The Entrepreneur: Jack Underwood, Circuit

Founder: Jack Underwood
Company: Circuit
Website: getcircuit.com

Description: Circuit is a software company that is focused on fixing delivery, by enabling a cheaper, and more convenient delivery experience.

Jack Underwood, co-founder and director of Circuit, speaks to Startups about aspirations, business challenges, and how his platform is fixing the broken last-mile delivery system.

The Business

Describe your business model and what makes your business unique:

Circuit aims to fix the broken last-mile delivery system. We look at the needs of each of the three stakeholders within the delivery ecosystem, drivers, courier companies/retailers, and recipients, and build software that both solves their individual problems, whilst also integrating them within the Circuit ecosystem to unlock efficiencies not otherwise possible.

We make our money from selling subscriptions to our products for individual drivers and to courier companies. For individual drivers, this means charging $20 per month in exchange for saving them around one hour per day. For teams, we charge between $40-$100 per driver per month depending on the feature set required.

We’ve always been a small and scrappy company, with just under 20 employees despite over $10m in annual recurring revenue (ARR). This means we can move very quickly, are always profitable, and can take big bets when we see opportunities present themselves.

What is your greatest business achievement to date?

Circuit has bootstrapped to $10m in annual recurring revenue (ARR) in just four years. It shows that in the right market, with the right product, it’s possible to grow incredibly quickly without burning capital.

How did you fund your business?

We’re a bootstrapped company, which means we needed to charge from day one. Aside from the first month or two, every customer we’ve acquired has been profitable from a unit level, and we reinvest every dollar made into acquiring more customers and accelerating the flywheel.

Once we had some scale, we negotiated NET-30 / NET-60 payment terms with all of our providers. This unlocks short-term working capital that you can invest in growing faster, and because our spend with our vendors generally goes up with time, we continually have more float that we can reinvest into growing faster.

What numbers do you look at every day in your business?

We care primarily about the unit economics of our business. How much it costs for us to acquire a customer (CAC), how long until we break even on them (payback period), and what we make from them in total (LTV). These are the three most important metrics for a B2C SaaS company.

To what extent does your business trade internationally?

Circuit has customers across the world as the app is available in hundreds of languages. The primary markets are the US, UK, Canada, Australia, and New Zealand. However, Circuit operates in most other countries worldwide, and continues to test and develop the products in new markets.

Where would you like your business to be in five years?

In five years’ time, we’ll be powering billions of deliveries every year, enabling a cost of delivery significantly lower than what’s available today, and making delivery easier and more convenient for hundreds of millions of recipients.

What software or technology has made the biggest difference to your business?

As a company, we don’t operate on the bleeding edge of technology. Instead, we look at existing, proven technology and try to apply it in novel ways to solve problems for our customers. Arguably, the absence of technology is what’s made the biggest difference, as instead, we’ve focused on providing the best user experience (UX) possible.

Growth Challenges

What is the biggest challenge you’ve faced in business?

Towards the end of 2018, during Q4 where we experienced a large proportion of our year’s growth, we had issues with hitting the API limits on a lot of the services we were using.

Customers in certain territories could not use the app for months, and every day we’d exceed our credit limit within 14-15 hours. This led to a significant number of bad reviews, and at the time, we had no way to increase the limits we’d suddenly reached.

Had this continued for long enough, it would have caused lasting damage that we’d still be recovering from today. Luckily for us, demand drops significantly in January, and this gave us time to reassess and fix the problems before we hit the limits again.

What one thing do you wish someone had told you when you started on your business journey?

The opportunity in delivery is much bigger than it initially seems. We were originally working on the assumption that the opportunity ended with early adopting drivers, and as such we’ve constantly had to step back and re-evaluate what we’re really trying to do. If we’d known what we know now, we’d have gone bigger, earlier.

How has the pandemic affected the market you operate in?

Ecommerce has been on the rise over the past few years, but with physical stores closing to curb the spread of COVID-19, the rate of online retail growth has increased. With a greater need to transport everything from homeware and clothes to medical resources, efficient delivery solutions were needed more than ever.

We have been very busy during the pandemic, with 10x more drivers signing up to Circuit Route Planner in April 2020 versus February 2020. We saw our Circuit for Teams product grow exponentially, raising $180,000 between March – April 2020. This allowed us to better our product as we saw how it worked with more users and let us develop insights as to what was working and what needed improvement.

The pandemic introduced us to new and diverse businesses that needed to adapt to ecommerce quickly. At the time we offered smaller companies 50% off the Circuit app to support them and help them take on the challenge of online shopping.

Personal Growth

Did you study business or learn on the job?

I’ve been entrepreneurial all my life, I definitely don’t think it’s something you need to be taught/study to be able to do.

What would make you a better leader?

Being better at managing the personal relationship part of leading a team.

One business app and one personal app you can’t do without?

Twist (Slack alternative), Monzo (Bank)

A business book or podcast that you think is great:

‘The Hard Thing About Hard Things’ by Ben Horowitz

Finally, what’s the most important piece of advice you would give to budding entrepreneurs starting a business?

When starting a business, the trick is to look for areas where the current product or service offering is poor, but where people are still buying or using the product. This shows there’s a deep need for a solution and proves that a market already exists. You don’t have to create a customer base and instead can focus on building the best product or service in a market that already exists.

That’s the strategy that led me to launch Circuit. I saw that delivery drivers were heavily dependent on technology but they were having to rely on products that weren’t properly built for them or that did a poor job. I knew that if I created something that specifically catered to their unique needs, I’d have a market-leading product that could truly add value.