Looking for Logistics Innovation? Keep Your Eyes on Startups
Earlier this week, Convoy, a trucking-industry startup that uses technology to match truckers to cargo, announced it had secured a $62 million investment led by leading startup accelerator Y-Combinator, alongside additional investments from moguls Bill Gates and Barry Diller. This latest investor deal puts the logistics startup industry on track to raise nearly $1 billion in 2017.
Convoy is another in a long list of tech-driven startups that were founded to digitize a legacy business that still relies on decades-old technology.
Successful startups foster change and innovation because of their visionary approaches to old problems. Startups don’t have a legacy business to protect, so they are free to experiment, to occasionally fail, and to “go for broke.”
Convoy didn’t snag such a massive investment because they’re doing the same old thing. It’s because they’re addressing pain points that affect everyone in their industry. In the marketplace of ideas, innovation often yields maximum benefit to all stakeholders: businesses, consumers, and investors. So if you ever hear, “That’s the way it’s always been” as a reason for why an industry operates as it does, you can safely guess a startup is coming along with major innovation in tow.
Much as trucking was in need of a new technological approach, at CoLoadX, we feel the same is true for ocean logistics. The logic is simple: if innovators like Amazon, Convoy, Transfix, and others are focused on solving “last mile” delivery problems, then it’s obvious that someone is going to have to solve the “first mile” problems of logistics. Consumers want an iPhone or LCD TV delivered to them quickly, but businesses need to get entire container loads of such product in position quickly to meet that demand. The longer it takes to cross the first mile, the longer it will take to cross the final mile.
So what does this mean for your business? You need to invest.
Invest in a startup? No, that’s something better left to professional investors. But your business must invest time in working with the innovators as a customer, or a business development partner, or in any way that keeps you good at what you’re doing but allows you to make that expertise relevant in the future.
So how can you use these lessons to your advantage?
- Watch: Keep an eye on what’s happening in the startup world: where the investments are flowing, whose products are getting adoption, and what your competition is doing.
- Connect: Identify the pain points in your business and see where they overlap with new capabilities startups might offer.
- Take a Smart Risk: Every new technology looks scary at first. Every change involves some risk. So do your due diligence and take educated risks; making new choices is the only way you’ll grow.
- Invest Time: New innovators take bold risks, but that doesn't mean they have all the answers. Meeting and collaborating with startups can add value to the very solutions they're building for your business. After all, there's a reason why large companies sponsor events like innovation challenges and "hackathons". Share insights on your business challenges and objectives and you'll likely get a solution tailored to your needs without spending a dime.
Following these steps and then investing in the change you need will eliminate inefficiencies, automate unnecessary tasks, and innovate effortlessly. And that frees you up to redirect your unique skills and strengths in ways that only human expertise makes possible.
By: CoLoadX on July 27, 2017, 2:56 p.m.