Latest / Beyond Fulfillment Podcast / From Side Hustle to Scaling Rapidly: The Story of Paccurate with James Malley

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From Side Hustle to Scaling Rapidly: The Story of Paccurate with James Malley · Beyond Fulfillment Podcast

• 0:00
  Imagine you're running a business putting your heart and soul into your product, but you're constantly facing diminishing margins due to unexpected costs and inefficiencies in your supply chain.
• 0:12
  What would you do to turn the tide and find a sustainable solution that not only cuts costs but also contributes to a greener planet?
• 0:21
  Today our guest is someone who has faced this very dilemma and turned it into an incredible opportunity.
• 0:27
  James Malley, the CEO and co founder of Pac Urit went from stumbling into entrepreneurship to building a game changing company that's revolutionizing the packing and shipping industry.
• 0:40
  We'll dive deep into James journey of navigating the tumultuous world of startups, his actionable strategies for overcoming challenges and the mission driven approach that fuels Pack your Ridge success.
• 0:53
  In this episode you'll discover the behind the scenes decisions, the hard fought battles and the emotional resilience that propel James to transform his side hustle into a thriving venture backed business.
• 1:07
  As always, if you found value from this content, please like and subscribe.
• 1:12
  Hello everyone and welcome to another episode of the Beyond Fulfillment podcast.
• 1:17
  I'm your host Dave Gulas and this week my guest is professional boxer Corrugated.
• 1:24
  That is the CEO and co founder of Pacurate, James Malley.
• 1:29
  Welcome James.
• 1:30
  Hey Dave.
• 1:31
  Great to be here.
• 1:33
  Yeah, great to have you.
• 1:34
  I appreciate you taking the time.
• 1:36
  Absolutely, yeah.
• 1:38
  So accurate is your company.
• 1:42
  So can you tell us how you became an entrepreneur?
• 1:46
  Sure.
• 1:47
  I think I kind of just stumbled and fell face first into it in around 2014.
• 1:57
  My, my now co founder and I were doing consulting work for shippers and you know, software providers and helping them build apps and integrations and things like that.
• 2:09
  And it was around that time that shippers were starting to notice their margins eroding from dimensional weight rating from UPS, FedEx and the, the carriers that actually instituted this, this rating a couple years before this.
• 2:27
  But they were really starting to feel it and so they said hey James, Pat, can you go find some cartonization software that actually works so we can solve this problem?
• 2:39
  And so we looked around and you know, didn't find anything and thought well it'd be cool as like a side hustle.
• 2:46
  We'll just build an algorithm and we'll put it out there and see what happens.
• 2:50
  Uh, so it was, it was almost like a hobby at first honestly.
• 2:56
  And then it continued as that and you know, slowly gathering SMB customers until the pandemic hit.
• 3:04
  And then all of a sudden we started getting big brands signing up to use it because they needed help with, with packing boxes um, yeah, so I would say the rest is history, but that, that's kind of how,
• 3:15
  how the company originated.
• 3:18
  Okay, wow.
• 3:19
  So you're doing consulting and you're working with shippers, you know, and, and other software companies.
• 3:25
  So do you have a background in, in that, you know, in that, that discipline?
• 3:32
  Myself, I minored in computer science in school, but I was never a very good programmer, but I was always kind of fascinated with technology and, and supply chain tech in particular.
• 3:45
  Um, and, but my, my co founder, Pat, I've actually known him for a very long time.
• 3:49
  We've been friends since middle school.
• 3:52
  Right after college, we, we just kind of hooked up and we're like, hey, let's, let's build some stuff.
• 3:56
  And we just thought we would do some freelance work.
• 3:59
  And we had some twists and turns along the way building, you know, trying to start.
• 4:05
  At one point we tried to start a for profit fundraising platform and we've, we had some other kind of false starts, but always fell back to doing technology consulting work in the beginning.
• 4:17
  Okay, so you, you have this need for cartonization with shippers coming to you and wanting to solve that.
• 4:23
  The dimensional weight problem.
• 4:26
  What was it like in terms of, you know, you said, hey, let's see, see if we can build an algorithm and, and make it work.
• 4:33
  Like, were you able to create the algorithm and have it basically work right away?
• 4:40
  Was it, was it that simple?
• 4:42
  Definitely not.
• 4:43
  That feels like a layup question leading a leading question.
• 4:47
  It was, it was not that simple.
• 4:50
  I will say my, my co founder Pat, who's our CTO here, brilliant engineer, and likes to think about things from the beginning, kind of from scratch.
• 5:04
  So we didn't take, you know, an open source algorithm or anything.
• 5:09
  We really built this thing from the ground up.
• 5:12
  It ended up being built in a way that was completely different from how warehouse management systems typically do cartonization, which they try to find the smallest box that everything will fit in and instruct the user accordingly.
• 5:27
  We thought about it differently.
• 5:28
  We thought, well, the goal here is actually to reduce cost.
• 5:32
  So volume is an important part of cost, but it's not the only thing.
• 5:37
  The carriers incentivize splitting shipments into multiple boxes or consolidating them into fewer, depending on where you're shipping something or the service type or the weight and all these things.
• 5:49
  And they express those incentives through your rate card, basically.
• 5:54
  And so it took us probably about a year to get a model that worked really quickly to be able to parse all those complex cost structures and incorporate them into the packing decision.
• 6:07
  So there is a, there was like a learning as we were trying to build this thing from scratch without making any assumptions.
• 6:15
  But, you know, some of the first customers we got, like Lionel Trains, I don't know if you're a model train guy, but they were our first customer and they're, they're still using it to this day, so.
• 6:27
  Oh, okay.
• 6:28
  Yeah.
• 6:28
  I'm not a trained guy, but I know the company, I know the name.
• 6:32
  Okay.
• 6:33
  And so I read the explanation on your, your website too, as well as.
• 6:37
  Right.
• 6:38
  This is practical.
• 6:39
  Right.
• 6:39
  It's not just about the volume itself because.
• 6:43
  Right.
• 6:43
  It may not fit in, in a certain size box.
• 6:46
  So you have to really have that, that extra dimension to ensure that it's practical and like the, the full dimensions fit in that carton.
• 6:54
  I mean, in hindsight.
• 6:55
  Right.
• 6:56
  Makes perfect sense and it seems so simple.
• 6:58
  But does it surprise you that there was nothing like this already on the market?
• 7:04
  Yeah, I mean, I think from the beginning we assumed that people had this figured out somewhere.
• 7:12
  I think, you know, cartonization or cubing, some people call it, has improved very slowly.
• 7:21
  And one of the reasons is, is that every shipper has an edge case.
• 7:27
  Pretty much they've got something that's like, unique to them.
• 7:30
  And so the challenge for WMS companies who typically have to have this functionality is they don't really, it doesn't really make sense for them to invest in building a system that is flexible enough to accommodate everybody.
• 7:46
  So they, they take the approach of, let's make something pretty simple and then we'll just get the customers to pay us to customize it for them every time.
• 7:58
  So that's led to kind of like slow adoption and shippers being like, well, this isn't working, but I really don't want to pay my WMS provider 50 grand, 100 grand, whatever it's going to cost to make it work.
• 8:12
  So that's the kind of friction that we realized was keeping good cartonization from really proliferating.
• 8:20
  Okay.
• 8:22
  So you have some modest success with, with it as a side hustle.
• 8:27
  Yeah.
• 8:27
  Then like you said, the pandemic hits and things took off.
• 8:33
  Can you talk about what it was like at that time in terms of the demand and then specifically how your, your product, you know, helped help shippers at that time?
• 8:44
  Yeah, I think there were really two things going on.
• 8:48
  Fulfillment costs in general as, you know, just like shot up.
• 8:52
  So things that we used to kind of take for granted.
• 8:55
  Not, not just carrier rates, although those did spike.
• 8:58
  There was all kinds of crazy surcharges as they were trying to handle all this new E Commerce volume.
• 9:04
  But, but things we kind of previously or the, the industry kind of took as the cost of doing business, like the price of corrugated boxes flew up just because of the supply chain issues that overseas especially it was
• 9:20
  just hard to get the raw material, hard to get the corrugate and hard to honestly manufacture the boxes.
• 9:28
  So there's all these prices going up that caused a lot of shippers to take a step back and be like, okay, wait, these all these things in the last hundred feet of fulfillment that we.
• 9:41
  We figured we had locked down.
• 9:44
  Do we really.
• 9:45
  Is there anything we can do to start chipping away at these costs?
• 9:48
  Because our margins are just getting completely blown away.
• 9:52
  So that was going on simultaneous to that E Commerce in general was blowing up.
• 9:59
  So you have a whole new set of people that maybe weren't E Commerce E Commerce buyers before, you know, older generations as well as, you know, Gen Z coming in and taking over the E Comm consumer base and
• 10:17
  are a lot of them were unhappy and complaining to these brands about waste or damage.
• 10:24
  And so the issue of bad packing was suddenly more in the kind of public consciousness.
• 10:29
  And so it was really those two things that kind of set the stage for, for us to, to start growing.
• 10:35
  Okay.
• 10:37
  And so when that happens and you have that aha moment like wow, this could really scale and be a business that takes off.
• 10:45
  Like what happened next?
• 10:48
  We panicked for a respectable amount of time, started, you know, calling around to, you know, friends, family, anybody that would listen, saying we need some help because we know we have an opportunity here.
• 11:03
  But we're just a couple of guys.
• 11:05
  We're a couple of like software guys.
• 11:07
  How do we.
• 11:08
  What does this look like as a business?
• 11:10
  And so we were lucky enough to have some.
• 11:15
  An experienced senior sales guy come join us.
• 11:18
  He was going to retire because he'd had a very successful sales career.
• 11:22
  It's this guy named Steve Cooper who you know, did very well selling shipping systems over the last 20 years.
• 11:31
  And we're like, Steve, we know you want retire, but we need your help.
• 11:36
  Can you just come, come work with us until we figure out how to, how to handle these, these larger opportunities.
• 11:43
  And so very grateful to him to have like a teacher kind of embedded in the company actually showing us how to sell.
• 11:54
  Okay, yeah, that was the first thing.
• 11:57
  Okay.
• 11:58
  And then how did you go about too right, because scaling and growing and selling.
• 12:03
  Like how did you go about like funding the company and growing it from there?
• 12:08
  Yeah.
• 12:09
  Early days was you know, friends and family.
• 12:12
  And we still did some consulting on the side just to keep the lights on.
• 12:17
  Like we were still supporting some integrations that we had built and we're still making like residual recurring revenue on.
• 12:27
  It wasn't really until maybe 2021 that we were making enough and had enough friends and family money to kind of leave that behind and focus solely on Pacurith the product.
• 12:45
  And then 2022 is when we raised our first venture capital round and it's a pre seed round.
• 12:55
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• 13:44
  Okay.
• 13:45
  And so, you know, coming from someone, software background consultant, you create this product almost by accident, right?
• 13:54
  And now it really takes off.
• 13:55
  You get funding, you have a senior sales guy teaching you, showing you the ropes, and now you're, you're pitching institutional investors.
• 14:04
  So what, what was it like learning how to navigate that world?
• 14:07
  It was brutal.
• 14:09
  I'm not gonna lie.
• 14:10
  It was, you know, I didn't know what investors wanted to see.
• 14:17
  I knew how to write a business plan, but I didn't know where all the gotchas were or, you know, the difference between a normal business and a venture backable kind of business.
• 14:31
  And so, you know, pitched 100 probably funds and was lucky enough to get the attention of a fund in Denver called Springtime Ventures.
• 14:45
  And the partner there, his name is Matt Bloomstead, he was like, yeah, this is, you know, it's interesting.
• 14:52
  You know, you guys are growing and there's a sustainability angle that I like.
• 14:57
  Let me, let me talk to your customers.
• 15:00
  And I'm very thankful that he asked to do that because after he talked to our customers and heard how happy they were with and you know, they were, we were, we were very committed to them.
• 15:13
  So we, we spent a lot of time with our customers and developed relationships.
• 15:16
  And so I think it was really our customers that were the ones that actually got us a very interested investor.
• 15:26
  And so if we didn't have customers yet, there's no way I could have raised that first round.
• 15:31
  It was really, we needed the proof point, I think, for somebody to get confident.
• 15:37
  And so Matt from Springtime actually was like, became really passionate about Pacurit and helped fill out the rest of the round by bringing in other funds.
• 15:49
  Okay.
• 15:50
  So when like you said you had happy customers, I mean, coming from, you know, this is like your first real company, you're scaling and learning all this stuff on the fly and through the chaos of the pandemic and,
• 16:04
  and all that, I mean was in terms of like, it just seems that, you know, even for me, right.
• 16:11
  It seems natural that you want your customers to be happy and that's just automatic.
• 16:14
  I mean, did you know at the time, right, like, was that just something too where the whole purpose is you want a happy customer so you're going to go the extra mile for them?
• 16:23
  I think that might be attributing too much foresight.
• 16:27
  It was more just like we really wanted this thing to work because we, at that point we had seen not just that there was like a really great ROI for our customers, but we did the math on the
• 16:41
  green impact, like how many acres of corrugated could we reduce or how many trucks could we take off the road over time based on, you know, making these, these packages more efficient.
• 16:56
  And so at that point it was like a very, were like in the full on, in the mission driven realm.
• 17:03
  And so the relationships with the customers, very, very hands on, wanting to make sure not just that it worked, but that they loved it.
• 17:14
  And I think that just came from.
• 17:16
  We wanted everybody to love it as much as we did.
• 17:19
  I think now, you know, founders, especially ones that go through like YC or something, they have maxims like do things that don't scale like this, spend extra time with the customer, go on site, give them the white glove
• 17:37
  treatment.
• 17:38
  These aren't principles that we knew at the time because we were just guys trying to make something work.
• 17:46
  But as time has passed, I've kind of looked back and realized that that's something that we accidentally did.
• 17:52
  Well, okay.
• 17:55
  And you know when you're, when you're building this and throughout that whole process too, is there.
• 18:01
  Because at that time too, right, like you said, prices shot up, e commerce spiked incredibly like overnight with, with everything being locked down and people not knowing what was going to happen.
• 18:14
  Was there other competition too?
• 18:17
  Kind of in this same, you know, in the same field?
• 18:21
  Not really.
• 18:22
  I mean they're, they're definitely competitors.
• 18:26
  Like there's some legacy load planning software.
• 18:32
  So if you picture, you know, sitting at a computer with a screen that has a virtual trailer on it and you're dragging virtual pallets in to try to plan out how a truckload is going to go.
• 18:42
  Some of the vendors that provided software like that had released cartonization versions and APIs and things like that so that people could try to improve this area.
• 18:53
  But we didn't, we haven't and to this day don't run into competitors a lot.
• 18:59
  And I think part of the reason is it's just, it's a huge market.
• 19:05
  I mean, there's just billions of packages shipped around the world every year and this problem hasn't become quite so painful until the last couple of years.
• 19:23
  So yeah, there were some competitors out there, but I think we were thinking about it differently enough early on that we were able to stand out.
• 19:34
  Okay.
• 19:35
  And another thing too, you mentioned the mission driven portion of it in terms of reducing waste and all that.
• 19:42
  How much of the, like, how important is that to the company?
• 19:47
  I mean, it's our whole purpose and I talk to the team about this sometimes, but our purpose is to make the supply chain less wasteful and we do that through spatial efficiency.
• 20:02
  That's our purpose.
• 20:03
  The fact that we're a venture backed startup is kind of the vehicle that helps us, you know, drive toward that, that purpose which might outlive us.
• 20:15
  And I think it, it, it is a, when things are hard, like if something doesn't go well, if you lose a deal or if you, you know, you're struggling to do anything, if you can in the back of
• 20:27
  your mind, fall back on a, a purpose that you know is permanent, you know, that will probably outlive you or hopefully outlive you with the company.
• 20:38
  It makes, it makes it a lot easier to kind of suffer the ups and downs.
• 20:44
  Yeah.
• 20:44
  And you know, glad you brought that up because that's one part of entrepreneurship.
• 20:49
  Clearly there's going to be ups and downs and all sorts of unexpected landmines, so to speak, that you don't see coming.
• 20:59
  Was there any, any part or any point in time during the journey where you thought about giving up?
• 21:06
  Oh, sure, yeah.
• 21:08
  Especially the, the time.
• 21:13
  So in the beginning we were like, oh, this is a nice side hustle.
• 21:16
  We can't give up our day job.
• 21:17
  And then now we're, you know, venture backed, growing pretty fast.
• 21:22
  The time between when we believed in our hearts that this was our, had to be our mission to create a company around this, but we weren't getting traction or attention that we needed to really do it.
• 21:37
  That was the most grueling period.
• 21:40
  You know, we were out there pitching WMS companies and they were like, who are you?
• 21:45
  What, what are these little whippersnappers talking about?
• 21:49
  We already have cartonization.
• 21:51
  You know, it, it was for a long time packing efficiency was not.
• 21:57
  Even though we got a burst of, of customers during the pandemic, it was not like a top three priority.
• 22:04
  So even if we got somebody's interest, we would have what we called phase two Itis.
• 22:09
  So like, yeah, this is great, we'll do it in phase two.
• 22:12
  And then that would never come.
• 22:14
  So there was plenty of frustration and you know, doubt.
• 22:19
  You know, I had plenty of doubts about.
• 22:21
  I never doubted my co founder because he's just, you know, know, he was the best man at my wedding.
• 22:28
  So one of the, one of my favorite people, but also one of the smartest people I know and continues to innovate.
• 22:34
  But I always had a lot of self doubt.
• 22:37
  Like I believe in this, but am I the, am I the guy, am I the guy that can be CEO and, and grow a business here?
• 22:46
  So yeah, I mean I, I think the, what is the joke about going to failure to, going between failure to failure with no loss of enthusiasm?
• 22:56
  The kind of quirkiness of, of the entrepreneur that you have to get punched in the face and then turn around and say, yes, I'll have another.
• 23:08
  Yeah, yeah.
• 23:10
  And you know, it's, it's a lot easier to talk about that when you're on the other side and you have success and you can kind of look back and laugh about stuff like that.
• 23:17
  But at the time, like you said, where you believe in this, but there's not the traction, you're not seeing the results you're having and.
• 23:26
  Right.
• 23:27
  The human mind will just attack you with all those limiting beliefs, negative thoughts.
• 23:33
  Like when you're in the middle of that, what, like how did you keep going day after day?
• 23:40
  I mean, my wife played a huge role in, in me being able to get through it, being an entrepreneur, especially if you don't come up in a community of them.
• 23:51
  Like, you know, a lot of Silicon Valley founders have like good networks, good support systems.
• 23:56
  Other founders being in New York and in supply chain, not really connected up with any founders my age, extremely lonely.
• 24:08
  Like none of your friends, if they've never tried to start a business, really understand what you go through on a daily basis and it's not their fault, but it can make for some loneliness to feel like you're, you're
• 24:24
  kind of alone.
• 24:25
  Nobody understands the pressure, and you can't complain about it because you're in a position to maybe try it.
• 24:33
  So I leaned a lot on family, and in particular, my wife was just unflailingly supportive as we.
• 24:42
  We try to get things rolling.
• 24:44
  Okay, and so like you said, consulting background and software guy, how did you make the transition to being a CEO and being responsible for, like, building a team and managing all these different departments and all the things you
• 25:00
  have to do as the leader of a company?
• 25:03
  Yeah, I.
• 25:05
  I think if I could say I'm good at anything, it's asking for help.
• 25:10
  So I am.
• 25:12
  I have always been extremely reliant on mentors to help, and I have some amazing ones.
• 25:22
  And.
• 25:22
  And thankfully that that trend continued after we started raising venture capital.
• 25:29
  So we've done three VC rounds.
• 25:32
  We did the pre seed in 2022, the seed last year, and the Series A most recently this year.
• 25:39
  I'm not sure how, but we've always ended up with investors and board members that are interested in the business and interested in helping.
• 25:52
  And so every time the company takes another step forward, grows, you know, there's a new chapter where we're a new headcount or trying to do something slightly differently.
• 26:02
  I have to kind of relearn my job, and it's just been that way since the beginning.
• 26:08
  And I never know, you know, is there going to be a phase of the business where I'm not the guy for.
• 26:17
  For the business at that point.
• 26:20
  It may happen someday.
• 26:22
  And just like, making peace with that and just saying, I'm the guy right now and I'm just going to do the best I can right now.
• 26:29
  And when the time comes to grow again, I will try to be that guy.
• 26:34
  But if I'm not, I've got to be the first one to kind of raise my hand and say, maybe, maybe the company's outgrown me.
• 26:44
  And how, you know, that that's.
• 26:47
  That's great perspective to have that mindset and that, I guess, let, you know, lack of ego, so to speak, to even, you know, be aware of that.
• 26:57
  But how do you tell, like, as you.
• 27:00
  Like you said, you have to continually relearn your job, and each one of these new levels of growth is.
• 27:06
  Is demanding new, I guess, new versions of you.
• 27:10
  Like, how do you.
• 27:11
  How do you assess, like, how you're performing, you know, in the middle of that?
• 27:17
  Well, I think.
• 27:18
  I think, like, you know, there's the basic stuff, which is you say you're gonna hit some target, and you do, or you don't you know, that that's pretty fundamental, but can't always get it right.
• 27:31
  But I think in the context of team building, if I'm still as long as I'm able to pick, find the perfect people for roles, especially leadership roles, and they are able to achieve and seem energized by your guidance
• 27:55
  and not frustrated, I think you're probably, you could be in worse shape.
• 28:01
  You know, those are really the, the things that I've seen where when the company's doing well, it's because leadership is all like talking to each other.
• 28:10
  They feel like they have everything they need in order to succeed.
• 28:16
  So I think if we get to a point, you know, I don't, I don't know if I'm a CEO of a 500 person company because it's very different.
• 28:24
  There's like, you know, politics, there' you know, there's different concerns.
• 28:32
  So that's my, that's my take on it.
• 28:34
  I think I'm pretty good at hiring people that are smarter than me.
• 28:39
  That's my secret.
• 28:41
  That's your secret?
• 28:42
  Yeah.
• 28:43
  Okay.
• 28:43
  And so what, what does, what does the company look like present day?
• 28:48
  There are 21 of us today and we've got a few open roles.
• 28:55
  So we'll be 20, we'll be 23 within the next few months.
• 29:01
  Okay.
• 29:02
  Yeah.
• 29:02
  And as far as you've come building this, like, what, what's next for you in, in, in the coming year?
• 29:09
  Yeah, so we, we've had a lot of success with partnerships.
• 29:15
  So next year, really doubling down on that.
• 29:20
  We recently hired a partnerships leader to come in, a very experienced guy in the space.
• 29:26
  He used to sell AMR Robotics.
• 29:32
  And so, so really doubling down on the things that we've found on a smaller budget have worked really well and just trying to do them more methodically instead of as like a when we have time kind of thing.
• 29:48
  That's really what I'm excited about going into next year.
• 29:51
  We also get to do, it's nice raising venture capital because you can do, you know, trade shows that are otherwise, you know, prohibitively expensive for a startup.
• 30:02
  So we get a, we get a little booth at most of the supply chain shows next year.
• 30:08
  Okay.
• 30:09
  All right.
• 30:09
  And James, if people want to get in touch with you and learn more about Pacurit, what's the best way they can reach out to you?
• 30:15
  Well, you can find me on LinkedIn.
• 30:17
  James Malley.
• 30:19
  My, my invites are open.
• 30:20
  I'm always happy to connect and, and chat Pacur it.
• 30:24
  You can find it Pacurate IO that's our website.
• 30:29
  All right.
• 30:29
  And we'll link all that in the show notes for everyone.
• 30:33
  All right.
• 30:33
  Well, James, thank you so much for taking the time to be here sharing your story.
• 30:36
  We greatly appreciate it.
• 30:38
  Thanks so much, Dave.
• 30:39
  This was awesome.
• 30:40
  All right.
• 30:41
  And that is all the time we have for now.
• 30:42
  We will see you next time.