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006 - Graham Parker, Co-Founder and CEO at Kontainers
111 Plays6 years ago
PROFILES
SUPPLY CHAIN CONVERSATIONS
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EPISODE 6 GRAHAM PARKER, CO-FOUNDER & CEO AT AWARD-WINNING OCEAN SOFTWARE PLATFORM KONTAINERS
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Welcome to Episode 6 of Profiles, a podcast centered around supply chain conversations hosted by Brian Glick, founder and CEO of Chain.io.
Our guest this week is Graham Parker, Co-Founder and CEO at award winning Ocean Software platform Kontainers.
Listen in as Brian and Graham discuss:
- The differences between supply chain logistics systems in the US and the UK
- How a lot of people who get into the supply chain industry begin with dreams of global trade and currencies and maybe they picture something from a movie, but when they actually start the first day and see the pile of paperwork some of them don’t make it to lunch time. So — what was it about the logistics industry that made Graham stay?
- Who influenced Graham in his career
- What inspired Graham to create something new in the world of supply chain logistics
- Everything takes longer than you think (what Graham knows now that he wish he’d known when he started in supply chain logistics)
- The importance of setting appropriate expectations up front
- Whether venture capital investors are patient enough to support logistics projects that don’t yield return for several years
- Learning moments and challenges over the last 5 years
- Managing expectations allowed them to not grow too fast so that now they are in charge of the destiny of their business
- It’s easy to over-raise capital too early
- The importance of having senior management that understands the tech space as well as the freight space
- Whether or not a few mega-companies could corner the market in the freight industry like Amazon has done, or if there is room for several companies in the space
- The trajectory the freight and logistics industry should be taking in order to survive in the future
Learn More About Graham Parker and Kontainers:
Subscribe to the podcast in iTunes or wherever you get your podcasts so that you’re updated when we post a new episode!
Take care, and until next time,
Brian Glick, CEO
chain.io
Recommended
Transcript
The Evolution of SaaS in Freight
00:00:02
Speaker
You started to see a lot of your customers adopting tools like Salesforce and moving to banking online. And they were transforming how their business was operating. And I just thought there had to be a way for Freight to be done the same way in a modern SaaS way.
Introducing Profiles by Chain.io Podcast
00:00:22
Speaker
Welcome to Profiles by Chain.io. I'm Brian Glick, Chain.io's founder and CEO.
00:00:28
Speaker
Over the coming weeks and years, we'll feature the partners and customers who make up the Chanayon network. We'll focus on learning about the individuals within these companies and how they've helped build the organizations that drive our network. Together, we'll learn what drew them to the industry, why they made it such a big part of their lives, and where they see us all going in the future.
Interview with Graham Parker, CEO of Kontainers
00:00:51
Speaker
Welcome to Profiles by Chain.io. I'm Brian Glitt, Chain.io's CEO and founder. On this episode, we're going to be talking to Graham Parker. Graham is the CEO at Containers, a UK-based software company that develops digitization portals to help freight forwarders compete in the modern digital freight environment. You can find containers
00:01:15
Speaker
containers.com and that's containers with a K. K-O-N-T-A-I-N-E-R-S.com. This is a great episode. Graham is definitely an industry personality and a long time insider having worked both on the operations and technology side.
Graham Parker's Journey in Logistics
00:01:32
Speaker
We really enjoyed recording this episode and I hope you enjoy listening. So welcome Graham and thank you for joining us. Happy to have you today.
00:01:43
Speaker
Thanks, Brian. It's great to be here and thank you for having me on the podcast. Sure. So always like to start sort of with the background. So can you tell us a little bit about how you got into the supply chain and logistics space? Yeah, sure. So after school, I grew up in Ireland.
00:02:02
Speaker
And I went to do business in college and to my parents' dismay and horror, I dropped out halfway through. And I was just always fascinated by the supply chain and logistics. I mean, at that stage, at the end of the last century, wow, I feel old.
00:02:23
Speaker
I'm talking like late 90s here and you know it was it was just fascinating you know connecting up the world global currencies global commodities all of it together it just seemed like a like a fascinating world and after I did that a friend of my family
00:02:41
Speaker
had a really large shipping group and I was super interested in getting in there. So I started just as a documentation clerk in a shipping company, just moving freight around. And back in those days, it was incredible to come in in the morning and sitting in Europe and starting your day, swapping emails with somebody in Asia and finishing your day.
00:03:08
Speaker
with having a telephone conversation with somebody in the US, it really gave a global feel. So that's how I got into it.
European Perspective on Global Trade
00:03:18
Speaker
Do you think that working out of Europe that there is sort of a different perspective on how this all comes together than
00:03:26
Speaker
that may be the people you've worked with here in the States? I think to a certain extent, yes. You know, I think growing up when, you know, in my teenage years, you know, thinking about the pre-college courses, it was all about kind of thinking about different parts of the world.
00:03:45
Speaker
you know, I think in Europe you've got such a diverse collection of countries, you know, in the landmass, approximately the size of the US, you've got literally dozens of countries and languages and cultures and I think it does make you more curious, you know, and thinking about trade and obviously trade is
00:04:07
Speaker
relatively easy would in Europe because you can just cross borders very easily. And certainly in my case, it did make me very interested in how the world is connected and how supply chains play a pivotal role in all
Problem-Solving in Freight
00:04:22
Speaker
of that. So a lot of people, when they aspire to enter this industry, they have sort of that very
00:04:30
Speaker
passionate view of global trade and currencies and maybe they picture something from a movie and then they get into it and they see the pile of paper that's on their desk the first day and some of them don't make it to lunchtime. What was it about it that made you actually stay and decide to make a career out of this?
00:04:47
Speaker
I think right from the outset, I remember my first day, the only file that was on my desk was this giant file that literally had a couple hundred pages. And I always remember it was an LCL shipment that was stuck in a depot in Miami and left Europe three months before that. And somebody gave me the job of getting on the phone and trying to fix it. And I didn't have a clue about anything. And I jumped on the phone and I got hold of this.
00:05:17
Speaker
really nice guy in Miami and he was you know very keen to get it sorted out and by the end of my first day I said okay I can put that file away it's delivering tomorrow. They all looked at me so I think I think you get this kind of problem solving part of your brain
00:05:33
Speaker
and in freight really you know becomes a pivotal part of what you do every day and you know it all comes back to solving problems and right from that first day solving that problem every day there's new problems and you look at things differently and yeah I totally agree it's not as glamorous as I thought it would be when I dropped out of college for it but
00:05:56
Speaker
you know, there is something incredible to think about, you know, as somebody that's involved in world trade, talking to people in multiple time zones and thinking about the problems that we face as, you know, as not just a country, but kind of as a globe, I guess, or as the entire world.
Inspirations: Buffett, Munger, Benioff
00:06:16
Speaker
So who is maybe a big influence for you in your career?
00:06:22
Speaker
And, you know, I think in even though I dropped out of business school, I was always instill a really, really passionate Berkshire Hathaway fan. And, you know, I was always in business school, some of the only books that I would read would be
00:06:47
Speaker
about Berkshire and just how amazing a company they were and particularly were on Buffett's but also Charlie Munger. They were just incredible to read their story and how grounded they were and how simple they made the look things.
00:07:03
Speaker
And I think, you know, as time has gone on and founding containers, containers is actually five years old today, by the way. So half a decade. Happy birthday. Thank you. Feels like about two decades already. I think during this this journey, I think the person that stands out is Mark Benioff.
00:07:25
Speaker
You know, if you look at Salesforce, you know, they pretty much invented cloud computing, as you know, and modern SaaS. But, you know, outside of that and to see the crazy growth, you know, fifteen, sixteen billion dollars worth of revenue this year.
00:07:40
Speaker
He's just such an incredible and inspirational leader. We've recently become a Salesforce partner and the ecosystem that he's built is incredible, but just a group of people. He's remained, again, so grounded and so passionate about the world and people around him. It's just great to see people that can be so successful stay grounded and really genuinely care about the world, be it homelessness in San Francisco,
00:08:05
Speaker
or upskilling people through the Trailblazer programs and things, he's truly inspirational.
Founding Kontainers and Digital Tools Adoption
00:08:15
Speaker
So take me back five years then, since it's your company birthday, which I can speak from experience, becomes your personal birthday after a while. What was in your mind five years ago when you said,
00:08:31
Speaker
I'm gonna create something new in the world. What motivated that to make that jump?
00:08:39
Speaker
So after I got into the freight world, I think it was like 1920. By the time I was 22, I was crazy enough to think I could start my own freight forwarding business. And my target was through a million dollars in sales in the first year and I managed to do it. And then every year for five or six years, I doubled it in revenue. So I went from a million to two, to four to eight and up to 16.
00:09:05
Speaker
And it was an incredible journey as somebody in their 20s doing that, traveling the world, building a business. And eventually towards the kind of, you know, sixth or seventh year, you started to see a lot of your customers adopting tools like Salesforce and moving to banking online and starting to use Dropbox or, you know, Office 365 or Google Apps. And they were transforming how their business was operating.
00:09:34
Speaker
And I just thought there had to be a way for freight to be done the same way in a modern SaaS way. So I was lucky enough to have a good friend who's my co-founder, Charles Nee, and he's a Cambridge educated computer scientist. He's a
00:09:52
Speaker
a hundred times smarter than me. And I thought, you know, if we could have this kind of, you know, marriage, if you will, of freight experience and technology experience, it would give us every chance to build something of value in the freight technology space, which, you know, back in 2014 was still very young, but it was clearly going to become something. And so we, you know, we took it took us two and a half years or so to get our first commercial product to market.
00:10:21
Speaker
But we just felt that we could add some value in the ecosystem. What do you wish you knew back then that you know now that you've learned either in those five years you're going back 10 to starting the first company?
Patience and Realistic Expectations in Product Development
00:10:34
Speaker
You know, I think about it every day in terms of, you know, everything always takes longer. You know, when you're writing documents and you're saying, you know, we can do this in X time and this in Y time. I think literally every time in my career now,
00:10:53
Speaker
everything takes longer. That's something that really resonates with me. And especially when products that containers have in the market today are brand new, they're almost reimagining the genre of software. So it's super difficult. So everything does take longer.
00:11:10
Speaker
And I think when you're an entrepreneur, you're just naturally not patient. So it's, you know, it's almost not within your DNA to kind of say, oh, it's OK, you know, it's going to happen in six quarters or eight quarters. You want it to happen tomorrow. And so trying to trying to kind of, you know, understand that everything does take longer. I think that's always the one that.
00:11:32
Speaker
that resonates. Have you found any tricks for sort of balancing that and not having your head explode? And I'm asking mainly for my personal selfish reasons, because I definitely live the same experience. So how do you kind of get your head through that?
00:11:48
Speaker
Yeah, you know, I think I think to be honest, Brian, I think it's it's it's it's about expectations as well. And I think like setting expectations both internally and externally and very early and
00:12:04
Speaker
make a lot of sense. I think Warren Buffett has a great story about ballets and rock concerts. You can put on one or both, but don't crisscross. Setting expectations very high and then not hitting them is obviously a big challenge in the freight technology industry.
00:12:27
Speaker
sometimes entrepreneurs even come from successful ones come from other industries and they look to replicate what they've done in other industries and it's just not that straightforward because it's you know a lot of what we do every day is still being kind of invented almost. So for us I think it's about kind of like trying to set your goals as high as you want to but kind of understand that actually a lot of this stuff really does genuinely take time
00:12:57
Speaker
especially things like this, so trying to set your expectations if you want to grow, but it's going to take a couple of years. I think being upfront and honest about that, just by default, we're in an industry where everything is going to take that bit
Investment Influx in Freight Technology
00:13:18
Speaker
longer. And if you look at some of the successful freight technology companies, I think they've done that very well.
00:13:22
Speaker
They talk about horizons of years and sometimes even decades. Jeff Bezos in Amazon has done it very well. In the early days of Amazon, he said, we're not going to make a profit for X amount of years. We're going to reinvest heavily. He set the expectations right from the outset. And I think it's easier said than done, but it certainly makes it easier in the long term to do something like that.
00:13:46
Speaker
So, there's orders of magnitude more money floating around now than when either you or I started our first companies 10 or 12 years ago, and orders of magnitude more companies floating around as well, I think, in the freight tech space. Do you think that the investment community especially has the patience for that? Not specific to containers, but just as a general thing, or do you think we're going to see sort of a culling at some point of some of these companies that they can't return quickly?
00:14:17
Speaker
Yeah, I think the freight tech industry, as we know, is super interesting on the finance landscape right now. I saw some charts where the pace of investment is now faster than FinTech.
00:14:33
Speaker
Obviously, FinTech is now more mature. But I think there's so much money piling into different rounds. Obviously, Flexport's billion dollar round last year got everybody's attention. Just today, I saw Yung Kwan at a Chinese company raising $70 million in a round that included Sequoia. It's incredible the amount of capital that's flowing through freight technology right now. And I think there are investors that have an understanding
00:15:02
Speaker
of the horizon for returns. And again, you know, in terms of setting expectations, I do think that it's going to take some time. And but I do think, you know, some of the smaller venture capital firms who have a maybe a five year lifetime value on their investments might come under a lot of pressure. And and, you know, these building these companies in these.
00:15:26
Speaker
Brand new sectors do take time. It does take time. And I would say at least a decade. And so I do think that you will see a natural calling. And I think on one side, you've literally got a new freight technology startup coming in every day. And you look at us, but I think the freight technology ecosystem is so new.
00:15:46
Speaker
If you fast forward three years, some of the billion-dollar companies might not even have started, yes. But I do think maybe some of the early ones, maybe they've peaked too early or raised too much money, or their venture capital partners' expectations don't match the horizon.
00:16:03
Speaker
of what they're attempting to do. So yeah, I think Brian, you will see a natural calling. I think you will see some companies not there in a couple of years. And I think that's another important point as well to look at. I think in technology, we celebrate raising money way too fast compared to winning big contracts.
00:16:28
Speaker
you know the amount of times I've seen people celebrate you know raising big rounds and and obviously clever people realize that that's actually okay it's great to celebrate it but it's actually only the start of the journey because you know there's a return on that capital to come and and I think you know over raising and
00:16:46
Speaker
is definitely an issue, especially whereas a lot of capital in the market, it's great raising money, but deploying it efficiently is very difficult. And if a market is still quite early, it's practically impossible to do. So I think it's an interesting dynamic within freight technology right now because it was the first time I saw Sequoia's name next to an ocean freight technology company.
Future of Freight Tech and Industry Transformation
00:17:13
Speaker
And I think at the same time,
00:17:19
Speaker
Sorry, Brian, did I lose it here for a second? No, you're okay. Go ahead. Okay. Would I just continue on? Yeah, go ahead. We'll just slice out. I think it's the first time I've seen a freight technology company with Sequoia's name attached. I think a lot of the big name venture capital firms that haven't been in or know
00:17:42
Speaker
are now looking to get in. So I think you'll see a very interesting dynamic in the quarters and years ahead. I think you'll continue to see more companies come into the ecosystem, more and more money be raised, while at the same time, maybe a natural calling of companies that might have come too early or might have over raised that too early a stage. So bringing it back maybe a little bit closer to home for you.
00:18:07
Speaker
What have been some of the challenges over these last five years with containers? What do you think have been some of your big learning moments? Well, definitely in terms of the investment side, we've raised very little external capital, around a million dollars in our five years that we've been around. We were profitable last year, cash go positive as well.
00:18:34
Speaker
It's really great to do that, but on the other hand, people might say it's also a little bit restrictive as well against companies that have masses of capital to deploy. We don't have an army of salespeople, we don't have marketing budgets, but we've signed almost $5 million a country in the last 12 months where
00:19:00
Speaker
we're kind of in control of our own destiny and one of those reasons is I was mentioning earlier you know we think that some people it's too easy to over raise too early and so I think kind of managing expectations and manage at board level has been a big learning curve for me over the last five years and understanding or trying to get to that
00:19:23
Speaker
point where the business has enough capital to grow versus not having too much capital too early where the repayment is not there. So I think that's been one of the
00:19:36
Speaker
biggest learning curves, Brian, that we've seen or I've personally seen in the roller coaster journey over the last five years. I think every young enterprise sales company is the same, right? It literally is like a roller coaster in the early years. I've had a lot of conversations recently, in fact, one this morning with people who
00:19:58
Speaker
They want to start a tech company and they go, oh, I'm going to do something in freight, right? And they don't necessarily have the pedigree that either you or I or a lot of the other sort of founders of our generation have of coming up through operations. Do you think, you know, some of them see that as a strength and some people see that as a weakness.
Success in Freight: Balancing Tech and Industry Knowledge
00:20:19
Speaker
Kind of where do you fall in that spectrum of whether you need to really have that operational experience to build something in this industry?
00:20:27
Speaker
Yeah, you know, I think it's super important, Brian. I mean, going back to the founding of containers, it was really important for me to find a great founder with a technology background. And, you know, Charlie is regarded particularly in Europe as one of the smartest technologists around. He was part of the team that remapped the human genome. So I think that kind of in the
00:20:57
Speaker
early stage companies having an understanding of both freight and tech is invaluable because I've personally seen companies that I've had a lot of freight experience that didn't quite get the technology space and vice versa. I've also seen great technologists come in and not understand the freight space and not be able to kind of make an impact.
00:21:18
Speaker
So I think having an understanding in your business at least somebody senior that understands freight and operations is really important because you know everybody is only one degree away from the supply chain but getting into the nitty-gritty of you know how do I move a container from Leanne Young gang by barge rail or truck to Salt Lake City you know all the intricacies and the different
00:21:40
Speaker
the different vendors that are involved and how it all works and you know there's such a small group of people that have that deep learning i think it's super important to have that if not in your founding team for sure in your management team right so what do you guys have coming up next what's uh what's the next five years look like
Customizable Solutions for Freight Forwarders
00:21:59
Speaker
So I think for us, you know, operating in this customer facing layer, we're looking to get more and more freight forwarders, this own branded customizable digital front end. And, you know, we kind of went a bit backwards. So in 2017, when we launched our flagship product, we went to the top 100 shipping brands, and we've got 25% of the top 20 now using our software.
00:22:23
Speaker
And that was a great learning curve. Our enterprise product alone will do a million bookings next year, making us one of the biggest platforms around. And now we're in the middle of our edge product, which is the medium-sized one.
00:22:37
Speaker
And our goal is to get this capability into the hands of every freight brand on the planet and make it as easy as going to Squarespace, uploading your logo, picking color scheme, and you're a digital forwarder in seconds. And we really want to democratize that and give every freight brand a chance of going digital and winning in the next decade. So I think a lot of the initiatives that we have will be
00:23:03
Speaker
focus towards getting there and then getting deeper into we're testing air freight right now it'll be live by the end of the year and we do trucking as part of devotion already so we'll most likely roll that out as a
00:23:19
Speaker
as the sole product and as part of the freight forwarder offering. But I think for us, yeah, that our goal is to, you know, get this front facing technology into the hands of every freight forwarder. And, you know, before Edge product, it was super expensive, you know, to get this customer facing capability. Right now, we even see
00:23:42
Speaker
top 10 forwarders spending one to two years building this technology costing millions of dollars. And even then it sometimes doesn't even get to market. So, you know, the idea of every freight forward is just being able to go to a website, uploading their logo, picking color scheme, and using technology that's been used by lots of big guys to transact millions of bookings and giving that piece of mind. It means that, you know, it's just truly democratizing it.
00:24:09
Speaker
As a company that's not a disruptor, as an enabler, we're really passionate about that. We believe that freight forwarders are going to win. They've got the customers, the global office network, and the deep industry knowledge. And by augmenting some technology, they're going to win. So we're super passionate about that. And our mission, I think, in the next five years is to see it as a reality that every freight brand gets access to that. And I think we've met a lot of inroads towards that already.
00:24:36
Speaker
So as a partner of yours, I obviously agree with your vision. But do you find that as you move down market, that the companies that aren't necessarily attending every trade show and staying up on the latest, that they can see that vision or that they understand it? Is it permeating yet? Or are you guys still having to do a lot of education with those sort of mid-market companies on why this matters?
00:25:04
Speaker
You know, that's a great point. I have to say, I mean, I think it's still very early. We've had, we actually just did a study recently internally and we've had 423 expressions of interest on our edge product that we launched in quarter four last year.
00:25:21
Speaker
And we looked at the ones that are seriously looking to buy something in the next couple of quarters. And we estimate it to be about 16%, one-sixth of that 423. And that's very close to the technology adoption curve.
00:25:38
Speaker
where the first 15, 16% or so are early adopters and innovators, which means that the early majority, which is 30%, and the late majority, which is 30% or so, are not there yet, which means effectively we're still selling to the early adopters. So I think you're right. I think a lot of the market haven't made decisions yet. I think the ones that are buying from us now are definitely the ones that have successes with
00:26:04
Speaker
maybe a Salesforce CRM or another pizza software where they've just seen a return or they've seen how it positively impacts their business. So yeah, I think it's quite early, which is interesting, but hopefully it's an opportunity in the quarters and years ahead. We all hope that one day we'll just wake up and the early majority 30% will just be ready.
00:26:28
Speaker
That would be nice, wouldn't it? Do you think they have time? One of the theories, going back to the money that's coming into the industry is
00:26:42
Speaker
you know, that that these early movers with a lot of money can sort of corner things like Amazon did. And I don't necessarily subscribe to that theory in given the size of our industry and how nobody really has a truly dominant market share.
Industry Changes and the Rise of Mega-Companies
00:26:57
Speaker
But do you think that that's a that this is a sort of a winner take all game or an early mover game? Or do you think that there's there really is space for that, that sort of the breadth of companies that we have today?
00:27:11
Speaker
I think you will see some kind of mega companies in the next decade that don't exist today in scale. I mean, if you look at the top ocean forwarder in the world, Kunenagel, they have around 5% market share. By the time you get to number 10, it's less than 1%.
00:27:34
Speaker
And there's probably lots of reasons for that, but technology in almost every other industry and vertical has enabled winners to get unseen market share. And it's easy to see.
00:27:49
Speaker
how the early adopter innovating freight forwarding brands and maybe some of the disruptors become companies in the next decade that might have 20% market share. I definitely think that's possible, but I'm not sure if in the global nature of trade and the diverse geographies that are involved.
00:28:09
Speaker
whether you would see one that would have the stranglehold over e-com that you see that Amazon have. But I do think that technology has presented a once-in-a-generation opportunity to revolutionise phrase, to offer brand new ways for existing freight brands to win, future-proof their business, upsell new products, while at the same time realising that.
00:28:33
Speaker
You know, Fred Arbitrage is really dying fast. And I think you will see a shift in dynamic and definitely some, in my view, some mega winners in the next decade and the natural culling of some as well. Well, I think that's an awesome place to sort of head towards the finish line here on this interview.
Embracing Digitalization in Freight Brands
00:28:57
Speaker
Any other final thoughts on maybe where the challenges are that we all should be addressing together or where you think we need to go as an industry? Yeah, I think embracing digitalization is something that I think every free brand has to do. They can do it a million and one different ways. But again, going back to somebody that I admire a lot, Marc Benioff, I saw an interview with him on Mad Monday last week.
00:29:27
Speaker
with Jim Cramer and he talked about a company that's doing 15, $16 billion revenue grew 33% in Europe in the last quarter and 24% overall. And Jim was saying, how is that impossible? And he said, every company is reimagining their journey with their customer digitally. And he compared it to Y2K as an opportunity in technology. So I think every company
00:29:53
Speaker
should be embracing digitalization. Every freight brand should be envisioning it. They can do it a million in one different ways. But I think sitting on the fence is not the answer. And I think somebody like Salesforce that has exposure to every company on the planet, when they're growing like that, I think it shows that this is very much happening. And then within that growth,
00:30:20
Speaker
the innovative freight brands are already starting to think about winning in the next decade. Awesome. Well, I think thank you so much for your time today. It's really, really great to hear about what you guys are working on in containers and really how that fits into the future of the industry. Thank you so much for having me Brian. We're all big fans of the podcast and thank you again for having me on. Thanks.
00:30:44
Speaker
And that's a wrap. Special thanks again to Graham for taking the time to talk with us today. Looking forward to the next episode as well where we will be learning all about physical security that happens at the container yard and where the technology really meets the physical world in verifying drivers, trucks, and all of the other aspects of the physical security process at that gate at your yard. Thank you.