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The SaaS Biz Powering Logistics Startups | Soham Chokshi @ Shipsy
325 Plays2 years ago
Shipsy is like the operating system of logistics - helping companies run logistics operations efficiently, with minimal paperwork and information loss. Soham is an investment banker inspired by Bloomberg to build a platform business and has had a fascinating journey of discovering product-market fit and building Shipsy into a global Saas business.
Know about:-
- Starting off as aggregators for last minute
- Pitch to investors
- Tackling local nuances in building a global product
- Generating inbound leads
Recommended
Transcript
Introduction to Shipsea and Its Mission
00:00:00
Speaker
Hi, this is Soham. I am the co-founder and CEO at Shipsea.
00:00:16
Speaker
In the recent Diwali sale season, I bought a TV. This one-click purchase has a very complex supply chain behind it. Starting from importing components from multiple countries, assembling them in a factory, shipping the finished TVs to a warehouse and finally delivering it to your door.
00:00:32
Speaker
In this episode of the Founder Thesis Podcast, your host Akshay Dutt is talking with Soham Choksi, the founder of the logistics management SaaS platform, ShipSee. ShipSee is the operating system of logistics, helping companies run logistics operations efficiently and with minimal paperwork and information loss. It is the brain that directs all the organs of a logistics organization to work smoothly.
00:00:54
Speaker
Soham is an investment banker and has had a fascinating journey of discovering product-market fit and building Shipsy into a global SaaS business. Listen on and if you like such insightful conversations with disruptive startup founders then do subscribe to the Founder Thesis Podcast on any audio streaming app.
00:01:21
Speaker
In this entire complex world of everything finance, global finance and trading and global markets, there are so many different participants. Think about it. So where a bank, there are traders, there are connected agencies, there are research houses. There are so many different people that are customers, right? So many different people.
The Genesis of Shipsea: Identifying Industry Gaps
00:01:40
Speaker
He was this platform called Bloomberg and that was one single thing where I used to log in at 8am and log out at 1am or whatever. It was that one single platform that actually connected together everyone in the ecosystem. So all our chats, all our trades, everything to execute, all the data, all the analytics, all the collaboration was all on that one single platform. And we thought it was obvious that for kind of industries where there's an ecosystem,
00:02:09
Speaker
and entities should collaborate with each other.
00:02:13
Speaker
platforms must exist in that sense. So that's kind of what it was. And that's right. How did you decide to do it in logistics? Yeah, so yeah, absolutely. Back in 2015, that's when we started off e-commerce was just on the rise. And as end customers, you know, we always had that terrible experience of accepting packages and returning it. You're in office, it gets undelivered, it gets returned, and then you're ordering it again. And it was a mess. Obviously the world has changed since then. But back in the day, I was really on the rise and we
00:02:43
Speaker
thinking that on the one hand, people are talking about going to Mars and then there's this, there's a big gap obviously. And we saw that again, there's multiple parties that are there. So there's the e-commerce company, there's the logistics company, there's the seller, there is ours as the end customer, there is a driver. There are so many different people that are collaborating together, so to say, on one transaction, which is a delivery of the shipment.
00:03:07
Speaker
And everything was happening manually. You won't believe what people used to work with these run sheets and date physical signatures. And you know, I'm right back in the day. It's kind of that way super inefficient. We thought that it's a multi-trillion dollar industry, logistics goods have been moving around forever. So that was actually the starting one. That is the time has to be massive. The total addressable market has to be massive. So it's a multi-trillion dollar industry, right? You do anything decent, it's going to be big. I think that's the first criteria that we had that look, while it looks interesting is the time began down. So was yes.
00:03:37
Speaker
It's massive. Is the idea ahead of its time? Probably. But it should not be too ahead. And then we just had that experience and we saw that there has to be a better way. How can all of these people collaborate manually? And imagine if instead of Bloomberg, like we didn't have Bloomberg, everything was on emails and Excels. How inefficient it would be.
00:03:56
Speaker
And that was the main driving factor behind doing it. And then there were not a question experience also through my co-founder. He shipped a bicycle from his home and it got stolen somewhere in the middle of the night. It was lying at somehow a month, two months. And then I think someone just drove off with it. So a lot of different experiences with kind of told us that if there's a problem for sure.
00:04:19
Speaker
Right. And customer expectations are through the rules. What the industry has to offer is nowhere close and be it's a massive market. So that's where it is. And we want to solve it using a technology first approach. So that was a genesis of why logistics and why we thought about this.
00:04:34
Speaker
And broad area logistics. Did you like narrow down what within logistics, what you want to tackle? Yeah, we did. For us at the time, it was just the last mile. And as end customers, that's also, for example, when you order something from a flip card or Amazon, what is the driver coming to your doorstep? But what goes behind it?
00:04:57
Speaker
their entire massive supply chain that goes behind, it is unknown to us. We don't see it. It somehow just magically appears at the doorstep. So anyway, so as end customers, the only thing we saw was the last one. So we said that, look, let's learn that that was the world we knew. And we thought that world is also very big, which it is. But when we got in, we realized that, oh, look, while last mile is there and then smash it, that's just a drop in the ocean.
00:05:22
Speaker
There is a massive ocean of global supply chain, global logistics, that's powering all of this. Like when you order something, it's probably, it made its first mile journey from let's say some other country to some warehouse in India. Then from that warehouse, it went to some fulfillment center from that fulfillment center, it came to the delivery center and from the delivery center, it came to them. So it actually, there's a lot of decoupled different transactions and actually go into having a package available.
00:05:50
Speaker
for you to order and be getting it delivered to you in the promised time. You know, when we got in, we saw last time because that was the only thing that we saw is end customers really. But then as we got in, we kind of approach it through first principles and that's a whole different story in itself because like when we started off as aggregators and kind of
00:06:10
Speaker
Yeah. So if you, as an individual, you want to send something somewhere or you forgot to charge them at home and you want to instantly summon somebody to go and get it. So we did that. And if you want to send something else, we used to aggregate across multiple carriers and kind of be that single platform. And it was technology plus operations. Um, and at one time we actually had about 80 or 90 drivers doing pickups and deliveries.
A Metro Ride to Investment
00:06:34
Speaker
Was this like a Denzel?
00:06:36
Speaker
Yeah, it was back in the time and it was a decent scale but it was burning a lot of cash. You had raised money or you were using your options? We had raised an angel round. We had raised an angel round with this and that's another interesting story actually. So dig that on a metro ride. How did you do that?
00:06:57
Speaker
Yeah, so I think so. When we came to Gurgaon, the kind of landed in Gurgaon, the first thing you realize is, look, there's no public transportation. You have the mentors and all this kind of stuff. There's no auto rickshaws and all that kind of stuff. So kind of got accustomed to Metro rides, all of those things. And at the time we were also aggregated. We were doing this whole.
00:07:15
Speaker
send anything anywhere 49 rupees for 500 grams anywhere in the country send anything like you yeah exactly that and the hyper local the intracity if it's something local instant label delivery
00:07:31
Speaker
Yeah, exactly. So the incident where one of our customers, he accidentally switched the labels on the packages. So a package that had to go to Noida ended up in Delhi and the one that had to go to Delhi ended up in Noida.
00:07:47
Speaker
uh, technology, uh, you know, errors happen, but, uh, you know, obviously you want to ensure that, uh, customer is happy. And, uh, uh, and we realize that logistics companies don't offer return services, not all of them offer pickups. So it's gone. It's basically just lying over there. So I said, then look, whatever it is, I'll go myself and I'll just exchange the packages. Yeah. And it's like a Sunday morning, uh, bent in the Metro was going to go to Delhi and then just switch the packages back to Delhi.
00:08:15
Speaker
When you're travelling from Gurgaon to get a seat in the metro, you need to get in at the city centre. You have to get in and you don't get a seat. It's going to be interesting. So, let me at least get a seat. That's the least I could do for my Sunday morning. I did that and then there was this kid that was on the metro ride and he clearly wanted to sit. I was like, he just sit.
00:08:38
Speaker
I have enough to deal with already. So at that time we had the Shixi t-shirt with a massive logo. So his father actually noticed that and he started asking me that what he do etc. And I told him what he does. So he was actually turned out to be an investment banker, a private equity.
00:08:56
Speaker
investor. And he was starting out his own angel investment firm as well. And he was actually showing his son the metro ride. He had come from London, et cetera, et cetera. So in the 40 minutes, he made us an offer for our angel. And we kind of declined it then because we wanted to reach a slightly larger scale, but yeah, we kept in touch. And then, so then he also introduced us to someone that acquired the ad tech company. I think just work in mysterious ways.
00:09:22
Speaker
Yeah. So that was the thing. And then I think, so we had based our retail round, but it was still burning a lot of money and took coming from a business family background always, or that look show a business should make money and see so much money being burned and nothing being made. And obviously from a standpoint of ODS, we were very popular. People knew us and all of those things, but.
Strategic Pivot: From Operations to SaaS Platform
00:09:43
Speaker
And we thought somewhere we were not actually solving the problem. We were sugarcoating the problem. Since we said that, look, why is the logistics companies have their own issues that sugarcoated with this nice frontend layer? But that doesn't actually solve the problem because the logistics companies, they themselves need a lot of help.
00:09:59
Speaker
in terms of really figuring out things. Let's take a step back and we wanted to solve this technology problem, not figure out how to deal with like driver unions asking for 50 peso more per kilometer of fuel. That's not what we are specialized in, right? So we said that we want to focus on tech. We've built up the tech internally for us.
00:10:17
Speaker
to solve it and we're willing to offer it to you, to solve your issues and working together as partners. And because that at the time we were just like eight, 10 people and it was basically selling us as a group of people that are going to effect change. At the time, God introduced to the CEO of BTDC express. So he was driving the whole transformation.
00:10:37
Speaker
for DTDC. And then he really believed in us and DTDC as a group, they really believed in us that look, these guys can help us. And it was a win-win relationship for them. They were kind of getting it built out a lot as per their requirements. And for us, we were actually building out our product as per industry standards and at a scale that we could actually talk about in terms of the benefits. So that was where we started off our journey of SaaS. So we did the aggregation bit for about
00:11:02
Speaker
three or four months, I think we very soon realized that that's not really going to scale. And we said that, look, let's focus on the core technology problem. And that's kind of where we raised our, we kind of extended the angel round and gotten more investment for the SaaS part. But again, we were not burning a lot of money because again, SaaS, it's just basically people expenses. And we were actually, from the very start, we've been fundamentally very strong.
00:11:25
Speaker
in your profitable year-on-year overall profitability. So that's how it was and that's how we got into the whole SaaS aspect of things. So the pitch to investors was that you would help companies like DTDC and other such companies with custom built workflow, automation, software.
00:11:44
Speaker
Yes. So the entire, because so think of it this way, all the new age, logistics companies that are coming around and run for all the entire logistics universe that's there. What is the one technology platform that exists? It's pretty much everyone has to build out their own internal systems. And look, engineering, core engineering is not the focus or is not the core business of a logistics company. Business is operations. Operations, yeah. They need a technology partner who held them on their journey.
00:12:13
Speaker
that is specialized in this. So that's not what it was. But again, at the time it was, you were still really just scratching the surface. Because when we started working with them, we realized that look, hey, this is a global problem. It's not just a India problem. B it's not just last mile. The entire first mile, mid mile, all of those things is where help is required.
00:12:35
Speaker
And then we also saw that, look, it's not just the logistics companies. The customers of the logistics companies, the retailers, the manufacturers, the distributors, they need a lot of help because look, if the logistics companies need help figuring out where the packages are, their customers working with multiple logistics companies, they would need more help.
00:12:53
Speaker
So then we said we got into retail, manufacturing, pharmaceuticals, the shipper side basically. So basically there is the logistics company, there is the shipper. Tell me, you got DTDC as your first client. What were you building for them? You were building like the last mile delivery?
00:13:11
Speaker
Okay. Something which from order to delivery that entire. So from the last mile hub, the last mile delivery center or the branch to the end customer, just that bit. Yeah. Exactly. So the whole route planning, route optimization, the driver app, the dispatch dashboard, customer communication, all of that stuff.
00:13:31
Speaker
How logically it would make sense to then go out and find more DTDC like companies and sell the same product to other companies. What made you want to go to a different audience altogether? What you're saying, the buyer side. Yeah. That was over time. Our first thing was to go to more logistics companies. Look, as a SaaS, this was one of our learnings. I mean, looking back, obviously it all made sense, but you want to build a very fundamentally strong product and see to get the product market fit.
00:14:00
Speaker
It's critical to have anchor customers because if you go out very quick, you're going to wind up in this crazy customization where we won't make anyone happy. And then the customers will basically start joining. So it's very important to have some anchor customers.
00:14:19
Speaker
with who we build out the foundation. So then kind of got connected with more logistics companies in India, then their trading partners, logistics companies in the Middle East. So that was our second destination. So we partnered with a few of the large logistics companies in Saudi Arabia. And we got to about five or six customers. These are our anchor customers, right? And we went very deep. We didn't do just last mile. Then we did first mile. Then we did mid mile. We did analytics. We did the customer facing portals.
00:14:47
Speaker
What would be, give me help me understand what would be first mile in mid-mile for a company like DTTC, give me some examples. Yeah, absolutely. So let's say you're a small shop and you want to send something from say Delhi to Sichanay. So the first mile, so you raise a pickup request from the app. So the first mile is essentially somebody that comes to do the pickup.
00:15:06
Speaker
and gets it to the first location. So let's say, if I'm doing it from Gurgaon, so there's going to be some branch in Gurgaon where the pickup will come to. Then the mid-mile is essentially it goes from Gurgaon to Delhi, Delhi to Chennai and Chennai to the local branch near the delivery address. So that's the whole mid-mile piece, which is the hub to hub movement. And then comes the last mile. Just from hub to home, hub to doorstep. Yeah, exactly, exactly.
00:15:32
Speaker
So you gave your clients a DTDC, you gave them like a white label app for customers who want to order a pickup. Exactly. Not just that the entire operations management tools as well. So the app for the drivers to get the pickup requests, scan all of the shipments.
00:15:48
Speaker
that dispatch screen and the hub so that they could see all of the pickups deliveries, the live operations, the live statistics, any escalation, any exceptions, reports, all of that stuff, proof of delivery on the driver app, complete integrated platform for operation management. Okay. Okay. Which sounds pretty powerful. Like essentially opening a logistics company is then just like a plug and play. You can just buy the software and start. So that's exactly what happened. Yeah, that's exactly what happened. So now.
00:16:18
Speaker
And we're fortunate to be in a position where we're really enabling companies to start operations in absolutely no time. So the barriers to entry have really reduced, which fundamentally benefits the end customer because look, that's going to reduce costs finally. So that's where it is. Amazing.
00:16:36
Speaker
Tell me like from a timeline wise also how the journey had been going. This year 2016 was when we started off with our SaaS journey. We got to put out the product with our first three or four customers. Last mile from Saudi. Yeah, no, so the last mile and then the first mile and the mid mile. So it went in that sequence because last mile and first mile are pretty much similar. It was the location that does last mile. We also do first mile. We solve for first and last mile and then we solve for mid mile.
00:17:03
Speaker
So the first about where had you built the full stack? So that was mid 2018. So mid 2018 or so, so about two, two and a half years, second half of 2018, got built out and we got three or four kind of anchor customers. 2019, what you were doing then in 2018, we were doing about a million dollars in ARR.
00:17:26
Speaker
And this was pure subscription. And what is the way you price it? Was it like based on number of transactions or number of seats? So we did it based on number of shipments, build monthly. So in a per shipment price, we hadn't thought about it that much, but that's one of the best decisions we made because the consumption based pricing automatically results in revenue growth as the customer is growing and as the industry is growing because seats don't grow as fast.
00:17:57
Speaker
Shipments grow fast because increasingly if you do say a hundred more shipments, you're not going to get 10 more drivers. You want to do it with the same number of drivers and optimize and do that. So that was one of the very good decisions.
Innovative Pricing Models in SaaS
00:18:08
Speaker
And I think retrospectively speaking, when I talk to a lot of entrepreneurs these days, people don't really look at pricing at the start of their journey. I tell them that look, pricing is extremely important. She was once you bought a price in the market.
00:18:22
Speaker
You've drawn a line in the same words and that price is going to be referred to every single time. And you can't take that back. Right? So pricing is actually very important. I know everyone thinks that yes, we need to get customers. We need to get something going, et cetera, et cetera. But pricing is important. So I think, and then thankfully we kind of looking back at the teams and then at the time it was also risk, right? Because companies were growing. If they don't grow, we don't grow. But if they grow, we grow. And it just happened to be that the logistics industry was growing very fast.
00:18:52
Speaker
So yes, by mid 2018 early 2019 is when we scaled up across about five or six anchor customers. We were doing about a million million, about 800,000 seven six to 700,000 shipments on a daily basis.
00:19:07
Speaker
And you know, some of our anchor customers, right. And then essentially is when we said that we, I mean, at the time it was just kind of me doing a lot of the sales. And then still, I love sales and I love anything related to revenue and growth and stuff like that. It's not like a, it's not like you're a large pool that you need to sell to. I guess your audience is limited. There will be like 10, 15 companies in each country.
00:19:33
Speaker
10, 15, 20 companies in each country. How did you build a global product? Say, wouldn't there be local nuances around? So tell me about that. What are the local nuances? How does it differ? Absolutely. So for example, when we went to Saudi, so the first thing we realized was we had built our entire system based on pin codes.
00:19:54
Speaker
There are open codes. There's nothing. It's just surprising. That was a big issue. But we've been very agile. One of the things that actually sets us apart as well, Akshay, is the fact that
00:20:11
Speaker
in the core team and top down where technology first. So we all come from a super deep technology background and everyone is extremely hands-on in that sense, whether it be actually really, so we have the whole system from pin codes to area codes overnight. We said that, look, let's abstract it. Why don't we create a hierarchy of area codes? And then we make that popular and then that really caught on in the market. And now almost every company operates over there based on area code. So what do you know?
00:20:38
Speaker
You gave codes on your own, like for each region, you gave it a code. Each area. We crawled a lot of publicly available area names, city names, et cetera. And when an address would come in, we would have address. And the other thing was language. It's Arabic. It's also from a text. And when it's difficult, because it's similar.
00:20:56
Speaker
So the whole app reverses, the whole dashboard reverses, everything reverses do that, but we figured out all the libraries and that'll help us do that. And, but yes, doing let's say, address identification and complex addresses in Arabic. That's a whole different problem statement because you need to translate it, retain the context and then try to do some sort of your coding geomapping based on that. So we developed this entire machine. Were you scanning the addresses or was it being entered in a form by a customer or something?
00:21:24
Speaker
So, see, in e-commerce, see where logistics companies work with e-commerce companies, you have to manually take the text address. You have to. So even today, when you go on Flipkart or Amazon, you have to fill up a text address. Unlike a hyper-local, like a Swedish, or a Zomato, where you pin your location and that's good enough. Here you have to write your address. Now, why is that the case? Because fundamentally that box.
00:21:47
Speaker
It's going to be traveling from somewhere to somewhere else. And a lot of things are still driven by people looking at the box and the address on the box. If you just put geo-coordinates on that, people won't be able to do a sorting. So even till date, sorting happens based on looking at the address and putting it into different bins. So do you like do a OCR of written address? Like someone can write down the address. That was one of the innovations that we did because we realized that to do accurate last file delivery, addresses are very important.
00:22:16
Speaker
and address are very important, but a lot of people still give printed or handed an address. They won't go to a separate system and do the data entry. We had all the APIs, we had all of that. People still wouldn't do it, right? Especially in a customer to customer kind of landscape, right? You still, if you want to send something, you just write it down and give it, right?
00:22:33
Speaker
So we got to build this tech where, and this actually ended up reducing massive costs for our customers. Well, otherwise they would have this huge amount of data entry happening at each of the branches and a lot of errors, things like that. What we gave is for all the field executives on that app, they could just take a photograph.
00:22:49
Speaker
and it would read all of the address, it would classify it as, you know, name, line one, line two, city, state, country, phone number, zip code, pin code, all of those things. So I think, see, one of the things that we've really done is, see, we realized earlier on that the industry that we're in, we are a must have for any customer, not a good to have, which makes it very critical for us to be super effective.
00:23:17
Speaker
And we need to solve real world problems. It's not about having a fancy dashboard and a fancy app. It's not about the best and whistles. It's about making it work on the ground. And see, this actually came to us because we did it ourselves. We did the operation for one month. I was actually myself doing pickups and deliveries. I realized that bad routing, it did really impact your day. You end up at a place and you realize that it's sort of some whole distance away. And then it is so that whole empathy.
00:23:48
Speaker
for people on the ground and to really ensure that the system helps them. It's not a means for data collection. It means for audit. That is an end goal. Obviously, I didn't digitize, automated all of those things, but only if it is actually effective on the ground, will it work. So we did things like this. Then we did things like complete offline working of the app. Whereas there's a lot of cases where you're in some society, they are under some of the same work.
00:24:12
Speaker
You're in a basement, a lot of there are go down based deliveries, or even over there. So the system must work offline. There are some remote parts of the country where there's a challenge in some parts. It does come when you go travel around. So you are made such that the app works offline. Then in our local language, we made sure that the app has to work in local languages, complete training within the app. So a lot of things like the field executive companies can just hire field executives and tell them
00:24:40
Speaker
Yeah, because the attrition is super high in this industry. So if you're spending like 15 days, people learning in a job where people usually turn out in four or five months, that's a lot of loss. That's a huge loss. So I think that's the other stuff that we did. And so in 2019, so we are kind of at that stage where we scaled up with a few of our anchor customers.
Expanding Market Reach: New Industries and Solutions
00:25:03
Speaker
We built out the product across first, mid and last mile. And like you said, it's not an unlimited
00:25:08
Speaker
It's a limited universe. At the same time, it was critical for us to achieve success there. Because that's the thing. It's very important to just stay focused and get the numbers. Otherwise, you can just keep running around that, oh, it's not a big market. Let's try something else. Let's try something else. No, it's not like that. However small a market can be, if you're 60% of that market globally, that's huge.
00:25:30
Speaker
Any market is huge, right? So that was our goal that, look, we just need to be like 60% of this market. We don't want to be a 10% or a 5%. You want to be like 60%. And there is nobody else who's doing this, or are there other companies which do this? So the interesting part is there are no global leaders. When you talk about ER, either SAP, when you talk about CRM, the Salesforce, but when you talk about like sales and supply chain, then nothing really comes to your mind.
00:25:52
Speaker
The interesting part is there are no global leaders. Of course, see at the time when we were doing it, other people did come around that were doing similar things, but they're all startups are level of maturity. But then we said that, look, we need to go and we need to expand in terms of product that we have with a few minor changes and tweaks. What other industries can we help? So we didn't want to obviously build out a whole new product because that's
00:26:18
Speaker
doesn't make any sense because you've gotten to product market fit. So you want to really extract as much as you can. So we were in that extract phase. So you said that, look, a lot of the customers of our logistics companies, a lot of them, they have their own fleet. So then we partnered with India's largest pizza delivery chain. They had their own fleet and we held them with the last one delivery from the restaurant to the home. Pretty simple. Exactly. Exactly the same thing. Yeah. Exactly the same thing. And then we also realized that, okay, people that are doing wide goods,
00:26:46
Speaker
like ACTV fridge. That can't go on courier. You need to have your own street to do it. Yeah, yeah. Chroma would have its own. Exactly. So the India's largest retailer, we unvoted them into wild goods. So we unvoted them and then until date, their pan-India deliveries are powered by a platform. Then we realized that, say, pharmacies, delivery from the nearby pharmacy store to your home. Again, people have their own fleet. So you'll see a lot of time they come and they deliver things. So is he talking about pharmacy tech, like those startups, like 1MZ and all?
00:27:16
Speaker
Yeah, exactly. But there are a lot of established guys like pharmacy, well, that's whatever. So yeah, all of these, so they're there. So we realized a lot of different use cases were there. And then we also built out an aggregation engine to say that, look, the thing that you're doing at the start, but still a tech layer to say that, look, if you have your own fleet or you're working with multiple carriers.
00:27:37
Speaker
How can you still have this one unified layer or platform that can help you work across your own fleet, if it's own fleet, the route optimization, route planning, if it's CPL, how to intelligently talk about machine learning and they're going to help select the best carriers, the best decision, etc, etc.
00:27:53
Speaker
So that's kind of how then we graduated to saying that, look, let's go to a separate set of customers to be realized. USR is a good industry. We realized white goods is a good industry. Furniture is a good industry. Furniture transport again happens to one fleet. We realize pharmacies is a good industry. We realize that groceries is a good industry. Fish and meat is a good industry. All these different adjacent, and that then really increased our time.
00:28:16
Speaker
So, by groceries, are you talking of say like a Unilever, in the same Unilever? No, not at all. Not at all. Like a quick commerce. Yeah. Or supermarkets. So, three of India's largest supermarkets are on our platform, doing deliveries from store to store. Right. India. Like a big bazaar. Exactly. Right. More retail, Spencer, Starquick, Dr. Starquick, all of these.
00:28:39
Speaker
quick commerce companies. So India is like this 10 minute delivery company there on our platform. So we did, we partnered with a lot of companies and for today, more than 3 million. So Zepto was launched on the back of this line. Like they were able to just plug in. So that's the whole thing. So for example, speed to market. So see, if you look at the value proposition, see for the established companies, it's about saying that, look, we need a technology partner. Obviously any company in the world will have goods moving. Technology is not their core internal forte.
00:29:08
Speaker
So they need a plug-and-play tool to manage it. So today, nobody goes and builds their own CRM, right? You just buy it off the market. Yeah, you go like a Freshworks or a Zovo or a Salesforce or a HubSpot. You just buy something from the market. So why should your entire logistics supply, why should I have to build internally for that? So everyone needs some system. So that is the hygiene part of it. You need some system to do it. We are one of them. And then there are not too many, there's no global leaders that we're competing against, so to say. For the new age companies that had the capability of building their own tech.
00:29:37
Speaker
Logistics and transportation and delivery just happened to be something where time to market was very important. It was something that was standardized. So people differentiate based on the speed of picking in the warehouse.
00:29:53
Speaker
Logistics isn't as much a differentiator. It's core, but it cannot be a massive differentiator. And second is you just want to be fast to market. Even if you can build it, it'll take you six, eight months, nine months to build something strong. And meanwhile, this SAS is constantly progressing. There are new upgrades coming in every single month.
00:30:11
Speaker
So how do you compete with that with learnings globally? So that's how for both the established enterprises and the new. Look, we actually didn't sell to new-age startups for the longest time. We thought that obviously they'll have their own tech.
00:30:23
Speaker
It can be realized that there is this concept of speed to markets, that anyone can build it if they want to, but why would you? Once you've raised funds and the clock is ticking, you need to show numbers. You said you are now integration with third party logistics.
00:30:44
Speaker
Yeah. What does that mean? Do you, are you doing API integration with ERPs of the third party logistics? So that there is two ways. That's exactly what we do. Absolutely. If you're a retailer or if you're a distributor or a.
00:31:02
Speaker
You're going to be working with a mix of part of it being your own fleet and part of it being third party logistics companies. You need an engine that can help you orchestrate across all of this. Think about it in terms of a completely automated engine that automates all of your decisions. Now, literally what you do is you say that, look, if my shipment, if as a retailer, I can make rules, I can say that if it is of type prepaid, I want the cheapest delivery.
00:31:30
Speaker
Because, fine, it's anyways pre-paid. If it's COD, I want the fastest delivery because I want to ensure that I get my cash. And all the complexity is handled by Shipsea. We say we scan through all of your contracted carriers. We say they look for this origin destination pair, for this weight of the shipment, for this price, for this COD amount, for this, that, blah, blah, blah. Millions and millions of decision points.
00:31:56
Speaker
Right? All compressed into an answer within 500 milliseconds or which is the best carrier. Right? Generating the variable number or the shipping label number of that carrier. Generating the actual label that actually are fixed on the package. Integrating and providing complete tracking related information. Completely automating communication to the end customers in the branding of the retailer.
00:32:23
Speaker
and hence reducing returns. That's the holy grail at the end of it. How can you reduce returns and hence reduce costs? So that's kind of the end-to-end journey, so to say. And this is now picking up in a big way for us because nobody wants to have their own fleet. Let's be clear about that. Amazon built up their own internal logistics because at the time, logistics companies were not good enough to meet the customer expectations. But now with technology companies like us coming and helping logistics companies improve,
00:32:53
Speaker
The world has changed.
00:32:58
Speaker
How many logistics companies have you integrated with? So I'm assuming that the moment the system gives a decision that use this vendor, you would also automate the communication to that vendor that this is the... Yeah, we are integrating with them. So look, we use the contract of the retailer and the logistics company. We don't come in between that. So the rates are agreed directly between the retailer and the logistics company, which is the AI based decision making engine. The retailer configures the rules on our platforms.
00:33:25
Speaker
So it's a completely self-serve SaaS platform in that sense. We've integrated with 90 plus logistics companies, actually a hundred plus now around the world. And yeah, I mean, we've also integrated with a lot of other types of carriers, but yeah, so that's where it is. Okay. So let's take the example of say, Zipto, which could use its own fleet, or it could use the ShadowFacts, which also has last mile. So you would be able to dynamically take those distances with your own fleet.
00:34:00
Speaker
We would automatically send that, generate the number fetch or the tracking updates automatically centralize that. See, because again, if I need to integrate 10 different companies as a retailer, that's going to take up my bandwidth.
00:34:12
Speaker
And why do I do that? When there is a single API solution that does this entire two-way communication, why invest? Why not focus? Because anyway, engineering bandwidth is very limited. And it's a big Mara Mari for good engineers. People want to focus. It all comes down to that, that you focus on your core and whatever it says, you are adopted. So that's what it is in the orchestration engine. It's capable of real-time checking the serviceability, availability, cost, performance, turnaround time, all of these different things.
00:34:41
Speaker
like tracking where the order is, estimated library, everything, all of that through API, you are able to give that data back, okay.
00:34:50
Speaker
Do you monetize this separately? No, because you're not contracting with shadow facts, for example, Zepto. And we'll never do that. See, one thing we're very clear about action is that we will always be a neutral tech platform. We will never compromise on our neutrality. See, the moment we start favoring certain logistics companies, we lose our neutrality.
00:35:12
Speaker
So we will all, or the moment we, if we decide to have our own drivers, we will become competitors to our partners. So we will never do that. So we're very clear. We will always remain a neutral technology platform, facilitating the collaboration between all the ecosystem entities that are there.
Transitioning to a Comprehensive Platform Model
00:35:30
Speaker
But there could be a play of telling a company that you don't even have to bother contracting with shadow facts and with XYZ. We have preferential rates from all of these vendors and you are signed up with it. I think this is what ship profit does. Exactly. And then you would have read about the issues that are coming where logistics companies raise the prices overnight. Because again, see the point is.
00:35:57
Speaker
Information asymmetry goes only so far. Now think of the airline industry. It's all democratized. You can't get different prices on, let's say, Indigo's website and a Make My Trip. You should get the same price. So those days are gone, like where that kind of information asymmetry is there because the read itself is commoditized. You cannot play on information asymmetry. And the thing that you're talking about, the headache of managing, that has to be tech.
00:36:24
Speaker
There has to be an AI mayor that does all of that stuff. And he should not have a team of people looking at calls and managing, what do you have to manage? See if the technology is self-learning. And if a supply chain is self-improving, you don't really need an army of people to substitute for that. So that's just sure putting the problem in our view that, okay, fine. The core might be bad, but we'll have a great support layer. What do you do? You can't help it.
00:36:54
Speaker
You're basically shifting the blame from here to there. And according to us, that doesn't really add value. And see, the most important part is we will always be neutral and we will never do anything that compromises our neutrality. So that's the important part. So most of these, you have two customer segments. One is a pure logistics business here, DTDC.
00:37:16
Speaker
And second is companies which are selling products where logistics is part of the offering. So first, large industry for us is logistics, third party logistics. The second is retail, where retailers work. And so retail has many sub-segments. There's apparel, there's white goods, there's furniture, there's electronics, there is fashion and lifestyle furniture, all of these things. And then there's the hyper-local retail, which is grocery, supermarkets, QSR, food, fish and meat, pharmacies, all of these things.
00:37:44
Speaker
is the kind of manufacturing. So, look, what we realized working with retailers was that they don't just have domestic distribution. Almost all retailers globally have imports also. They import goods from around the world and distribute it. And look, we also built up the thesis that we want to be a platform, not just a tool. Because if you're a tool, we can be easily replaced. Salesforce is a platform. SAP is a platform. People can build services on top of it.
00:38:13
Speaker
Right? So we want to be a platform. We don't want to be a tool that's easily replaceable. And that's kind of where we said that we need to add more things to capture the entire wallet of the customer. And for the retailer, we said, why not have the entire import automation also in place?
00:38:29
Speaker
What does that involve? If you order a washing machine, for example, or if you get some furniture from somewhere, that's most likely getting imported from different parts of the world. So now how does that entire thing work? So essentially, let's say if I'm importing from let's say country, let's say China, for example, I'm looking at the China to India. First thing I would need is the freight. So essentially when you're talking about container and ocean,
00:38:55
Speaker
the rates are dynamic. It's not you contract for a year and the rates remain the same. You need to procure the freight and that's kind of where to procure the freight means by space ownership to
00:39:07
Speaker
the container. So basically it's for containerized, you need to procure the freight for the container. So your space on the ship is a container basically. So that's the unit entity in that sense. And you either do it by working with freight forwarders. So again, so now there are more entities. There's a freight forwarder that comes in or there's a shipping line.
00:39:27
Speaker
There's a freight forwarders could be DB shankers, DSVs, Kuna Nuggles, expediters, all these large global freight forwarders. And your shipping lines directly could be like a MERS, or a CMACGM, or a Hapagloid, or Evergreen, or some of these. And so as a first part, we just freight procurement. So we have a bidding system through which you can send out inquiries, RFQs, get all the rates on the platform. The system automatically tells you L1, L2, L3, you make the best decision and you finalize the rate.
00:39:57
Speaker
So this would happen, like you would trigger an email to all of these and ask them to bid and they would get a link where they can submit something. Yeah. And it's absolutely what it is. And once they're on the platform, then they start getting notifications. And then we also have a mobile app, like an iOS and Android mobile app where you get the notifications. And so then we started making it easier and easier for these freight forwarders really respond faster. They could digitize all of their rates.
00:40:24
Speaker
They could digitize the rates, they could just give one-click responses, tiering of prices across customers, et cetera, et cetera. So again, this is our own collaboration piece. The platform keeps extended. There's the first bit, which is a freight procurement. The second is really once you procured the freight, you need to do all the documentation. So we have the shipment execution module, which means your entire one of the documents and movement of the container until it reaches the origin port.
00:40:49
Speaker
The entire thing can be managed on a single platform, collaborating with all your internal teams and collaborating with the freight forwarders. So things that would otherwise take about 800 or 900 emails, sorry, 80 to 90 emails per shipment and thousands of emails across all of your different shipments on a daily basis. All of that gets allocated on a single platform where everyone has visibility that, okay, what is spending on me? By when do I need to do it? And there's a digital document vault.
00:41:18
Speaker
that actually has all of the information. So brings in a lot of efficiency. Again, the whole vision towards becoming the Bloomberg kind of equivalent. So there's a second piece, which is this whole documentation execution part. The third is track and trace. Okay. So now that you've done the documentation, I want to track the shipment as it's coming in to India.
00:41:37
Speaker
So then we built out integrations with 60 plus shipping lines. So now we're integrated with 60 plus shipping lines. We're integrated directly with the vessels. So a lot of times shipping lines don't update information correctly. So we need to actually get and then vessels are mandated to relay their live location to the satellite and that's public information.
00:41:57
Speaker
So you would have seen during this crisis in the Suez Canal, all those images of ships, crowding and vessel, it is diagonally stuck over there. So yeah, but yeah, so we do all of that automatically. It's all auto integrated into the platform. And she has a third piece, which is a track entry. So then, then kind of completes the journey.
Enhancing Import/Export Capabilities with Major Clients
00:42:16
Speaker
The last is the invoice reconciliation that doing all of this, you'll get eight or nine invoices per shipment.
00:42:21
Speaker
Do you feel a way to automatically reconcile it? I procured this freight. Did I actually get billed as per that? You'd be surprised how many gaps are there in invoicing.
00:42:31
Speaker
Amazing. Why do you get eight, nine invoices? Because there are different stakeholders, each stakeholder. There are different stakeholders and each stakeholder provides a different invoice. There is a container inspection invoice, there's a cleaning invoice, there's a customs invoice, there is a freight invoice, there is a this invoice, that invoice, and there are all different types of stakeholders that give their own invoices. Okay. And you're building this with some anchor customers, as you did with the logistics SaaS.
00:42:58
Speaker
So, yes, actually we did. And so India's largest exporter, so for dendipetrochemicals, which actually amounts to about 3% of India's trade, ison managed through the ship sheet platform today. And then some of India's largest steel manufacturing companies. So you're doing both export and export as well? As both. Yeah.
00:43:16
Speaker
Yeah. So now basically, so our platform at this stage, it's around the domestic distribution and the cross-border logistics. So you can think of us as either a container on a ship or a box on a truck. That's what it is. Amazing. Okay. So what is your go-to market? You have a lot of marquee names as your covers. How did you acquire them?
00:43:38
Speaker
See, we are an enterprise software company and then we focus on larger accounts. So ours is a very focused targeted GTM. So it all starts with marketing where we have a clear database and universe of customers that we need to go. We know logistics, these are the categories, subcategories, retail, these are the categories, subcategories, manufacturing, these are the categories, subcategories.
00:44:03
Speaker
And then you draw out your time and the typical size of the different customers, et cetera, et cetera. Then there's a lot of work around content to generate inbound leads for the rest of the world, because you obviously can't map out the whole world. But you'll obviously miss a few. You'll miss lots actually. So you need to get your inbound strategy and then you can need to get your outbound strategy on you. Yeah. Publish a lot of content around logistics, workflows, automation, digitization. Yeah.
00:44:28
Speaker
So you start ranking when someone is searching? So both organic and great. And even till the 8th, north of 60% of our revenue comes through inbound. People going on our website and requesting for demos. Right. So that's why in Chum, the second big chunk is a very targeted outbound. So we do top of the funnel, middle of the funnel, bottom of the funnel, top of the funnel stuff like webinars, email campaigns.
00:44:51
Speaker
all of those things and then middle of the funnel, which is more when I'm not cheering these leads, sending them case studies, all of a sudden bottom of the funnel, we have kind of inside sales that does the calling and that does all the warm or hot leads. And then it comes to meeting. And then we have the sales team that takes it up from the initial meeting to then getting the demo, the proposal, and then sending the contract.
00:45:14
Speaker
And you did since, like you told me. So we now have a head of PIA for the long, yeah, I still love you guys. Wow. Amazing. So what's your vision for the next couple of years? Do you see yourself getting to a unicorn status or, you know, what, I would know, understand that. Yeah.
00:45:33
Speaker
Yeah, absolutely.
Promoting Sustainability in Logistics
00:45:35
Speaker
We measure ourselves in terms of the success we bring for our customers and the success we bring overall to the ecosystem. And the more we can drive that, the better we rank ourselves and not more so in terms of funding things like that. And honestly, over the last few years, things have really changed. Last mile has seen a massive push, but at the same time, there's a lot of
00:45:55
Speaker
are concerns around global warming and how logistics, transportation is a big contributor to carbon footprint and greenhouse gases. And we do consider ourselves that once you've done the kind of digitization automation, we now need to drive a lot of key outcomes on a global scale as well. And that's because sustainability is actually playing a central role in our strategy. How can we reduce the total miles traveled for a package?
00:46:23
Speaker
And how can we make those miles traveled greener? So for example, things like route optimization, route planning, it reduces the miles traveled. Efficient communication with end customers, making sure that the shipment gets delivered in the first attempt itself. You're going to make multiple attempts. That reduces the miles traveled. And for example, choosing say bicycles for less than one kilometer. That makes these miles traveled greener or prioritizing electric vehicles.
00:46:50
Speaker
in the automation or optimization engine. These make the miles greener or choosing shipping lines that have more sustainable emissions when it comes to fuel that they're using. So these are some of the other decision making points that kind of come in to the engine that really drives key global outcomes around sustainability and overall efficiency enhancements for enterprises.
00:47:15
Speaker
And that brings us to the end of this amazing conversation. At this point of time, I'd like to make a request. I want to know what you think about the show and how we can improve it. Do you have suggestions? Do you want to discuss your startup ideas? Is there any way in which we can add more value to you as a disster? I love reading your emails and suggestions. Please write to me at ad at the podium.in that's ad at the t h e podium p o d i u m dot in.