Designing The Infrastructure For Freight
Bangladesh is the second-largest garment manufacturing country in the world after China. It has the 42nd largest economy in the world that is growing at a rapid pace of 8.00% per year. It shares its borders with India and Myanmar which are also bustling with trading activity. As a result of the recent trade shifts multiplied with better margins, Chinese factories started popping up in Bangladesh as well.
As a result of such massive shipping activity, a lot of data is also being generated. And in order to continue to grow, we must make sure that all these data points are able to paint a picture that can help manufacturers and distributors make faster, more dynamic decisions.
Except that what was missing, was a trackable, measurable, searchable enterprise infrastructure for all things logistics.
THINK INFRASTRUCTURE, NOT PRODUCT
When we decided we wanted to work on Loop, we figured out that we were not going to build a product first. We had to think of the overall infrastructure. And when you’re trying to build an infrastructure from the ground up, there is a lot of factors you need to consider. We focused on these four essential components:
- Who is this infrastructure for
- What are their specific roles
- What type of relevant data should be collected
- How could such relevant data be collected and put on the canvas to paint the overall infrastructure
SIDE NOTE ON PRODUCT STRATEGY
At this stage, you shouldn’t be worried whether your users will use your product or not coz that’s a completely different topic with a lot of different dynamics.
Here’s an analogy: You just bought a beautiful sedan (this represents an idea) only to realize that you are in the middle of a dense, dark, and rocky forest. And so the first thing you need is to build a road to drive out of this forest (This is what the baseline infrastructure is). Next, once there is a critical mass of vehicles using the road, you will need to put Stop signals, traffic lights and toll booths. These are all offshoots of the original baseline infrastructure.
That would essentially be your product strategy where you have successfully devised the architecture and you’re going to build the product so easy that it seeps into the skins of your users without them realizing it; because there was such an inherent need for it and that you have successfully identified it. Congratulations.
During my trip to China, I was blown away by the level of technological adoption. From young adults to old people to people from all sections of the income spectrum — Everyone had a smartphone. I kept wondering how did such a modern device penetrate the minds and behaviors of people across all generations. And I also thought that, as a tourist, it was incredibly difficult for me to get around in China, even access menus at restaurants. Even Pizza Hut and KFC menus were in Cantonese or Mandarin. And then I had the EUREKA moment! Everything was in their native language — Even the Starbucks baristas had an unfamiliar accent! That was when it occurred to me on HOW such a deep level of adoption and tech penetration could have happened — LANGUAGE. And so one of the most important product strategies we came up with was to build it in the native language of the users ie. Bengali. And of course, it cannot be just a simple Google translation of the entire page. We had to hire a linguistics expert.
The product strategy at this stage should be that it is being built with the lowest possible upfront cost, pushing innovation and behavior change, very easy to adopt and collecting the necessary data in as little steps as possible.
Lets elaborate on all this in a different blog.
THINKING ADOPTION
One of the hardest things was to push adoption — driver adoption. They have had very little formal education and are generally not much incentivized. And that is when we realized we were asking the wrong question. Instead of asking ‘Is the driver incentivized?’, we should have asked, ‘Who should be incentivized?’. At least at first. The answer was clear: the truck owner. The truck owner needed to know where his drivers were at all times during a load assignment, make sure any cash received at delivery should be collected and documented, maintain a record of all the daily orders/transactions, and that the usage of company assets was monitored and maintained regularly.
And the government was trying to push tech adoption in all industries, so for our own sake, we had to sort of convince the truck owners that the government was coming for them too and they needed to get their affairs in order and make sure everything is valid on paper. This was a big risk we took since it could have backfired easily and they would have kicked us out. But it worked. Because we promised them one underlying essential thing they needed to survive in the trucking business; More trips → More utilization of their assets.
This meant that by associating with us, they could foresee a future with lower gas prices per truck, lower insurance and of course, a constant inflow of orders and that not one truck will ever return empty.
These are all possible theoretically. But we knew it takes time.
HARDWARE VS NO-HARDWARE
We debated hard. And one thing was certain. In order to enforce an optimization mindset, we need to be light. Moreover, there were previous cases of competitors giving away free GPS trackers where the truck was being tracked but the driver was somewhere else. This happens in the case of double brokering where the driver is also a broker assigning the load to someone else entirely.
Moreover, we had to start taking things on a more human level and think of how we could enable safer roads by logging driver hours. Such measures are not very common in Asia and certainly not in Bangladesh. Critical driving hours could be linked to the rate of accidents on long highways. Invoices, documentation, and proof of delivery had to be photographed at first and uploaded for us to process the payment faster.
We were not going to buy GPS because we’re trying to push a behavior change and even though a GPS device fixed on your truck was collecting the necessary truck information, it did not involve the driver and was not collecting driver data which was critical. We had to invest in pushing smartphone adoption which is why we focused on building a robust carrier mobile app.
BUILDING TRACTION
At this stage, no other traction can compare with these two key variables:
1) Critical Business Insights (I call it CBI for short) x The % of the people who felt the particular business need strongly among those who signed up.
2) Rubber To The Road Sales: Hardcore Sales. I am talking about just picking up the phone and dialing down a very large list of numbers of potential clients. This is another area we particularly focused on initially along with building out the product. Building a pipeline to push topline revenue and having an operational model to conduct those cold calls is a winning streak in my opinion.
REMINDING OURSELVES OUR WHY
We started Loop because we believed every business deserves a lean supply chain. And the act of streamlining the humongous amount of fragmented data is the backbone of this belief. Whether the users use it or not initially, it's important that the process of building that infrastructure or the operating system shouldn't be compromised in any way and that we are responsible.
Speaking of operating systems, here is a fun fact: Loop’s original name as Loop Systems came from Logistics Operating Systems.
The data had to be collected somehow at first to lay the foundations; either autonomously or rigorously through our own effort. We recognized that our rockstar dispatchers were at the forefront of all this.
We had to make sure whatever way possible we record, collect and organize that data; even if it meant that we consider opening up new sections of our business such as 1) organizing freight data for enterprises or 2) opening up a driver training institute for safer, more compliant roads of tomorrow.
