8VC

Ultimately, I connected with Matt McKinney (Loop Co-founder/CEO) when he was at MakerSights as the founder was connected to Davidson I got to know him well and learned more about his role in Data Science We stayed in touch and I ended up working on a project with MakerSights as they had compiled a compelling data set but nobody had time to assess it and extract value It was great to see that my experience in the classroom was directly applicable to a startup environment and Matt became a close mentor

Following graduation, I joined Rakuten as a Search Engineer In early 2021, Matt reached out and mentioned he was talking with a colleague at Uber Freight about building a modern payment network for the logistics ecosystem Granted, I had little to no exposure to logistics, but these conversations with Matt were happening against the backdrop of heightened dialogue around supply chain challenges in early 2021 This back and forth ultimately resulted in a full time offer to join Loop as a founding engineer

Seeing you were new to the logistics ecosystem, how did you quickly ramp your knowledge?

Unlike ecommerce, where most data is designed with the internet in mind, logistics existed long before anyone was writing code I had to take off my engineering hat and grapple with complex and disparate data coupled with conversations with logistics professionals who could pull back the curtain and unpack the industry I greatly benefited from meeting with our Loop advisors who shared invaluable insights regarding freight and logistics, which was just as important as my technical knowledge as an engineer

It was a constant balance of learning where we can drive innovation, and deeply respecting the domain and complexity of the market Our goal is to meet Loop customers where they are, but we also need to be able to synthesize their needs and pain points from a first principles approach

What part of Loop do you work on today?

Very early on when we were a small engineering team, we were hyper-focused on building understanding of the domain We had a few awesome pilot customers who had common pain points and were willing to be open with their data and time – we were able to speak in great depth with everyone who touched freight invoices and the associated bottlenecks

My first few months were marked by an exploratory learning phase – we did a lot of reading, studying carrier rates and how carriers decide to charge for the services they sell across industry

Initially it was a lot of exploration and discovery to ensure we were diligent when building out the platform The engineering team has scaled and adopted domain-specific focus areas At the highest level, there’s the platform team, which consists of the tooling and modules that are agnostic to transportation and payments – there’s a ton of complexity around how to extract text from a PDF or get data from many different sources and merge it

I’ve honed in on the transportation-specific team – at the lowest level, we take the data we’re collecting and figure out what the cost of a shipment should be We then expose this information to transportation professionals through our product to simplify their day to day operations We can help a carrier understand how much to charge their customers and dictate to a shipper how much they should actually be paying for an invoice from a carrier I now spend a good amount of time exploring transportation rates and contract management

A lot of Loop’s value prop is creating the modern payment network for logistics Just offering to process payments isn’t enough Through our ability to understand rates and audit freight invoices, we bring transparency to the payment so that whatever side of the equation you’re on, Loop can share exactly what you’re paying for and why – we become the system of record for financial-related logistics data and take over payments as an added bonus

You have this abstraction layer between the core platform and extending it to domain specific use cases. How did you decide what gets abstracted out to the platform tier?

We try to think of that boundary as something that can evolve If our team is working on the audit and we find ourselves building functionality agnostic to the complexity of auditing a freight invoice, we contemplate how to break this up into independent tasks associated with the audit We discuss which modules and features can be designed at the platform level and potentially leveraged elsewhere in the Loop ecosystem

This decision-making process can happen during project planning but often will transpire in a more natural way We go through the normal planning of business and product requirements – as we build new product functionality, we can revisit key decisions and identify the common modules we’re able to extract to the platform level

What has been the most surprising thing you’ve learned @ Loop to date? What about the most surprising thing about the logistics space?

The opportunities available to me at an early stage startup are unparalleled – I certainly would not be able to take on as much responsibility and learn as fast at a larger company There’s so much to build and understand, you inevitably get exposure to so many meaty problems I get to think through how to build software systems from scratch, engage with potential users to understand needs, and translate said needs into product requirements, which ultimately become designs that engineers build into software Being involved in this process from start to finish is incredibly rewarding

From a domain-specific perspective, I’ve learned how complicated paying for freight is When I first talked to Loop’s co-founders, they highlighted the sheer volume of freight in the US and how much is currently paid for by paper checks It’s painful for all stakeholders as pricing is directly tied to the movement of goods, which is highly volatile Fuel prices fluctuate, a truck driver’s time is valuable, delivering a pallet to downtown SF will incur different charges than delivering a truckload of goods to rural Maine This has evolved into complex rate structures and hard to understand contracts

Shippers need to move their goods for their business to run They’ll receive an invoice and have little visibility into what happened over the course of the shipment journey There isn’t a central place that consolidates all of this data, which includes assorted transportation documents, TMS data, EDI messages, and signed receipts to name a few

What's something on the Loop roadmap that you're looking forward to working on?

There is pain on both sides of the equation – in order to process payments accurately and transparently, we need to provide benefits to all stakeholders

Our initial GTM has been focused on the shipper side - customers of logistics services We’re expanding our support for freight brokers I’m excited to build more tooling and products geared towards carriers Our goal is not to be an accounting tool that helps shippers drive down costs and gouge carriers We’d like to be a neutral financial layer between all different parties involved in how freight moves Carriers are 50% of this equation and have their own set of unique points of friction – I’d like to formalize this vision of building for both sides of the equation

This is an engineer's dream – we have this problem of data wrangling as data is everywhere across many systems and filing cabinets We have a complicated domain that’s ripe for disruption There’s also the added bonus of building a modern payment network on top of all this There’s effectively unlimited surface area to think about and innovate upon

What are some of the hardest technical challenges that your team has had to solve so far? What hard problems are yet unsolved? What are the most complicated problems of freight billing?

Rate management and contract management is a key challenge – we’ve made progress but there continues to be room for improvement

There’s an unlimited amount of rules around how much freight should cost – every carrier generates their own agreements and rate contracts so there’s no real template At Loop, we manage and apply those rates in a tech-first approach – this is how we change the industry as well as bring simplicity and transparency to its payments

The challenge of representing and applying rates in the Loop system across customers, carriers and modes is no easy feat As we learn how rates are structured, we recognize there will always be a long tail or edge case for that shipping situation that our system does not expect We’re innovating with the understanding that while human intervention may be necessary to assess special cases, we can leverage the (oftentimes hidden) common themes across rating rules that will allow our system to scale

Any hot takes you might have on startups / investing!

There’s a lot of excitement and energy around building tech solutions for the logistics industry However, the companies that focus on improving the lives of folks in industry who are keeping it moving daily will win

We should remove the painful, back-office operations component so individuals can hone in on the most important aspects of their jobs These companies will endure – no one will build a successful tech-enabled logistic company simply by creating a slick new piece of software It’s critical to understand the true challenges of the industry and its core operators