 Trying to get back to the basics of great products, power comes from sharing information. I try to convince people to slow down Hello, hello, welcome back to the soaked by slush podcast my name is William von der Palen and next to me is Isaac Hi, William and today's guest is the CEO and co-founder of sender David not hacker welcome Thank you for having me very very glad you could could join the show You want to start off by telling the listeners who you are? Sure, I'm as you mentioned the CEO and founder of sender. It's a digital freight forwarder To my grandmother. I always explain it as an Uber for trucks Very straightforward. We have big customers on one side. They could a be in bath Or uni level that I'd have to move freight from point a to B and need a truck And on the other side, we have small family onto trucking companies that have no digital processes and we bring the two sides together Not only as a marketplace With a contractual partner and a single point of contact to both the a be in baths and a small truck Yeah, exactly. I think it's very needed idea for anyone who's been dealing with shipping before as we discussed before the Episode we also noted that you worked in consulting before becoming an entrepreneur and there's quite a few successful startup founders Who's who kind of gone through the consulting path before? Founding a company. So where do you see the synergies between consulting and entrepreneurship? Why it's a good match Well back then when when I started my professional career Consulting was still a cool thing to do after investment banking. I think the priorities of Students these days change, but for me it was a great school back then I always like to think about it that in university. I learned to think and I've been consulting I learned to work to apply the theoretical thinking and to the real life And that's why it was a good excellent school to get structure processes to know how to communicate How to interact with those senior stakeholders how to manage team with a lot of trainings a lot of exposure So definitely at least for me was hard. It was not always fun. I can tell you that But it was definitely good school. Do you think it it has you know, is it important that it be? Consulting or could you could just as well just be that you found a few companies? You learn those things and then you may be more ready to do something in a bigger scales It is the the big thing you get out of it is is, you know learning how to work as you said There are different ways to success and consulting is just one of really many and I think these days Just starting something learning on the fly sometimes takes longer sometimes You know those sorts of mistakes, which any way you do anytime you start a company is also another very successful way of doing I think back then at least for me Startups was something I was not really familiar with so it was a bit distant So for me the more natural and probably also lower risk step was it I think and then more by chance that I That I got to to the start of life Do you want to talk about that chance or that jump? Was it something that you discovered in while you were working and consulting that this is something that needs to be Fixed or changed or innovated on it was actually a university project because after a couple of years of consulting I went back to to to to university to do an MBA and in my first semester. I was put together into a group I Was really to get to know each other and we had to do an exercise and was for the founder bloodluckers was a writer in Company was a big unicorn in Europe and out of that project And I was really just set to get to know each other and I did come out took it throughout entire MBA Did all your entrepreneurship classes venture competition and we thought I had the perfect business model business plan everything Then after graduating I decided to move to Berlin With an MBA co-founder I took us one year to realize that what we have Prepared or had prepared during the MBA was actually not really working We didn't have a single customer and then I went a tricky face almost face bankruptcy But was very very lucky found an agent investor from new co-founders and then beginning 2017 I started sender 2.0 was still the same company. I had the agent investor's friends Family and Classmates and also some professors and vests. I took the same entity and pivoted into the business model They were for truckings that I had with you earlier. Do you want to talk about that pivot a bit more? What was that like and how how do you go through a pivot that hard first from going near bankruptcy To where you are now The way I experience it is not something I would recommend to anyone Because I didn't do my homework properly. I always faced the same action That I did not test there's a product market fit going out to testing things and changing and moving Something that I didn't do and I didn't do it the first time And it didn't work and the second time I just kept going and we went to two big e-commerce companies one day One with a big A and one with a big Z And we were pitching our first business model the old one which was around same day past delivery and We saw them was a little bit as a competition Same day past delivery was coming and the big e-commerce were offering it and we had the business model Addressing smaller e-commerce offering also fast delivery by using fastest along this night Back then I really thought it was the next big thing and but then when pitching to them We realized that they were not interesting and what we were offering but so in our presentation that we also have small van in Our let's say plan because we thought when the bus the belly of the bus is full with passes It makes sense to get more than for the long distance part and they ask us do you have can you do this and of course We said yes, you know, we didn't really have a lot of experience and then that's how we jumped into that Pray forwarding for brokerage business and then as we kept going and growing We really realized what the opportunity really was and how big it could have come and was just by Chance we're extremely lucky for a certain time. I didn't do my homework properly. I just followed the only Opportunity ahead to keep the company alive that then luckily turned into what Senna is today, but as mentioned I would not recommend anyone to hold their same Do your homework test, but if someone really wants your product and also Service and try to understand how big it can get we go all in and that's something that I was very lucky But if I would speak to myself of five years ago, I would probably tell myself, you know Stop it papers take a step back. Maybe go back into consulting and for one or two years and then start again at the latest Yeah, no exactly It's not exactly a new industry the freight forwarding industry So why do you think the timing is ripe right now and why do you think digitalization is is happening at the pace? It's happening right now Think if you follow the news Especially if you see what happened what is happening in the UK McDonald's is running out of matrix few stations out of fuel and supermarket out of good to sell and This just shows that supply chains are broke the way they work today. I'm not any longer Feasible at scale and I think what we see in the UK is definitely driven by Corona and by Brexit, but it's still the ice but same structural problems that we see in the UK have been accelerated by again Brexit and Corona and we also have a continental Europe. We have them to hit that as well There's the structural problem, which is the there's not enough truck drivers in the market. Just one of many. This is why Coming back to your question logistics is yes in old school industry that has seen very little innovation over the past 20 to 30 years And now because we have structural problems and increased demand for always faster and more flexible Supply chain solution and deliveries it is in my opinion in the spotlight and One thing that excites me about the future and not only of stand up this industry is that I really believe that in the next 10 Years we're gonna see a lot of innovation coming that will fundamentally change The way this industry work. It's not gonna be my kids or grandkids, which I don't have yet But it's gonna be sender and myself that will Witness it for sure, but also have potential to influence and impact and change the way this industry is evolving And this is why I'm excited about what we have ahead of us In what ways did you Identify that the Supply chains were broken who are the main things that just didn't work you measure the lack of drivers That's obviously a big one Well, it can just give you a few numbers and then you feel like how how how inefficient and broken this is We started with drivers in continental Europe today. We're missing over 500,000 truck drivers. We could employ tomorrow 500,000 more truckers. It is crazy The market is super fragmented. That shows the inefficiencies 70% of all trucks That's in the road are owned by companies that have fewer than 10 trucks Really really small companies that don't work in a digital way. They use phones. What's up? Sometimes even surfax machine to have orders formalize and send over. It's really really also 25% of all trucks Drive completely empty Because of information symmetry if there is a truck that drives some load from I don't know Helsinki to Berlin That same truck probably struggles to find a back load back to Helsinki and has to drive to the Denmark Way that he knows someone that has a load that that brings him back home Because of information symmetry also something that with technology We we can solve so there's a number of indicators that just show this is a huge industry 350 billion in size Europe road trade So I'm not talking about air sea air freight sea freight. Just what is moved on the road in Europe is 350 billion in size Which is huge and if you look at that market, that's industry There's a lot of things that are broken in the numbers that I shared with you Just the tip of the ice pack. I would not be surprised if maybe also has burger And it's running out of fries and we don't have any longer French butter in German supermarket Yeah, it's it's for sure becoming an increasing problem at the moment There's a lot of talk about where when we look at the most valuable companies in the world right now They are almost all of them are B2C platform companies. They are based on on Not owning a product per se. Maybe they are connecting people with with or giving having people give up their data or something like that If you then look at the B2B platform side There seems to be a huge amount of potential, but there are not that many companies yet There are these huge huge B2B platform companies But it seems that that that would be the next big thing in terms of this business model. So How much do you haven't built a B2C platform company, so this is always a hard question but do you think you see what is the main difference because you know Just on the top of my head if you build a B2C platform, you need to sign up individual users Quite a lot if you build a B2B platform It's more about getting maybe the forwarders to sign up and then having a different kind of customers It seems like the sales and user acquisition processes at least are completely different from a B2C platform company So do you see there's a different way to approach building a company like this? It's a very good point I think if you look at how Digitalization impacted industry definitely started with B2C and it always comes in waves They're always you know a cohort of companies that doing exactly the same and they all come more or less at the same time a few survive And so it started 15-20 years ago and was mostly B2C started with e-commerce and then Went to a lot of other space space in the B2C segment I think B2B picked up already five maybe already ten years ago But it's not as much in a spotlight as B2C because B2C something that you see every day as a consumer And you realize it's out there What B2B sometimes even bigger Is not in the present in your daily life That's why you know to where maybe companies such as Sender but you maybe know more companies such as Uber or Flix bus Where we have an interaction And on your question is there a different way of approaching it? Yes for sure And there's also different business models within B2B Some that are a bit closer to B2C where marketing plays a big role others that are closer to more Accounts management where you have to identify the key decision makers that can unlock a huge opportunity But in big companies But what I think is a common denominator is that businesses are more reluctant try something new And adopt new technologies and this is why I think also we saw first in the B2C segment a lot of innovation Consumers try out more flexible And now as the pressures coming the utilization pressures coming also to B2B segment I think we're gonna see much more for the next couple of years in industries that we don't know about but I use Yeah, exactly. How did you approach the carriers? How because you need you need customers obviously to get off the ground and create the value So how did you go about finding the first major accounts to manage in the first place? So Our business model is also backed by a marketplace model So we had a couple of big commerce that give us an opportunity Extremely lucky. So we had constant volume coming in and could build a carrier base That we then could use to approach other customers and then you know build up and our marketplace model in Mentioned earlier trucking companies truck drivers carriers is something that We're struggling to find everyone is competing for the same truck There multiple loads in Germany up to three loads for the same truck and the truck owner can decide Hey, we'll go for Senna or we'll go for the Vishenka and I will make the other The set without that. That's why we had to tailor our value proposition to our carriers It's definitely superior. Just want to mention one point which is accelerated payment in West Africa We put our invoices to carriers within three days And from from the load being executed This is so powerful that we started offering now also in by structuring solutions Where the small carriers can upload invoices that they sent to our competitors to third parties And also get the money when they didn't three days Instead of waiting 45 to 60 days, which is the industry average. This is how we should say hook them convince them Hey, yes, you phone bringing all the time But do it with sender you get faster payment in the second set We can generate the invoices tightly on our system for free to the entire planning on our platform also for free Then you you get them on our platform and then Which we then can use return to grow or feel our growth on on the ship What about the the other side of it the bigger companies you mentioned Unilever How is that type of? Acquisition must differ a lot from Contacting and trying to acquire smaller drug companies. Absolutely. So on on the big enterprise side cheaper side It's always a couple of decision makers that you have to commit and it takes time Sales cycles are extremely long and take up to 12 months materialize and especially in logistics It's a celebrity relationship driven business So the providers that work with companies such as Unilever or AB in bed have been working with them probably for many years already But when you come in You get first the left up You have to prove yourself. Luckily now we get in much more easily Everyone needs truck. I want to struggle to find capacity and if we come and say hey guys We have trucks because we can source them in a more competitive slash digital way They at least Speak to us let us in and say okay Christmas is coming up We're missing trucks if you say you can do it be my guest and then we get the lack of us Things that no one else wants to do or can do and then it takes Months to build a relationship to prove yourself and then ideally when the next and the season comes these big companies Have and us that's what they have regular allocation for one two or three years Just then when we then finally have an opportunity to get the carries that are sizable that then Bring a significant volume One thing that's pretty central also to your offering or something that you could potentially be a big part of solving is As you mentioned Reducing the amount of empty trucks driving on the road and thus also creating more sustainable practices in the industries a whole Do you want to talk a bit more on how you How you view the sustainability how you unlock the sustainability and if you have some kind of inbuilt Criteria and what do you see a platform's role in this kind of questions to be in the first place? Absolutely, we see green transport as a really big opportunity for us and also to build a competitive However, only this year we saw that the first shippers the AB in there for example Where open to the idea to invest and maybe potentially pay also a little bit more to have green transit And our role as a digital freight order Is one side we're able to combine loads of different customers in a more efficient way So that we reduce the empty kilometers in my early example We have someone coming from Helsinki to the land Potentially have someone else then from that drives has a load from the land to I don't know Denmark And then they follow on the road back to Helsinki to reduce this 25 percent of that Kilometers empty kilometers and the second one that I find even as exciting The first one is there's a lot of new technologies coming on the market now. We have advanced fuels We have electrification coming As the next opportunity But all these new technologies especially engine technologies come with a lot of risk if I have 10 trucks And I have to buy an electrical truck that costs 50 percent more But I don't know what my operating costs are what the residual cost value is and how much business to get I'm gonna stay away from that But with sender we can de-risk that we can give certain guarantees health and actually upfront is a hay 50 percent more we as they put it on the table and You pay us back by driving for us 20 percent of the time And and so you're all 50 percent if you'd like to so you reduce the risk for you and try to adopt these new Technology so our role is not only about being more efficient and combining loads reduce that to meet us But also to be the enabler to adopt new technologies Electrical trucks is the next big thing today. We are with advanced fuels For example, we have a fuel type that we use that's called HBO Which could very simply is frying oil from McDonald's that has a second life And that can be used as a fuel and that reduces CO2 emissions by up to 80 percent And this is what we're doing today, but also here. It's a de-risking and tech adoption Let's say a factor that we bring to the carriers and this will become even more important as Electrical trucks are gonna go on the road actually next week. We're gonna have our first electrical transport Going going on the road Very cool. Yeah, it seems there's a lot of innovation happening. Also, I saw the What was it the Swedish firm now that sold some some a big contract to the states where they have unmanned trucks trucks coming? So was yeah, what seems seemed like to be You know, it seemed like that was quite far far It seems like that that's not gonna happen for a few years, but maybe it's happening now like pretty quickly at at least According to this example, so it's very interesting to see how that's gonna change. Yeah, how do you think about that? Yeah This is one of the things that excites me the most. I'm very glad you asked the question And in my opinion, I think that in the next seven to ten years, we're gonna see the first autonomous trucks But on highways from highway entry to highway exit We're gonna have big parking lots where traditional trucks and truck drivers will do the last mile from warehouse to Exit and and back for the next 20 30 years But I think that in terms of Technology we are almost there especially if you put a separate dedicated lane on a highway where you don't have any kids Staying around it's really like this long-distance trucking that can be Come autonomous Very very quickly now who more considerations first is when it will happen Or what does it take to make it happen next seven to ten years and secondly what an implication for the industry? We start with the first point. I think it's not about knowledge the readiness that will impact the adoption of this technology of the autonomous technology, but it will be policy makers It will be politicians that will have to invest in infrastructure and This technology that again in my opinion is there is almost that if I see what happened now in the UK I see what we experiencing in Europe We now slowly feeling the shortage of drivers I can imagine that the next five to ten years policy makers will realize that instead of losing votes of Truck drivers that they had involved for you any longer because they're killing my job They win votes because suddenly truck drivers that is an aging population in Germany 51 years on average That will return the next 12 years. They can sleep at home today They sleep three weeks in the truck and they can sleep at home to the last mile and the technology companies will also Be supported by these policy makers because the technologies can be adopted So I think that this is let's say what is going to happen next seven to ten years Now the more interesting thing is what is the impact on Logistic industry if you take a more long-term horizon in 30 to 40 years a truck can drive autonomous from warehouse This means that a lot of players such as truck manufacturer have to reinvent the business model If you take one of our investor with just Scania Swedish truck manufacturer today They sell 80 to 80 percent Well, that's the small companies that have fewer than hundred truck And these small companies will eventually do is their purpose the reason to exist again It's 40 years. I'm going to make I will make sure that they want to be from one day to another I will do special transports and a lot of other things and in the mean fact But they lose the reason to exist because they won't be able to buy a truck and autonomous truck will not be owned by Something happens definitely not Responsible for that. They don't have to hire and manage a driver And I won't be able to optimize costs because they won't be able to change the oil at the neighbor shop Instead the high-tech machine. It's electrical machine was slightly so they will be facing out eventually 30 40 years from from now. That's why Players just Scania are not going to be selling their trucks to the customer base to have today They have to reinvent the business model the customers they're serving today won't be there in 40 years from today And this is why I think There's not only 70 or 80 percent of the market of this 350 billion market that will be taken on Someone else gets that I said but also the big players have to reinvent their business model Will it be just asset manufacturer? Will I put autonomous technology on it? Will they sell it at the service one kilometer per one Europe a kilometer to send up or whether become a logistic provider? I think no one has answered expressions, but these technology autonomous and if you others as well will push Fundamental transformation into this industry and as mentioned earlier We had send up preparing to be in full position to make the best out of this I'm also really worried what's gonna happen to country music No one's gonna want to listen to songs about truckers who get to sleep at home and only drive the last mile But then again, I don't care about country music that much it also. Maybe that's a better future. Anyway, maybe yeah Hey, let's talk a bit about acquisitions and and also, you know growing through acquisitions so by slush did I did a survey together with Axel and In that survey it seemed that European founders at least prefer taking their companies public As opposed to maybe selling the companies onwards, but then if you look at the statistics It's much more likely that you sell your company than you go public with it The only handful of companies end up going public Yeah, you've you've basically seen seen at least one side of this equation where you've acquired a few few businesses yourself you acquired Ubers Freight European business and ever road as well But and I don't know if you can comment this but if you can comment on this do you have have you had You know other companies trying to acquire you during this this relatively short path of yours already Interest has been there But we did not consider it in seriously for the simple reason is that we're still very bullish and I realized that What we have with sender is at least for me at once in a life some opportunities just after graduating from MBA I always thought if someone comes along pays the right price, you know, I sell it and then do my next other past especially two years I realized that The likelihood of me building again something like sender is almost zero So I want to enjoy the ride as much as long as I can I also know that we can take this company And this is why for the time being we we've caused any discussion On that front and up are getting in shape takes a couple of years Good to be ready to to go public and then you have to show a lot of sides of yourselves. So you better Shape and look good Exactly, what about your own acquisitions have there have they been The companies approaching you or or do you actively look for for companies to acquire and approach them or is it, you know, can it be both? So our position strategy can be divided into two first place was digital This was more optimistic. We did not plan that. So we first Merge less acquired French company could ever wrote there were largest competitor in Europe They were based in France where we were trying to build up on operation They were fundraising in Corona hit and we had an opportunity to do something very It's interesting for us in France. And this is how that came along. It was more opportunistic. I had a very good relationship with Founder Maxim and we kept in contact and then when you can we said hey, let's do this And then while we were sitting at the notary permit long for us to pick up and Who were freight reached out and said hey guys We talked about the collaboration and we thought okay, that sounds interesting And then after the first discussion with them realized, okay, there's an opportunity for us to acquire or phrase European business And this is what we then did Consolidated the European road trade market in the digital space now significantly bigger than two three other players that Are competing with us in in the space. It has allowed us then to raise our last round hitting this magic valuation that a lot of entrepreneurs dream about and included the first phase of M&A activity what we realized then is that so does have pretty high expectations when it comes to valuation Send that we also prove of that But there are also a lot of other companies that are more traditional That are too small for prior equity to big for the neighbor to take over when the owner wants to retire that have no digital process But have access to capacity Especially when we're going to expand it to new jobs And this is what we started doing now is to see okay, can we acquire small traditional also as the light without going truck Companies bring in our technology bring in our network and make sure that they grow much faster And become even more profitable With the technology that we come that we bring in and this is now the second phase that we're currently exploring And I'm actually quite bullish for for the next year because you can help us accelerate Expansions into new countries where otherwise would take two or three years to build the relationship the network How do you go by determining whether or not a company is worth acquiring? I mean obviously a Competitor sounds like something Makes me make sense on paper, but then like are there any other things? Do you look at culture? Do you look at all these other things are either just secondary to the bigger picture? And just things you make fix make make work if you have to yeah, it's a very good question for us every position was very much around The team is the core part of everything together the other companies where it's more of a kind of winner takes all market where they just want to acquire competitors to get significant market share turn the unit economic They do not even always integrate them. It's just you know taking out so market share you need one of the proof Was that's not the case not interesting number the five largest players in a road trade in Europe And I'm going to be shankin son have a combined market share of five point six percent combined highly fragmented market So for us are crying to take to grab significant market share doesn't make sense So we're prior to companies for the know-how that they bring in and know how Especially for more traditional trade brokers is with the people and so the team is exactly what we are looking for So when we look at what are the criteria that lead the financial ones are profitable. They have to be Sustainable business, but what is even more important is how do we make sure that? Founders typically that sell a company are Motivated and engaged to continue working with tender and give to say what they have created the baby You know the chance to do the next step into the bigger more orange Family and environment and that's why we spend a lot of time on understanding What leaders how to incentivize them how to bring them closer how to make sure what they're getting into And then once we sign this a very strong effort from our side on the integration side We have the onboarding Academy where all the employees of the companies that require I invited to run up a meeting to Berlin to get to know us to meet us There's a one-week program where to get to know our systems our leadership or history With class that we do So it's really about the people and making sure that they had a good fit and that the same Exactly Maybe lastly just would be interesting to hear a bit more on your future plans What which countries are you operating in now you mentioned you are in in you have six seven offices and You are you're in your series. Do you said you're gonna expand in Europe? So, how's that? How's that going? So we are now Almost a thousand people at that 650 people over the past 40 to 50 months open a couple of offices Now we have nine offices in continental Europe. We're looking at northern Europe And even countries as well as the UK Some more Eastern European countries So this is what we're gonna be doing over the next couple of one or two years either through an acquisition that can accelerate Our entry all through building it on our own To stay in Europe but to grow into the countries that Yeah, and you also said that you want to be physically, you know present in the market to operate in so because all markets are Different culturally and and also with regulations. So how does that look in practice? Do you? apply apply small teams that go in and kind of Take care of everything and try to to open in the market or do you how do you approach that that? Scaling yeah, so it's a good question as mentioned earlier, but you think it's a very Relationship driven so to get someone to work with you either tipper or a trucking company carrier You need to build a personal relationship and you have to generate a certain level of trust to convince them to adopt your technology Do an API integration that costs some money or to move away from what's up and use our app communicate With us. This is why we think and I think until now it proved to be a correct assumption need to be on the ground People need to need that touch up Now last Christmas I didn't receive it the Christmas before that Got homemade sausages from one of our college carriers because this is the type of relationship They want to build in the first place so then you need to be there you need to meet them It's fine once a year twice per year But they need to know you are really you're there and then you can build a trust to push adoption And this is why having this local present with different languages with different cultures with different regulations As you currently pointed out it's extremely important right because I mean the country music thing that I said earlier is kind of a joke But it's still a bit old-school isn't it like the there's a there's that mentality is there Super super old school and people are also afraid and to adopt technology our first assumption was okay Let's develop an app a driver app for the truck drivers And then we have enough food visibility and what's going on what has been loaded and so on we realized that truck drivers Not always have a smartphone if they have a smartphone is their private smartphone They don't want to use it for their boss. They're mostly employed in in Europe. So we said, okay Let's send them a smartphone with the sim card and an app installed Costs of 50 euros the drive record for us recover that but also then realize These guys don't like to do that and for the 20 past 20 30 years They didn't and they can get another job any time So also you don't want much pressure on one of the company to make them use the phone And then if you convince them they do sometimes some stops where the one one gets tracked So they take out the battery and the sim card and then good luck putting everything better back together And so also there we had to learn That it's relationship revenue to get them to use you and or and now we on that front Tracking mostly for an integration likely with the telematic system that isn't installed in our big truck So we get rid of that, but it just shows how say Relationship driven this business is you always have to convince them get the buy-in and this is where what's our relationship? Makes makes total sense and then sounds very exciting So we will hope for for future European dominance as well And it's been very nice to talk to you. Glad you can join the podcast. Thank you very much Thank you for having me. Thank you and thank you viewers and listeners. See you in the next one. Take care. Bye. Bye. Stay safe. Bye. Bye