Dynamo Dispatch (02/18/19)

Issue 54 | E2log, Nuro, Rivian

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 💭

This week, I pick up on my discussion around market understanding (Part I covered sizing). Regardless of whether one raises capital (VC or otherwise), founders tend to benefit from intentional analysis around 1) what they’re solving (problem), 2) who they’re solving it for (the users/buyers), and 3) why they think it’s better than an alternative solution (competitive advantage). We will cover part 3) in a later issue.

The “data gathering” effort should be a constant process that comes from getting in front of customers. Routine product roadmap meetings tend to force a lot of thinking among the founding team to distill hypotheses against customer feedback. This relentless focus on bridging the market’s needs with a great product is what drives a company to “product/market fit” (proof that they’ve built something that solves a big problem and people are willing to pay good money for it).

Now how does one convey these learnings for the purposes of educating stakeholders (getting people on the same page and in a culture that balances customer needs with engineer’s capabilities and business goals) and for prospective investors (builds buy-in as to why you have a privileged insight/approach)?

I tend to focus on three aspects: Background Information, The Problem & Status Quo, and The People.

Background Information. When you’re talking about an industry where operations, behaviors, and tendencies are less understood, it helps to level-set everyone’s understanding. In terms of stakeholders, it helps fill in knowledge gaps that team members or partners might have (knowingly or unknowingly).  For investors, it helps debunk any assumptions or preconceived notions they bring to a deep dive or whiteboard session. Practically, I would suggest this is one to two slides that details the trends and requisite knowledge to help one understand why the problem exists, why the problem matters, and why now is the time to solve it.

The Problem & Status Quo. In supply chain and mobility, problems tend to be best conveyed by “showing and explaining” given the archaic (and at times, unbelievable) nature of key functions and process — a lot of the problems are tangible and as a result, relatable. For example, the stack of paper associated with underwriting trade finance, the iterative and computationally intensive process of route planning, or the 1 hour slog to get 2 miles in our urban centers. Explaining the process by which the problem is dealt with today is powerful and also debunks the stock question, "so how's this dealt with today?" This tees up the later conversation around competitive advantages.

The People. This helps everyone build empathy for the user of the product and highlights what is absolutely necessary to have a viable product and why. Develop a profile of one to two major personas and describe them: habits, needs, wants, goals, likes/dislikes etc. Then proceed to build an understanding of their attitude towards the problem, how they currently cope with the problem, what they like/dislike about the status quo, and any noteworthy thoughts they might have shared. Then, if possible, get a short video of them using the product while providing feedback -- helps convey a lot of what might be lost or biased in a consolidated set of slides. It’s worth noting if there is a different buyer and their considerations to purchasing -- especially important given that functional and technology leaders often cooperate around a decision. For investors, this is likely kept as follow up or discussed (rather than shown in a set of materials) during a deep dive.

Having a deep and up to date understanding of the market is important for founders. As you scale your team and think about raising outside investment, this mastery of the market and user base will be sought out.

We Are Dynamo,
Santosh 💥

Supply Chain 📦

Are Mobile Warehouses the Future?. Specifically, dry van trailers are being increasingly used to store inventory that needs more mobility. “Nationwide, as many as 500,000 trailers may be used as temporary warehousing” If you need flexible warehousing, check out Stord.

Walmart Operating Own Container Fleet and Drayage Operations. As part of a trial that started last year, Walmart has been complementing their existing container operations with custom designed containers and their own fleet of drayage drivers. While we praise Amazon for entering the logistics space, Walmart has been a major player for several decades.

Experts Opine on Autonomous Mobile Robots. A Q&A covering AMR selection and implementation, adoption trends, and ROI considerations.

🌟 Investors are Hot for LatAm Logistics Startups. LatAm is severely behind in terms of logistics capabilities according to the World Bank but that’s proven to attract the interest of entrepreneurs. “The challenge of automating and streamlining shipping logistics in Latin America is becoming more pressing as e-commerce and other B2C delivery businesses take hold. Not only are large corporations dealing with sending and receiving bulk cargo across the region, but individual consumers want more on-demand services that require better organization and logistics.”

Truck Parking Shortages Cost Drivers $4,500+. A lack of parking is estimated to cost drivers over $4,500/year in lost wages. It will be interesting to see how infrastructure upgrades and the existing network of travel stops captures some of this opportunity.

XPO Notes Major Customer Pull Back During Earnings. Managements has guided that one customer will pull back spend and cause a $600M shortfall in 2019 revenue. Analysts believe the customer in question is Amazon which contributed $900M to XPO revenues last year.

USPS Reports Net Loss of $1.5B in Q1. Despite a 3% increase in revenue to $19.7B, higher volumes caused an increase in salaries/benefits and higher than normal transportation costs drove the net loss.

Mobility 🚗

🌟 Ford is Testing Visual Language for AVs and Pedestrians. Ford is testing a variety of light interfaces to help other road users understand what an AV is doing and what it will do next. Similar to how brake lights give us queues when someone is parallel parking or an oncoming driver flashes their lights to warn of a hazard, Ford believes well-designed lights can better bridge the gap between AVs and the rest of the world.

📊 A Recap of California AV Disengagement Reports. “California’s self-driving car reports are imperfect, but they’re better than nothing.” The reports are available here.

Could Waymo Be Repeating the Same Mistakes Xerox Made?. Waymo has faced a lot of criticism as it attempts to  on it’s path to taking a commercial AV services

Japan’s Plan for Flying Cars. A public-private partnership has drafted plans for technology development and regulation to make flying cars commercial by 2023 (testing aimed to start later this year).

Uber’s Growth Slowed, Losses Narrowed in 2018. While Uber is pitching itself as a platform focused on transportation and logistics, it’s investments in Freight, micromobility, and Eats are weighing on profitability.

Strategic Developments, Fundraises, M&A 💸

Rivian Raises $700M led by Amazon. Rivian makes electric trucks and SUVs with it’s first models expected to be delivered in 2020.

Softbank Leads $940M Round in Nuro. Nuro builds autonomous vehicles for last mile delivery. Most notably they’re working with to deliver groceries. Related, is concern over the “final 100 feet” of delivery overblown?

E2log Raises Seed Led by 8VC. E2Log is led by industry veterans and specializes in providing logistics solutions for oversized cargo like transformers, rig machinery, turbines.

May Mobility Raises $22M Series A. May Mobility is implementing driverless shuttles in cities around the country. The round was led by Millenium New Horizons and Cyrus Capital Partners.

Ford and VW Discussing Argo Investment Around $4B Valuation. After reports that the two were far apart on valuation, it looks like a deal might be clinched after all. The size of investment is still uncertain with some reporting that VW doesn’t want to invest more than $500M.

Agility Joins Panalpina Drama. As DSV raises their bid for Panalpina, news emerges that Panalpina and Agility could be discussing a potential tie up.

Maersk Buys Customs Brokerage. As Maersk moves to be an integrated container logistics company, it’s beefing up it’s customs offerings with the acquisition of Vandegrift and US customs brokerage.

Walmart and Deliv End Online Grocery Partnership. A lack of volume and delays at stores were cited as reasons. As an avid Walmart pickup customer, I will say that the pickup experience has significantly degraded as it’s gained in popularity. Wait times are often 20 minutes, items are stocked out, and “picking” of goods is shotty with many items close to expiration or produce of subpar quality.

Bob Biesterfeld appointed CEO of CH Robinson. Biesterfeld is currently the COO of CHR and will replace current CEO John Wiehoff on May 9th through a planned succession.

Company Building 🛠️

Innovation & Industry Analysis. A solid primer on conducting innovation industry analysis.

Why Has Seed Investing Declined? What Does That Mean for the Future?. Mark Suster explores the decline in seed investing activity. He concludes that the venture market has split into three distinct categories: seed, venture, and growth. Over the last 3-4 years, the latter two segments have slowed down on their seed activity and opted to patiently fund opportunities they fund worthwhile in their circle of competence.

How to Build Quality Relationships As an Introvert. I’m an ambivert so my energy levels wax/wane when it comes to networking and being in large groups -- I find the thoughts of others to be helpful especially if I’m in an introverted mood. We can all take a few pointers from this piece, introvert, extrovert, or ambivert.

Who's Hiring? 👩‍💻

Full-Stack Engineer at Stord in Atlanta, GA.
Business Development at Sennder in Berlin, Germany.
Customer Success at LEAF 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.