Please help validate/review my logistics startup idea.
My idea is to provide a RELIABLE TRUCK service which will help to move your things – be it machines, any raw material or household, just anything from place A to B.
This idea has been in my mind for now over past 3 months. I currently manufacture board paper at Chandrapur, Maharashtra and trading at Nagpur, Maharashtra and have named it Lotus Board Industries. (my previous post was regarding suggesting name for my company from rodinhooders).
Touchwood, my machines and business both have got rolling, within 40 days of starting operation, money has also got comfortably rolling. Well, that’s other part of the story and would soon share my experience of setting up a factory and starting a manufacturing business in India.
Now, the major problem I face in this business or say which retards my business is truck transport. Right from raw material coming in my factory to finished good going out its all done by truck logistics. I find it very hard to find a good transport service which would get raw material in time and deliver it in time and that too at reasonable price. Many times I am not able to sell products on a particular date and time because the truck which I had booked didn’t come on time and I couldn’t track them either.
I do feel there is a major lacuna in transport business:
- No fixed price of truck transport rates.
- No fixed time of truck coming to your site.
- No reliable service.
- No insurance (Few provide though, but forget reimbursement)
- No tracking of your material location + others
These are the few problems I want to solve. I do feel this has exponential potential.
I don’t want customers to get reports from logistics providers, “Sir maal nikal gaya hai aata hi hoga” or damaged products.
Revenue would be definitely on commission basis and model + tech would be similar to cab service providers. I can discuss it in detail with like minded people and those who are interested. I would also need a co-founder/mentor to help me before starting up.
Pls help me understand pros & cons, also any other tips and advice before I plan to startup.
You can connect me at-
email-harshitbarve@gmail.com
@harshitbarve
asha chaudhry
hi harshit,
how different will you be from https://www.truckmandi.in/ ?
Shehan M
Hi Harshit,
It’s nice to see you wanting to solve a pain point which is bothering you personally and not wanting to create a “me too” company!
If I comprehended your post properly, I believe you want to model the business as a truck aggregator where you offer end-users and truckers a platform to interact and do business. Your job will be to add truckers and watch over their performance on the platform. Please correct me if I’m wrong.
This sector you want to dive into has picked up rapid pace in the last few months in terms of new entrants and investor interest. Take a look at the startups and investment deals made recently:
https://techcircle.vccircle.com/2015/12/21/exclusive-truck-aggregator-truckmandi-gets-under-2m-in-pre-series-a-funding/
https://techcircle.vccircle.com/2015/10/29/instavans-raises-funding-from-dells-suresh-vaswani/
https://techcircle.vccircle.com/2015/10/20/mahindra-ventures-into-intra-city-logistics-aggregation-with-smartshift/
https://techcircle.vccircle.com/2015/08/04/last-mile-logistics-startup-letstransport-raises-1-3m-from-rebright-partners-others/
https://www.vccircle.com/news/technology/2015/07/03/exclusive-snapdeal-co-founders-invest-mumbai-based-last-mile-logistics
https://techcircle.vccircle.com/2015/06/18/on-demand-logistics-tech-startup-moovo-raises-seed-funding-from-youwecan-others/
https://techcircle.vccircle.com/2015/05/28/startup-linking-local-mini-truckers-thekarrier-raises-240k-from-sol-primero-others/
There has also been quite a few acquisitions in this space, which indicates a large number of players in the playing field and inevitable consolidation in the near future.
All of the above information I have mentioned is not to discourage you or scare you away from starting up in this particular field, but to show you validation, that what you are experiencing is a real problem faced by many and that investors may be willing to make a bet if you decide to raise capital.
You have mentioned a few problems in particular which you see in the transport business. I have a few suggestions which I believe is very much executable.
1. No fixed time of truck coming to your site: I have only stayed in India for 2 weeks and OH MY GOD, I could have made babies in the time it took for me to get from Delhi airport to Meerut which was only 75 kms away, and I’m not even married yet! In a country notorious for heavy and slow moving traffic, it wouldn’t be practical to inform end users of an arrival time,because it will never be 100% accurate. So why tell them a time which will more often than not be useless information? What is practical and can be 100% accurate is a real time tracker which the end users can look up on the platform. This can easily be achieved with the use of technology (more on this in below point ).
2. No reliable service: This can easily be fixed through a rating and incentive system on the platform. End users will rate the many truck service providers based on their performance. Lets say, for example, any truck service which falls below a 3 star rating will automatically be taken off the platform. On the flip side, any truck service which maintains a 5 star rating for a period of 1 month will receive a 10% pay hike (these can be adjusted after calculating basic units of economics). This system will ensure that end users are not connected to dodgy truckers and the ones on the platform will be encouraged to aim for the 5 star performance level.
3. No tracking of your material location + others: A real-time location tracker is pretty commonly used these days for this exact purpose. End-users will know exactly where their materials are at any given time. This feature can be built into a supplier-side app.
These are just some ideas I wrote down from the top of my busy head! I’m sure they have been executed to some extent by similar startups. If I were you, I would do the following in the exact order:
1. Download the app of each and every truck aggregator I have mentioned above.
2. Book 1 truck from each aggregator and see whats missing/what could be improved.
3. When truckers arrive to deliver your goods, TALK TO THEM! ask them the ins and outs of them being on certain truck aggregation platforms and what they want to see improving. NOTE DOWN THEIR PHONE NUMBERS!
4. Spend 1 week researching and analyzing the exact business models of these startups to spot any loopholes.
5. Put all your findings/experiences onto paper. Draw up a plan and move onto the most important step thus far!
6. Start looking for a techie co-founder who is capable of transforming your plan into a working prototype. This problem can only be solved and scaled into a profitable business with the use of technology, so finding a techie partner who is talented and reliable will be a make or break stage in your journey.
7. Once your prototype is ready, call those truckers over. If they don’t come, book them for a delivery!
From here on, its all about selling!
Hope this helps 🙂
Shehan.