Before CarrierConnects, I was working on providing trucking solutions within the US. For this we used available load boards and booking platforms to find trucks for shippers. While doing so, a new client for us was an Indian SME who requested help with transportation of his ocean container from New York port to an inland location in the US. While fulfilling this requirement, I realised that there was no digitally available solution for internationally located Shippers to get truck pricing and capacity booking in the US. Especially with container transportation, there were 10+ variables in the cost which made pricing complex and opaque. The final invoices were almost 50% higher than the initially quoted rate for container transportation. 

Further, the SME truckers in the US rely heavily on factoring agencies to get paid and these factoring agencies that charge upwards of 3% per transaction, do not approve credit for a non-US based Shipper, denying international shippers the ability to find and book trucks directly with the trucker in US. Instead such shippers rely on US based freight brokers who charge over 30% in commission for providing trucks to international shippers. This is when we came up with the idea of having a digital platform to connect international shippers with direct truckers in the US.

Q2. What made you start working on Carrier Connects and executing this idea?

With over $ 75 Billions in exports from India to US which is growing at 14% CAGR, we believe it is the right time to create a digital marketplace for Indian freight forwarders to find and book trucks in the US and hence CarrierConnects was created to solve this problem. We have the right expertise to build this solution owing to our trucker network and domain knowledge of transportation in both India and the US. Before starting CarrierConnects, we spoke to 100+ truckers and shippers and we realised that the industry largely relied on email and phone call based negotiations for truck booking. An average SME was spending over $100K per annum on avoidable tasks that can be automated with today’s technology. Presence of middle-men who charged over 30% in commissions also resulted in Shippers overpaying and truckers being underpaid for their freight. Existing digital freight forwarders were largely focussed on ocean transportation and relied on agents for last mile logistics in the US. We found a clear opportunity for a disruptive marketplace that connected international shippers with last mile truck providers in the US. 

Q3. When did you realise the need to raise Venture Capital - Seed funding? 

We started up in February 2021. Over the course of the next three months, it was

Q4. How has 100X helped you at the beginning of your journey?

100X believed in the founding team’s expertise in the logistics space. They came invery early when we were still experimenting with our MVP and iterating acrossmultiple solutions in this space. Their model of initial funding, mentoring and thenfollow-on funding from their network of Angels and VCs ensured we were able tofast track our hiring and conduct multiple experiments without having to pauseour efforts. There was immense learning from their classes, where we were able tointeract first hand with other successful startup founders and learn from theirjourney.

Q5. Has your startup pivoted? If so, What has the pivot been?

After multiple experiments and pilots, we understood that just a matchmaking platform was not sufficient. Based on the feedback from clients and truckers, we realised there was a need for the platform to build trust among our vendors and customers at which point we decided to pivot to a managed marketplace model. We moved away from a monthly subscription based pricing model to a transaction fee based pricing model charged on every booking. It was a counter intuitive move for us as shippers would be paying much more in this model than the subscription model. However, once the revenues started coming in and customer stickiness improved, our experiment proved that we were solving a critical problem for which the customers are ready to pay more. 100X backed our pivot even before the revenues came in and helped us chart our course for future growth. 

Q6. What challenges did you face & how did you overcome them?

The road was full of challenges from the beginning. A two sided marketplace model is a double edged sword which needs both vendors and customers to be present on the platform to derive significant value from it. We decided to focus first on truck providers, who would be the vendors for us. We spent over 6 months emailing and telecalling more than 18000+ trucking companies and on-boarding 3500 truckers across all the major ports in the US. We were able to achieve this in the most cost effective manner without having any physical presence in the US. With a reliable supply base on hand, we then went to the Shippers to use our platform. 

Q7. What stage is CarrierConnects at present?

After the initial hurdles and pivot, we started generating revenue from May 2022and have grown 100% quarter on quarter since then. We broke even in January2023 and to this date we have never taken a loss on our unit economics. We arefocussed on building a robust business model that can withstand the challengesof economic downturns caused by global events. 

Q8. As founders, what are your goals for the next 1-2 years?

Our goal is to grow 5x from our current MRR by the end of December 2023 and 20xby December 2024.

Q9. What keeps you motivated & keeps you going?

Our end goal of creating a dent in global cross border logistics space keeps usmotivated. Constant support from Investors, employees and family helps us sailthrough our challenges. I have no doubt in my mind that India is poised to reach

greater heights to become a $ 30 Trillion economy by 2050. An ecosystem that

Q10. Your message for Startup founders building in this sector?

We are building for a niche B2B sector and B2B is an entirely different ball gamefrom B2C. The primary differentiator is the fact that in B2C, the payer and user ofyour product is the same person. However, in B2B, the user of your product is anemployee of your customer company and the payer is a cost consciousowner/manager of the company who actually does not use your product. Thisdifferentiator needs to be accounted for in the GTM strategy. 

In the early stages, we were focussed on building our platform for a broadermarket. With guidance from 100X and our key investors we quickly realised theimportance of focussing on a niche (inch wide, mile deep as 100X likes to call it).This has helped us improve our customer retention and our earnings per customercontinue to grow month on month. 

GTM is more than a slide on our pitch deck. In fact I have started to believe that it is the most important area for founders to focus on. Gaining as much clarity as possible on GTM, rather than learning on the go, should be the priority for founders instead of building the solution first. 

About Poorna Reddy:

Poorna is an alumnus of IIT Madras and has worked at Amazon and GAP, US. He previously founded East Cape Logistics in US, which was Bootstrapped and currently at CarrierConnects, he is working on providing logistics solutions in the US to Indian freight forwarders and exporters (collectively termed “Shippers”) for last mile delivery of their exported goods in the US.