On Fuller Speed Ahead at FreightWaves’ Domestic Supply Chain Summit, Venture 53 founder and General Partner Pat Martin spoke to FreightWaves founder and CEO Craig Fuller, stressing that the supply chain industry is highly fragmented but on the cusp of a revolution.
Here are the top takeaways from their discussion.
The supply chain is the most fragmented industry.
Visibility is a key discussion point in today’s economy and supply chains, but according to Martin, we’re not there yet. He believes we will see robust visibility in the near or possibly distant future, but supply chains are currently disconnected. A few in the tech space offer an excellent thin layer of visibility, but there’s no true visibility at scale.
Supply chain visibility is the modern-day gold rush, and we could be in a new version of the Industrial Revolution, Martin said. Fuller expounded on that idea, explaining that AOL founder Steve Kase calls today’s era the “third wave.”
AOL’s launch was the first wave. Then big data created the second. The industry is in the middle of or on its way to the third wave, where the analog side merges into the digital age. This is visible now with numerous connected devices, but a much more integrated future is coming.
Venture 53 is a behind-the-scenes part of this move to the future, backing various entrepreneurs with funds and the resources and knowledge that new companies may need to connect the dots. Martin believes that is an essential step in creating a connected future.
Go bullish on the final mile and the gig economy.
Martin also believes that the final mile is the most fragmented part of the supply chain, in addition to drayage and truckload, making it the most exciting. Right now, if you ask 10 people who the most significant provider in the final mile is, you will get 10 different answers.
The parcel side will see the greatest disruption. While big parcel companies like FedEx and UPS have extensive networks, they have big fixed-cost networks. The gig economy’s participation in freight delivery will likely significantly impact the last mile.
Machine learning to solve problems is the future.
Venture 53 participates in short-term funds in the seven-year range, while some competitors focus on the 10-year range. The 10-year range is more focused on physical automation, like robotics. But Martin believes that AI and machine learning are the way to go today. There are interesting aspects of the automation side of things, but many aren’t perfected — and likely won’t be in the near future.
However, AI and machine learning leveraged to make humans more efficient can make a difference right now. This needs to be perfected before moving on to automation. It is not the time to attempt to replace the human worker with automation and robotics.
The key issue is solving problems. Martin said a few companies are raising money right now that will make a real difference. Those that tap technology to find niche areas to solve real problems will be the future.
Logistics is still relationship-based.
A salesperson in a technology company today can have a difficult time getting direct contact with the decision-maker. You need more than a great technology that can change the world because the logistics industry is so rooted in relationships. And it’s harder to get to the decision-maker now than ever before. The ability to accelerate and scale comes from the people you know and trust in the business and from word of mouth.
Getting in front of the right people and telling your story is imperative. Explain how your product works and why it’s essential. There is so much extra process now, starting from the bottom to the top, and no one is just going to stumble on to a product.
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