Dynamo Dispatch (03/25/19)

Issue 58 | Kargo, Blackbird, Careem

Dynamo Dispatch. Weekly update from Dynamo covering the latest and greatest in supply chain, mobility, and building venture-scale businesses.

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Weekly Commentary 💭

My wife and I have been huge fans of Walmart’s Grocery pickup service for over a year now. Having a kid really shifts the shopping dynamics whereby “click and pick” becomes highly attractive for us as users. Unfortunately over the last 4-6 weeks, we’ve seen massive deterioration in service as the offering gains popularity.

Firstly, let’s be clear, this is a GREAT problem to have and is common when one achieves product/market fit. This embodies itself in various ways in enterprise supply chain products: intransparent process; mismanaged integrations; increase backlog of “loads” or “picks”; slowdown in key feature development; and a generally slow user experience. Tactically addressing these require on-going awareness of bottlenecks, a prioritized, long-term plan of complementary actions, and an active culture of customer obsession.

I have come to notice that the understanding of bottlenecks usually rests across an organization at seed. The nuggets of insight sit with CEO, VP Engineering, Ops, Customer Success Leads and more. A product manager ultimately ends up owning this type of intelligence as the steward of the product. To this end, I’ve come to find weekly product meetings led by the CEO (obviously exceptions here) that bring together leaders from each function is helpful in this effort. It’s important to have representatives from every group that supports the value proposition to the customer. The group can then “peel back the onion” on areas based on priority and feasibility. Ultimately, the CEO (or product manager) can pass the final determination but this is entirely a data-gathering effort. I like to delve into two areas with such a group.

Review and understand prior gaps/shortfalls when the product experienced growth. This ensures that the product and organization don’t face the same short falls it previously did. For example, if we know that between $10M and $50M in gross revenue, there was a need for another customer success person, make sure that’s fixed. It’s also a natural check/balance that previous solutions to such bottlenecks are effective and not a misguided feature. Equally, it might highlight certain fixes that no longer work or will expire with greater success.

Have an understanding of potential shortfalls across functional areas as the product sees 2x, 5x, and 10x growth. This helps create a plan that supports the progressive growth the team expects for the business. I’ve seen gaps that product could and should be reasonably addressing by their fifth or sixth major release covered by great ops or customer success people. For example, I’ve noticed that functions around invoicing or collections often need substantial tooling, vendor integrations, and headcount additions. Equally, I’ve observed in marketplaces that supply side development often needs a level-up around procurement, compliance, and feature-set build outs to reduce manual workflows.

Keep in mind the drivers of growth -the types of accounts (personas) that can triple or quadruple usage.  Larger enterprises tend to come with certain requirements such as visibility, system interoperability, specific exception handling protocol, and more. These are bottlenecks that can turn a great reputation into a lackluster one — it tends to result in slow service; mistakes/errors; lose the benefits of technology.

Delve deeply into statements made here - it will help arm you with a strong understanding when setting priorities, requesting certain features or tooling, and managing customer expectations. I’ve observed supply chain ops teams being the most tolerant for managing stop-gap manual processes and overtime, that can turn into product debt that needs to be addressed. A long-ago fix such as this can also compound and detract from the experience and value proposition. Consider a digital workflow where you keep having to exit to an email to validate outbound scheduling from a warehouse - likely ok for a short period of time but not ok as the status quo. I’ve seen CEO and CTOs also walk away with great empathy for their organization as they sometimes go unaware of the smaller workflows/adjustments that could be easy solves or one day turn into bigger issues.

Experience deterioration is something that can be thoughtfully managed and handled. In the early innings the answers sit among the group whereby a thoughtful and regular check-in can ensure that ever-increasing activity isn’t killing an otherwise great product.

We Are Dynamo,
Santosh 💥

Supply Chain 📦

📊 Impact of eCommerce on Trucking. Some other interesting stats: last mile fulfillment centers up 15% y/y; average trip lengths down 37% since 2000 with urban trip volumes up; from 2015-2017, 2,130 less department stores but 1,937 more courier services operating. Related, Monetizing $370B of eCommerce Returns.

🌟 Meet Mercado Libre, the Amazon of LatAm. Mercado is investing in logistics and payments (increasing the velocity of freight and capital) as it looks to fend off Amazon and Alibaba.

Women in Trucking Announces 2019 Watchlist. A great list of industry veterans and operators in the North American trucking industry. I especially see this of relevance for startups seeking mentorship, advice, and talent.

📊 Federal Report Casts Doubt on Truck Driver Shortage. “Qualified” drivers is key but it does raise questions and a call for solutions on how we turn supply into “qualified” drivers. The study also presents some interesting evidence that trucking labor dynamics are not inefficient relative to the other industries that it competes against for labor supply.

Coming Soon: Uber Freight European Edition. Uber Freight has announced plans to expand into Europe as early as next month with an initial base in the Netherlands. I’m interested to see whether there’s enough market similarity that Uber’s [US centric] platform will hit the mark for European clients without meaningful adjustments.

Convoy Launches Automated Bidding. “Convoy will now automatically bid on loads for carriers based on rate, preferred lanes, and pickup dates specified by the carrier. When a carrier wins a load, Convoy sends a push notification, and the carrier simply taps to confirm.”

Aldo Optimizing Shipping from Stores. It looks like Aldo is assembling a series of modules to help it better manage demand and fulfillment between online and physical channels of demand. We suspect this trend of “modular systems” will continue across vertical and horizontal technologies.

The Robots Running Amazon. A look at Amazon’s new facility in NYC. The visuals are eye candy for those interested in robotics and fulfillment. Note Amazon believes robots augment the human. “We certainly see that being an augmentation to what people are doing and helping them be as efficient as possible with what they’re doing.” Related, Manhattan Associates provide an overview on warehouse automation.

Mobility 🚗

Examining AVs in the “Trough of Disillusionment”. The death of Elaine Herzberg last year was a key moment in the development of AVs. I don’t think any single group has summarized the lessons this well. Related, Kara Swisher on Car Ownership.

🌟 How Nuro is Spending $900M+ from Softbank. It plans to have 5,000 R1 delivery vehicles on the road that are built to be a platform for other robots. Recent patent filings show it plans to have robots that can climb stairs and cross lawns. It’s also trademarked “Fido” for a new delivery service.

The Five Categories of Micromobility. A data-driven categorization of micromobility form factors.

Autonomous Shuttles are Coming to NYC. Optimus Ride is going to launch a shuttle in the Brooklyn Navy Yard. The 300 acre private area is home to 400+ businesses and 9,000+ employees that can benefit from the 25 mph shuttle service. While details are scant, I suspect this is the first step in using NYC and its urban complexities as a great test bed for responsible AV testing.

📊 The Challenging Economics of Microtransit. Ford among others have acquired or started microtransit services only to shut them down due to challenging unit economics. Turns out there’s a lot of smart folks making data-informed advancements including our friends at Zeelo.

Lumotive’s Metamaterial Lidar. With backing from Bill Gates and Intellectual Ventures, Lumotive builds a lidar that can steer a radio save electronically vs mechanically. This allows one to more quickly scan their environment and focus on areas where an object might be detected. Unfortunately pricing is still TBD as the company ramps product investment and design for manufacturing efforts.

Charlotte, Detroit, and Omaha to Charge for Curb Space. This is a poor way of embracing change and innovation in urban mobility. If anything, one should charge (read fine) folks for NOT parking on a curb or designated area.

Strategic Developments, Fundraises, M&A 💸

Kargo Technologies Raises $7.6M Round. Kargo is an online freight logistics marketplace for Indonesia. It allows shippers, transporters and truckers to connect, transact and track shipments in real time. Sequoia Capital led the round with participation from Travis Kalanick.

Blackbird Raises $10M for Short Flight Trips. Blackbird provides an uber-like interface for short airplane trips. NEA led the round.

Markforged Raises $82M for Industrial 3D Printers. Markforged can provide precision as well as multi-material printing with it’s full-stack approach (software, printer, and materials).

Thirstie Raises Series A. Thirstie provides eCommerce and delivery software for alcohol brands.

Populus Announces $3.1M. Populus provides cities and local governments with data and intelligence to inform mobility plans.

Uber Nears Deal to Buy Careem. The $3.1B deal will consist of $1.4B in cash and $1.7B in convertible notes for the Dubai-based rival.

UPS Launches B2B eCommerce Platform with Inxeption. The platform allows B2B users to sell and distribute their goods across multiple online channels from one location. The integration will help customers list and sell the products, which can then be tendered to UPS for delivery.

Quiet Logistics Bought for “Several Hundred Million”. Related Companies and Greenfield Partners purchased Quiet to gain more exposure into eCommerce fulfillment (Quiet was famous for the automation it leverages in its operations).

Navis Buys Octopi for Undisclosed Sum. Octopi provided a cloud-based terminal OS for small container and mixed cargo terminals.

Walmart CTO Departs. Jeremy King will leave the firm this week after navigating them away from being a traditional retailer to an eCommerce company.

Andrew Clarke Departs CH Robinson. Clarke appears to be a free agent with a very deep background in logistics and experience growing a “supply chain conglomerate” in CHR.

Lyft Seeks $23B Valuation. An IPO is a dance between private company execs, their investors, bankers, and Mr/s Market. An IPO price is expected to be finalized this week… let’s see what a growing yet cash flow negative North American pure-play ride sharing network will garner.

Omnitracs buys BlueDot Solutions. “Omnitracs will now integrate its Omnitracs One platform with Blue Dot’s cloud-native MilesAhead solution – helping fleets improve their productivity through a unified workflow experience that features an elegant user interface and a high degree of workflow configurability.”

DHL and XPO Shy from M&A for Different Reasons. DHL is cautious of the regulatory approval required for large purchases while XPO retrenches amid reports from short sellers and the loss of Amazon-related revenues.

Company Building 🛠️

Market, Team, Product. Fred Wilson reflects on the qualities of USV’s best investments. Surprise: no single factor wins out over the others. As seed investors, we tend to say that team and market are 80% of a decision.

Naval Ravikant on the Long-Term. Ted shared this in our group chat yesterday afternoon and it’s a must listen. “All returns in life come from compound interest over many turns of long-term games—and they usually come at the end.”

Audit Your App for Friction. A friction audit is a list of every moment of confusion, frustration, concern or delay in your product experience and a plan for how to improve the total experience.

Who's Hiring? 👩‍💻

SDR at SKUPOS in Denver, CO.

Senior Front-end Engineer at Stord in Atlanta, GA.

Product Manager at Sennder in Berlin, Germany.

Check out other jobs at Dynamo portfolio companies.

❤️ We would love your support. Please forward to friends or share on Twitter or LinkedIn.
🗞️ If you were forwarded this and found it interesting or helpful, please sign up.
🎙 Check out Dynamo's podcast series, The Future of Supply Chain.