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Burried in Petersons mail is one nugget every B2B start-up needs to take to heart: >> It's clear that our customers want us to be a profitable company they can

by hef19898 3y ago

Burried in Petersons mail is one nugget every B2B start-up needs to take to heart: >> It's clear that our customers want us to be a profitable company they can rely on to solve important problems in their supply chain. An endless stream of VC money allowing you to sell dollars for dimes does not achieve that. Also, I had a feeling that Flexport might run into problems one day, when Softbank invested, Softbank being such a harbinger of problems its only saving grace is setting Saudi money on fire. Also also, Flexport is the most impressive comoany coming out of YC if you ask me. All they have to do, is to aim being the next Schenker, Kühne & Nagel, XPO... instead of being the "global trade disruting tech thing" and they'll be fine.

braza 3y ago
> Also, I had a feeling that Flexport might run into problems one day, when Softbank invested, Softbank being such a harbinger of problems its only saving grace is setting Saudi money on fire. Also also, Flexport is the most impressive comoany coming out of YC if you ask me. All they have to do, is to aim being the next Schenker, Kühne & Nagel, XPO... instead of being the "global trade disruting tech thing" and they'll be fine. One very underestimated aspects of the logistics business is trust. Specifically trust in your carrier/forward-freight/etc company. The least thing that you as a SME and/or a BigCo. wants is to have one of the companies that deliver your physical goods (that implied some manufacturing and other resources in advance) being carrier for some unstable company[1] in terms of cash with financiers (e.g. Venture Capital) that characteristically has the reputation to make it or fail. [1] - Of course airlines and some other companies has those two issues, but differently than most of VC business, in some cases the government and/or the market will come for a bail out.
- Closi 3y ago
  I think this is an interesting point - I work in supply chain and commonly when tendering companies will say things like: "We have been profitable for 20 years straight" Being profitable in SCM is a sales point, being unprofitable is a risk.
  - anonzzzies 3y ago
    > "We have been profitable for 20 years straight" I don't know why this is more of a thing for other fields as well. I like my suppliers to be profitable for decades. All the new and shiny is ... well, new and shiny. Long term, I want stability, not new and shiny.
  - ChainOfFools 3y ago
    I have a close non-business connection to a reasonably large Intermodal carrier that serves the rails and the ports in the northeast US, and featured very prominently on their website page header is the number of years that they have been in continuous operation. Fluffy promises of service or growth or expansion are either completely absent from their corporate Identity material or buried on second and third tier links away from the simple and straightforward proof that they have quite literally delivered, for the past two plus decades.
jacquesm 3y ago
Softbank is the VC worlds' equivalent of the kiss of death.
- hef19898 3y ago
  Which raises the question why they are not involved in the eVtol sector, doesn't it?
  - jacquesm 3y ago
    Maybe give them a hint ;) Also: AH is in Flexport as well, so that's two of those long shot investors.
    - hef19898 3y ago
      I'm out of the eVtol stuff now, so they can talk to Softbank themselves ;-) Just wondering if Softbank not investing in something means the thing has actual potential or it is so far beyond hope even Softbank avoids it. Flexport is intersting, on the one hand they have a solid future in the freight forwarding and 3PL sector. On the other hand they attract investors by selling themselves as tech disruptors. Not sure if that mix doesn't create quite some tension down the road, that go beyond 20%+ layoffs.
      - jacquesm 3y ago
        I definitely think there is a market for their services but the silly money approach won't play well in the logistics world where everybody else is running as lean and mean as they can. It's a world that I've had some business in (but years ago), your typical manager/executive in that world is very much feet-on-the-ground and a shaky promise that you are going to be in business a year or two out would already make some class of customers doubt about about whether this is the right time to bet on you. Ironically, Flexport could do very well as a lean business, but I'm not so sure if it can succeed under competitive pressure if they don't get their house in order quickly.
throw0101c 3y ago
> An endless stream of VC money allowing you to sell dollars for dimes does not achieve that. It depends on who your customers are: if you're consumer-facing then perhaps an acquisition (with or without an IPO first) is just fine as you may be rolled into other product offerings. Also, if consumer-facing, clones may pop up (even open source), so if you go broke then folks can perhaps transition somewhere else.
rchaud 3y ago
> aim being the next Schenker, Kühne & Nagel, XPO... instead of being the "global trade disruting tech thing" But that's the entire game. Being "tech-only" is attractive due to the magical thinking that drives its valuations, particularly in stodgy, capital-intensive industries like logistics and real estate (WeWork). Companies like Schenker have tens of thousands of employees too, some unionized and some not. Startup companies aren't equipped to handle things like organized labour strikes.

braza 3y ago

> Also, I had a feeling that Flexport might run into problems one day, when Softbank invested, Softbank being such a harbinger of problems its only saving grace is setting Saudi money on fire. Also also, Flexport is the most impressive comoany coming out of YC if you ask me. All they have to do, is to aim being the next Schenker, Kühne & Nagel, XPO... instead of being the "global trade disruting tech thing" and they'll be fine. One very underestimated aspects of the logistics business is trust. Specifically trust in your carrier/forward-freight/etc company. The least thing that you as a SME and/or a BigCo. wants is to have one of the companies that deliver your physical goods (that implied some manufacturing and other resources in advance) being carrier for some unstable company[1] in terms of cash with financiers (e.g. Venture Capital) that characteristically has the reputation to make it or fail. [1] - Of course airlines and some other companies has those two issues, but differently than most of VC business, in some cases the government and/or the market will come for a bail out.

Closi 3y ago
I think this is an interesting point - I work in supply chain and commonly when tendering companies will say things like: "We have been profitable for 20 years straight" Being profitable in SCM is a sales point, being unprofitable is a risk.
- anonzzzies 3y ago
  > "We have been profitable for 20 years straight" I don't know why this is more of a thing for other fields as well. I like my suppliers to be profitable for decades. All the new and shiny is ... well, new and shiny. Long term, I want stability, not new and shiny.
- ChainOfFools 3y ago
  I have a close non-business connection to a reasonably large Intermodal carrier that serves the rails and the ports in the northeast US, and featured very prominently on their website page header is the number of years that they have been in continuous operation. Fluffy promises of service or growth or expansion are either completely absent from their corporate Identity material or buried on second and third tier links away from the simple and straightforward proof that they have quite literally delivered, for the past two plus decades.

jacquesm 3y ago

Softbank is the VC worlds' equivalent of the kiss of death.

hef19898 3y ago
Which raises the question why they are not involved in the eVtol sector, doesn't it?
- jacquesm 3y ago
  Maybe give them a hint ;) Also: AH is in Flexport as well, so that's two of those long shot investors.
  - hef19898 3y ago
    I'm out of the eVtol stuff now, so they can talk to Softbank themselves ;-) Just wondering if Softbank not investing in something means the thing has actual potential or it is so far beyond hope even Softbank avoids it. Flexport is intersting, on the one hand they have a solid future in the freight forwarding and 3PL sector. On the other hand they attract investors by selling themselves as tech disruptors. Not sure if that mix doesn't create quite some tension down the road, that go beyond 20%+ layoffs.
    - jacquesm 3y ago
      I definitely think there is a market for their services but the silly money approach won't play well in the logistics world where everybody else is running as lean and mean as they can. It's a world that I've had some business in (but years ago), your typical manager/executive in that world is very much feet-on-the-ground and a shaky promise that you are going to be in business a year or two out would already make some class of customers doubt about about whether this is the right time to bet on you. Ironically, Flexport could do very well as a lean business, but I'm not so sure if it can succeed under competitive pressure if they don't get their house in order quickly.

throw0101c 3y ago

> An endless stream of VC money allowing you to sell dollars for dimes does not achieve that. It depends on who your customers are: if you're consumer-facing then perhaps an acquisition (with or without an IPO first) is just fine as you may be rolled into other product offerings. Also, if consumer-facing, clones may pop up (even open source), so if you go broke then folks can perhaps transition somewhere else.

rchaud 3y ago

> aim being the next Schenker, Kühne & Nagel, XPO... instead of being the "global trade disruting tech thing" But that's the entire game. Being "tech-only" is attractive due to the magical thinking that drives its valuations, particularly in stodgy, capital-intensive industries like logistics and real estate (WeWork). Companies like Schenker have tens of thousands of employees too, some unionized and some not. Startup companies aren't equipped to handle things like organized labour strikes.