Anshu Prasad, the founder of freight tech startup Leaf Logistics, is pushing back against conventional wisdom: Logistics is not “an old school, stodgy industry.”
Prasad, interviewed in a session of the FreightWaves FreightTech Venture Summit entitled “A Founder’s Journey,” talked about the history and the hurdles of getting Leaf Logistics launched to the point where earlier this year it raised more than $20 million in a series A round of funding.
Leaf describes its primary product as “dynamic contracting,” using technology to take capacity that might be already contracted for but in danger of not being utilized and putting it on the open market where it can be scooped up by somebody who needs the service. Its target would be capacity further out on the calendar, rather than a sudden number of trucks looking for work. The goal is to reduce empty miles and create efficiency.
The issues facing the logistics industry are “super hard,” and it’s a “serious industry that gets up every day and tries to work this problem,” Prasad said.
“If you think this is an old school, stodgy industry that just needs to be disrupted, you’re kidding yourself,” Prasad said in an interview with Ryan Schreiber, co-founder and adviser at Kinetic, which describes itself as “focused on Freight Tech companies’…Go-To-Marketing, Content Marketing, and Customer Success.”
Schreiber added his voice to the Prasad argument that the challenges in the supply chain to produce greater efficiency are not because it’s an industry that just can’t figure out the solutions. “There are a lot of smart people in this industry that are capable,” he said. “They are not backwoods hillbillies.”
To get a startup launched in the logistics industry, Prasad said entrepreneurs and investors alike need to “respect the problem being solved for the complexity. There is a lot of thinking that needs to be folded in to do this right.”
Prasad said the choice to go through venture capital funding rather than through what he called “bootstrap funding” came after he addressed two key issues.
One was whether he’d be able to pull in a first group of customers “that I could build the business around,” Prasad said. The question was whether these customers could “see the end vision and how it would align with their business.”
“In the end if you’re not making a sustainable solution to a problem, the customer feels this is all cute but it doesn’t last,” Prasad added.
The second issue was that Prasad did not want to try to build a company alone. “You need to bring people together,” he said.
He described those he turned to for guidance as people “who I knew were smarter about the problem than I was … both people and customers who had superpowers that venture capital talks about that I knew I didn’t have.”
Those discussions, including some with people who chose to become employees at Leaf Logistics, were “winds in my sails and convinced me this is a journey I want to be on,” Prasad said.
Prasad described a process in which, while the specter of money changing hands was always present in any discussion with potential investors, he was looking for more. He said he wanted investors who “really had more or less of a sense of what we were trying to do and what they could do to help before it was time to ask for money.”
If the conversation turned too much to how long it would take to get things done, Prasad said that he was tempted to ask, “Do you already have a stopwatch out, or a yardstick that you measure by?”
Because as Prasad described it, he was “living and breathing this business on a day-to-day basis and I don’t necessarily know where it’s going three years out.”
Schreiber said that anyone who has raised money knows that “you could chase your tail when you go out for advice” and that “every talk with a funding source comes across like you’re trying to get money rather than learn.”
Schreiber said his advice was just to “focus on building the best business you can.”
With the recent series A funding in the bank as the pandemic began, Prasad said they knew that the second quarter was not going to be a time when “you were going to start knocking on doors and sell them stuff. People were busy.”
But with the funding in hand, it allowed the company to “just focus on building,” he said.
The investment capital it has is “bandwidth that gives you the luxury to go build stuff.”
More articles by John Kingston
TIA: Market conditions that created broker transparency rule no longer exist
E2open about to go public through a SPAC gets B rating from S&P Global
E2Open acquired by SPAC logistics software provider will convert to public company