Startups reinventing logistics 📦

An event featuring 3 startups building better ways of moving things from one place to another

Our guests of honor

At The Family, we believe ambition can be learned. That’s why we organize lots of events to educate our community and help the next generation of ambitious founders build giant tech companies here in Europe.

Our latest event was on one specific industry: logistics. We gathered experts and entrepreneurs to give you insights about the ongoing trends of the industry, examples of growing startups, and perspectives to identify new opportunities. We were delighted to have Nicolas Colin (cofounder at The Family), Maxime Huzar (CEO at SpaceFill), Julie Pathé (Head of Ops at Totem) & Sébastien Tronel (cofounder at Trusk).

Wanna feel like you were there? Check out the full video ☝️

When we think about logistics startups, one particular company comes to mind: Amazon. Amazon was launched more than 25 years ago in Seattle, not Silicon Valley. And they lost money for a very long time, as it’s hard to mix retail and software. It’s a business that comes with low margins and significant problems regarding scalability (thanks, AWS! ;).

That’s why if Amazon had been launched in Silicon Valley, it would have failed. You can only explore combining logistics and software away from the startup promised land. But Amazon succeeded, and now we have 25 years of company history to help us understand the wonderful world of logistics.

To crack it, we have to understand how logistics are perceived 🔎

On one side, there is the tangible “real” economy — goods and services. On the other side, there’s the virtual economy of information, content, gaming, 1s and 0s, everything we love in startups.

People are used to separating those two worlds, and many think that only the former actually matters. But when you work in logistics, you know that everything is some combination of the two: tangible goods & information, together. Wherever there is information, there is value to add and information flows to reinvent. And the mobile revolution made information available 24/7, everywhere, even when people are on the move.

Any startup that deals with tangible goods & information enters the realm of logistics. If you think about Amazon, Deliveroo & Uber you might think first about e-commerce, food & transportation. But your books, food, car service, they only arrive thanks to logistics. There are 4 main categories of actors in the logistics value chain:

• Suppliers. As usual, the most difficult part comes down to people. You knock on doors and try to convince people to trust and work with you. Finding the right supplier is always a pain, depending in large part on personal relationships.
• Transportation. How do you ship products? Boat, plane, truck? The margins are very thin here, companies need to process a lot of volume.
• Warehousing. This is another tricky one because it’s for the long run. You commit, you invest. It’s a pain when you have to change things. You have to be able to work with a multitude of providers & manage them easily.
• Last-mile delivery. This really developed in the last twenty years thanks to the rise of e-commerce. Lots of startups have tried doing it internally but failed because you need lots of volume to make it worthwhile. The only way to really stand out is by providing a game-changing experience for your customers.

In the past, companies that needed to use a logistics system went through three phases:

• Rely on old-school logistics providers,
• Lose money because providers all offered the same thing, all for too much money,
• If you’re big enough, internalize all logistics.

That’s why organizations like FedEx or Walmart were the best at logistics. They couldn’t rely on third-party providers, they had to build internally and optimize their own value chain.

Today, you have many startups providing flexible & cheap logistics to anyone who wants it 🌈

And this changes the game. You don’t need to become huge before having logistics tailored to your needs. The competitive advantage of being very large has disappeared.

One-size-fits-all doesn’t exist anymore. The entire 20th century economy was organized around a standardized offer. That’s over. Today, you can grow at scale and still have a product that is customized for every single customer.

SpaceFill is the perfect example of that. They provide a personalized experience by always getting closer and closer to their customers. While a lot of companies are spending millions of euros to build warehouses and centralize goods, Spacefill keeps things flexible and offers clarity in a very opaque field. With a flexible supply chain adapted to consumer demands & able to accommodate last-minute changes, they’ve basically invented on-demand warehousing. They have a warehouse within 20 km of wherever you are in France, you can get a contract including insurance in 10 minutes, and they have tailored software to manage your day-to-day operations.

Trusk, a last-mile delivery company, uses their flexibility as a strength as well. They started by shipping from stores that no one else was servicing and then went up the value chain to ship directly from the warehouse after winning big contracts like Ikea. And one amazing fact? Trusk’s founders had zero experience in the transportation industry when they started. They basically just used Google Sheets and a phone, all the other tech was built later. They simply understood that e-commerce was providing a huge new shipping opportunity.

Totem is the most delicious B2B company we know, putting customized snack/coffee/drink corners in companies to make sure employees are relaxed and well-fed. Clients have their own account space to manage different offices and different Totems through a connected iPad. Orders and delivery are managed directly via a cart guiding the operator all through the warehouse — a cart they built internally to make order preparation as smooth and fast as possible. They track everything, knowing they can’t make mistakes. Using smartphones, they can know that the right box has been delivered to the right customer.

There was a time when great logistics was only for those with deep pockets 💶

Today, logistics is all around us: our world has become integrated. But there are still a lot of logistics problems to be solved, mismatches between what we expect and what we’re getting. If you are have that entrepreneurial drive, if you feel there’s something wrong in the old way of doing things, know that you can now combine scale, quality & customization just like the three startups above. And know that there is a Family here to help you do it.

& here are the slides they used.

LOVE 💜

Vlad

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PS: Thank you Kyle for your precious help :)