers order something, they are going to expect it within hours,” Eachus says. “Flowspace is building a platform to enable this future.”
a rejoinder to Schulman’s. “Our role is to be conduits of capital,” Gorman says.
As slices of chocolate cake with Chantilly cream appear, delivered by a silent army of servers, a projection screen begins to display a steady stream of $1,000-plus commitments to the museum. It’s a Monday night, and it’s getting late. By the time Anthony and Deidre Scaramucci pledge their $5,181, Schulman’s front-row seat is empty.
GROWING UP IN NEW JERSEY,
Schulman seemed destined for all-american success. He was the captain of three sports teams at Princeton High School, and a beloved local swim instructor. Despite middling grades, which fueled an initial string of college rejections, he won a late acceptance to study economics at Middlebury College, in Vermont, starting in the spring semester. To the outside world, at least, his early life was one of popularity and privilege.
At home, however, Schulman’s parents lived by a set of values that set the family apart. His mother, a civil rights activist, brought Schulman to a protest on the National Mall in Washington in his baby carriage; his father, half-jokingly, wondered whether their firstborn would become the youngest person ever to have an FBI file. Schulman’s father, too, took risks to stand up for racial justice. When one of his direct reports, based in Mississippi, was fired for drinking from the wrong water fountain, the elder Schulman, a chemical engineer, traveled from New Jersey to the company plant in Pascagoula to argue for the employee’s reinstatement. “I remember my mom telling me just how nervous she was about it,” Schulman says. “These things take courage, and courage comes from believing something.”
One summer during his college years, Schulman traveled with friends to Washington, D.C., to attend a march in support of ratifying the Equal Rights Amendment, which drew 100,000 people—including his mother. They ran into one another on the side of the road, where she was resting in the 90-degree heat. She was happily surprised to see him. “Of course I’m here,” he recalls telling her.
Schulman, now 62, didn’t see a disconnect between the values he was raised to follow and a career in business. “If you wanted to take care of yourself, you were going to go work,” he says of his mindset. “There was this ad that I saw that said, ‘Be an account executive. It’s like the quarterback of the sales team.’ ” So the former quarterback went off to AT&T, where a willingness to log long hours caught the attention of his managers. At one point, while he was immersed in an assignment to revamp AT&T’S advertising strategy, Schulman’s boss babysat his daughter so that the rising star could work late and perfect his pitch. (Schulman’s wife, a professor of English, was also working.) By 1998, he was head of AT&T’S consumer markets business, running a multibillion-dollar P&L and reporting to the CEO. But Schulman wanted out. Following the sudden death of his younger sister, who suffered a brain aneurysm at age 20, he felt the need to “live life as fully” as he could. Moreover, he began to question the dominant telecom business model, which was based on charging for minutes of call time per month. “You’d either have overage charges or end up paying a lot more than you needed per minute,” he says. “It wasn’t a great customer experience, but the industry was profiting from this inefficiency.” He took a job at Priceline .com, where he stayed for two years, and then went to Virgin, where founder and serial entrepreneur Richard Branson was looking for a CEO to launch a U.S. version of the company’s prepaid mobile phone service. At Virgin, Schulman had permission to break the rules—a Branson specialty. Starting in 2001, the two spent hours discussing ways for corporations to be socially responsible. “We were a bit more formulaic then, because it was so new,” Schulman says. (B Corporation certifier B Lab, for example, was not founded until 2006.) “Do we set up specific parts of the organization to give back? Do we take 1% of our profits, and give that?” Eventually, Schulman landed on the idea of serving homeless youth through a program he called Re*generation, as a way to echo the brand’s connection with young people. To better understand the issue, he grew a beard and spent 24 hours living on the street in New York City. “If you haven’t begged for money before, and seen how invisible you really are, you don’t get it,” he says. Grasping something intellectually, he believes, is only ever “40% of the story.” Even more fundamentally, Virgin Mobile presented Schulman with an opportunity to build a profitable business model that aligned with his values. “Rich and I talked all the time about why people fire companies,” he says. “It’s because you feel like you were taken advantage of, or that [the company] wasn’t responsive.” At Virgin Mobile, he carried the principle of fairness through from the company’s pricing (prepaid, no fees) to its product design (customers could check their prepaid balance in real time through their Virgin device). When he joined American Express, in 2010, as president of enterprise growth, Schulman operated with the same resolve. His team unveiled Bluebird, a prepaid card with no monthly or overdraft fees, in partnership with Walmart in late 2012. The retail giant sold Bluebird starter kits for $5 at checkout kiosks and allowed shoppers to fund the cards with up to $500. “I could have talked to a lot of executives who would not have been supportive” of serving a lowerincome demographic, says payments veteran Laura Kelly, who pitched Bluebird to Schulman shortly after she joined American Express, in 2011. “Dan is a great business guy, but he also has a heart for people who are underserved. He got it immediately.” Some members of the enterprise growth team recall that going “down market” was a tough sell at an organization most comfortable evaluating the risk of high-net-worth individuals. But any internal resistance to democratizing the financial giant evaporated when Bluebird attracted 575,000 account holders and $275 million in prepaid funds within three months of launch. These days, with 49% of Americans living paycheck to paycheck, what was once considered “down market” is effectively “middle class.” Bluebird has served millions of people, the company says, and is still growing.
THE SNOWCAPPED MOUNTAINS
of Davos, Switzerland, gleam in the January sun as Schulman joins the hosts of CNBC’S
Squawk Box at their outdoor set. Schulman, wearing a brown Patagonia fleece and his signature jeans, is in town for the World Economic Forum’s annual meeting, along with 3,000 other global leaders. Without a hint of irony, the WEF dubbed this year’s meeting “Stakeholders for a Cohesive and Sustainable World,” and then invited a decidedly uniform group of stakeholders to opine on the topic.
Schulman, one of the few executives at the event to have followed through on the idea of maximizing a company’s purpose as relates to its employees, finds himself both in demand and under fire. Today, it is CNBC’S curmudgeonly cohost Joe Kernen who bristles at any mention of multi-stakeholder ad