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 💭
One of our founding teams is exploring the concept and approach to implementing a “low touch sales model” for their enterprise product. Like all things, they’re gathering data and anecdotes. I also shared some thoughts on the topic as I look across our portfolio and the startup world broadly.
In my opinion, the moniker is actually better termed “low touch conversions.” I view this as a way to build and execute on highly qualified demand at the top of the funnel with minimal human interaction and increased technology or self-service flows. To clarify, I see this to be different from “the path of least resistance” selling that's a great philosophy for higher touch approaches (more on this in a later post). Ultimately, any enterprise product with annual contract values north of “$50K-ish” likely still needs the attention of a salesperson. You’ll also notice that businesses that lead with a low touch approach ultimately add a high touch component to help with retention (via differentiated customer service) and also drive upsell.
Low touch conversions seem like a scalable mecca for venture-backed startup founders but is not for every buyer/industry persona, contract values, and product type. Sean Henry, Co-Founder and CEO at Stord notes, “It’s worth posing the question - does low touch selling actually help your business? It sounds like the dream, but there are some sales where you want to be in front of the buyer because it increases batting percentage and contract value.” For those exploring implementing a low touch approach, some food for thought to inform your perspective on whether they are a good fit.
Buyer behaviors. Generally, SMEs get a low touch approach and large enterprises, a high touch approach from the start. Some questions worth asking as you weigh a low touch approach: is there a demonstrable tendency by buyers to search for a solution to a particular problem, trial, then buy it? Are people consistently googling to solve this problem and landing on your page (or a competitor’s)? Are they ok trialing or going through a recorded demo/webcast to understand the product? Is this how they buy other tangentially related products? Don’t be shy to ask a buyer what the most similar product he/she has purchased and what the process was.
Annual contract values. This depends on the product and industry spend -- some have higher ACV tolerances. I tend to notice in supply chain that anything above $50K in ACV usually needs group buy-in and harder to pass on a credit card. This threshold might also be a signal for an SME buyer but not always. No hard science here but tracking to credit card purchasing limits I hear/note when speaking to founders. Higher values also likely needs multi-stakeholder buy-in that will require an Account Manager or VP Sales to step in.
The product. Can the product quickly convey the value proposition? The key in supply chain and similar complex operational and technical environments are the integrations and ease of interoperability. Low-to-no integration requirements to support a trial or “self-serve” option ensures a fast time-to-realizing the value proposition without a heavy professional services component. Furthermore, for the buyer, it doesn’t need multiple stakeholders involved. Be sure to also understand prior to a trial what success looks like -- it provides a basis to close, expand, and upsell..
If these three vectors align, one can usually deliver on highly-qualified prospects in a low touch process. Having that this, in complex technical and operational environments that come in supply chain and mobility, the product will rarely sell itself. Ultimately, one doesn’t want to try to automate the top of the funnel if it is just shifting the burden to customer success or operations people. You might just be getting prospects to trial quickly but the problem/product itself is ill-suited to a low touch approach. It turns out you’re still pulling people into functions at the top of the funnel! Sometimes this is an issue with the market’s understanding, sometimes a product issue, and sometimes just not a fit for the business.
I will note that in the Pre-Series A days, the learnings and lessons to drive to product/market fit are totally worth using a high touch approach if your ACVs allow. The importance of face time with customers in the early stages cannot be understated and I tend to encourage it as it often results in higher sales velocity. This will evolve at the different stages of a company lifecycle -- often times allowing for a lower touch approach with certain customer segments as the company matures (for a later discussion). Be thoughtful as you think through distribution as what might seem amazing could actually be negative for the business.
As always, I welcome thoughts and experiences from others.
We Are Dynamo,
Santosh 💥
Supply Chain 📦
🌟 Learning from Shortages at Adidas. "Are we effectively providing insight to our suppliers into future demand, such that they can keep up with and meet our needs?"
How Global Trade Shaped World Languages. My parents would always point out words in Western languages that are rooted in an Indian dialect. It’s interesting to see how trade has driven us closer economically but also on much more intimate levels such as language.
🌟 How Amazon Makes It Work in NYC. Urban logistics is a beast of its own and we now have a look into Amazon’s approach in The Big Apple. We’ve been keen on micro fulfillment facilities, “build up vs build out”, and automation since 2017 -- now we’re seeing it happen at scale.
Building the Largest Ship in the World. The Maersk Triple E is the largest ship on the planet and only needs 15 crew members to operate. Some amazing photos of the ship and work in progress here.
Global Trade Slowed in Q4; Forecasts Down. World trade shrank by 0.3%t in the Q4 2018 and is likely to grow by 2.6% this year, slower than 3.0% in 2018 and below a previous forecast of 3.7% according to the World Trade Organization.
📊 US Robot Ranks #7 in Robot Density. Robot density racks the number of robots per 10,000 workers in an industry. In 2017, US came in at 200 vs in 189 and 176 in 2016 and 2015, respectively.
Wait Times on US/Mexico Border Sky Rocket. Wait times are up 500% as CBP staff have been reallocated to fight illegal immigration efforts. Ultimately, friction in supply chains is a net negative for the economy as prices increase and investment hurdle rates increase/become totally uninteresting.
How Machine Learning is Accelerating Last-Mile Delivery. Showcases Dynamo founder, Chazz Sims and the work of the Wise Systems team’s routing software that helped one customer cut late deliveries by 85%.
Manufacturing the Future at Hannover Messe. My friend and Dispatch reader, Robin Dechant’s presentation from Hannover Messe. Manufacturing and supply chain are increasingly converging so it’s interesting to hear people who sit on the manufacturing side of the value chain share their thinking. Listen to him on the Future of Supply Chain.
Mobility 🚗
GM, Ford, and Toyota to Develop and Share AV Safety Testing Standards. Self regulation is always a good way to preempt ill-informed or slow regulation. The trio of OEMs will team up with SAE International to establish “safety guiding principles to help inform standards development” and "work to safely advance testing, pre-competitive development and deployment" for AVs. Related, UL4600 Standards.
UK to Pay Motorists £3,000 to Use Public Transport. The trial will provide motorists with cash to be spent on public transport, electric car hire and bike sharing schemes in exchange for giving up their vehicle. Also, How Poor Public Transport Led to UK Productivity Issues.
🌟 McKinsey on Improving EV Business Models. A strategic “decontenting” or reduction in features, optimizing for urban usage and partnerships could make EVs more economic to produce. While EVs cost $12k more vs ICEs, this excess could be reduced by half with such measures by the mid 2020s.
Congestion Pricing Coming to NYC. Not the worst idea, the toll would help fund infrastructure upgrades while also helping to relieve highly congested roadways. While details need to be ironed out (like not double-tolling citizens) -- it could help incentivize trips during off-peak hours and align more to a world of consumption taxes (use the road, pay for the road).
EU Transport Commissioner: Fully Self-Driving Cars by 2030. As Europe develops it’s transportation infrastructure to be multi-modal across planes, trains and automobiles, Commissioner Bulc believes autonomy is a key component to a future of lower fatalities and emissions.
🌟 Inside Tesla’s Push to Remake Automobile Manufacturing. Oliver Wyman notes that the most efficient automotive manufacturing facilities use a lot of manual labor while the most automated ones are at the bottom. I’ve heard first-hand accounts of how ambitious and insensible Musk’s “automate from day 1” is. As Erik Nieves says, “robots work and people rule” -- use people first and complement them with robots overtime for the dirty, dangerous, and dull functions.
Kara Swisher Interviews Ford CTO, Ken Washington. “Cars that do not have LIDAR, do not have the sensor technology, they are not self-driving cars. They are cars with really good driving assistance. Self-driving involves a lot of serious technology.”
Battery Reality: There’s Nothing Better Than Lithium-Ion Coming Soon. I’m more optimistic about advancements than this article. That said, 10x-ing the current Li-ion energy storage options will be difficult and sunk costs might add to the inertia.
Strategic Developments, Fundraises, M&A 💸
🌟 ICONIQ Buys Majority Stake in Truckstop.com. The rumor is that the pre-money was just under $1B for a company with annual revenues of $110-120M. The investments will be primarily funnelled to ramping technology in hopes that Truckstop.com becomes the defacto platform in the era of digital freight brokerage/transactions.
Fliit Raises €10M Series A from Maersk Growth. Fliit provides fresh food logistics.
UPS Leads $48M Series B for Fast Radius. Funds will accelerate expansion of Fast Radius software platform, identification and launch of additive applications, and scale-up of production-grade additive manufacturing capacity.
Providence Equity Repurchases GlobalTranz. In less than 8 months, The Jordan Group is expected to see a 100% return as it flips GlobalTranz back to Providence Equity.
DSV/Panalpina to Merge in $4.6B Deal. The combination will create the fourth largest forwarder after a monthslong back and forth that included (now terminated) discussions with Kuwaiti, Agility Group.
Lear Buys Xevo for $320M. Xevo’s Journeyware is an in-car controls and entertainment system with an installed base north of 25M vehicles. It’s software also has functionality that enables wayfinding to local businesses and eCommerce.
Boston Dynamics Buys Kinema Systems. Kinema specializes in "deep learning" and vision technologies for industrial robotic arms. Boston Dynamics will continue to develop products for warehousing.
UK Establishes €2M Fund for Cargo eBikes. The fund will grant financial assistance to companies to use electric cargo bikes to fulfill last-mile deliveries. Applicants can benefit from grant funding for up to 20 per cent of the cost of a new ecargo bike up to the value of £1,000 per bike.
Hyundai and Tencent Partner on AV Software Development. Both companies plan to conduct joint research and development on safety and security systems for self-driving cars, which Hyundai seeks to roll out commercially by 2030,
Company Building 🛠️
Don’t Over-Optimize Fundraising. Raising funds to execute on a founder’s visions and goals for the business is important. Sometimes we also see founding teams losing the forest for the trees and end up over-optimizing to the nth degree.
Fred Wilson on Setting Operating Rhythms. In business, especially a startup, it’s important to get a routine and cadence around execution. Similarly, we build a rhythm through which we work with our portfolio companies -- it differs based on stage, our role in the round, and the founder’s preferences.
🎧 Evaluating Early-Stage SaaS Startups. Christoph Janz from Point Nine delves into some of the more successful SaaS companies from the past few years and uses them as case studies to talk about how to evaluate an early-stage product, team and sales strategy.
Who's Hiring? 👩💻
Lead Electrical Engineer at SEEVA in Seattle, WA.
Office Manager at Zeelo in London, England.
Full Stack Engineer at LEAF Logistics in New York, NY.
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.