Logistics of the future: What is LogTech

1. LogTech – Thinking of logistics of the future

To put it simply, the term LogTech combines the words Logistics and Technology. But it is more than the mere combination of these two industries suggests.

LogTech stands for an emerging industry sector that strives to improve and disrupt traditional logistics services through the use of technology. The emergence of new technologies such as Artificial Intelligence, Digital Twins and Robotics Process Automation has dramatically expanded the possibilities for logistical innovations that allow for leaner and more transparent processes. Most importantly, these technologies open up new possibilities for profitable ventures driven by out-of-the-box business models or vast cost-saving potential.

While other traditional service industries, such as finance and healthcare, already have well-developed Tech sectors, logistics are somewhat lagging behind. Yet, given the highly manual processes, asset-heavy traditional business models, and fragmented value chains with numerous stakeholders, the potential for disruption through technology is enormous.

Due to the disruptive nature of this emerging sector, LogTech companies can be found primarily in the startup sector. A recent study by McKinsey [1] finds that most successful LogTech startups can be found primarily in two verticals: last mile logistics and the freight forwarding market. This illustrates how difficult it is for outsiders to observe deep-rooted logistical issues. To obtain a sound understanding of the opportunities for digital disruption along the entire supply chain, it is necessary to gain profound insight into processes that take place inside of warehouses and on the road. Therefore, the LogTech sector is prone to cooperation between startups and established logistical players.

LogTech touches upon all logistics verticals: from planning to forwarding, customs, warehousing, fulfillment, distribution and beyond.

LogTech touches upon all logistics verticals: from planning to forwarding, customs, warehousing, fulfillment, distribution and beyond (Source: XPRESS Ventures).

Here, company builders such as XPRESS Ventures come into effect. As the interface between established logistics providers and startups, company builders enable founders to access the critical infrastructure, know-how and networks jointly with the operational support needed to take their idea to the next level [2].

All in all, this is only the start: As new use cases for emerging technologies become feasible, industry verticals along the entire supply chain will become subject to digital disruption. However, to unlock the full potential of LogTech, incumbent-startup partnerships must grow in importance.

2. Logistics technology landscape

The landscape of technologies is broad and intertwined in its development and application. The following provides examples of LogTech enabling us to solve new challenges along the supply chain as well as a brief overview of companies already exploiting their advantage. Sources differ when these technologies will be fully introduced to the market given also the development of infrastructural technologies such as 5G or cloud communication. However, their potential is seen to flourish within the next 1-5 years given the recent exponential developments.

Big Data Analytics

Big data analytics are the first step to overcome data silos across the logistics ecosystem. Hereafter it aims to make this multi-faceted data available for predictive and advanced analytics.
The startupDatumize, for example, uses Big Data Analytics to generate and integrate data in warehouse operations.

Augmented & Virtual Reality

Augmented Reality (AR) and Virtual Reality (VR) make it possible to experiment and work in digital environments to enhance logistic material flows and processes and have all information at the right time in the right place (i.e. Google Glass AR).  
Picavi applies this technology for pick by vision in warehouses.

Digital Twins

The use of Digital Twins describes the creation of accurate digital 3D models of a physical object, i.e. for scenario planning in logistics hubs, creation of virtual delivery networks as well as collection and visualization of product and packaging data of shipments.
Cognition Factory uses the technology for predictive material handling and warehouse automation.

Supply Chain Visibility (SCV)

Supply chain visibility is a solution to track and monitor demand and supply along the supply chain by leveraging data about external conditions (weather, road or traffic) or internal operations (inventory, vehicle capacity, etc.) enabled by IoT sensor technology.
The startupEtheclo uses this technology for cold chain monitoring.

Artificial Intelligence (AI)

Artificial Intelligence is an umbrella term for giving machines and systems the ability to learn and act through data-driven insights.
You can find cases of AI in the following functions: predictive capabilities (demand planning, capacity forecasting), route planning optimization, also software for robotics and autonomous transportation.
Westphalia Datalabs applies AI to, for example, match warehouse utilization and delivery fluctuations, while the startup Smartlane applies it for AI-powered route optimization.

Robotics Process Automation (RPA)

In Robotics Process Automation software robots perform manual-intensive and repetitive tasks for improved cost efficiency, error rate or redundancies.
Use cases for RPA are inventory management, purchase order management, return and refunds.
The startupsShipamax andMagazino use RPA for automatic order processing and intralogistics robotics.

3. Conclusion

Logistics and technology are overcoming what might seem to be a complicated relationship in the past. LogTech will play an increasing role with the evolvement and practical application of technologies along the supply chain verticals. As a consequence of this potential, the term LogTech might sooner or later be as prominent as its “Tech” relatives in other industries.

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Sources:

[1] McKinsey, 2020. Startup funding in logistics.
[2] XPRESS Ventures, 2020. How Company Builders can give Founders an Unfair Advantage.

How entrepreneurship can shape corporate innovation

1. What is corporate innovation?

In its essence, corporate innovation can be described as the development and promotion of innovative business ideas within an established company. Corporate-like entities have shown to be relatively weak in generating groundbreaking ideas due to their complexity in size and processes. Hence, it is of high urgence for established companies to engage in a model of corporate innovation. And the pressure is rising as startups are continuously showing to be more adaptable in the face of technological change and in creating and serving emergent market needs. Companies thus engage in corporate innovation to stay competitive and relevant, while also putting (new) competitors under pressure. Simultaneously, the innovation efforts enhance flexibility as well as agility of the company and question taken-for-granted risk attitudes.

Further, a distinction can be made between corporate innovation and its subfield corporate entrepreneurship. Here, an emphasis is placed upon activities that involve or lead to founding new business units or startups rather than implementing new ideas within the company. Generally, corporate entrepreneurship merges entrepreneurial ability with corporate ability in a systematic approach to re-invent a business and to gain a competitive position in the market. Often, it offers corporations as well as entrepreneurs the possibility to engage in a mutually beneficial relationship to ensure longevity of business on both sides. The concept intends to combine “the best of both worlds” between companies and startups: agility and fast decision-making as lived in startups combined with the financial resources, assets and the strategic direction of a big player. 

In overall, both efforts can be distinguished by their goal: while corporate innovation strives to generate rather incremental innovations, such as product feature and product line innovations, corporate entrepreneurship aims at more radical innovations and business model reinventions.

Corporate entrepreneurship is a subfield of corporte innovation. Together with partnership teams, corporates can engage with startups to innovate.

Depending on the corporate innovation model, partnership teams represent the interface to the startup world (Source: XPRESS Ventures).

While various corporate innovation models exist, the following examples constitute the most prominent models to profit from innovation inside and outside of established corporate structures.

2. Corporate innovation models – An overview

Think Tanks

Think Tanks deal with future-oriented ideas. They often consist of project groups or corporate divisions and are structured like workshops. They are used to identify future opportunities for the company strategy and based upon these, generate new concepts and innovations from within the organisation. Within think tanks, participants are often instructed to imagine the impossible and work on prototyping until market readiness is reached.

Think Tanks do not necessarily have to consist only of internal employees. Often, few external people are asked to join to bring new innovative questions into play. The goal of Think Tanks is to facilitate executive decision-making, for example, by developing future scenarios and analyzing trends for new opportunities. The best example of this corporate innovation model is Google, which many other Think Tanks have based their processes on. Google has generated many creative and successful ideas through its Think Tanks, for example Jigsaw, an independent entity within Google to research and implement technology to defeat societal crises of the future.

Intrapreneurship Programmes

Intrapreneurship describes yet another innovation process from within the company itself. As the name suggests, intrapreneurship programmes enable employees to act like entrepreneurs within the organisation and help develop their ideas and processes to market readiness. The programme offers intrapreneurs  both in-house facilities, e.g. a dedicated workspace, as well as mentoring, such as methods to test and develop ideas with different approaches and by accessing internal assets. By doing so, the company actively leverages its innovation from the inside-out but also creates a dedicated space apart from daily business for it.
The most popular example for a successful intrapreneurship programme is the office supply Post-It from the company 3M, which today no workshop is imaginable without.

Corporate Accelerators

Corporate Accelerators are corporate entrepreneurship activities supporting focusing innovation efforts on ideas and ventures that are outside of the established company. In a corporate accelerator program, a company supports external growth-driven startups in the infancy state through operational knowledge and its network reach. They aim to achieve market fit and market access in a certain period of time. In comparison to other models like Venture Building, the corporate accelerator program is relatively short and usually only lasts a few months. As the name suggests, a company intends to accelerate innovative idea generation – comparable to a sprint – by mentoring the startup in fields such as sales, tech or finance. Through providing a seed investment, the accelerator often gets hold of a minority stake in the companies while the founders stay in control of their ventures.
A perfect accelerator example is the Axel Springer Plug&Play Accelerator as part of the international Plug&Play Tech Center in California.

Corporate Venture Capital

As the name suggests, corporate venture capital depicts companies (outside of the finance sector) holding private equity shares in spin-off projects or startups in their early phase. The company goal is mainly financially-driven, but not restricted to it: it is also aimed at fulfilling strategic goals of the investing company. Mainly, the company’s intention is to gain a competitive advantage by coming into contact with new technologies and/or markets. In this case, it provides the funds relevant to the startup’s growth in exchange for the exploitation of new business opportunities. Here, innovation efforts are fully placed outside of existing structures and the company engages in a moderate level of investment risk by holding equity shares in the innovation project.

In practice, a good example for this model is given by F-Log Ventures, which is a venture capital subsidiary of Fiege Logistics. 

Venture Building

The most complex approach to corporate entrepreneurship surely is Venture Building (also referred to as company building).  This model digs deeper than just providing funding for startups. Venture Builders help with their market knowledge about trends and development approaches. They can offer access to important customer networks, useful market data and support during ideation processes for disruptive new innovations. 

All these network advantages can help to build up and grow new startups faster than a standalone project. Venture Builders act as valuable partners and mentors and hence accompany startups for months to years (unlike in the case of corporate accelerators). For the corporate, venture building is mainly about the new and innovative use of existing expertise and assets in new opportunities within the startup. Additionally, corporates hope to transfer the entrepreneurial spirit of the venture building units into the corporate culture. On the other hand, Venture Building offers founders extensive operational support and a comprehensive network that no venture capital or accelerator can provide.

XPRESS Ventures as a Venture Builder, inter alia, helps logistic startups to gain a foothold in the market by offering access to the extensive logistical network of Fiege and enable more efficient market entry which is a crucial success factor for most startups in this sector.

3. Conclusion

For established companies, corporate innovation is an important part of sustaining competitiveness in the marketplace, regardless of the size and industry. It’s not for nothing that they say: Innovate or Die.
Especially larger companies with bureaucratic structures can learn from startups in making processes leaner and maximize their corporate innovation through entrepreneurial thinking and suitable models.

In the end, there is no one fits all corporate innovation model. Rather, companies should consider their goal of innovation and their current business model when deciding on the most suitable innovation approach. Interestingly, reality shows that most established companies engage in multiple forms of corporate-startup partnerships simultaneously because – due to their differences in processes, degree of external involvement and investments – they serve different innovation goals. 

How entrepreneurship can shape corporate innovation

1. What is corporate innovation?

In its essence, corporate innovation can be described as the development and promotion of innovative business ideas within an established company. Corporate-like entities have shown to be relatively weak in generating groundbreaking ideas due to their complexity in size and processes. Hence, it is of high urgence for established companies to engage in a model of corporate innovation. And the pressure is rising as startups are continuously showing to be more adaptable in the face of technological change and in creating and serving emergent market needs. Companies thus engage in corporate innovation to stay competitive and relevant, while also putting (new) competitors under pressure. Simultaneously, the innovation efforts enhance flexibility as well as agility of the company and question taken-for-granted risk attitudes.

Further, a distinction can be made between corporate innovation and its subfield corporate entrepreneurship. Here, an emphasis is placed upon activities that involve or lead to founding new business units or startups rather than implementing new ideas within the company. Generally, corporate entrepreneurship merges entrepreneurial ability with corporate ability in a systematic approach to re-invent a business and to gain a competitive position in the market. Often, it offers corporations as well as entrepreneurs the possibility to engage in a mutually beneficial relationship to ensure longevity of business on both sides. The concept intends to combine “the best of both worlds” between companies and startups: agility and fast decision-making as lived in startups combined with the financial resources, assets and the strategic direction of a big player.

In overall, both efforts can be distinguished by their goal: while corporate innovation strives to generate rather incremental innovations, such as product feature and product line innovations, corporate entrepreneurship aims at more radical innovations and business model reinventions.

Corporate entrepreneurship is a subfield of corporte innovation. Together with partnership teams, corporates can engage with startups to innovate.
Depending on the corporate innovation model, partnership teams represent the interface to the startup world (Source: XPRESS Ventures).

While various corporate innovation models exist, the following examples constitute the most prominent models to profit from innovation inside and outside of established corporate structures.

2. Corporate innovation models – An overview

Think Tanks

Think Tanks deal with future-oriented ideas. They often consist of project groups or corporate divisions and are structured like workshops. They are used to identify future opportunities for the company strategy and based upon these, generate new concepts and innovations from within the organisation. Within think tanks, participants are often instructed to imagine the impossible and work on prototyping until market readiness is reached.

Think Tanks do not necessarily have to consist only of internal employees. Often, few external people are asked to join to bring new innovative questions into play. The goal of Think Tanks is to facilitate executive decision-making, for example, by developing future scenarios and analyzing trends for new opportunities. The best example of this corporate innovation model is Google, which many other Think Tanks have based their processes on. Google has generated many creative and successful ideas through its Think Tanks, for example Jigsaw, an independent entity within Google to research and implement technology to defeat societal crises of the future.

Intrapreneurship Programmes

Intrapreneurship describes yet another innovation process from within the company itself. As the name suggests, intrapreneurship programmes enable employees to act like entrepreneurs within the organisation and help develop their ideas and processes to market readiness. The programme offers intrapreneurs both in-house facilities, e.g. a dedicated workspace, as well as mentoring, such as methods to test and develop ideas with different approaches and by accessing internal assets. By doing so, the company actively leverages its innovation from the inside-out but also creates a dedicated space apart from daily business for it.
The most popular example for a successful intrapreneurship programme is the office supply Post-It from the company 3M, which today no workshop is imaginable without.

Corporate Accelerators

Corporate Accelerators are corporate entrepreneurship activities supporting focusing innovation efforts on ideas and ventures that are outside of the established company. In a corporate accelerator program, a company supports external growth-driven startups in the infancy state through operational knowledge and its network reach. They aim to achieve market fit and market access in a certain period of time. In comparison to other models like Venture Building, the corporate accelerator program is relatively short and usually only lasts a few months. As the name suggests, a company intends to accelerate innovative idea generation – comparable to a sprint – by mentoring the startup in fields such as sales, tech or finance. Through providing a seed investment, the accelerator often gets hold of a minority stake in the companies while the founders stay in control of their ventures.
A perfect accelerator example is the Axel Springer Plug&Play Accelerator as part of the international Plug&Play Tech Center in California.

Corporate Venture Capital

As the name suggests, corporate venture capital depicts companies (outside of the finance sector) holding private equity shares in spin-off projects or startups in their early phase. The company goal is mainly financially-driven, but not restricted to it: it is also aimed at fulfilling strategic goals of the investing company. Mainly, the company’s intention is to gain a competitive advantage by coming into contact with new technologies and/or markets. In this case, it provides the funds relevant to the startup’s growth in exchange for the exploitation of new business opportunities. Here, innovation efforts are fully placed outside of existing structures and the company engages in a moderate level of investment risk by holding equity shares in the innovation project.

In practice, a good example for this model is given by F-Log Ventures, which is a venture capital subsidiary of Fiege Logistics.

Figcaption goes here

Venture Building

The most complex approach to corporate entrepreneurship surely is Venture Building (also referred to as company building). This model digs deeper than just providing funding for startups. Venture Builders help with their market knowledge about trends and development approaches. They can offer access to important customer networks, useful market data and support during ideation processes for disruptive new innovations.

All these network advantages can help to build up and grow new startups faster than a standalone project. Venture Builders act as valuable partners and mentors and hence accompany startups for months to years (unlike in the case of corporate accelerators). For the corporate, venture building is mainly about the new and innovative use of existing expertise and assets in new opportunities within the startup. Additionally, corporates hope to transfer the entrepreneurial spirit of the venture building units into the corporate culture. On the other hand, Venture Building offers founders extensive operational support and a comprehensive network that no venture capital or accelerator can provide.

XPRESS Ventures as a Venture Builder, inter alia, helps logistic startups to gain a foothold in the market by offering access to the extensive logistical network of Fiege and enable more efficient market entry which is a crucial success factor for most startups in this sector.

3. Conclusion

For established companies, corporate innovation is an important part of sustaining competitiveness in the marketplace, regardless of the size and industry. It’s not for nothing that they say: Innovate or Die.
Especially larger companies with bureaucratic structures can learn from startups in making processes leaner and maximize their corporate innovation through entrepreneurial thinking and suitable models.

In the end, there is no one fits all corporate innovation model. Rather, companies should consider their goal of innovation and their current business model when deciding on the most suitable innovation approach. Interestingly, reality shows that most established companies engage in multiple forms of corporate-startup partnerships simultaneously because – due to their differences in processes, degree of external involvement and investments – they serve different innovation goals.

Last Mile Delivery in the food and convenience sector: Digital transformation in logistics

Impact of digital transformation on consumption and delivery behaviour 

Digitization has and will significantly change consumer behaviour: all-time access to messaging, e-mail, media and the presence of online shops right beneath the touch of our fingers on smartphones generate fast-moving, simple, and efficient experiences for consumers. Products and services must be readily available and at hand with little room to waste time. Exactly this expectation creates an ‘on-demand’ behaviour of consumers – we want it and we want it now. The on-demand economy can be described as the economic momentum created by technology companies and radical technological integration in fulfilling customer demands through the immediate provision of goods and services. This new economy represents exactly the aforementioned evolution in consumer behaviour due to its manifestation of technology and innovation. New business models and technological advances to fulfill the on-demand needs of customers have opened the way to real-time processing of products and services, thereby embracing the new frequency of busy consumer behaviour evermore.

For the logistics industry, this shift in consumer behaviour implies that consumers expect fast, cost-effective and efficient delivery right at their convenience. This focus on convenience, speed and simplicity is especially noticed in e-commerce, where order quantities are significantly lower than before and shipping times substantially shorter. This generates a shift from e-commerce to quick commerce.

Logistics providers, more specifically delivery services, need to adjust to meet changing expectations of consumers by embracing exactly this digital transformation that drove consumer behaviour in the first place. Through last mile delivery right at the doorstep, real-time tracking and transparency of order processing and shipment, the on-demand concept and preceding customer expectations can be effectively fulfilled. Technology companies competing in this arena have revolutionized logistics-dependent industries which have been prone to slow innovation so far. Hyper-growth examples in this on-demand world include the transportation as well as the grocery and food sector. This growth is mainly a result of the digitalisation of logistics services and the integration of technology on top of an existing infrastructure.

As other industries with close links to logistics, such as retail and food, are revolutionized by digital technology, linked delivery services also have to adjust. Delivery will become increasingly important as online ordering accelerates to quick commerceThis can be seen by the rise of quick commerce leading to new digital entrants in the last mile delivery market. The digital transformation in logistics is especially noticeable in the last mile delivery due to its close link to customers and their expectations as well as heavy reliance on logistics to fulfill these.

Last mile delivery technology: An enabler for quick commerce

Due to aforementioned shifts in consumer buying behaviour, quick commerce is the natural evolution of e-commerce. Hereby, speed and convenience constitute major determinants of buying behaviour and are expected to be fulfilled through delivery services. This poses challenges as well as new opportunities for last mile delivery logistics as channels must be intelligently connected and linked to deliver orders as quickly as possible.

Quick commerce brings small quantities of goods to customers almost instantly, whenever and wherever needed. Last mile delivery in this case, is more than just the mere simple pick-up and delivery of goods but rather the complex bundle of customer orders in convergence of different technologies. Digital solutions revolve around inter-connection, collection and linking of data and their intelligent interpretation as well as the design of their applications in last mile delivery services.

To provide examples of these, current trends in last mile delivery technologies include:

Especially the corresponding quick commerce sectors such as food, that are increasingly relying on logistics services, has been relatively weak in innovation and technology integration so far. The Covid-19 momentum has further reinforced consumer expectations in online grocery and food ordering and makes last mile delivery a key expectation. Thus, digital transformation in logistics along last mile delivery grows in huge importance.

Examples of digital transformation of logistics in last mile food and convenience delivery

According to the Capgemini Research Institute Study (2019), 40% of consumers now rank delivery services as a “must-have” feature for food purchases. This underlines the growing customer expectation within the food and convenience segment for last mile delivery services.

The number of consumers who use food delivery weekly is expected to climb to 55% by the end of 2021. Germany and the Netherlands will see particular acceleration in adoption, with 18-19% growth respectively. Thereof, the food sector and respective last mile delivery provides a substantial nourishing ground for transformation of delivery services and businesses to provide these. Specifically, dissatisfaction with current services due to lack of same-day and on-time delivery opened the gap for new business models to enter the market.

So what are successful technology-based last mile delivery businesses addressing digital transformation and changing customer expectations in the food and convenience sector? We have identified three examples prominent in the German market:

Gorillas

Berlin-based hype startup Gorillas, operates across Europe and delivers groceries in less than 10 minutes. CEO Kağan Sümer states that Gorilla is designed around expectations of customers instead of customers designing their needs around supermarkets. Hence, the focus lies on emergency and convenience deliveries rather than bulk purchases. In terms of technology, Gorillas uses a network of centrally-connected fulfillment centers as well as optional purchase and delivery automation next to on-the-go traceability of orders. Gorillas is currently aiming to raise 100 million euros in order to boost their expansion.  New York hedge fund Coatue just invested $44 million in Gorillas – at a pre-money valuation of 160 million.

Flaschenpost

With the delivery service Flaschenpost, customers can order a variety of beverages, groceries (and now also household items) via an on-demand app. The promise made: delivery will be made no later than 120 minutes after ordering. This customer expectation is realized not only by route optimization and data hubs, but also by on-the-go ordering traceability for customers. The Oetker Group has just recently acquired the German drinks delivery startup Flaschenpost for 1 billion euros.

ANGEL Last Mile by FIEGE

ANGEL connects stationary retail and pure e-commerce players with their customers at a more convenient and personalized level. Opposite to other logistics providers, ANGEL is centered around the customer: delivery time and place can be chosen based on individual preferences. This does not only enable higher customer satisfaction and convenience, but also lower CO2 emissions due to unnecessary delivery routes. The infrastructure itself is based upon networks of partners to use existing but unused capacities. An advanced IT platform matching free capacities of local partners with dynamic route optimization, helps in achieving same-day delivery right at the doorstep. Real-time interaction, delivery transparency, personal client-communication and sustainability stand at the heart of ANGEL’s City Logistics Concepts. Founded by FIEGE as a corporate startup, ANGEL Last Mile could tap into specialized logistics knowledge from the very start and was able to fulfill growing on-demand customer expectations.

Conclusion

The on-demand economy is here to stay. And with it the striving opportunities in logistics-based industries such as quick commerce in the food sector. It is more than clear that digitalization and automation are the future of on-demand urban delivery concepts. New consumer expectations have triggered these two aspects across all industries, not only logistics. However, last mile delivery logistics as its main enabler are – not only through the Covid-19 momentum – no exception for this transformation.

Green Logistics: A mere trend or a new business turn?

Why should green logistics come before logistics?

While traditional logistics goals look at cost and efficiency considerations around high inventory levels, readiness to deliver as well as delivery quality, the exponential progress of climate change shifts a new aspect into the picture: sustainability. The vision of environmental protection and current environmental policies is an emission-reduced, and in the long-term, an emission-free future. Aiming at exactly that, the European Green Deal of the EU Commission proposed a concept to evoke ecological protective measurements in face of climate change by becoming emission-free and climate neutral by the end of 2050. The pressure to reduce environmental impact in the logistics industry is growing, as this sector is responsible for roughly 14% of all greenhouse gas emissions – not only for the logistics sector but all logistics activities considered in supply chains. On the one hand, there is a need for established companies to transform their business and supply chains towards an ecologically sustainable paradigm – so-called green logistics. On the other hand, it also creates new business opportunities that can be exploited by new, dynamic startups that sweep in to solve newly arising demands. Especially in times when digitalisation empowers new customer expectations for fast order processing and delivery, new concepts cannot be thought without sustainability.

Why green logistics and digitalisation go hand in hand

Green logistics considers the bundle of sustainable strategies and measures targeted at reducing – or in the long run neutralizing – the environmental impacts caused by activities in logistics. More specifically, it looks at the processes, structures, systems, transportation and storage along the whole supply chain of a company. Its goal is to ensure that the supply chain and accompanying logistics services are efficient but also preserve natural resources. Hence, the aim of green logistics is not simply to reduce the ecological footprint of a company, but rather combine ecological and economic ambitions. 

On a high level, three prominent ecological measures can be observed:

On a high level, three prominent ecological measures can be observed: Reduction of energy consumption and carbon footprint Analysis and reduction of air- , soil- and water pollution Efficiency improvements within business processes and vertical value chain integration

Ecological measures as taken by the logistics sector (Source: XPRESS Ventures).

Digitalisation and the resulting surge in technologies enable green logistics and the aforementioned measures due to interconnection and efficiency enhancement of supply chain steps. Besides hardware-based trends like robotics, it is essentially software-based technology that leverages a substantial change in processes, operations, functions and even entire business models towards sustainability.

Therefore, green supply chains can translate into feasible financial and commercial advantages – especially long-term. Some advantages of the application of new technologies to achieve green logistics include but are not limited to:

Many big players in the logistics industry have placed their bet on new technologies and their integration into activities to foster green logistics and the aforementioned advantages as early as possible. Logistics pioneer DHL, for instance, sets a focus on new hydrogen technologies in road freight to lower emissions as well as data integration and tracking to combine multi-channel transport solutions in the supply chain.

Green logistics: the new green deal for VC & LogTech Startups?

To put simply, digitalisation is making green logistics achievable while maintaining ambitions to grow. But for whom – established logistics pioneers like DHL, FedEx etc. alone?

No, green logistics is more than the mere digital transformation of processes within a business operation. Big players in logistics can count on their financial resources, established infrastructure and existing customer bases to implement ecological measures. New businesses usually cannot count on these resources to transform.

On the flipside, the fragmented LogTech landscape leaves room for new business models and ventures to fill the gap that logistics providers are not able to cover before. The advantage of founders and startups is the agility and speed of innovation, which established players struggle to implement. According to the Green Startup Monitor of 2018, around 39% of logistics startups are named to be green logistics startups. What’s interesting to see is that in 2018 LogTech does not appear among the most prominent technology sectors of where green startups seem to grow – just yet.

By now, the adoption and exploitation of green logistics becomes increasingly interesting among venture building and thereby proposes a high potential startup landscape for the future – also due to the strong interconnection between new technologies. For instance, In February 2020 it was announced that the Silicon Valley corporate accelerator pioneer Plug and Play is investing in green logistics. Recipient was Mixmove, a provider of software solutions for logistics operations, which uses real-time data to consolidate shipments to optimise fill rates and fleet vehicle management. 

The following venture-funded examples of startups have exploited green logistics through new technologies from their early inception. The most prominent technologies used for economic and ecological equilibrium constitute real-time tracking and data interconnectivity, artificial intelligence as well as drone robotics.

Budbee

Budbee is a Swedish logtech startup offering a solely sustainably-focused last-mile delivery service specialized on e-commerce. It combines fossil-free line-hauls, bike cargos as delivery methods with real-time data tracking for flexible delivery to customers. Recently, it announced that it has raised roughly €52 million of new investment. It currently operates in Sweden, Denmark, Finland and the Netherlands.

RigiTech

The Swiss startup RigiTech develops drones with large formats and capacities for efficient cargo delivery. By drone delivery, pollution caused by delivery traffic is to be reduced. With a single battery charge, their products range up to 80km in a round-trip. Moreover, it was built via 3D-printing biodegradable thermoplastic and runs on a battery with zero carbon dioxide.

Tracks

The Berlin-based start-up shares the mission of higher efficiency and strong emission management in road freight transport. Based on real-time data and the use of artificial intelligence, Tracks does not only question the status quo but can deliberately offer recommendations to logistics to track and reduce CO2-emissions in line-haul truck fleets.

Pamyra

Pamyra tackles unnecessary empty runs and resulting air pollution and cost inefficiencies by offering a transparent freight route system and transport mediation for private and business clients. Like a search engine, Pamyra calculates possible time and cost of transportation of goods and leaves an offer to the user.

Smartlane

The German startup Smartlane created a platform for demand-oriented tour- and order management. By connecting various transport management systems and real-time traffic data, it increases efficiency of order management and optimisation of tours.

Conclusion

It is certain that green logistics is one of the main aspects in logistics activities due to two reasons: pressure from regulators, investors, customers and the public pushing for sustainability measures and simultaneously, significant benefits arising from integration of new technology to achieve those sustainability measures in the supply chain. Based upon the Internet of Things, logistics technology such as artificial intelligence, cloud-connected sensors and smart tracking systems make green logistics achievable. One thing is clear, the shift towards green logistics is more than just a mere trend: it poses a competitive advantage for companies that will compete in a future that inevitably has to be sustainable. Due to the strong interconnection of innovative technologies, green logistics especially poses a groundbreaking potential for LogTech startups and new business models over big players yet alone.

What an optimal pitch deck should look like

The pitch deck and its objective

The primary objective of a pitch deck is not to fund the project, but to move the project to the next meeting. Especially startups should work on creating an informative and engaging pitch deck which attracts investors and company builders. Often it is made up of ten slides in a presentation. On each slide, only one aspect is presented and briefly explained.

Pitch decks as an inevitable tool for startups and ventures

The pitch deck should be structured in such a way that it presents an overview of the business idea and includes an overview of the financial and non-financial (i.e. soft skills, market entrance etc.) requirements for the implementation of the project. A pitch deck does not replace a business plan but it contains its key points. It is an opportunity for startups and ventures to present their structure for a concept in a concise form and also for potential financiers to have a business idea explained in a short and enticing way.

How to structure a pitch deck

The structure of a pitch deck follows a stringent scheme, which is as follows:

Key steps for the optimal startup pitch deck

Key steps for the optimal startup pitch deck (Source: XPRESS Ventures).

In order to give a brief explanation of the contents of the pitch deck, the different contents are exemplarily illustrated. In each point we describe the general requirements and, if needed, the requirements we are personally aiming for in a logistic pitch at XPRESS Ventures. The differentiation is important as the request for Venture Capital focuses on funding and its allocation. In contrast company building aims to support the project operationally and in our case also with the valuable infrastructure and network of FIEGE Logistics.

1. The executive summary

In the executive summary, technically oriented logistics projects or startups should present who they are in an understandable and pictorial way. Logos and pictures of the company itself can be used here.

XPRESS Ventures also attaches great importance to the logistic context of your project/venture. Please include a brief overview of key facts about the state of your project/venture, the idea and the request.

2. The problem

The problem should be presented both comprehensively and concisely on a slide. It is important to highlight the relevance and the magnitude of the problem to be solved and to present it convincingly.

As a company builder for the logistics branch, XPRESS Ventures always focusses on improvements in this specific sector. While preparing your pitch deck for us, the problem you want to solve should be related to the logistic sector.

3. The solution/approach

A previous solution approach can be optimally inserted here. A completely elaborated solution strategy is not yet necessary but a current solution status shows initiative and solution-oriented thinking.
Especially startups who present digital solutions for the logistics industry should pay attention not to overwhelm the audience with technical details but to list the essential points in an understandable way.

4. The product/service

To give potential investors and incubators a first impression of the solution, it is a good idea to create a slide with a picture of the prototype (or bring a prototype if possible) and highlight the key functions of the product or service. This makes the idea more tangible.

5. The market

When presenting the current market, it is especially important not to use embellished figures. It should be clearly and truthfully shown which target group is addressed and how they are solving the problem at the moment. This creates a picture of how valuable your solution is to customers.

6. The competition

On this slide you should describe which competitors exist and what their solution to the previously mentioned problem is. This will serve as an indication for the saturation of the market and also shows in which niches there is potential. Therefore, mention products with a similar use case and highlight, why there is a need especially for your product.
Ideally undermine your idea with relevant empirical evidence.

7. The unique selling proposition

This is the point in the pitch deck where you can entirely convince investors . Since many are reluctant to invest in ideas for an oversaturated market or in products that already exist in the same form, it is possible to clearly demonstrate what exactly makes your product or service so unique. It also makes sense to outline the differentiation from competitors, in terms of price, quality or other relevant business criteria.

8. The business model

In order to justify the profitability of the idea, it must be shown how sales are generated. The best way to do this is to use the canvas model. It is important that potential investors or partners can understand how the product will generate revenues. In addition to that, unit economics matter even more. Based on the revenue model, the cost structure gives insights about the scalability and path to profitability. These two aspects are arguably the most important drivers for a promising and substantial business model.
Make sure to also mention your future plans for the business model and your vision for your startup. How can new revenues be generated? Are there any new services or products that would make a great addition to your existing idea?

9. The team

Another important point is the introduction of the team. Here, the investors/incubators are not only presented with a personal point of contact but a general overview. On this slide it is advisable to also work with the pictures of the team leads, so that the spectators know who is responsible for the relevant tasks.

For us at XPRESS Ventures it is always relevant to see how the team in that specific constellation can drive and execute the idea. Convince us with your knowledge and experience!

10. The request for action

The aspect of financing and operational support runs through the pitch deck presentation, but on the last slide it is important to make clear exactly how much money and/or operational support is needed. Transparency and specific projections of how the cash will be used are evidence of a serious and profitable project.

As a company builder our primary focus lays on providing operational support and technical advice for early stage ventures and founders that seek to start a logistics venture with us. With XPRESS Ventures you can benefit from years of experience in the logistics market, access to logistics assets, customers and FIEGE infrastructure as well as a reliable co-founding partner.

How should a pitch deck be presented?

The average attention span for a presentation is max. 20 minutes. Therefore, a pitch deck should not only be aesthetically prepared in terms of design, but also presented in a way that attracts attention. The central message should run like a thread not only through the slides but also through the verbally mentioned points. A pitch deck presentation should be kept to a certain level of professionalism but cleverly placed humorous phrases can still lighten the mood and relax the audience.

Guy Kawasaki’s “10/20/30 Rule of PowerPoint” is a popular example for successful and interesting presentations. According to these rules, a presentation should only consist of 10 slides, it shouldn’t exceed 20 minutes and it should further not contain any fonts smaller than 30 points.

What tools can be used for a pitch deck?

When it comes to tools, there are a variety of offers you can choose from.

The simplest and most popular tool to adequately present a pitch deck is a PowerPoint presentation. However, other tools can be considered to strengthen the design and overall structure of the presentation. One pitch deck assistant is Prezi. The program has multiple features and allows you to zoom in on ideas. Another way to boost your pitch deck is with the use of Haiku Deck. This program supports especially the design-heavy part with a variety of decks and filters.

Where can I find a good pitch deck example?

In order to design your own pitch deck, it is often worthwhile to take a look at existing ones. This can provide ideas for your own presentation and serve as inspiration for industry-specific structures. Some well-known companies shared their pitch deck for the public. Here are two some examples of successful pitch decks:

AirBnB: The linked pitch deck covers the early AirBnB version aka AirBed&Breakfast
Launch Rock: A service that allows users to create quick landing pages
The platformsslideshare and piktochart offer a lot more of these famous pitch deck examples.

Conclusion

A pitch deck, if thoughtfully designed and attractively presented, is a first step in securing support for your startup and to take your idea to the next level. A successful presentation leads to further negotiations, presentation of the business plan and a potential partnership that can make the difference in a startup’s journey. Therefore, it’s worth it to continuously sharpen your pitch deck until it hits a high score on the above-mentioned aspects.

CONTACT US

If your idea has the potential to shape tomorrow’s logistics sector, do not hesitate to get in contact with us at hello@xpress.ventures.

We will be happy to hear from you soon!

How an innovation challenge can foster inside-out company building

Every venture starts with an idea. For company builders, each venture starts with creating or finding this idea. What sounds common sense is of particular importance to establish an effective and frequent idea flow from which only a few may make it. This idea sourcing process is not a one-way street but instead relies on two channels:

  1. Ideas can be actively sourced from external founders, partners, or business angels outside-in.
  2. Clients, staff and, in the case of corporate-led company builders, employees from the corporation may provide the expertise and thus ideas for promising business models.

This article shares insights from the idea competition FIEGE Innovation Challengethat was established in 2017 and how it can foster inside-out company building.

FIEGE Innovation Challenge 2021. We want your best logistics ideas.

APPLY UNTIL 13 DEC 2020!

Set a call to innovate – and win people.

First, the company innovation process centers around the needs and expectations of employees. This includes a precise definition of the outcome and personal reward of an innovation challenge. In this case, FIEGE decided to attach personal benefits to an entrepreneurial call for action. As such, the competition provides the outlook of piloting winning ideas with the help of company building competencies and resources by creating and iterating an MVP. To reach this stage, transparent expectations for an idea and a business model guide the employee. Customized templates, for instance, are useful tools to define a problem, solution, and short business model assessment.

Also, an infrastructure of innovation coaches and decentralized workshops can help to empower employees to formulate creative ideas in teams and become ambassadors for the competition along the process. Together with the buy-in of the top management, the prerequisites to create ideas and find ideas are established.

Empower the creation of ideas – between business models and process optimisation.

With the submission of ideas by the candidates, the evaluation and feedback phase starts. The transparent expectations about each business model idea may be reflected in the evaluation scheme as well. Among others, potential questions include:

  1. Does the idea serve a need that can be identified and tested?
  2. Does the idea have the potential to evolve in a scalable business model?
  3. Does the idea incorporate the expertise of the company to build it?

Even though only a fraction of ideas may make it through this gate, every idea can have value in other parts of the organization. For this reason, personal and detailed feedback is beneficial beyond an innovation competition. However, the most promising ideas and their candidates are provided with personal coaching and expert feedback. Further, this includes methodological support like the definition of the value proposition or how to nail a pitch. Depending on the idea’s complexity, connections to industry experts can also be crucial to jointly shape the idea. This process can result in pivoting the idea through the course of pitches that decide which teams book their ticket to the final.

Steps and key activities for an innovation challenge

Steps and key activities for an innovation challenge (Source: XPRESS Ventures).

Evaluate, feedback and mentor – towards preliminary pitches.

Arguably, one of the biggest challenges may arise from what paradoxically used to be a key competence: How can customer-centric thinking enable ideas that may also lay outside the box? While years of competence in a certain industry, technical field or organizational topic have optimized internal processes and maximize the value for the customer – the perspective is mostly focusing on what already exists.

Many of the available design thinking techniques may be applicable to break-out from the daily business and efficiency-driven thinking. However, by choosing which method fits best, client-centric expertise can be combined with user-centric and cross-industry sessions. This way, workshops can not only focus on existing product optimization but also be an inspiration for something new. In addition, digital workshops and learning tracks, for instance, can further shape an idea towards a well-rounded business model before submission.

Find a winner – after the challenge is before the MVP.

The final pitch event is the fixpoint of the entire innovation challenge. A selection of up to 6 teams presents their ideas in front of a jury of top management executives, external experts, and business partners. The final selection is made through a scoring system different from the previous evaluation. At this stage, it balances the focus on both the idea and business model but also the pitch performance.

The expectation that was communicated at the beginning of the applicant’s journey should now be considered. This refers not only to a personal reward but also to the outlook of implementing their idea. Following the finale, the winners of the event should be given the chance to attend boot camp workshops that focus on the potential to create an MVP and receive reliable market feedback. As a result of the concentrated incentivizing and mentoring of promising ideas throughout the innovation challenge, ideas are already at an advanced stage. Hypotheses are already formulated, the idea initially validated in interviews and the business model guided with industry experts. This advantage can give inside-out company building processes backwind and empower employees to innovate and eventually become entrepreneurs.

FIEGE Innovation Challenge 2021

Challenge accepted?
Whether in a team or as a lone fighter –
apply here anytime until the deadline on 13 December 2020 for the first application round.

13 Dec 2020

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About the FIEGE Innovation Challenge 2021

XPRESS Ventures invites all FIEGE employees and students to take their ideas to a new level with the FIEGE Innovation Challenge 2021 and to shape the logistics of tomorrow. Challenge accepted? Whether in a team or as a lone fighter – apply for the FIEGE Innovation Challenge anytime until the 13 December 2020 for the first application round. The best ideas and business models make it to the light pitch. Those who convince here have the chance to inspire the jury and a selected audience at the final pitch event. The most promising business model wins and receives not only attractive prize money of 5.000€ but also the chance to pilot the idea with a budget of up to 250.000€

About XPRESS Ventures

XPRESS Ventures is a Berlin-based company builder specializing in the development of innovative and disruptive start-ups – especially in the logistics sector. The XPRESS Ventures does not only offers the young companies the required know-how and background knowledge, but also the corresponding digital expertise, logistics assets and access to its network of investors, customers and partners. XPRESS Ventures was founded in 2019 by the family-run logistics medium-sized company FIEGE Logistik Stiftung & Co. KG in Greven, Germany. Matthias Friese, series founder and digital expert, is the managing partner of XPRESS Ventures.

How Company Building can give Founders an Unfair Advantage

The concept of company building – equal to venture building, venture studios or start-up factories – is becoming an increasingly prominent phenomenon in the start-up ecosystem. While the first venture studio originated from Bill Gross’s Idealab in 1996, independent and fast-growing company builders followed suit in Europe with – most prominently – Rocket Internet, BCG Digital Ventures or Project A. Since then, the German Mittelstand began to implement open innovation initiatives. The latest of which, namely corporate company builders, aim to build start-ups from the inside-out perspective, – and thus, bring new opportunities for founders to get their idea off the ground.

Let’s take a step back. 

The basic concept of accelerating and incubating founders’ potential to leverage their ideas is well-established and nothing new. The positive effect of office space, mentoring and also initial access to funding on start-up success rates and going to market is empirically proven. However, corporate company builders are a new phenomenon within open innovation. They act as hybrids between incubation and acceleration, allowing founders both long-term operative assistance as well as access to resources, networks and markets.

Process matters.

The process of company building focuses on its key purpose: finding the most promising business model ideas and complementary founder teams to build and scale companies. The core activities in every step of the founding journey are built on the value of providing specific know how and shared infrastructure, building teams and enabling access to capital along the entire process.

Core activities of company builder and intersection with venture capital

Core activities of company builder and intersection with venture capital (Source: XPRESS Ventures).

Along this process, company building helps founding team to concentrate on what really matters in each step. Finding a cutting-edge idea and business model to solve a proven customer problem (ideation), iterate a business model with experts and existing customers to gain initial feedback (iteration), test a minimum viable product on the market to approach a product-market fit (MVP) and found and scale the company to an operating business as a team (Seed). At this point in the journey, company building further accompanies the startup to make a crucial step in its development: the acquisition of venture capital. The proof of concept, an ambitious founding team and an elaborated product-market-fit are, among others, key factors VCs look for, and which company building actively pushes as well. Besides, the legal and financial advisory of company builders are benefits to structure a VC-attractive cap table, find smart capital and scale from here (Series A / B / C).

Established company builders can provide these services at scale based on long-term experiences in digital business modeling, integration of tech expertise and founding experience. Corporate company builders help streamline during these early-stage steps. By providing user and market access to founders, critical in-depth information becomes accessible exactly at the right time. Thereby, iteration processes can be accelerated significantly.

Unfair Advantage for Founders = Digitalisation chances for Corporates

The success factors of start-ups along each development phase are manifold and different from industry to industry – from an early validation of a business idea to accessing critical infrastructure for market tests. The fact that digitalisation and innovation increasingly become top priorities on a CEO’s agenda fosters the exchange between corporates and founders which ideally is mediated through company builders. Along with the core activities of company building, these two worlds of corporate innovation and entrepreneurship can result in a symbiosis that gives founders an advantage. The facilitation of this advantage can be seen as the key purpose of corporate company building.

Company builder at the intersection of corporate and founder

Company builder at the intersection of corporate and founder (Source: XPRESS Ventures).

Fast and in-depth Idea Validation

First, crucial and early challenges of the founding process lie within the validation of the idea. Often based on solving a customer’s problem, the trusted confirmation of the existence and importance of it can be hard to find. This is especially true for technology-specific topics focusing on industry verticals. Even more, early access to specific expertise and the willingness to jointly validate the idea in depth sharpens the idea from an early stage on and can be a crucial time-saver.

Real Customer Feedback

Second, on the way to a product-market fit not only time but especially customer feedback matters. As this iteration can be seen as an ongoing process from build, measure and learn, the effectiveness of its process relies on the quality of feedback. The earlier an MVP can be tested with a critical number of potential customers, the earlier it becomes clear whether to pivot or achieve a proof of concept. In this period, founders depend on access to relevant customers given limited resources of the founding team. As a consequence, company building can fill this gap through the introduction of its core business to existing customers or partners.

Access to Critical Infrastructure

Third, starting the operations of a new venture requires the connection to critical infrastructure. Depending on the business model, this can be tech-focused and hence be solved through internal know-how or external providers.  But especially start-ups at the intersection of tech and asset-heavy industries benefit from early adoption of existing partnerships, shared services and also office or warehouse spaces. In this way, company building can serve as a bridge to an infrastructure that the corporate has been building and optimising for years.

About XPRESS Ventures

XPRESS Ventures, partner of FIEGE Logistics, is a German company builder to empower logtech ideas and build technology-oriented companies for the logistics sector of tomorrow. XPRESS Ventures follows both the inside-out track based on the innovation potential of FIEGE, a leading global full-service provider in logistics, as well as the outside-in track through cooperation with ambitious founders. XPRESS Ventures was founded in 2020 and is located at the Maschinenraum in Berlin.