by Y Combinator7/27/2016
Rose Rocket is building software that helps trucking companies with order management and communication at every level. Co-founders Justin Hein, Alexander Luksidadi, and Justin Baile sat down with us to talk about what they’re building.
What YC Likes About Rose Rocket:
“Trucking is one of the largest industries in the US and it is one of the last large industries not to be disrupted by technology. Do you know the app that Uber drivers use? Amazingly, truck drivers still don’t have anything like that – in some cases they still communicate with their base over the radio. Rose Rocket is the right solution. It’s modern software that makes trucking companies better without trying to replace them. Even when trucks become driverless, trucking companies will still need to manage their operations, and they will use Rose Rocket to do it.” – Jared Friedman, Partner, Y Combinator
YC : What problem does Rose Rocket solve?
Justin Hein: Trucking is one of those really old industries that hasn’t really seen much change over the past 20 years. Everything is fragmented. Trucking companies talk to their customers through a mishmash of phone, email and fax. And booking an order online is almost nonexistent. Even internal communication is broken. People will get up and yell across the room to talk to another person in a different department. Some truck drivers are still using flip phones and radio. Basically everything is done manually. We had a customer who was doing $20 million in sales every year but was still using Excel sheets to keep track of orders.
We created Rose Rocket to streamline tracking from order to delivery. We allow you to create a portal on your website that will let customers input their orders and track them. This portal is connected to an internal order management system that lets your dispatch team assign orders to the truck drivers via a mobile app. Truck drivers can then use the app to update a customer on the shipment’s location.
YC :You’ve eliminated a lot of steps and legacy tools from the process. How much money does that save trucking companies? Justin Hein: We’ve mitigated a lot of data entry, phone calls, and paperwork from their workflow. These things don’t seem like a lot, but it’s actually very high overhead. In some cases up to 50% of their gross margin is used on administrative tasks. By automating these things, we’re basically able to double their profits.
YC :Why haven’t trucking companies done anything to modernize their process before? Justin Baile: Not all trucking companies are equal because this industry is very fragmented. Some of the large multi-billion dollar companies have spent a lot of resources on technology over the past ten years but the vast majority of trucking companies have not because they’re much smaller by comparison. Trucking is an old school, low-tech business that operates on low margin business, so investing in enterprise grade technologies didn’t make sense for a lot of them.
Our competitive advantage is that we’re able to build enterprise-quality software that can be used by companies of all sizes.
YC :You mentioned that not all trucking companies are equal. Which type of trucking companies does Rose Rocket work best for?
Justin Baile: I think we’re delivering the most value with LTL (less-than-truckload) companies today. The majority of them struggle with determining how much profit they making on a shipment because there are so many variables involved. No one order is the same and the cost to service them is never the same. The costs constantly change depending on the logistics, locations, and capacity. .
One multi-million dollar trucking company we know has a monthly meeting dedicated to try and figure out how much money they made. They sit in a room for hours and in the end, they only have a general estimate.
It’s hard to measure how much you’ve earned unless you have visibility and data from end-to-end. We help trucking companies solve this problem. Our software can tell you how much your customers are paying, and how much the entire operation costs on a per order basis. Because we have all this information in one place, we can manage and understand the costs as they change.
YC :Does the idea of driverless trucks scare you?
Alexander: No, we are all for it. I really see our software as an enabler of driverless trucks. Our technology will automate the operational portion of getting something from point A to point B so in essence we’ll be the conduit between the customer and the technology in the truck, driverless or otherwise.
YC :What’s your long-term vision for this company? Justin Hein: Our vision is to make trucking companies extremely profitable by automating the entire order process using AI and machine learning. We’ll be the platform where all the technology exists off the truck. We want to see trucking companies run as efficiently and profitably as possible.
Y Combinator created a new model for funding early stage startups. Twice a year we invest a small amount of money ($150k) in a large number of startups (recently 200). The startups move to Silicon