Dynamo Dispatch (10/22/18)

Issue 40 | Postal Union Problems, EVs, Uber Powerpool

Dynamo Dispatch. Weekly update from Dynamo covering the latest and greatest in commerce and trade, #logisticstechnology, and building venture-scale businesses.

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Weekly Commentary 💭

I got a message from one of our founders on Friday night about how the company's sales narrative is evolving and customer feedback is driving iterations. For a founder who sells to different constituents (customers, prospective employees, investors), it can be tough to iterate or at times overly fixate on one strategy vs another. Let's dig in a bit.

Often times I've seen even the greatest CEOs sell the product vs the benefits — not intentionally but because they are often the keeper of the product vision. A good practice is to give one's self 5-10 minutes before a sales meeting to review notes and context switch to "customer mode."

In customer conversations, it's important to not get caught up in the "how" or "what" but driving home the "why" — why should the customer care? That's a result of understanding their needs and goals and drawing a line to the benefits they get as a user of your solution. As a customer identifies that a solution could be a good fit for them, their line of questioning and exploration will naturally require a startup to share how the product works and what is happening to deliver the benefits a CEO or sales person is touting. This is when they want to understand the "proprietary network" or "advanced applications of data science." It can be frustrating for a technical founder who wants to tout their amazing product but know that opportunity will come, you just can’t lead with it.

Ultimately, the benefits and inner workings of a product must be translated to dollar terms, after all, money talks. Case studies from previous customers (even if anonymized) can be helpful in early conversations — "we saved a large CPG company over $10M annually because our solution: [problem A/benefit A], [problem B/benefit B], and [problem C/benefit C]." Note how we don't tout the product features or how the product actually works. The dollar benefit/ROI can help an internal champion sell your product and get through the procurement process. Mind you, a specific customer’s dollar benefits are not something you will just “know.” It’s something your champion will help you derive as your sale goes through the funnel.

What about time? Time's important but valued differently across organizations and roles. After all, the reason time savings is interesting is because there is inherently a cost associated with it — so just get to it. Getting time translated to dollar terms is what helps cut through ambiguity and subjective conversations that favor the customers. Again, conversations from past customers or prospects can help one estimate such benefits. Ultimately, the sales process will lead to discoveries that help translate time into dollars for your customer — sales is in part, the process of educating one’s self of the needs and goals of their customer.

In many of our pitches and post-investment discussions we always walk from customer problem to product to a focus on dollars. In the fast paced environment of seed stage startups, it's important to remember that dollars, not features help drive a sale.

We Are Dynamo,

Santosh 💥

What We’re Reading 📖

Supply Chain

The Winners if the US Leaves the Global Postal Union. The Trump Administration has notified the Universal Postal Union that it intends to leave the group amid concerns that subsidies called terminal dues unfairly advantage foreign manufacturers and retailers (they pay the USPS to deliver small parcels under 4.4 lbs). FedEx, Amazon, and domestic manufacturers could benefit by competing on a more level playing field where products will end up being more fairly priced. A better outcome would be a negotiated subsidy that won’t impact US exporters in foreign markets while still benefitting from ops, standards, and payments infrastructure from the UPU.

Amazon Seeking Dominant Position in India. Amazon has enlisted hundreds of shop owners to encourage Indian citizens to shop at Amazon and help liaise in an environment that’s cash-based and a last mile maze. With 50 fulfillment centers in India, the struggle is to get local merchants to list their goods online. Amazon makes a concerted effort to educate shop keeps on the internet, phones, apps, and the benefits of using Amazon to sell their wares. It’s also working on getting people familiar with shopping online — it’s turned 14,000 shipping stores into “training centers” where an employee walks a customer through their transaction (think like shopping with the help of a store associate but using Amazon.com instead of weaving through aisles). In India, Amazon has launched Prime, Pantry, and in select cities, Prime Now — not an unfamiliar playbook.

Uber Freight Launches Powerloop. The new company is a member of the Uber Freight family and allows carriers to rent trailers from a "pool" of trailers. Those carriers who only have the "power-unit" or tractor can rent a trailer to move loads quickly and affordably. The pool improves on the existing drop trailer programs by ensuring round trip freight. Convoy announced a similar concept a few months ago.

Robots, Drones, and the Physical Cloud. Chris Mims at WSJ describes how large retailers are building massive supply chain operations that allow them to store and deliver goods like data — a physical cloud. I was with a large global supply chain outfit and they believe that many industrial components can sit in a digital inventory and get 3D printed and delivered using a last mile network. As technology is increasingly injected into supply chain, logistics firms and retailers are able to reduce friction in eCommerce and drive superior customer experiences.

Instacart Raises $600M to Continue Grocery Delivery Ramp. In just 6 months, Instacart has increased it's valuation by 75% as it works with over 300 grocers providing delivery services. In a $1T+ market where eCommerce is growing but still only 5% of industry sales, brick-and-mortar needs service providers that enable them to better serve their customers. The company is still not profitable.

Meet Passport, Enabling eCommerce Expansion with Easy International Shipping. International eCommerce is a hairy business — the logistics, duties/tarriffs, customs, among other things make it hard for a US retailer to sell abroad. Passport recently raised $3M to enable eCommerce internationalization through it’s service. Currently, Passport is primarily focused on facilitating the logistics component cross-border with over 300 carrier relationships (both long hail, last mile, and air). It’s a hairy problem that contrary to popular belief, with the right solution and timing, can be highly defensible and impactful to a rising middle class overseas.

Flexport's Prospects in the Face of a US/China Trade War. Given the forwarder’s exposure to the US-China tradelane, a trade war could impact it’s growth significantly (it runs freightliners 3x/week which highlights it’s commitment to being deep and active in the lane). While Flexport is still bullish on it’s growth prospects as it relates to China, it also expects Southeast Asia to fuel growth in a scenario where the China/US continue to hurdle tarriffs at one another.

FedEx Acquires Manton to Strengthen International Forwarding Offerings. Manton brings experience in air and ocean freight forwarding solutions, as well as customs brokerage. With a focus on automotive and healthcare, FedEx can beef up it's international capabilities in the Asia Pacific region.


The State of US Electric Vehicle Adoption. In 2017, just 1% of the 17.3M vehicles sold were electric representing 26% growth yr/yr. Government incentives have helped spur adoption with California leading the charge with close to 5% of new sales being EV. Charging infrastructure is still sorely needed — VW's $14.7B fine will in-part ($2B) be used to fund charging stations.

Why Tesla Can't Open Up Dealerships in 16 States. Tesla is currently fighting antiquated franchise laws and protectionist legislators in 16 states that prevent car makers from opening dealerships. Lobbying efforts are underway to help Tesla and other manufacturers keep direct ties with a customer and sell their vehicles.

Consumer Confusion As it Relates to Autonomy. Marketing vehicles as "auto pilot," "self-driving," or "semi-autonomous" is giving consumers the wrong impression of a modern car's capability. Couple (scary) stats from the global survey: 71% of drivers think a fully autonomous vehicle exists today; 18% of British motorists think that a car marketed as being capable of automatic steering, braking and acceleration allows them to “sit back and relax and let the car do the driving”; 51% of drivers think they are liable if their ADAS is on in an accident.

Keeping EVs Juiced — Battery Swapping vs Charging. It turns out that current battery technology and charging infrastructure might not make charging an optimal solution for EVs in need of a spark. Chinese EV company NIO is building battery swapping stations — it turns out one can swap a battery as fast as it takes one to fill a tank of gas. It’s a trend worth watching as battery tech continues to lag and charging infrastructure/time is a hurdle to long-distance viability.

Redesigning Cities for the Scooter (or Micromobility) Era. Some potential ways to make cities more friendly for micromobility form factors: 1) roundabouts to slow fast traffic; 2) night truck deliveries to free up streets; 3) two-wheeler parking; 4) multiple bike and scooter lanes. It’s easier said than done but dedicated lanes, load balancing freight and deliveries, making smaller streets, as well as dedicated parking can prove to improve our cities.

The Competition for Charging Scooters. Earlier this week, I was explaining the concept of "Bird hunting" and how it's giving tweens/teens a healthy source of income. It turns out adults are getting in on the bounty from charging scooters, be it Bird "hunting" or "juicing" a Lime.

Company Building

Andrew Mason on Groupon's Rise & Fall. The story of Groupon from the eyes of it's founder. While it's down from it's peak, Groupon is still a $2B business. Despite offers from Yahoo! and Google, Mason and team decided to stay independent — it's hard to build something and just let it go.

Sales Advice for Early Stage Founders. "In the vast majority of cases, a product released in an emerging market lands with a dull thud, and it’s up to the company to figure out how to sell it. Sales in early markets should be about finding the few right customers strategically aligned with the vision of the company and the product"

M&A: Expectations in Venture Integration. A primer into integration expectations as it relates to M&A in venture-backed technology companies.

What We’re Listening To 🎧

Village Podcast: Keith Rabois on Career Strategy, Talent, and Evaluating Markets. Rabois shares his experience as a mentor, joins in a discussion about career planning, what he's learned about hiring and growing talent, and finishes with his framework for evaluating businesses.

Who's Hiring? 👩‍💻

Associate Product Manager at SKUPOS in San Francisco, CA.

Full Stack Developer at Vector AI in London, England or New York City.

Network Engineer — Connected & Autonomous Vehicles at Gatik AI in Sunnyvale, CA.

Check out other jobs at Dynamo portfolio companies.