Dynamo Dispatch (12/10/18)

Issue 46 | Uber Freight vs Convoy, p44/Gatehouse, Rideshare IPOs

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 💭

Hello from NYC (again) — the city that taught me so much as a professional and uniquely provided insight for many of the relationships, conversations, and decisions I make today.

As an investor, I spend time speaking with talent that our portfolio is looking to hire. I had a conversation this morning with an individual that has a similar background to mine but struggling with the realities of joining a startup — lower cash compensation. It was a life altering decision for me at 26 to leave a well paying job, burn through savings, and be all-in on achieving a dream. I know I'm not alone in this and that the decision can be really uncomfortable.

The anxiousness of leaving "the known" especially when one is a consultant, banker, or corporate executive cannot be focused on cash compensation. Startups require different personalities, backgrounds, and skillsets in what can be dubbed a "pressure cooker environment." This is what provides an individual a great platform for personal and professional growth. Where else can someone come make or impact key decisions around product, sales, or culture? The short-term compensation trade-off comes with knowledge and experience that are worth multiples in long-term gains — early hires/early fires, team dynamics, building a MVP, sales, scaling a team, and more! The best founders lean into employee goals and work to drive outcomes that contribute to them as well as company objectives.

It's important to understand that the current cash compensation is temporary. In an event of a success, as a Series A round is raised, salaries approach market-rate. In the event of failure (and this is a very real risk in startups), one will have a great body of experience and lessons to point to — it is NOT a scarlet letter. However, one must know their risk tolerance and lifestyle aspirations and how startup compensation plays to that.

The "compensation" in joining a startup are numerous and not exclusively cash-related. I am glad I made the difficult decision and having weighed the decision, I can honestly say I spend my life truly doing what I love. BTW — several of our companies are hiring, send me an email at santosh at dynamo dot vc if interested!

We Are Dynamo,

Santosh 💥

What We’re Reading 📖

Supply Chain & Mobility

Uber and Convoy: Lane Explorer vs Shipper 2.0. In a world where digital freight brokerage seems to be a "game of capital," Uber and Convoy released major updates to their shipping platforms. Uber is looking to build a moat around it's ability to accurately price lanes two weeks in advance and still earn healthy margins while offering shippers a discount to their forecasted price. Convoy, also using data is trying to prove their worth and ultimately show their customers that their platform is the more cost efficient for a shipper's trucking needs.

USPS Could Franchise Mailboxes. The Task Force on USPS released their report this past week and one of the potential solutions to the near $70B in cumulative losses ($3.9B in fiscal year 2018) could be to charge private companies a fee to deliver to individual mailboxes.

Local Knowledge is Key to Great Last Mile Delivery- DHL. “When setting up e-commerce operations, we are finding different consumer expectations on a country-by-country basis.”

NYU on Consumer Consumption & Mobility Preferences. A piece of the study focuses on estimating the impacts of online consumption practices on mobility practices. It turns out that 37% of Manhattanites and 26% of Parisians use express delivery or collection option. Further, 14% of Manhattanites and 9% of Parisians use instant deliveries.

The Story of Rethink Robotics. A pioneer in "cobots" Rethink was viewed as a leader in industrial robotics till a series of technical setbacks and cultural friction led to it's ultimate failure.

Dollar Stores Are Feeding More People Than Whole Foods. Dollar stores threaten grocery stores as they drive sales lower by ~30% even though most dollar stores have no fresh food, only a limited selection of packaged items.

How Starship Uses Neural Networks for Delivery Robots. An approachable explanation for the non-CTO using a real world example of neural networks in autonomous last mile logistics.

Tesla Battery System Proving It's Worth. Neoen, the owner of the giant Tesla battery system in South Australia, revealed that the energy storage system saved about $40 million over the last 12 months. The system only cost $66M — could it be a worthwhile investment for select coldchain or conventional distribution facilities?

JB Hunt Takes Delivery of First Mitsubishi Fuso eCanter EVs. The medium duty box trucks will be used in last mile operations. The vehicles cost $6/mi less than conventional diesel vehicles but range is limited to 80 miles.

The American Power Grid Can't Support EV At Scale. It turns out our power generation infrastructure could inhibit uptake. The issue specifically is around smoothing charging away from peak-use periods (afternoons in the summer in Texas) to non-peak periods using incentives such as "time of use."

Ford City Data Solutions. A data-driven, European-centric study on mobility in city environments. Interesting discussions around safety, trip timing, EV infrastructure, mode shifting, and more.

WaymoOne Struggles to Hit Full Autonomy Amid Service Launch. The launch on 12/5 comes with challenges as rider volumes seem anemic and safety drivers remain in the car.

Multimodal Transit and City Traffic. A call to focus on throughput of people vs vehicles as well as a system that provides multimodal transit options that supplement larger public transit arteries.

Strategic Developments, Fundraises, M&A

project44 Purchases Gatehouse Logistics. The pair had initially struck a partnership to improve visibility across US and Europe. The pro forma entity will be a leader in US-Europe freight visibility solutions and set the baseline for a global visibility platform.

Lyft and Uber File for IPO. Lyft beat Uber to making the confidential filing with both companies still unprofitable. Uber has been estimated to earn a $120B valuation with a net loss of $1.07B on sales of $2.95B in Q3. Comparatively, Lyft had a loss of $254M on sales of $563M. Both have their own strengths (Uber is international/Lyft is largest eScooter provider) and two wildly differing narratives. The big expected news by year end is Uber's acquisition of either Bird or Lime (owns minority stake) to own the micromobility market — Lyft recently closed the Motivate acquisition and is expected to invest in further scale-outs.

Dynamo Portfolio Company, Wise Systems Raises $7M Series A. The round was led by Gradient Ventures, Google's AI-focused venture fund. Wise provides dispatch and routing software for fleets.

Audi to Invest $16B on AV and EV Efforts through 2023. The investments will be made through 2023 and jive with the broader VW Group's efforts to double and triple down on emerging mobility technologies and business models.

Creandum and Point Nine Lead cargo.one Seed Round. The $3.2M round also saw participation from Lufthansa Air Freight in the air freight booking platform.

Farmstead Raises $2.2M to do Grocery Delivery, Better. Farmstead is building a fully integrated grocery delivery service that leverages a distributed base of cold micro warehouses and last mile network. The company also partnered with Udelv for autonomous deliveries. ARTIS Labs, Resolute Ventures, Red Dog Capital, and YC participated in the round.

Kobo360 Raises $6M to Expand African Digital Freight Brokerage Ops. The round was led by IFC with participation from TLcom Capital and YC. The company started with an app to connect truckers and shippers but plans to use the funding to ramp a platform of supply chain management tools.

Neuron Raises $3.7M Seed to Scale Scooters Across Asia. The company believes that it's manufacturing and supply chain advantages allow it to scale faster with proprietary scooter models and uphold safety standards. It's worth noting major players such as Bird and Lime are also investing in building/partnering custom-design hardware.

TrueCar Buys DealerScience for $27M. The vehicle-shopping platform adds digital retailing software and associated expertise. TrueCar customers will get more transparency around their car purchase and also empower dealers with improved eCommerce and digital tools.

Company Building

Advice for Companies Running Out of Money. As we approach year-end this is the unfortunate reality for many startups. Some great perspective to navigate the challenges.

Startups Aren't Cool Anymore. More millennials are avoiding entrepreneurial activity as savings remain low, competition high, and recessionary signs emerge. Food for thought as founders look to hire essential leaders into their organization.

Playing Your Role. Fred Wilson on an investor's role in the startup building process.

State of European Startups. Atomico releases a data-rich analysis of the European startup scene. Some highlights that caught my eye: motor for economic growth, diversity an issue, research is a strength, strong talent density, and record investment of $23B (up from $5B in 2013).

What We’re Listening To 🎧

60 Minutes Interview with Elon Musk. The Tesla founder discusses his year with Lesley Stahl.

a16z Podcast: The IQ and EQ of Robots. A discussion on the human-robotic future, the history of robotics, and the next big breakthroughs.

Tim Ferriss Show: Lebron James and Mike Mancias. A great interview with Lebron and his under-the-radar trainer. Despite not being a huge NBA fan, I had a blast. After all, success begets success.

The Future of Supply Chain: Building the Freight Brokerage of the Future. Parker Holcomb of Fraight AI discusses how he and the team are using advantage data sets, algorithms, and conversational AI to deliver a differentiated and advantaged freight brokerage experience.

Who's Hiring? 👩‍💻

Senior Full Stack Engineer at Stord in Atlanta, GA.

NLP Engineer at Vector AI in London.

Data Engineer at SKUPOS in San Francisco, CA.

Check out other jobs at Dynamo portfolio companies.