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 💭
We’re back after taking a couple weeks off for some summer time fun. A few notes:
I'll be in the Bay Area next week and have a couple slots for pre seed and seed stage founders for office hours on 8/5 in SF. Shoot me an email if you’re building something and want to meet up.
We’ve had some stellar guests on the Future of Supply Chain over the last couple weeks. If you haven’t already, check out Episode 27 with Dan Johnston of Workstep.
We Are Dynamo,
Note: please add “firstname.lastname@example.org” to your email client so you don’t miss future issues due to aggressive spam filters.
Supply Chain 📦
Amazon Prime One Day Transition Costs Higher Than Expected. Amazon is learning that inventory placement and network optimization is a difficult and necessary part of making Prime One Day economically feasible. Part of the higher costs was related to excess capacity in the network ahead of peak season. Also, Amazon Ordered 2,000 More Sprinter Vans from Mercedes.
📊 ATA Estimates 100K Driver Shortage by 2024. The American Trucking Association estimates that by the end of 2018, there was a shortage of qualified drivers to the tune of 60K. That number is forecast to reach 100K in 5 years and 160K by 2028.
UPS Announces Sunday Deliveries. Following FedEx’s announcement in May, UPS announced seven day delivery starting 1/1/2020. As Amazon ramps it’s own delivery network, parcel companies are under pressure to deliver on higher volumes and throughput. UPS sees technology investment and automated sortation and distribution facilities as key to this endeavor as are partnership is retailers that serve as pick points and USPS. ICYMI, UPS Launches Flight Forward for Drone Deliveries.
eBay Launches Managed Delivery Fulfillment Services. Managed Delivery will provide sellers the ability to store inventory closer to buyers in strategically located warehouses and also offer pack and ship solutions to reduce delivery times and shipping costs. The offering will be powered by a global technology platform and third-party partners will run the operations. Speaking of fulfillment and delivery, Dynamo portfolio company, Gatik AI Ramping with Walmart.
BlueGrace Introduces Carrier File. Carrier File integrates with BlueShip TMS and makes it easier to find the right truck for the right load by filtering through data collected on hundreds of thousands of carrier records to come up with the best transportation options for each shipment. Looking out to sea, Flexport Launches Flexport Capital to help fast-growing shippers hit by tariffs and facing cash flow pressures.
🌟 Asos Faces Disruption Due to WMS and WCS Complication. The connector and integration software issues impacted ASRS and picking accuracy and efficiency. Speaking to a few founders in our portfolio, this is a symptom of interdependence between systems that are reliant on sequencing and timing without access to any machine learning or AI.
Trucking Company Failures Likely to Increase. FreightWaves has identified that three major items can spur trucking company failures. 1) spot rates are down meaningfully – 20-30% off highs. 2), contract rates are moving lower with risk of continued downward trend. 3) trucking companies’ costs are running higher due to wage increases and excess capacity entering the market following a robust 2018. There is a very real potential for higher diesel prices because of IMO 2020.
Hasbro Warehousing Costs Spike Due to Tariffs. In anticipation of tranche four tariffs, Hasbro has increased inventories and warehousing capacity. While it offers retailers “direct import” capabilities right from it’s factory, many have paused such orders because of increased costs due to the current trade tensions. Also, Caterpillar Spent $70M Last Quarter on Tariffs.
📊 Response Times & Gaze Behavior - Trucks vs Cars. Truck drivers have substantially faster takeover times vs car drivers when assuming control from ADAS. Research shows that gaze has no impact on takeover times but the predictability of such situations does improve takeover responses.
The Effect of EVs on California’s Transportation Funding. It’s been expected that as EVs ramp in CA, revenue from gasoline and diesel vehicle taxes will decline. It turns out the “TIF” which every vehicle owner pays based on the value of their vehicle, will ramp overtime as EVs are more expensive vs ICE vehicles. Further, EV owners will begin paying $100/year in 2020 in addition to that sum -- viewed as a corollary to the gas tax car owners pay. It turns out government still somehow manages to get their cut (can’t be surprised).
How Safe to AVs Need to Be?. At this year’s AV Symposium in Orlando, participants debated and discussed the standards and thresholds that deem a vehicle to be “safe enough.”
🌟 Insurers Unsure How to Account for New Safety Tech. Insurers are struggling with a lack of data to validate the effectiveness of ADAS to increase safety and thereby reduce risk and premium costs. Insurers are grappling with a lack of detailed data from OEMs, inconsistent standards, and varying usage habits of such safety features.
GM to Delay Cruise Robotaxi Deployment. GM has not provided guidance for when they expect to launch the robotaxi service. Increasingly, it looks like any announcement or intention to launch a fully AV service within the next 5 years will be heavily discounted. By the way, Benz and Bosch Launch Robovalet in Stuttgart.
A Tale of Two Cities: SF vs Oakland on Micromobility. While SF officials have been incredibly difficult to ramp micromobility, Oakland has embraced it by requiring 50% of fleets to be in “mobility deserts” thereby improving mobility equality.
Lyft Open Sourcing L5 Data Sets. The Level 5 Dataset is the largest publicly released dataset of its kind. It includes over 55,000 human-labeled 3D annotated frames, a drivable surface map, and an underlying HD spatial semantic map to contextualize the data. Related, Waymo Using Deepmind’s Starcraft Algos to Improve AVs.
BMW to Charge Owners Annual Fee for Apple CarPlay. In a move to “keep the upfront costs of its car lower”, BMW wants to charge $80/year for buyers who use CarPlay. I can’t imagine this will have a meaningful impact on the upfront price of a car (that’s only $800 over 10 years).
Uber Testing Subscription Offering. For $24.99/month, one will get discounted rides in cars, on scooters and bikes as well as free food delivery. Uber is moving to solidify itself as the go-to option and effectively locking in a recurring behavior.
Talent, Fundraises, M&A 💸
Sennder Raises $70M Series C from Lakestar. Months after announcing their Series B, Dynamo portfolio company closes Series C to dominate European digital freight brokerage. #weAreDynamo
Bird Raising Series D at $2.5B Valuation. Sequoia is leading the round but details on round size are yet to be made public.
Boring Company Lands $120M. With a contract win in hand, 8VC, Craft Ventures, Vy Capital, Valor Capital, DJF, and Steve Jurveston invested the first outside money in the tunneling startup.
Fetch Raises $46M Led By Fort Ross Ventures. The funds will be used to expand internationally and expand its range of products for the growing warehouse automation market.
UVEye Raises $31M Round. The company builds vision-based, drive-through vehicle inspection software. The round was led by Toyota Tsusho, Volvo, WR Berkley, and FIT Ventures.
aCommerce Raises $10M. The company provides eCommerce enablement for brands looking to expand in Southeast Asia.
Freedom Robotics Raises $6.6M. Freedom makes cloud-based software development infrastructure for managing fleets of robots. Initialized Capital led the round.
Ratio City Raises $1M Seed. 2048 Ventures led the round in the urban analytics startup.
Velodyne Acquires Mapper.ai. Velodyne has acquired Mapper.ai’s mapping and localization software to accelerate development of the Vella software that establishes its directional view Velarray lidar sensor.
Lyft Hires Bird’s Head of Vehicle Product. Are customized Lyft scooters and bikes on the way?
Flexport Hires James Chen from Amazon as CTO. Chen was most recently a Director of Technology for Amazon.
Cargomatic Rebuilds Executive Team. New hires include CFO, CMO, Chief Legal Officer, CPO and CTO, Chief of Staff, and CAO.
Walmart Announces Changes to Supply Chain Leadership. After years of managing brick/mortar and eCommerce supply chains separately, Walmart took a step towards building a more unified, omnichannel supply chain team.
Company Building 🛠️
Certainty of Close. “If you are comfortable with the people involved and have a high degree of confidence that they will be great partners, then everything else is secondary. That is true for at least the first five years of a venture. At some point, in very late stage or public financings, the people issues lessen and you can optimize for other things.”
The Sequoia Guide to Pricing. I’ve been discussing pricing with several of our startups through the start of the year. It only felt appropriate to include this primer.
A Framework for Customer Success. The ramp of customer success teams is a conversation we end up having regularly with our portfolio. I cannot underemphasize #2 and #3 herein as well as having the proper incentive program to drive metrics and alignment between sales and customer success people.
🎥 10 Lessons from Justin Kan. I found Kan’s discussion around the stresses of building a startup, coaching/mentorship/peer help, and mental health to be interesting.
Who's Hiring? 👩💻
Software Engineer - Simulation at Gatik AI in Toronto, Ontario.
Senior Front End Engineer at Verusen in Atlanta, GA.
Senior Mechanical Design Engineer at Seeva Technologies in Seattle, WA.
Check out other jobs at Dynamo portfolio companies.
❤️ We would love your support. Please forward to friends or share on Twitter or LinkedIn.