The Propcast talks with Tyler Scriven and Maxwell Bonnie from Saltbox about making warehouses and logistics accessible to everyone in e-commerce. We discuss creating hyperlocal logistics centres, what this means for diversity and reducing the barriers to entrepreneurship for everybody across the board. We talk about building a compelling brand and recruiting the right people to deliver a mission which is much bigger than just warehouses and logistics.
Click here to listen to this episode and hear a preview of our chat below!
A thoughtful, dynamic, and innovative entrepreneur, Tyler is currently the Founder & Chief Executive Officer of Saltbox, a venture-backed startup building workspace and logistics infrastructure to power the future of commerce. Saltbox was founded in 2019 and is on a rapid growth trajectory.
From 2016 to 2018 Tyler served as the Founding Managing Director of Techstars Atlanta, a global early-stage venture capital investment fund. At Techstars he led investments in dozens of early-stage startups.
From 2009 to 2016 Tyler served as Head of Operations and Chief of Staff at Palantir Technologies, the world’s leading big data analytics software provider. During his tenure at Palantir he built and led people operations, recruiting, IT, real estate, corporate development, and various other operational functions. His responsibilities led him to build and lead teams across the globe, including Europe, the Middle East, Asia-Pacific, and India.
As a key member of the company’s executive team, Tyler was broadly engaged in scaling the operations of the business from 100 to nearly 2,000 employees and saw the company grow to become one of the most valuable technology companies in the world.
Tyler currently sits on the board of directors of the Serenbe Land Corporation, a pioneering and nationally renowned wellness community connected to nature on the edge of Atlanta.
Tyler began his career in 2005 with J.P. Morgan, and worked in the fields of private equity and investment banking in New York City prior to moving to San Francisco in 2009. He holds a bachelor's degree in American Studies and Economics from The University of Virginia.
He currently resides in Atlanta, GA with his wife Faith, and son Patterson.
Maxwell Bonnie is one of the cofounders of Saltbox, currently leading all aspects of the Member Lifecycle and Product. Prior to Saltbox, Maxwell helped build the Customer Experience and Bionic Operations teams at FullStory and was part of the leadership team in the Research and Operations departments at Bridgewater Associates.
Maxwell received his bachelor's degree in American History from The University of Virginia, and his master’s in Economic Development from Georgia State University.
Louisa started her career in property working at a well-known estate agency in London. Realising her people skills, she moved over to Lloyd May to pursue a career in recruitment. She now is a Director at LMRE, who are a specialist recruitment firm driven by PropTech and recruitment professionals, and Louisa oversees their 5 core areas. Louisa co-founded LMRE and provides a constructive recruitment platform to the new disruptors in real estate. Louisa is also on the board of Directors at UK PropTech Association (UKPA).
LMRE believe there is a better way to recruit. LMRE focus on a more comprehensive, client led focus delivering exceptional talent to the place at the time. They are passionate about the industry and passionate about people's careers. LMRE spend time with each client to become and an extension of the business, and their transparency and core values help them grow with the sector. LMRE simplify recruitment and innovate with our clients and evolve the people driven, PropTech community.
Saltbox Fulfilment https://www.saltbox.com/fulfillment
Bessemer Venture Fund https://www.bvp.com/
Louisa Dickins: Today on the podcast, we will be discovering how to make warehouses smart and who better to talk about this than Co-Founders of Saltbox, Tyler Scriven, and Maxwell Bonnie. So welcome to the show guys.
Tyler Scriven: Thanks Louisa. It's great to be here. Appreciate you having me.
Maxwell Bonnie: Yeah, it's a pleasure to be here. Looking forward to the conversation.
Louisa Dickins: Awesome. So on this podcast, we will explore the future warehouses and logistics, how to attract talent to this new part of real estate, nd we'll hear more about Saltbox’s mission, their expansion, and I guess how they going to be growing across all 50 states.
For those listening not familiar with our guests, Tyler is currently the Founder and Chief Executive Officer of Saltbox, which is a venture backed startup building workspace and logistics infrastructure to power the future of e-commerce. Saltbox was founded in 2019 and is on a rapid growth trajectory, which we’re going to hear so much more about later.
Prior to this Tyler served as the founding Managing Director with the well known Techstars at global early-stage venture capital investment fund. At Techstars, he led investments in dozens of early stage startups.
And we are also being joined by Maxwell, who is another Co-Founder of Saltbox. He currently is leading all the aspects of the member lifecycle and product.
And prior to that Maxwell helped build the customer experience and bionic operations teams at FullStory and was part of the leadership team and the research and operations departments at Bridgewater associates. And so I'm delighted to have you both on the Propcast today. So without further ado, let's start the show, and why don't we begin with how you both got into this space?
Tyler, maybe you can talk us through, you came from banking into scaling another business, Palantir technologies, to over 2000 people. So how do you get from that to warehouses? Talk us through it.
Tyler Scriven: Yeah, that's a good question. How do I get from, from Silicon valley to, to a warehouse? Lots of adventure. I think the first thing I would say, Louisa is that as a kid, I was an entrepreneur very early on and did a lot of really gritty things. And my parents had to convince me to go to college and I wanted to stay home and run my own business.
I've always had appreciation and an affinity for small business, as opposed perhaps to the world I lived in for while of venture capital funded companies. In 2016 I decided to move to Atlanta and to buy a small business myself, really with the intention of putting myself back in those shoes and with some fresh eyes and hopefully identifying some new opportunities. And that's exactly what happened, that was the origin story of Saltbox.
Louisa Dickins: And Maxwell, what about you and how, how did you guys first meet?
Maxwell Bonnie: Good question. So Tyler and I are actually coming up on our 20th anniversary. We met when we were 5 years old (laughing).
We actually met the first year of university at the University of Virginia. We have had like these very parallel paths ever since. We connected five years ago in Atlanta. We both moved to Atlanta, Tyler from San Fran, me from New York. And, in reconnecting we just said, there's something here.
We want to eventually have the opportunity to work together. And, personally I'm drawn to really hard problems that have a big impact, with smart people. And when Tyler first brought this idea and said, “I’m thinking about solving this problem” I was like “There's a reason no one has solved it, and it's because it's really hard to do”, but there's opportunity there and if I have the opportunity to build a great company with someone I want to spend my life with let's do it and I'm excited.
Louisa Dickins: Okay. Now let's hear from both you. Talk us through the Saltbox product. Run me through it.
Tyler Scriven: I guess I'd have to start with what is the problem that we’re solving? I'll share that just through the lens through which I experienced it and then eventually kind of rationalised it.
As mentioned in 2016, I purchased a small business, a consumer product goods retail company. And my goal was to evolve that company from being primarily a retail distribution strategy, to primarily e-commerce distribution strategy. And I thought to myself that I could use all of the best in class software that exists now to do that.
You think about Shopify and Stripe and Facebook, MailChimp and these sorts of products and that turned out to be true. Those technologies are really effective, which shows in their adoption and growth.
But I also encountered this ugly, dark side of digital commerce, which was having to source all of the goods. Having to store the goods. Having to move the goods. Having to employ people to deal with all of the logistics, the operations, the physical aspects of that business are really what shaped my experience.
And what I found effectively was that I, along with millions of other smaller e-commerce entrepreneurs were kind of pushed to the fringes of the real estate ecosystem. And implicitly also pushed to the fringes of the entrepreneurial ecosystem at large, because we were forced to work in basements, garages and self-storage facilities. In some sense treat it as second class entrepreneurs and in a world that principally focused on what was happening on the internet. There is this simple reality, which is that e-commerce begins and ends in the physical world. It will always be that way until we moved to purely digital products.
Someone has to do with that. If you are a big company, you can afford to invest the capital and effort to build out the logistics infrastructure that you need to operate efficiently.
Louisa Dickins: Like the Amazon’s of the world?
Tyler Scriven: Correct. Yeah. Even my son who's six, even he understands it's Amazon's logistics. He wouldn't use that word, but he understands that Amazon's logistics which shaped that company, because he sees all their trucks. So they have the resources, but the other half of the curve they don't have those resources. In effect, what we're doing is we are creating access to this critical logistics infrastructure which begins with physical space. Logistics begins with the warehouse, plain and simple.
Sometimes you need a million square foot warehouse. Sometimes you need a 1000 square foot warehouse, but it all begins there. So we're creating access to that infrastructure, and we're doing that in a way that reflects the fact that our primary user, that merchant, is a human. And they need these spaces and these services designed in a very different way than we've historically thought about logistics, in this country or in the world for that matter.
The very basic idea is human centric logistics. You could summarise it by saying that what we're doing is we are creating an access to critical logistics infrastructure, that is a workspace, all of the surrounding services and activities.
And we're doing that in a way that makes it very approachable, very accessible by a normal person but without any sort of meaningful trade-offs to the efficiency or productivity of those tools.
Louisa Dickins: Where did you kick off your first warehouse, in Atlanta? How has it how's it grown so far?
Maxwell Bonnie: We decided the best way to start this is do it in our backyard. For a couple reasons. It’s just easier cause we lived there, we can easier manage it. But also Atlanta has this thriving entrepreneurial ecosystem. So part of the hypothesis is there's lots of the entrepreneurs that need a space to grow, and a place to either start, or build, or scale their e-commerce business. So let's build a home for them and do it in our backyard.
So we launched the first one, it opened right after Thanksgiving of 2019 and within three months we were at capacity. This was right before COVID, so we saw this amazing need and draw to what we were building. It was awesome.
And then we had this period where we were nervous. Everybody was nervous in March 2020. Very quickly what we realised what's actually happening during the pandemic, was this exponential growth in adoption of digital commerce. When people were just buying more online because they weren't leaving their homes. That was like gasoline on the fire.
What we were already seeing was this is growth in e-commerce and growth in these startups who had the ability to reach their target customers directly with an idea. An idea became a product and they needed a place to take that product and deliver it to their customers.
And then we've been riding that wave ever since, which has been very humbling.
Louisa Dickins: Congratulations. And so where have you further grown then? What states are you in?
Maxwell Bonnie: We are in Dallas and Seattle live right now. So Dallas launched in March of 2021. Seattle officially opened actually yesterday. Dallas is already at capacity in under five months, which shows that the market's like “I need a place to go do this”. We just have the privilege of building the purpose-built space for them to do that.
Tyler Scriven: Dallas is more than two times the size of our first location in Atlanta. Atlanta, Dallas and Seattle are open today. We have locations opening this year in Los Angeles and Denver, and also a couple of new locations in existing cities as well. We’re doubling down on growth already in some of those markets.
Louisa Dickins: You've also launched part of your product called Saltbox Fulfilment. Run me through that part of the product.
Tyler Scriven: In order to best answer that question, I have to step back for a moment and speak about how we think about solving problems for our members and the scope of that.
We want to be, over time, their go-to solution to solve the entirety of their logistics and operations problems.We think about our business, our capabilities, as being kind of firmly rooted in the physical space, in any problem in the physical world. Any problem that kind of emerges out of that is within the purview of things that we believe we can solve for that customer.
You think about a wide range of logistics needs, but even potentially capital needs or supply chain. Fulfilment is an interesting one, and important one, because there are a subset of companies for whom coming to Saltbox and getting a 500 or 5,000 square foot warehouse suite and leveraging our elastic workforce in our loading docks and pallet jacks and all these sort of things, that is the right approach for them to managing their fulfilment or operations. And there are customers for whom outsourcing that activity is the right approach.
Obviously when we talk about Saltbox offering fulfilment as a service, we're talking about the latter group, those for whom outsourcing is the right solution. The reality is that kind of spectrum of need is very nuanced. What is the right solution for me and my business at this time, is a hard question to answer.
And a lot of times companies just get that wrong. One of the underlying reasons why they get it wrong is because historically they've had limited choice. That is to say that it has not been a choice to get your own a thousand square foot warehouse suite, and do it yourself in a highly leveraged environment.
The choice has been do it out of my garage, or outsource to a 3PL. And in outsourcing through a 3PL there often is a mismatch of scale. A small business seeking to work with a very large 3PL is challenging. The incentive structure of that 3PL is just not aligned to meet the needs of that small business.
So our solution is premised on that problem. Whereas your typical 3PL is operating out of a quarter million square foot facility and shipping 20,000 outbound packages per day, a Saltbox fulfilment hub is embedded within a saltbox. It is by definition very small, but in a way that allows for that product to meet that small business where they are.
Instead of having to ship your inventory across the country, into a building you've never been to, you can drive it down the street instead of having to wait on hold to talk to the customer service team who will eventually try to problem solve what happened to your order, you can talk directly to the operations manager in Saltbox Dallas, and so on and so forth. That is really the starting point of that offering. And we think that it creates a lot of opportunity for us to grow alongside our customers as they scale.
Louisa Dickins: It sounds a lot more efficient and less fragmented.
What major trends have you seen over? Obviously we touched on it a bit with COVID, more deliveries that are happening, but are there any trends you've seen over the past five years and any predictions in terms of warehouses and logistic?
Maxwell Bonnie: Sure. I say the highest level one of the things we were seeing is the demographics and firmographics of who our customer base is. And that's reflecting the changing dynamics of who are business owners. Within them are people who have been traditionally to the fringes of building their own capital and able to control their own enterprise.
We're seeing that it’s more heavily index with more women as founders of these companies, and more heavily indexed on people and persons of colour. Where traditionally you see something like 70-80% of white males, we see like more of a 50/50 split, which is very interesting. And it like goes to this general hypothesis that there's a lot of entrepreneurs who just haven't had that place to be supported and grow. So that's a big part of one of the drivers.
On the logistics side, when our third Co-Founder Paul, who wasn’t able to join us today, he's had this theory for a while and we're seeing a truer and true that additional logistics was in these large increments. These 40 foot containers going across ships that had millions of them, however, the world's going where logistics needs to be enabled and smaller and smaller increments and faster cycle times.
So it's hyper-local, it's really focused on getting things from point A to point B and between point A and point B it’s few miles away as opposed to hundreds of hundreds of thousands of miles. And so that means the infrastructure needs to change to enable smaller and smaller increments of logistics activity. And that's a big part of what we're seeing. Our locations are just are sort of nodes in this greater infrastructure, that we are enabling - logistics in smaller increments. Businesses have smaller footprints. You can have less lower volume of packages. You can have last mile delivery, last mile pickup. All coming out of a Saltbox.
Louisa Dickins: And, we spoke about trends, there’s more women founders going into these businesses. Talking about specifically your team, how do you attract talent to warehouses and logistics. Maybe more female talent. I don’t think of it being particularly sexy as an industry. I understand the growth of it, the investment, the money to be earned as well. But in terms of your team culture, diversity, how have you gone about that guys?
Tyler Scriven: Yeah. I mean it begins with the customer here.
And the simple fact is that women are, as well by the way as black and brown people are disproportionately represented in our membership and our customer base. And that's not because of anything that we've done in particular, I think that is a reflection of some broader systemic issues or perhaps opportunities, this is where those groups find the best outlet to pursue their entrepreneurial passions. Perhaps because they have fewer opportunities elsewhere. And so, we will lean into that and what I would say in response to that is that I want to make sure that whomever is walking through the doors of Saltbox is able to pursue the building of their business with the most leverage possible.
That is a fundamental issue. The issue is not that pursuing a venture backed company is inherently better. I don't think it particularly is. The issue that we need to address is that when one pursues a business, like the sort of businesses that are built at Saltbox, they often are doing so without operational leverage in a way that's going to help them to grow faster and achieve their goals. And so, we want to solve that.
You asked about how do we attract diverse talent to Saltbox. As someone who's dealt with this my whole life, I'm very hesitant to say we're great at it.
I don't know that we are. The facts are the facts. As a founding team of essentially three minorities, we're a pretty unique founding team. And I think that we are building a culture that is attractive to a diverse array of people. If you asked me that the key to that, if we are doing it well, is to treat everyone the same. It's not rocket science.
Oftentimes in the past Maxwell and I have been kind of put in the seat of saying, “Hey, Tyler, Maxwell, why don't you work on making, XYZ company more diverse?” And now we kind of have that mandate for ourselves. Our strategy is first and foremost, treat everyone equally.
Maxwell Bonnie: What Tyler mentioned there is key. Having a mission that's not about warehousing. Warehousing is the means to the end. So you have this attractive mission. There’s a story that people want to be a part of. And then you have internally a culture where people feel supported and feel that they can be themselves. We talk a lot about self-awareness, talk a lot about vulnerability as key tenants of our culture, so when you have that in place, those are like the little kernels of a culture that people can feel comfortable. With that, we can attract the right people who want to be part of us achieving our ambitious mission.
Louisa Dickins: Talking about your ambitious mission, you also recently announced your Series A, it was over 10 million? What are your big plans? You have obviously for expansion to other states, but what's what's ahead of you for 2021/2022 guys?
Tyler Scriven: Yeah. What's not ahead?! As you noted, we completed Series A earlier this year in February, $10.5m Series A. That celebration ended the day after it started, and we went back to work.
We've got a lot going on. We will end this year with seven or eight open Saltboxes across the country, a robust pipeline that will result in well more than a double digit growth next year.
We believe that we'll be building Saltbox workspaces for many, many years to come. A lot of our focus, the things that we stress about if you will, are first and foremost hiring. Continuing to attract really smart people that are independently passionate about the problems that we're solving and want to be a part of that.
And secondarily is around continuing to innovate, not just with respect to the workspace product, but also our solutions business. It was very important to us to begin to build the business beyond the workspace offering very early.
I'm excited to say that, even in these early days, we are already seeing revenue contribution from non-workspace activities that is well into the double digits. So it's a healthy foundation for us to begin to work from.
But, we're moving quickly. We are building a product and engineering teams. We are advancing fulfilment and we have a number of other solutions in the pipeline and we'll continue to push very aggressively on those.
Louisa Dickins: Awesome. Well I'm looking forward to following your growth throughout the years to come, who knows?
Maybe you guys were expand to the UK, I know we've got the same problem over here.
Tyler Scriven: Oh yeah, we’ll definitely be in the UK, no doubt. Probably not next year, but I would say start looking out for us and other places in 2023. But you’re right, the problem exists for sure. Everywhere.
One thing I'll share with you, because I just think it's so fascinating and to some extent reflects on our opportunity is, about a year ago, Bessemer Venture Fund published their Shopify Series A deal memo. It's a really interesting read. To my mind, the most notable part of that is that they also share their exit multiple table, which every deal includes - what do we expect the outcome to be here? And the highest order outcome that they could imagine at that time, which was in 2010 was a $400 million valuation for Shopify, which in their own words, reflected them achieving essentially market dominance in the world of e-commerce, including penetration into medium and large enterprises.
What's interesting about that is that Shopify today is $190 billion public company, not a $400 million company. It really tells you something, to some extent about our ability as humans to predict the future, but more specifically about our ability to appreciate the impact and scale of the transformation that is happening in our economy today. And that is transformation from an analog retail economy to a digital one. And, it's one thing to be off by 10 times. It's another be off by 10,000 times.
So I think as we think about the future of logistics and in particular, the future of logistics for small companies, we believe in essence that, as Maxwell said, this is something that every company will need in the future, and they'll need it in a way that is much more humanised, in much smaller scale, much more flexible, much more approachable. And that's really the vision that guides us.
We think that in a world in which there is some trillion-ish dollars worth of market cap of companies that are enabling things to be sold online today that surely there's a few tens of billions at least for companies that enable those things to get to where they're going. And that’s exactly where we’re focused.
Louisa Dickins: Well, you're in a very good space. That's all I can say, guys. Unfortunately, we're coming to the end of the podcast, but how we end it is with the LMRE part. So, Maxwell why don't you start off with the L - lessons learned, then we go into M - mention anyone, product, give someone a shout out.
R - what's the most rewarding part of working and PropTech or specifically, you could say warehousing logistics and E - is what you're most excited about in the future of prop tech? So let’s start off with what's the biggest lesson you've learned in your career? Big question!
Maxwell Bonnie: I think the biggest thing I've learned and learned it a lot at FullStory and deeply applying here is obsess about it what are the problems that your customers are having? If you obsess about them, they'll be your guiding light to building the right thing. And it's not like what's right in front of him, but what is the root of their problem?
And if you address the root of it, you can then solve that at scale for lots of different people.
Louisa Dickins: Anyone you want to give a shout out to, or maybe a product or service?
Maxwell Bonnie: This is hard. Are we getting paid for this? (Laughing)
Oh man. I would say I'm on the spot for this one. I'm very interested in what's happening with like headless commerce. I'm not going to name ones particularly, but this world of on the digital side, enabling commerce to happen. Whether it's things like drop parties or things like brand lists sort of like backend enablement of e-commerce, that's a very interesting world that help shape this new adoption of digital commerce.
Louisa Dickins: Okay. Now we've got, what's the most rewarding part of working in PropTech, other than working with Tyler?
Maxwell Bonnie: I mean the a hundred other Tyler's that we get to, (well maybe not a hundred other Tyler’s), but we have the privilege of trying to attract, but then choosing the smartest, most passionate people to work with.
Every day when I wake up I have to be on my A-game because we have lots of people who bring lots to the table, who are every day pushing to do something awesome. They get me up early in the morning, so I'm prepared.
Louisa Dickins: Awesome. Okay. And last but not least, we've got the, what are you most excited about?
Maxwell Bonnie: Ooh. Everybody laughs at me. I’m most excited about getting to 10,000 actual customers who we can help change the world. That's the number I keep in my head. The problem is that large, and that's just a small subset of the total number of entrepreneurs who need to be logistically enabled.
And so that's what drives me, getting to that number so that we were achieving logistics in the United States.
Louisa Dickins: Yeah. Well, when that happens, I'm coming out to Atlanta to celebrate with you guys. Tyler, over to you. What's the sort of main lesson you've learned?
Tyler Scriven: Main lesson is the combination of forming a long-term thesis, having a point of view on the world and being patient. That's how you build a big business as you believe something about the future and how just work towards that. So I've learned that lesson and feel better prepared to do that.
Louisa Dickins: You can mention anyone or product, or something.
Tyler Scriven: I too, won't name names, but I’m very fascinated and bullish on modular construction. I think that another decade or so from now many of those companies will change the way that we think about physical spaces and in our capacity to create them, quickly and cost-effectively and wherever we want them to exist. And so I'm excited about that.
Louisa Dickins: The third one is what's your most rewarding part of working in PropTech?
Tyler Scriven: It's hard to say, working in prop tech. The most rewarding part of the work in general is the satisfaction of hearing someone tell us that we really solve the problem for them.
I'll tell you very briefly. I talked to a customer last week who described that she, before Saltbox, was working out of a self storage facility in which there was, she described it, a Vagrant who had rented the unit next to hers and it made it very, very uncomfortable. And so she was quite happy to be at Saltbox.
Louisa Dickins: Finally, what are you most excited about for the future for what you guys are doing?
Tyler Scriven: I have this image in my head, this vision of putting together some really thoughtful, interactive narrative piece around our first thousand customers and just kind of showing the world we see this incredible mix of small businesses and their stories and every single one of which is really, really interesting. And I want to tell those stories in a good way. So excited about that.
Louisa Dickins: Awesome. Well, we'll be looking forward to that. But unfortunately we have come to the end of the Propcast.
Thank you, both Maxwell and Tyler for joining me. And I'm looking forward to catching up with you after the show.
Tyler Scriven: Thank you.
Maxwell Bonnie: Thank you for having us.
Louisa Dickins: So thank you both for joining me on the podcast and looking forward to catching up the after the show. Thank you for joining us this week on the podcast and a big thanks to our guests and our sponsors CREtech and Reimtech. Make sure you visit our website www.lmre.tech where you can subscribe to our newsletter, keep up with our industry news and events or if you’re looking for your next career move it’s all on there. The Propcast can be found on iTunes, Spotify and YouTube where all good content is found. Whilst you're at it, if you found value in the show, we'd appreciate if you could spread the word and tell and friend about it or even write us a review, and I’ll catch you next week.