The globalization of our economy — and the role that countries like China play in manufacturing goods that get consumed very far outside its borders — has been a big topic in the tech world. One of the sidenotes of that story is the role of shipping and distribution — an essential part of the equation, but one that carries a lot of risk: risk that products do not arrive on time, or in perfect condition, or perhaps in the worst cases, at all. That’s where Y-Combinator-backed HD Trade Services comes into the picture.
HD Trade Services has developed a suite of software for logistics services providers, delivered via portable-friendly tablet and smartphone apps, which lets them track the arrival and departure of products in warehouses to make sure that things are going where they are supposed to, and that products are what their suppliers say they are.
Using data entry, the company tracks inventory management, and the location of the products for selling on to trading partners.
And as it turns out, the whole “Pictures or it didn’t happen” meme actually has some relevance in the world of enterprise. Using the cameras on the smartphones and tablets, logistics service providers can take pictures of the products and scan barcodes on the products to supplement their data entry.
The picture-taking service, says co-founder Daniel Sugarman, “is actually a lot about pictures. Pictures help with liability.” In trading that takes place often thousands of miles from where a business is headquartered, he notes, some traders would never get to see their products if it weren’t for those pictures.
Services like these already get used by larger shipping companies like FedEx and UPS. But HD Trade Services is now making them something accessible to the tens of thousands of smaller logistics service providers in the market. It’s another example of how the consumerization of enterprise IT — using apps and devices readily available in the wider consumer electronics market — plus the falling cost of cloud storage, are giving smaller businesses a crack at the same kinds of services that their larger counterparts have spent millions to develop. Before something like this came along, real-time would not have been an option for these companies, which would have used paperwork (in triplicate!) to record everything.
HD Trade Services is the brainchild of two co-founders, Daniel Sperling-Horowitz and Sugarman. Sperling-Horowitz had first-hand experience of the drawbacks of doing business in the global economy:
“When I was a student at the University of Maryland, I started an operation importing electronics in China,” he says. Using the Alibaba trade network, he unwittingly got involved in a trade with a scammer.
Luckily, he managed to pull out of the deal in time, but the whole incident spurred him to look further into the problem, developing that into a paper that reached the finals of a business plan competition at Peking University. ”It turns out it was quite pervasive, the problem of companies offering one thing and delivering another.” Realizing a gap in the market, he decided to develop that research into a business of its own.
Sperling-Horowitz soon teamed up with Sugarman, who had been in the same fraternity, and was pursuing a computer science PhD at New York’s Stony Brook University. He left the program to help to build the team that has developed the tech underpinning for the business as initially conceived by Sperling Horowitz, and that’s how HD Trade Services was born.
Since then, the target market of consumer electronics has remained but there are further opportunities in areas in fashion, jewellery, home goods and industrial parts, Sperling-Horowitz notes.
The company had originally been founded with the idea that would potentially take the idea of logistics tracking even further: using HD cameras to monitor the whole warehouse process in real-time, with all partners having access to the video feeds to monitor progress. For now the company wants to “grow organically” using their existing app-based offerings before ramping up to the next level using video, which would require more investment from HD Trade Services, and from their customers, to implement.
The company already has two paying customers in the U.S. for its service — with pricing for the sales product service varying by the size of implementation; and the portal inventory access costing less. In its small state, it’s using a kind of trickle-down model to grow the business for now: “Our customers get their partners using the service, and they get their partners to use it,” is how Sperling-Horowitz explained it to me. “That represents an excellent distribution channel.”
Mobile and cloud based logistics software.
Y Combinator is a venture fund which focuses on seed investments to startup companies. It offers financing as well as business consulting along with other opportunities to 2-4 person companies looking to take an idea to a product. Y Combinator looks for companies with “good” ideas over companies with experience and a business model. The company made its first investments in Summer 2005. Y Combinator selects companies to finance and consult with twice a year. They are located in...