HOW TO GO PUBLIC WHILE TAKING CARE OF YOUR PEOPLE
Entrepreneur|January - February 2022
CHIEH HUANG started an e-commerce company in his garage and took it public in eight years. At every step, he prioritized his workers. His dream is to show future generations a “different way to do business.”
ELIZABETH GREENWOOD
Chieh Huang walks the 150,000-square-foot floor of a Boxed fulfillment center. Nestled between the New Jersey Turnpike and a quaint residential neighborhood—just 20-odd miles from his childhood home—this place could comfortably fit more than 400 of the garages where he started this business in 2013. Pallets of V8, Polar seltzer, and Cheerios are stacked three stories high. A series of seemingly endless conveyor belts ferry tubs filled with thousands of products, like a roller-coaster ride of household essentials.

But Huang nods toward the front door. To him, that’s where the business really starts. “All employees and management walk through that door,” he says. “There’s no executive washroom, and we all use the same break room.”

In a perfect world, there would be nothing interesting about ​that fact. A door is a door; a human is a human. But in our actual world full of executive privilege and dollars measured in microseconds, this isn’t always the case. Especially in Huang’s industry.

In theory, e-commerce is a beautiful thing. It’s the height of convenience for consumers and a liberating marketplace for entrepreneurs. But e-commerce is also a great collector of data, and data can be cold and ruthless. Data can show that if, say, warehouse workers move three steps faster, they will shave seconds off every fulfillment, and when replicated at scale, that will result in millions of dollars saved. Efficiency is hard to argue with, and it often wins at human cost.

Huang knows all that. He is a systems nerd who revels in the logistics of the warehouse. And he has used data to great effect, driving the growth of an e-commerce platform that sells a wide range of goods. But perhaps against the odds, Boxed has thrived by being a kind of anti-Amazon retailer. It is not the Everything Store. It is not here for your one-off, last-minute, deliver-a-single-pair-of-underwear-to-myfront-door-tomorrow needs. And it now employs 500 people. In December, it went public with a special purpose acquisition company (SPAC) valued at $900 million, proving something that Huang has long believed but for which it isn’t always easy to make a business case: “To build a successful company in the public market,” he says, “you don’t need to squeeze every last penny.” Or every last employee.

In our moment of “Great Resignation,” where employees have backed away from thankless jobs with thankless pay, Huang is showing that a helpful hand works as well as a squeeze.

Boxed offers a $12- to $15-per-hour starting wage in its fulfillment centers (dependent on location and cost of living), a $500 emergency fund, college tuition for employees’ children, subsidized “life events” like weddings, and a number of other benefits. Those programs cost money, of course, and early investors were skeptical. But Huang doesn’t see prioritizing workers as antithetical to the bottom line. He sees it as part of a mission that differentiates his company in a crowded space.

When he decided to take Boxed public, he looked to partner with an acquisition company that viewed workplace culture as central to the business—and found it in the SPAC Seven Oaks Acquisition Corp. “This business is traditionally low-margin, and it’s easy to be shortsighted and focus on pennies,” says Gary Matthews, CEO of Seven Oaks. “But the cost of replacing and retraining people—that’s far more costly than college tuitions.” As far as the New York Stock Exchange is aware, Boxed is now the only public company with a majority-minority board.

“We are a different way to do business,” Huang says. “What drives me personally is to show a future generation that you can be kind to the folks in your company and still do well. You can offer free health insurance and still be profitable. That’s not without its own stress. But we are a pioneer in some of these ways to do business. Sometimes pioneers make it, and sometimes they don’t.”

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