We talked to Franz Purucker of Hive about the logistics brain for e-commerce and here is what he said about it.
First of all, how are you and your family doing in these COVID-19 times?
Franz Purucker: Great, we adapted to the circumstances in Germany’s lockdown and are grateful for the good medical system.
Tell us about you, your career, how you founded Hive Logistics.
Franz Purucker: Our founding team consists of Oskar, Leo and me – bringing together a strong combination of e-commerce insights, logistics experience and passion for software development.
5 years back, I founded a social venture in Indonesia producing and selling organic dried fruits but got very frustrated by the operational challenges of order fulfilment and international shipping. After spending some time at McKinsey and JP Morgan, I decided to take on the challenge of making operations and logistics easier for e-commerce brands. My co-founder Oskar has previously built up the logistics team for a Rocket Internet venture and spent 4 years at McKinsey as a strategy consultant focused on operations. Together with Leo, an ETH Zurich graduate passionate about coding, we have the right team to make excellent e-commerce operations more accessible. We achieve this by focusing on software-driven order fulfilment and warehousing initially and building an integrated operations solution later on.
How does Hive Logistics innovate?
Franz Purucker: We are building a tech-driven operations brain for e-commerce entrepreneurs in order to help them automate logistics, order fulfilment and procurement.
For now, we have built an inventory management tool with plug-and-play integrations to shop platforms like Shopify and pair this with operational excellence by running our own warehouses to fulfil orders, supported by former Amazon and DHL employees. This enables e-commerce entrepreneurs to store and ship their orders with ease.
In the mid-term, we will provide inventory analytics and financing solutions, integrations with freight forwarding and packaging suppliers as well as data-driven suggestions to choose the right last-mile shipping carrier (UPS, FedEx, DHL, DPD etc.) and cut costs.
Similar to the way Shopify has made it very easy to set up an online store, we will democratize access to amazing operations.
How the coronavirus pandemic affects your business, and how are you coping?
Franz Purucker: The COVID-19 pandemic has accelerated our business in two ways:
1. Consumer behavior is shifting towards online purchases more rapidly than before.
2. An increasing number of people decide to found their own online brand based on Shopify and sell products directly to consumers.
Many of these new direct-to-consumer brands prefer not to sell and fulfil through Amazon to own the customer experience and data, enable quality branded packaging materials, and keep higher margins without a large marketplace involved.
Did you have to make difficult choices, and what are the lessons learned?
Franz Purucker: No, although we very much hope for this pandemic to be over as soon as possible and return to normal life, we have barely been impacted in a negative way. Of course, we have to adapt our operational processes to ensure our team’s health, and we would love to travel again, but there are people and businesses facing much greater challenges than this.
What specific tools, software and management skills are helping you navigate the crisis?
Franz Purucker: We use Notion for knowledge management and Slack + Zoom to stay in touch closely despite some people working remotely. In addition, we’re taking a few hours every week for an all-hands team session where we don’t focus only on results and metrics, but rather share all our concerns openly – business and personal ones – and learn from each other how to overcome them.
Who are your competitors? And how do you plan to stay in the game?
Franz Purucker: We’re the first European player providing both software and operations out of one hand.
Our competitors can be grouped into three categories:
a) Very large logistics providers like Amazon, who will certainly stay in business but lose market share among high-quality brands focused on direct-to-consumer sales.
b) Smaller mid-cap warehousing providers, who have flexible processes but no advanced software solutions.
c) Logistics startups building platforms to connect online brands with warehousing providers, but without any access to or control over the actual operations.
We will stay in the game by providing the right combination of technology and operational excellence. In the long run, we will provide a better cost structure and customer experience by owning the heart of the value chain around order fulfilment and integrating adjacent logistics services through software.
A variety of logistics veterans believe in this vision, and we’re very excited to newly welcome the founders of FlixBus (Jochen Engert) and Forto (Michael Wax) as angel investors together with venture capitalists who previously invested in Zalando and Seven Senders (Picus Capital, Holger Hengstler).
Your final thoughts?
Franz Purucker: We are truly excited about enabling online entrepreneurs to scale up their companies smoothly. If you’re an e-commerce founder craving better operations or a passionate software developer/operations magician looking for a new challenge, please reach out!
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