Dynamo Dispatch (02/04/19)

Issue 52 | Darkstore, Augury, McKinsey on Micromobility

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

❤️ 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.

Weekly Commentary 💭

Good morning from rainy Santa Clara, CA!

I’m at SaaStr this week. Come say hi and let’s talk about the nuances of building software companies across supply chain and mobility. Picking up on our series in building market understanding, Part II will be published this week on Tradewinds, stay tuned!

We Are Dynamo,

Santosh 💥

Supply Chain 📦

Vacant Retail Space Being Converted to Warehouses. I discussed this back in 2017 and it looks like markets with below average household incomes, < 5% industrial vacancy rates, and free standing big box stores are natural candidates.

🌟 UPS Correctly Estimated Returns Season Timing. At the core of this estimate was UPS understanding that eCommerce purchases have trended earlier and earlier each holiday season which as a result, pulling returns forward. The first wave of saw 1.6M returns on 12/19 with the next wave on 1/3 (vs 1/5 in 2018) with 1.4M packages returned.

Uber Freight Rating Facilities. The new feature update rolled out this week allows truck drivers to rate wait times, facilities, and the overall experience at shipper and receiver facilities. Carriers can now use a data-driven approach when accepting loads while facility managers can work on improving bottlenecks and poor experiences — important during periods when capacity is tight and carriers hold more power.

📊 Consumers’ Shipping Expectations. A recent survey showed that 63% of consumers expect orders to be delivered within 3 days, 50% opt for click-and-pick, and the expectation by 75% of shoppers that returns are free (47% of retailers charge)

🌟 What’s Holding Back An Automated Supply Chain?. The head of supply chain and transport for the WEF believes a fully automated supply chain requires: 1) move products beyond pilots; 2) better integrations between systems; 3) intelligently automate transactions to remove back office functions; 4) acceptance of autonomous technologies across public and private stakeholders. Warehousing will be the initial frontier of automation (as we’ve observed since 2016) with autonomous transport taking time to develop and get regulatory approval.

Air Freight Players Going Digital. Cargo.one and it’s contemporaries, namely, SmartKargo, are attracting more attention from capacity providers (airlines) as constituents recognize the time and cost savings from digital workflows and process improvement. While I don’t have data to back it, it feels that airlines seem to be moving faster than their ocean peers in embracing technology — perhaps the latter helped reduce friction for the former.

Mobility 🚗

📊 McKinsey Estimates $500B Micromobility Market. The US would represent about half of the total market value by 2030. This is in comparison to Horace Dediu's numbers that total $1T for trips < 10 miles (from last week's Micromobility Conference).

🌟 Optimizing Micromobility Around The Peskin Ratio. The Peskin Ratio is a measure of failed rides to successful rides. Incumbent modalities have low ratios (great experiences) and it might be that the high ratios for micromobility imply a poor experience and added friction to entice consumers to switch from vehicles to bikes or scooters. Also, The Promises of Micromobility and Bird's CEO on Unit Economics.

Burning Tracks in Chicago. The past week’s brutal cold can warp and fracture metal tracks causing service outages in a key rail artery. Railroad authorities had to burn the tracks to keep them warm for maintenance and repairs.

Amazon Appears to Pilot Embark Trucks. While both parties did not comment, Redditors captured Amazon’s private fleet using an Emark truck. Currently, Embark operates at L2 autonomy — truck can stay in their lane, accelerate, and decelerate with no human interaction.

VW, Daimler, and BMW Weighing Cooperation on AVs. The German Auto Complex seems to be coming together to work together on autonomous technologies and standards. The cost of developing and deploying such technology is too much for a single OEM to bear — spread it across several players is a smart way to defray the costs. The added benefit — a quick agreement on technical, safety, and perhaps, experiential standards.

🌟 Detroit Mobility Lab & BCG: AVs to Create 100K Jobs. A recent study shows that labor shortage might worsen as AVs require 30k computer engineers, 65k skilled trade workers like mechanics and safety drivers, and systems integration specialists.

London’s History in Transit Design. It turns out that London has a great history in (textile) design for mass transit. Lot’s of eye candy here.

Strategic Developments, Fundraises, M&A 💸

Darkstore Raises $7.5M Series A. Darkstore uses excess capacity in storage facilities, malls and bodegas and enables them to be fulfillment centers with just a smartphone.

Augury Raises $25M Series C. Augury provides software that helps monitor industrial machine health through noise and vibrations. IVP led the round.

Sendle Raises Series B for Parcel Delivery. Federation Asset Management led the A$14.3M round in the carbon neutral Australian startup.

Airworks Raises $2.3M Seed. Airworks provides automated processing solutions for aerial mapping and surveying. Innospark led the round.

JUSDA Raises $356M. The Foxconn spin-out raised a Series A to bring visibility to B2B supply chains.

Wynd Raises €72M for Omnichannel SaaS. Wynd provides order cashing, orchestration, and order picking modules.

LatAm Scooter Startups Merge, Raise $150M. Grin and Yellow announced their merger as the industry acknowledges the benefits of scale. The new funding should help fend-off rivals in a region with high urban density and favorable weather — friendly for micromobility unit economics.

Techstars and Eastern Pacific Shipping Launch MartimeTech Program. The program will be based in Singapore and focus on working with startups in maritime focused on regulations, fuel efficiency, vessel ops, digitization, and other related applications.

Uber Adds Transit in App Update. Teaming up with regional transit authorities, Uber’s latest update includes public transit options. It turns out in the Dara-era, more governmental cooperation could unlock opportunity for Uber. I can’t help but to wonder if Citymapper is in Uber’s cross hairs due to a robust door-to-door, multimodal transit experience as well as a loyal user base.

Company Building 🛠️

Hiring a VP of Engineering. I’m currently helping a portfolio company prepare to hire a VP Engineering, their first senior engineering hire. This is a great primer on the critical functions a high-powered VP Engineering brings to a scaling startup. Related: First Round on Hiring a VP Engineering.

Beware of Happy Ears During the Enterprise Sales Cycle. We constantly flag founders who might be overly optimistic with their sales cycles and engagements. Large buyers often take many meetings and a fast, direct series of questions on functionality, differentiation, shared deadlines, and budget/spend can help mitigate a lot of wasted time and money. Related: Check out Episode 13 of the FoSC podcast where we discuss buying behaviors at large and small logistics outfits.

Determining Funding Strategy for Industrial Startups. My friend and Dispatch reader, Robin Dechant shares his thoughts for financing industrial-related startups. The space often requires a longer ramp to P/M fit and thought around raising venture capital. I would point out that timing is important — selling to a market that’s not ready for your solution is a scary prospect and could be a major waste of resources. Determining if this mindshift will occur in ~2 years is difficult and important to convey — customer discovery, informed opinions on regulatory environment, labor shifts, and economics can help de-risk this.

Who's Hiring? 👩‍💻

Full Stack Software Engineer at GatikAI in Toronto, Ontario.

Recruiting Coordinator at Stord in Atlanta, GA.

Front End Engineer at LogisticsExchange 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.