Setting up a business during the recession may not be the optimum time for most entrepreneurs, but for David Grimes it was the perfect time to launch his price comparison website for parcel deliveries. It gave people, particularly micro businesses, two of the things they valued most – saving time and money. Five years on, the CEO of the MPD Group sat down with Business Advice to discuss his new venture Electio and how online businesses are fuelling My Parcel Delivery’s success.
Since establishing My Parcel Delivery in 2010, Grimes has seen the firm flourish – and fast. “We never looked back. There’s been 65 per cent year-on-year growth every year,” he said. The quick development was all the more impressive considering the business climate at the time. “We started up bang in the middle of the recession, but while everyone was saying it was a terrible time to start a business, for our sort of company, it was the ideal time to launch,” he pointed out. “People wanted to save time and money and we offered that.”
As with many business ideas, My Parcel Delivery came about as a result of frustration. Grimes started his first company straight after graduating from Cambridge, selling branded merchandise for big corporates. When looking into sending packages, he soon realised how time-consuming and inefficient the process was, and just how much time he himself was spending queueing. “Senders weren’t interested as I didn’t have the volume. That was my lightbulb moment and I set about making the whole process less of a faff,” he put simply.
Realising many other smaller businesses would be in a similar position, Grimes saw a viable opportunity to transform delivery by setting up online. He also mentioned that the rise of online sellers has been a big driver of growth propelling My Parcel Delivery.
Recent research from Development Economics and eBay found there was a rise of businesses run by mothers, in part due to improved connectivity and growing digital literacy. Many were taking to the online space interested in monetising a hobby, without compromising on their flexibility in hours and other interests.
Grimes too, has noticed a significant increase in the numbers of online sellers utilising My Parcel Delivery. “There are those on Amazon and eBay as well as standard small businesses using the service. We can see they’re growing like wildfire and online business is a big chunk of that growth for us.”
He added that it was the “ideal solution” for these individuals, as “they won’t even get a rate from a carrier,” with My Parcel Delivery providing the sophisticated additions which are becoming a mainstay for popular online services – live tracking and email SMS confirmation. “It’s all about giving them a quick, easy and cheap option,” Grimes said.
The business has tapped into both an already present need among individuals and micro businesses, but also a growing market as more people take to online businesses as a workable option to make a living.
It was similarly straightforward when it came to Grimes’ own path – he knew he wanted to set up his own firm, since he went to university.
“A lot of other people I graduated with went to the City, to be bankers and lawyers, which I could’ve done, but I didn’t think it was for me,” he said. “I wanted to take control and have that variety – because when you’re running a business you’re covering finance, sales, admin, marketing, all of that. I also knew I wanted to work for my benefit and not someone else’s.”
It wasn’t all smooth sailing though. While My Parcel Delivery took off quickly and has continued to grow, the initial period when Grimes set up his first company was a bruising experience. “I just pounded the phones, ringing all the companies I could think of. Initially I was just getting shut down constantly,” which was all the more difficult considering he had moved back up North to try and get the business going and needed to see results. He feels that anyone looking to become a business founder needs to be aware of just how committed you need to be.
“I think a lot of people give up too early. They get a few knocks and let it keep them down. That early stage was the toughest part by far, but you’ve got to have the belief that you will succeed and be dedicated and passionate,” he said. Grimes also feels that keeping an eye on costs is of paramount of importance, as too many simply “focus on sales”. He suggested getting in a finance person as soon as you’re able to, covering that side of things and forecasting for you.
“Cash is king and customer is king. You need to grow your business on what customers want, not what you think they want – and make sure you get the experience right. Take them on a journey through the website,” he advised.
Getting your name out there can be boosted by targeting the local press. “Don’t be afraid to tell good news when you have it.”
Grimes has made many mistakes when it comes to recruiting, and it took him a year to 18 months to establish his current senior management team, though he noted “it has changed my life and made the business that much more efficient”. The set-up now allows him to focus on strategy and acquisitions.
Next up for him is the launch of software platform Electio, which will be aimed at major retailers like ASOS, Boohoo and Missguided, allowing each to take the least costly route. It tells users the best carrier to use and allows each to access more than one at a time, so the risk is spread and more options are available. “Shipping is the second or third biggest cost for retailers. We invested £2m into this as we’re that confident the market needs it,” Grimes said.
It has developed much in the same way My Parcel Delivery did – hearing people’s frustrations and difficulties and attempting to respond to them. While this new business is targeting the mid to large heavyweight retailers, Grimes is assured in its prospects.
“We’re launching from a heritage, people can see what we’ve achieved with My Parcel Delivery, which is making it easier,” he said. With one billion parcels delivered last year and Grimes’ ventures now covering any size of parcel, he hopes to become “the preferred choice logistics company”.
The industry itself he said is a great one, but difficult to enter, with numerous barriers to entry and requires “complex knowledge”, as well as significant investment. “It’s a hyper-growth market, but people with that amount of money and knowledge in the industry are few and far between, but we are seeing more innovation,” he said. Grimes mentioned the development of P2P shipping “challenging the status quo of using couriers”, and has just invested in a startup in this space. “We’re excited about that, because it will challenge people’s behaviour.”
My Parcel Delivery is currently based in Manchester, and Grimes is adamant the North–South divide is not what it once was. “It doesn’t matter where you’re based, with everything online now anyway,” he pointed out. “There’s also a great talent pool in the North and a lot of companies setting up here.”
This includes some of the names he’s targeting with Electio – both Boohoo and Missguided have bases in Manchester. “When a startup is making waves you hear about it too. It gets people interested to help out,” he added, suggesting the business network is also stronger and more intimate.
“It was a no-brainer for us to move up North, the biggest reason was cost, but nowadays there’s no longer that North–South divide,” he said.
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