In 2013, Chieh Huang launched online warehouse club Boxed out of his parents' two-car garage in suburban New Jersey — "the cradle of civilization," he jokes. Boxed did $40,000 in sales that year.
In 2016, less than 36 months later, Boxed — which ships bulk-sized packages of paper towels, laundry detergent and potato chips — did $100 million in annual revenue. And in January, Boxed reportedly turned down a buyout offer from Kroger in the neighborhood of $325 million to $500 million. The company is reportedly now being courted by Amazon and Walmart, though it did not respond to CNBC Make It's request for comment.
Whatever the case, that's astronomical growth. But 36-year-old CEO Huang, who sits at the helm of this empire, still flies coach — even for international flights.
"We have really interesting policies, which I have to adhere to myself. So I'm fresh off of a four-country trip over 36 hours, across the world, where I flew economy on each leg," says Huang, speaking to CNBC Make It at the Synergy Global Forum in New York City at the end of October.
He left New York, flew to Dubai, then Dubai to Germany, Germany to London and finally London to New York in under two days.
"It's the reason why I may not be as good looking as I should be, but that would be an example of a policy where we are frugal," says the CEO, laughing.
"There are policies like that that we need to stick to because they're the same policies when we were in a garage. And now that we're big, that doesn't mean that we deserve the luxuries of being a bigger company."
Whenever the co-founders travel together, they share hotel rooms. "Just something we do. We're not a high maintenance group," says Huang, in a February follow-up to the conversation at Synergy.
The company avoids expensive parties and unnecessary perks.
"We don't do the typical 'fly everyone out to Vegas for team offsites,' or do crazy things to celebrate milestones — things start-ups are known for," says Huang. "I'm sure people will strip us of our start-up title when they find out we don't even have a pool table or ping pong table at the office."
And "free" team lunches in the warehouse are bought with money saved by recycling.
"At our fulfillment centers, we ask our employees to 'chip in' for free lunches," says Huang. "By that, I mean we ask them to adhere to our recycling practices, then use the money we get back to fund our free lunches for the warehouse teams. The more we recycle, the more budget there is for lunches."
Boxed is a frugal company for multiple reasons. First of all, selling Oreo cookies and toilet paper in bulk is a business that operates at paper thin margins.
But also, Huang was raised in what he himself describes as a "working class" family. His mother supported a family of four with a minimum-wage job at a fast-food Chinese restaurant.
Boxed may be frugal, but the company is not cheap. The company spends big on its people.
Currently, the New York City-headquartered company has hundreds of employees all over the United States and offers some exceptional benefits. Chieh personally pays for employees' children's college tuition (with no limit on cost) and the company pays for life-changing events like weddings up to $20,000, depending on how long the employee has been with Boxed.
The business has raised $160 million from investors, who generally want to push costs down to maximize profits. Huang justifies the money he spends on benefits to his investors by explaining that morale is high and turnover is low, he says.
"In a more esoteric sense, what I've told our shareholders is that, these folks aren't just people who work at a company. These folks — whatever they do in the company — are actually the same people that are powering the shareholder returns for you and your fund for your company. And actually, by investing in these people and making them happy and being able to create a workplace where they want to stay for a long time, it's actually is a long-term way of thinking about, How do I invest and make this company really big?" says Huang.
"At the end of the day, organizations, no matter how big or how small or how powerful or how weak are all about people. And if the people are unhappy and you're not investing in them then you're doing them and the company a disservice. So that's the message that I give to our investors. Luckily I'm still employed."
Also, it is the right thing to do, he says. He learned that long before he started Boxed.
"I know later on, when my mom was really working tough hours, her company took care of her when it was time for her to send me to college," says Huang.
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