1. In the light of your experience what are the trends and challenges you’ve witnessed happening in the Logistics Tech Startup space?
We are witnessing a real unprecedented disruption in the global logistics industry fueled by the increasing disposable income of the average household. People shop (online) more than ever, resulting in that the retailers are demanding more than ever efficient inventory management and warehousing solutions. Consumers want their orders fulfilled within the day, and logistics providers have to cater for that.
One of the main challenges that I’ve witnessed in the logistics tech startup space is its digitalization. The specific trend has been gaining momentum throughout the past years as companies like Transfix, Convoy, Shippabo, Sennder, Vayu, and Flexport are trying to make the whole experience seamless.
In addition, another trend is Last Mile as a Service (LMaaS). From processing the order, doing the packaging and finally delivering it, companies can now integrate robotics combined with innovative storage systems to deliver any type/size goods, using the most cost-efficient carrier in the market.
2. Could you talk about your approach to identifying the right partnership providers from the lot?
The way we operate at Charge Ventures is very specific. First and foremost, we look into working with people that share our values, vision and of course our entrepreneurial spirit; being that we’ve all been at the other side of the table. Then, given we usually invest quite early, we value the passion of the founding team that is looking to start a company. Moving along from the so-called “basics”, we then look at the Founder/Market fit. We want to make sure that the founder(s) understand their domain.
For example, we invested in Transfix because we felt confident about the CEO, as his parents ran a freight brokerage operation and Drew (the CEO) grew up working in the family business building business relationships. When he realized that he could apply the Uber model into the trucking sector to minimize the empty leg and the wasted miles, we knew we wanted in.
Besides the aforementioned, like with most industries, we look at the size of the addressable market, the problem the specific product/idea solves and the exit options…among many other things.
3. How do you see the evolution of the Logistics Tech Startup arena a few years from now with regard to some of its potential disruptions and transformations?
There are a few technologies that are here to stay and will definitely transform the logistics industry.
Everyone’s heard about Amazon’s vision for the future of delivery. It involves drones. And it actually promises that its fully electric drones will be able to fly as high as 15 miles up and deliver packages under 5 pounds in less than 30’. Not sure whether delays mean the delivery will come free of charge, like Domino’s did with its pizzas in the 90s, but boy that’s fast. Drones have a couple of characteristics that really stand out: One, they can avoid traffic jams and two, they can deliver packages on time.
Therefore, I’m a firm believer that a new wave of startups will evolve to actually support Amazon’s vision. Products and services will be created and a new logistics sub-sector will be born. Amazon, Wal-Mart and others will acquire some of these startups (i.e. Drone Traffic Management Platforms) to bring them in-house. As a result, this M&A activity will definitely create new jobs and generate wealth.
In addition, Blockchain technology can and will literally transform the logistics space as well. Suppliers, customers, warehouse managers and manufacturers will be able to create a transparent system to monitor and manage all documents and transactions in a process, while tracking assets at the same time. Blockchain will impact the way warehouses and logistics centers are run and will bring new levels of efficiency and transparency in the sector.
Finally, startups in logistics automation and big data will be able to transform the supply chain market.
Delays, errors, poor monitoring and thefts can be extinguished through the integration of IoT devices and automation.
Calculated purchase decisions will be the new norm. Information re inventory, supply shortage, and route optimization will advance the performance of 3PLs.
We, at Charge Ventures, are very excited with what’s coming in the logistics space within the next 2-3 years. And we invite aspiring entrepreneurs to drop us an email at email@example.com and share their vision.
4. What would be the single piece of advice that you could impart to a fellow or aspiring professional in your field, looking to embark on a similar venture or professional journey along the lines of your service and area of expertise?
Tips for people looking to embark on a similar venture:
1. Don’t do it for the money. Do it for the journey and only if you LOVE it. Money may come in the end. It’s a competitive space and unless you really get fascinated by all the different ways the world is changing and feel you got something to add, don’t bother.
2. Start a company first, or 2..or 3. See what it takes being an entrepreneur. Go through the product market fit headache, the fundraise process, the recruiting of the team. Then if you’re super lucky you’ll enjoy the perils of success. If things go normal, you’ll fail. If you’re just lucky, you’ll experience both. That’s the way to create empathy. And empathy is one of the most important traits of a good investor. Cause you’ve been there. And when times turn bad, you’ll know how to help.
3. Make a few angel investments. If you don’t have the $$$, create your own dummy portfolio of tech investments that you can monitor over a 3-5 year period. If you do well, perhaps this is for you.
4. Alternatively, seek a full time job or even an internship with a venture capital fund. If you’re a serial founder (with good track record), network in one of the many tech events and ask a VC to be an EIR. Either way, you’ll learn a lot fast.