Banking on KC – Ben Jackson & Harrison Proffitt of Bungii: Driving Innovation in Last-Mile Delivery
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Kelly Scanlon:
Welcome to Banking on KC. I'm your host, Kelly Scanlon. Thank you for joining us. With us on this episode are Ben Jackson and Harrison Profitt, the co-founders of Bungii, a company that specializes in last mile delivery of big and bulky goods. Welcome to both of you.
Harrison Proffitt:
Thank you. Great to be here.
Kelly Scanlon:
Thank you, Harrison, and welcome to you too, Ben.
Ben Jackson:
Thank you. Thank you. We're excited to spend some time with you.
Kelly Scanlon:
You have a very interesting story, so let's just start there. It began with a personal need and then you talked about it as part of a college class that you took. Take us through that origin story.
Harrison Proffitt:
Yeah, I can speak to that, Kelly. So back at Kansas State University, Ben here, he had a typical college truck, a little '99 Ford Ranger, and one day, I think it was during our college move out weekend, he had four people, including myself, ask him to borrow himself and his truck. Now, Ben's a pretty nice guy, but at the end of the day, he's like, "There's got to be a better way to do this."
Kelly Scanlon:
Yeah, because you probably felt obligated to help him too, didn't you? So four move-ins.
Ben Jackson:
Oh, it was the worst. It was the worst. I vividly remember that night, I was laying in bed. I think I was still sweating and I was staring at the ceiling, and I'm just so salty. It's like, there's got to be a better way here.
Harrison Proffitt:
So the next day or a few days later in class, we were in our advanced sales class at K-State. Shout out Don Deeter. And I was just coincidentally sitting in front of Ben, which is a funny story in its own because we were colleagues. We weren't really close friends at that time yet, and so sure enough, he taps me on the shoulder. I feel this little tap on my shoulder, and I lean back and Ben says, "Hey, I had this idea last night and I'd love to talk to you more about it, but think almost Uber but for pickup trucks to move people's stuff instead of people." And in the moment, I don't know what happened. I basically blacked out and I said, "That is amazing. Let's start a business." And so we walked out of that class with one thing in mind, and that was tap a button, get a truck.
Kelly Scanlon:
Okay, so it would be app driven. Okay, so take us from there. You have the concept. Everybody has ideas though, we all know that, but very few act on them, so how did you get it from concept stage to act of business?
Ben Jackson:
That's probably a two and a half, three-year story. It was the spring semester when we had that conversation. The idea essentially was like Uber but for pickup trucks to help move big stuff. And so walking out of class, we're like, "Hey, we're going to pursue this," and really excited about it. I told Harrison, I was like, "You know what? I'll just learn to code over the summer. I'll take some online classes, get this app built," and I think it was maybe five minutes into some free online course. I'm like, "Nope, I'm over my head here." And then Harrison I remember had some friends, I think they were down in Dallas or something that built apps before, and it took maybe three or four months before we got the message saying, "You know what, guys? We tried. This is too complex. We can't build this."
And then after that, we got connected to this offshore shop in India and they said, "Hey, it'll take six months, five, $10,000 or something." We had won some award for the concept. And what, nine months later I think, we got the MVP and we were so excited about it. It's like it's finally here, and then upon some deeper analysis, we realized there was no security features in it whatsoever, and if we went to market, it would not be good news, so it's square one all over again, right?
Harrison Proffitt:
And really just taking even a step back from that, we first had to prove that the idea was feasible. And so Ben had his truck. I had a little 1998 Jeep Grand Cherokee with the little trailer hitched behind it, and so we had to first prove that the model was something that would be a solution in the marketplace. And so Ben and I, we had a Facebook account, we had a generic email website on Wix.com, and essentially we put ourselves out there in Manhattan saying, "Hey, if anybody in the community needs something moved or delivered, on demand, anytime, let us know." And so over that summer in 2015, we had over 350 people, 350 deliveries, moves ourselves. So it was a sweaty summer to say the least, but we took a lot of great notes of exactly what we were moving, where we were moving it, who was moving it. We had a price point in place, which we learned that our time is valuable and definitely have a-
Kelly Scanlon:
That quintessential always underpricing yourself that entrepreneurs do. Yeah.
Harrison Proffitt:
Exactly. I think we started with just a base rate of $20 plus a dollar per mile was our original price point, and then we had a lot of people take advantage of that. We were moving refrigerators into the back of storage units and spending hours on a single delivery to make 25 bucks.
Ben Jackson:
Up the steps, down the stairs, through the hall. We walked through so many-
Kelly Scanlon:
God forbid if you drop it.
Ben Jackson:
Yeah, right. Exactly. Exactly.
Harrison Proffitt:
So we had to implement a time variable in the pricing, but we were able to get a lot of data from that summer.
Kelly Scanlon:
What a great testing ground you had there.
Harrison Proffitt:
And that allowed us to really start marketing ourselves to investors.
Kelly Scanlon:
What time period are we talking about? You've said spring semester, but where were you in college? Was it your senior year? Was it freshman year? Where were you?
Ben Jackson:
So it was the summer of 2015, which makes me feel old now.
Harrison Proffitt:
Super seniors.
Ben Jackson:
Yeah, super seniors. It was funny because as Harrison brings up that story, I remember that after this app had failed three times, we were talking to Chad Jackson. He's the head of entrepreneurship at Kansas State, unrelated, and we're like, "Okay, Chad, how do we build this? How do we get this out?" He's like, "Well, you guys raise money. That's what you need to do." I'm like, "Okay, Chad. Well, how do you raise money?" And this is great advice that I would give to other entrepreneurs, and he is like, "People will never invest in an idea or a concept. You have to prove that people will actually pay money for your service, for your product, and once you get traction, then you can start having these conversations." And it's kind of a chicken in the egg because it's like, well, I need money to get traction. Okay, well, but I need traction to get investment money. So it's tough to do, but to Harrison's point, held together by Band Aids and spit, but we got enough to get that initial traction.
Harrison Proffitt:
Yeah. Essentially, what Chad told us was ideas are sexy, but data is what raises money.
Kelly Scanlon:
When did you finally get the funding? What were some of the challenges to get... What advice can you give other entrepreneurs who might be listening that are at the same stage now that you were then? Talk to us about that.
Ben Jackson:
At this point, we have a summer worth of deliveries, a summer worth of revenue, and we've proven the concept. I think we did 350 deliveries in little Manhattan Kansas that summer in three months, so yes, it's a viable idea that works. And again, this was 350 deliveries that were strung together on a free landing page with Craigslist postings. We have no technology, we have nothing.
Harrison Proffitt:
In a city of 50,000 people max.
Kelly Scanlon:
Right. So a very confined geographic area, limited marketing, and people were still seeking you out. So you're showing there was a demand for your service, your idea.
Ben Jackson:
Exactly, exactly. The app had fallen on its face a couple of times now, and we're like, "We have to get this built the right way." And we learned that it would cost, it was a quarter of a million dollars to get it from a technical perspective built the right way where we could build upon that. And I grew up in Europe, Harrison grew up in Denver. We're both in the Little Apple, Manhattan, Kansas. We don't know anybody with deep pockets, so this was a problem. And at this time, it had probably been a year, a year and a half. We both had great summer internships that we had turned down to pursue this crazy idea. It was something that a lot of our peers, a lot of our professors, even our parents and grandparents at times were like, "Are you sure?"
Harrison Proffitt:
My parents laughed at me.
Ben Jackson:
Yeah, right. They're like, you want to turn down-
Kelly Scanlon:
That was a fun little summer thing you did with those 350 moves.
Harrison Proffitt:
What are you doing with your life, Harrison?
Ben Jackson:
Yeah, right, right. It's like, "You turned down this internship to move people's stuff in your truck? What are you doing?" And again, this is going into your senior year of college, super senior year of college. Thanks for reminding me, Harrison. And we were stuck for a couple of days, and I remember a couple of times it was like, "Maybe do we just move on and do what our peers are doing and get some tech sales job in Kansas City? What do we do?" And we were like, "No, no, no. We'll figure this out." And again, back to K-State, so we were walking out of class one day and something caught the corner of our eye and it was a bunch of names in the College of Business that were etched in marble on the wall, and these are people who donated, I don't know, a hundred thousand dollars or more to the College of Business. And Harrison pulls me aside and he's like, "I don't know, Ben. We might be onto something here."
So we took a picture of it and we skipped class, I don't know, for the next two or three days. Sorry, professors. And we just Googled names, phone numbers, email addresses, and I think by the end of that time period, maybe we had 125 names, contact information, which turned into-
Kelly Scanlon:
A prospect list for possible investors.
Ben Jackson:
Exactly. Exactly. And then that probably turned into maybe 15 meetings, which turned into three offers. Two of them we took very seriously and we ended up closing our Angel round in 2016, April of 2016, which was a month or two before we graduated K-State.
Kelly Scanlon:
I've never heard anybody do that. Take a picture of the donors of the school and then into your prospect list. So you get the funding that you need to create the app and what you need to get started. You launch locally. I know that you are now in major markets across the United States. How long did it take from that local launch to your national expansion, and what were some of the challenges that that posed?
Harrison Proffitt:
We launched in Kansas City in 2017, and we proved the viability in a larger mark outside of Manhattan Kansas first. And so after we did that, the next big thing was how can we expand this across the country? And so Ben was married and one of our angel investors was rooted in Kansas City. I was single at the time so I said, "You know what? I will gladly go out there and travel and see what we can do to... What it takes to launch a new market." And so moved to Atlanta, actually lived in Ben's parents' basement for eight months, and we really tried to figure out what it took to get a new market off the ground.
And so we were learning from a supply standpoint, how do we recruit drivers? We were going into fire stations and talking to firefighters and first responders, and then on the flip side, we were going over to businesses and retailers and saying, "Hey, you guys can market our app for your customers and your consumers." And meantime, Ben and team are crushing the digital advertising aspect of it and building our presence in these markets, and so the first market took us eight months after Kansas City, and then after that, we moved to Washington DC.
Kelly Scanlon:
Because by then, you had a model that you knew worked.
Harrison Proffitt:
We were still figuring it out. We were figuring it out.
Ben Jackson:
We were figuring it out, yeah. The playbook was being written. We'll say that.
Harrison Proffitt:
So after eight months in Atlanta, then we started to continue to expand. I moved to Washington DC, lived in an Airbnb there for six months, then Baltimore, then Miami, then Chicago, and so over the course of two and a half years, we launched an additional 10 cities on the consumer model. And so it took us a couple of years to launch Kansas City, a couple more years to launch the next 10, and then we really exponentially grew from there as our product, our team, and just our technology. Now we're in over 80 major US metro markets and we cover 90% of the US population.
Ben Jackson:
A week or two ago at a team tailgate, they're like an all hands meeting, we call them team tailgates, and Josh, who's our chief operating officer, he just really low-key said, "Hey, this month we're launching six different markets," and then rallied off the markets just as a casual announcement. And I was like, just six markets in one month, and juxtaposed to Atlanta which took us nine months, and he was in Atlanta with Harrison down there. It just took nine months to launch Atlanta, so it was one of those moments where you take a breath and look over your shoulder and you're like, "Wow, we've come a long way."
Harrison Proffitt:
Haven't made it, but we've come a long way.
Kelly Scanlon:
You certainly have. Do you have a parameter that you work around in terms of mileage? How far will you take something?
Ben Jackson:
Our niches last mile or five mile specifically, and that's usually less than 50 miles. But there's a lot of use cases where we'll find a driver who says, "Hey, I'm willing to sign up," raises his hand, and someone who says, "Hey, I need something moved." Maybe it's a delivery in Colorado and they have a mountain cabin and they need it deep in the mountains. So we'll do that occasionally, but really, our niche, our sweet spot is 50 miles or less.
Kelly Scanlon:
You mentioned hiring drivers and you've mentioned the Uber model. How do you attract drivers? How does that work? Are they all independent?
Ben Jackson:
They're independent contractors. It was funny, that was a big question mark for us when we first launched the service. When we first launched, we had I think it was a policeman or a firefighter sign up, and then all of a sudden, we had a lot of policemen, firefighter, EMT and public servants sign up. And we figured out it's a great niche because for them, they work 24 hours on, 48 hours off. They're looking for something to do in their off time, not enough to get a part-time job.
Harrison Proffitt:
And a lot of them have pick-up trucks.
Ben Jackson:
And a lot of them have pick-up trucks, right.
Harrison Proffitt:
Importantly.
Ben Jackson:
Right. And then for us, having the men and women who protect and serve our communities as our drivers is excellent because of the very high level of professionalism that's required, especially when entering homes. So we found a great niche with the public servants base with veterans, even things like high school principals, because they have the summers off. They have some evenings, weekends off, and so we really found a niche in those two specific areas.
Kelly Scanlon:
So shift workers, seasonal workers, and like you say, the public servants and the teachers are very credible. People trust them. I know that as you have continued to expand, the opening up of new markets gets faster, but what kind of challenges are you still experiencing?
Harrison Proffitt:
One of the biggest challenges early on when launching new markets was making sure that we can balance a marketplace opening a new market, and when I say marketplace, it's supply and demands. So we have a supply of our independent contractors, our Bungii certified pros, and then we have the demand of the delivery volume coming in. And so we would go into a new market and the challenge was can we get this marketplace balanced quickly enough where it could sustain itself and move forward? And so for instance, if you had too many drivers, too much supply but not enough demand, the drivers leave. They're frustrated, "I can't make any money," and so there's high driver attrition. On the flip side, if there's not enough drivers but all this volume coming in, these deliveries coming in, your consumers, they're going to delete the app, they're going to stop using you, they're going to move on to something else. And so-
Ben Jackson:
Because they need their things delivered or moved, but there's no one to do it.
Harrison Proffitt:
We really had to figure out how to balance the marketplace early on, and we got meticulous on how we recruited because that's something we could control, and so we would recruit hard. We figured out digital advertising, Facebook, Google, on how to find the right people, how to target these first responders and civil servants. We really got that down pat. And then moving forward, working with our partners-
Ben Jackson:
Which are like retailers.
Harrison Proffitt:
Yeah, retailers, logistics partners, if we could find a guaranteed volume, it would allow us to confidently move into a new market. And so in the past, we would move into a market and the supply and demand weren't balanced, and we would have a lot of challenges to maintain that balance and really grow that market. But now, we have so many great partners, retailers that we can say, "Hey, we know how to do the recruiting process. You let us know where you have volume, and we can expand there within two to three weeks."
Kelly Scanlon:
Wow, that's amazing. We heard about the attempt to get the app built in the first place, but as all of us who carry around these smartphones know, apps can change a lot. You're constantly, it seems like, downloading a new version of the app, and I assume the same is true for you. What have you found about keeping up with the technology? What kind of new features have you added for convenience to your customers? And also just because you have to keep the app up to date with the devices, so what have you learned about all that?
Ben Jackson:
Our technology has evolved significantly, and really, I'd say it's evolved with the business as well. When we first started, the concept was Uber for pickup trucks, or maybe more accurately, it would be like DoorDash, but instead of delivering a bag of McDonald's in a Prius, it's five gallons buckets of paint, tires, mattresses and cargo vans or pickup trucks. Going into 2020, 90% of our revenue was in-store but it was consumer initiated. So I'd be at Costco, I'd buy a big screen TV, I'd use Bungii. And then during the lockdowns of COVID, really, the rug was pulled out from under us as, again, consumer initiated in-store demand totally dried up, and we saw virtually overnight our revenue decreased by 85, 90%. It was a time to look yourself in the mirror and be like, "Okay, well, what are you made of?" And so we pivoted, and again, we went from consumer initiated in-store to business or retailer initiated demand. And it was a tough pivot and there was a lot of learning curve, but really, it could not have turned out better for the business.
Kelly Scanlon:
What'd you learn? How'd you get through that?
Ben Jackson:
It just takes grit. There's a fine line between being naive, naively optimistic, and then being a pessimist, and you really have to find that line. And if you're getting too high, you have to say, "Okay, here are all the problems." If you're getting too low, you have to say, "Hey, look at what we've built." Now focused on these retailers, they're much stickier, we have a much longer term revenue, we've had none of them churn. Because with consumers, with individuals, they're going to use the app 2, 3, 4 times a year if we're lucky, but a major retailer, they could be using Bungii 10 times a day.
Kelly Scanlon:
Exactly.
Harrison Proffitt:
I think that was one of the big learnings in 2019, right before COVID hits. We were really getting into our data and we realized that we were acquiring consumers off of all this digital advertising for one to two times a year to use them, and usually they're going to forget about us by that second time they need us since we have to reacquire them. But then on the flip side, we had these retailers, these local businesses referring us every day to their customers, and we didn't have to acquire those customers because the retailer or the business did it for us. And so we made that decision, why are we going after these consumers when we can just go after one business and get an exponential amount of deliveries? So we made that pivot.
Kelly Scanlon:
Let's talk about culture for a minute. That is so huge for most companies, but I think you have two challenges from where I sit, and one would be that you have all these independent contractors, and the second piece is the many markets that you're in. So how do you keep that culture intact when you're as national as you are and when most of your workforce is out there acting as an independent contractor on the road?
Harrison Proffitt:
So shout out to Josh Camacho on our operations team because they do an amazing job recruiting our drivers and keeping them in line, to say, but we have a highly stringent vetting process. We have an 18 point safety standard that every driver goes through. So first of all, we're looking at their vehicle, we're looking at their driving history, we're looking at their criminal background, all the things that a lot of these gig economies do, but we're going about 10 layers deeper. And so because of that, we are really getting the cream of the crop of these independent contractors, and we only accept about 13% of all applicants for our drivers.
So because of that, that allows us to have a lot more confidence in our contractors and in our delivery providers, and at the end of the day, we're measuring and we're taking feedback from the final end consumer for every delivery. So if a consumer or a retailer has a bad experience, we know about that immediately. We can coach those drivers, independent contractors, or if we have to take action and remove them from the platform, it's very easy for us to do so.
Kelly Scanlon:
You still have a very hands-on approach here and constant communication. As you have expanded into all of these different markets, are you still controlling it here from Kansas City or do you have people in place in each of those markets that manage that particular market on site in that location?
Ben Jackson:
Yeah. Yeah, we've spent a tremendous amount of time, energy, effort developing a playbook from an expansion perspective that is efficient, and there's a lot of other sharing economy companies that when they launch a market, they hire local teams, they set up local offices, they spend a tremendous amount of ad spend to prop up the market both on the supply and the demand side. And we've gotten to a point where we can, again, like Harrison said, launch a market in two to four weeks completely remotely, and because of that, we're not burning a significant amount of cash up front. The company's not burning cash, and really, new markets are contribution margin positive on day one, so on day one, they're contributing money back into the company.
Kelly Scanlon:
How do you know which markets to expand into?
Ben Jackson:
Yeah. Yeah, so back in 2017 and '18, we used to look at a bunch of different metrics. It was pickups per capita, it was the density of the population. We'd even do things like we'd scrape Craigslist for data and understand how many couches were being sold each week to get an idea for the transient nature of large items in that market. And now, really, it's based upon one thing, again, as we evolved and transformed as a company, and that's demand from our partners, from our major retailers. And to give you an example, we'll use Floor & Decor. So Floor & Decor is one of our customers. It's a flooring and tile company, and before Bungii, they charged $250 for delivery and it took up to 10 business days. And now with Bungii, they can deliver these tiles to their customers within a couple of hours, and it takes a fraction of that cost. So all of a sudden, Floor & Decor customers, employees, managers alike love Bungii because we get their merchandise or product up off the floor, out their door, much faster.
Kelly Scanlon:
And it makes them more competitive against the others out there doing the same thing, the other flooring companies, yeah.
Ben Jackson:
Exactly, and Amazon's really almost weaponized the supply chain, causing-
Kelly Scanlon:
That's true. The expectations are so high.
Ben Jackson:
Yes, they've gone through the roof, and retailers, they don't have the formula, they don't have the solution. They're looking for a way to solve this.
Harrison Proffitt:
So because of the value that we're providing a lot of these retailers, we have a little bit more leverage now in terms of where we need to go. And so these retailers now are coming to us and saying, "We have a footprint in these markets across the country that you aren't there yet. If we provided you guys guaranteed volume, can you move out there for us?" And so that has allowed us to confidently move into these new markets because we have a guaranteed volume from a number of our partners day one, and that's what's led us to day one revenue in these markets.
Kelly Scanlon:
You have them actually pretty much opening the market for you, it sounds like. Both of you have been recognized for your entrepreneurial skills, for your achievements in a number of ways. One of those was the Forbes 30 under 30 list. Talk to us about some of the key lessons that you've learned about entrepreneurship that you wish that you had known before you started.
Ben Jackson:
What do I wish I could have told myself, again, back when we were walking out of class at K-State? The headline would be entrepreneurship sucks.
Kelly Scanlon:
Do you still believe that.
Ben Jackson:
Good days and bad days, right?
Kelly Scanlon:
I was going to say, to a certain degree, if you're really honest, you still feel that way sometimes.
Ben Jackson:
Exactly. And I think that entrepreneurship today is so glamorized. It's what you see on Instagram, it's what you see on TikTok, it's movies, and I think the reality of it is there's a reason it's glamorized, but also, you don't see the underbelly of entrepreneurship. And entrepreneurship, it's not about the bling, it's not about the podcasts. It's really about putting in the work. And it's easy to look at Zuckerberg today. It's easy to look at Evan Spiegel today, the founder of Snapchat, and say, "They're lucky." But we weren't there when Mark Zuckerberg was spending 12 hours a day in his dorm room.
I like to think sometimes of entrepreneurship as watching any good action movie, there's a scene where the main character is fighting the main bad guy, and they're duking it out and the main character gets punched in the mouth and the camera's behind him, some dramatic angle, and you see him hunched over, bending over. He's hunched over, and then he spits out his tooth and he gets back up and he looks at his assailant right in the face, and then he smiles. What type of deranged person?
Kelly Scanlon:
That's a great analogy.
Ben Jackson:
Right, exactly. So back to my point, we weren't there when Zuck and when Spiegel were taking punches in the face, spitting their teeth out, getting back up and smiling.
Kelly Scanlon:
You know what's interesting? Sometimes success breeds contempt too. I've seen so many small companies that when they're still a mom and pop or startup, whichever you prefer, and everybody's rooting for them, they're the underdog and so forth, and then they get big. They hit the success point and they're nationwide. I'm thinking about maybe some coffee places that we know about that started really small and now they're all over the country, all over the world, really, and they're the big monster in the room now. So sometimes it comes full circle. I feel that way about entrepreneurship sometimes too. Do you feel that sometimes?
Harrison Proffitt:
Yeah. You either die the startup hero or see yourself become the corporate villain.
Kelly Scanlon:
What are some of the upcoming developments or innovations at Bungii that some of your customers and partners-
Ben Jackson:
I can share this. It was just announced that we made the list of the top-one hundred freight tech awardees, so essentially, it's the companies who are doing innovative things in the freight industry, who are disrupting the freight industry, and we made the top 100 list, which is a decently prestigious list. And Kelly, I hate to use the cop-out answer here, but we have some really interesting things coming. We're not quite ready to announce yet, but if you follow our LinkedIn, follow our Facebook, follow our Instagram page, we'll make those announcements very soon.
Kelly Scanlon:
Okay, so we need to keep an eye on you. Well, we wish you continued success. Whatever those new features that you have coming down the line, we'll keep an eye out for them and we wish you continued success, and we'll be looking for you in some new markets too.
Harrison Proffitt:
Thank you, Kelly.
Ben Jackson:
Excellent. We appreciate you, Kelly.
Joe Close:
This is Joe Close, president of Country Club Bank. Thank you to Ben Jackson and Harrison Profitt for being our guests on this episode of Banking on KC. Ben and Harrison's entrepreneurial journey with Bungii started with a simple idea while they were in college. They didn't give up on that idea, and it's morphed into a dynamic company that's become a major player in last mile delivery of large items. Theirs is a story of innovation and perseverance. They've approached fundraising resourcefully, adapted to shifting business landscapes during COVID, and navigated tech challenges as they've scaled their operations across numerous US cities. Their passion and enthusiasm, ability to think creatively and navigate challenges as they've expanded their business aligns with our mission at Country Club Bank to support transformative businesses and entrepreneurs. Thanks for tuning in this week. We're banking on You, Kansas City. Country Club Bank, member FDIC.