Issue #31 | Uber Trucks Are Over, Walmart's latest efforts, and more
|Aug 6, 2018||Public post|| 3|
Dynamo Dispatch. A weekly update from Dynamo covering the latest and greatest in commerce and trade, #logisticstechnology, and building venture-scale businesses.
Weekly Commentary 💭
I have spent the last week with a couple of our portfolio cofounders digging into their company's "operating system." One of the prime responsibilities of a CEO is to set a vision and mobilize a culture against that vision. Setting a culture and managing to that culture is not an easy task but incredibly important. The difficult part is that such strategies will continually be iterated on as a startup goes to scale-up mode. The one thing that does not change often are the values of a company — the fiber of the people involved and the organism as a whole. I would argue that the most important part of a company's operating system are the values — let's dig in.
Each founder has a different approach to this and there's no right way to go about this. In this instance, the first thing we focused on are the values the cofounders believe is important for any business and then, important to them as they build this startup. A few exercises they undertook: what values do the founders feel strongly about?; study companies that are successful and admire — what values did they hold true to?; reflect on their early hires (roughly a team of 10) and ID the common traits that allowed that individual to "win" an offer; pulse the team on values they find important. I have seen some teams do an all-hands to set this tog, others having prepped a baseline and add to it as the first hires join — there's variations.
Now, once the reflection and feedback has been completed, there is the ability to pull together a list of values, define them with context (use an example), and explain why it's important to the company. I find that using members of the early team as examples is a great way to highlight how the values are already in the culture of the company (ID a person as one who exemplifies the team spirit or as one who checks their ego at the door) as well as make the examples real and relatable vs hypothetical. The best forum to share them tends to be a special all-hands meeting and one that's very open and centered on discussion.
Setting and communicating values is an effort that takes a few weeks and requires attention and care. What I do think is important is to openly communicate about values, continually reinforce them, celebrate great demonstrations of them, and highlight and use failures or gaps as a learning moment. Values are amazingly important in building a culture and an "operating system" and worth the investment to formalize and evangelize.
What We’re Reading 📖
Uber Stops Autonomous Truck Efforts to Focus on Cars. The Uber Freight efforts are not impacted by the move. I suspect this is a net-positive for the broader industry as it removes the overhang of competition from Uber AT that has sat in a zombie-state since the Levandowski distraction. AT was never totally written-off by the industry due to the deep pockets of the parent (and rightfully so). The focus on cars makes total sense as it's relevant to the core ride hailing business. I suspect this is also related to IPO-prep and it wouldn't surprise me if the Uber Freight unit is reported on the block as non-core. Also, Drive AI that's led by Andrew Ng is piloting taxis in Texas. They are using an approach that limit environmental variables and in "instances of confusion" a remote guide sets a route for the vehicle (vs operating it remotely) and lets it back on the road.
Walmart Stumbles in Last Mile Effort. Walmart has stopped it's efforts to provide delivery using it's store associates and their vehicles. It turns out associates have commitments after their shift is up and the extra income isn't enough to offset that. Despite having 4,700 U.S. stores within 10 miles (16 km) of 90 percent of the U.S. population, Walmart is still trying to figure out how to efficiently make deliveries and has poured billions of dollars into ecommerce in recent years. The focus has been trimmed to groceries with a dedicated team in Georgia running pilots as well as an AV pilot with Waymo. Noteworthy reads to the subject: Zara hopes to use store locations for local deliveries; The concept of a Last Mile Exchange to cope with e-commerce delivery volumes.
Walmart Piloting Grocery Picking Solution. I have raved about the Walmart Grocery Pick-up option and by the looks of it, a grocery delivery service might not be too far off. The convenience of pick-up for customers is unrivaled and the best part, it's free. I just go about my errands and stop by for 10 minutes to grab our groceries and am on my way. I have explained to my wife (like a broken record) about a futuristic Walmart that's smaller on a plot of land. The groceries get moved through the facility and "pushed out" via a conveyor belt or a mobile robot. Well, it looks like we might be moving towards this sci-fi dream of mine. Such an effort will increase through-put, expand margins (better allocate labor), and give way to improved store layouts based on the consumption trends of the neighborhood.
Blockchain Deployments Proves to be Challenging. It looks like 2017's blockchain-mania is coming home to roost. Corporates are realizing the implementation of the technology is more difficult that anticipated. There's no doubt important work taking place especially at the protocol level but such shifts simply take time. From our discussions, the big hurdles are: 1) seeing ROI from such a solution (in other words, only select things need such infrastructure), 2) inter-operability with legacy systems, 3) first-mover is great for PR but less satiable in production. On the topic of blockchain, I found this piece on decentralized exchanges to be interesting, specifically the point around counter parties and price discovery (the drivers of a liquid market). On the subject of digital freight brokerages, the issue related to counter parties is solved through relationships. We are still not at a point yet where people can be peeled away to substitute for technology in a purely digital marketplace.
David Cohen on Bridge Round Valuations. Some investors view bridges as a bad thing. I think it's ok provided we understand the levers a team must pull (that capital enables) and the outcomes they are seeking to drive. From our experience, companies close to product/market fit see the best outcomes. The lack of Series A metrics generally is a function of a little more time and a few introductions to prospective "logo" customers. That said, we tend to only engage when we can provide value to drive Series A metrics and the valuation makes sense. A worthwhile read to understand some of the behavioral dynamics at play behind such rounds.
Your Job Isn't to Make Every Customer Happy. This might be a shock to some readers but it's the truth of founding a company. To productize something for a large market and stay focused on the problem, certain asks need to be de-prioritized or never addressed. I was on a call recently where a large corporate was raving about a product and said, "it feels like they customize exactly to our asks!" — red flag. I revisited my notes and noted that a substantially large engineering team was feeling under water. Likely because the founders aren't managing feature asks well enough. In another situation, we were weighing the feedback and strategic implications of offering a capability asked for by customers. In this instance, we very clearly came to an understanding as to why we want to offer such a capability, how it drives our core value proposition, and how we plan to test a solution. It might be painful to say no to a customer but only certain customer segments are truly viable in the long-run. It's worth noting that as a startup scales, some of these pockets are unlocked as product teams ramp, bandwidth is unlocked, and efforts to capture related customer areas become a priority.
What We’re Listening To 🎧
Greymatter: Future of Shipping and Logistics in an Autonomous World. Shared by Dispatch reader, Wesley. Greylock Venture Partner Simon Rothman and Convoy VP of Operations Kristen Forecki discuss the impact of automated technology on the space, competitor landscape, and what it takes to win.
Founders Camp 🏕️
Founders Camp is a four day effort to help founders build their business and drive traction. Founders will get insights and advice from proven operators and managers who have scaled startups and enterprises. Startups will have opportunities to drive revenue through introductions to potential customers and partners. Hosted in Chattanooga, TN from 10/8 to 10/12. We are fortunate to have count Covenant Transportation, Omnitracs, EPB, and Market Street Partners as sponsors to make this effort happen.
Founders building revolutionary businesses in supply chain and transportation should consider applying for an invite to Founders Camp. Competitive companies will have a strong team, a product/service built, and early traction with customers/users. Those companies that are looking to raise a seed or Series A would benefit from our focus on relevant operational advice and customer introductions.
Applications close on August 12th at 11:59 PM Pacific Time.
Reach out (santosh at dynamo dot vc) if you have questions or want to introduce yourself!
Who's Hiring? 👩💻
Trucking Tech Engineer at Starsky Robotics.
SDR at SKUPOS.
Account Executive at WorkHound.
Check out other jobs at Dynamo portfolio companies.