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15/11/17
11:36
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Originally posted by Memsl
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Forgive my ignorance but I keep reading people talk about execution risk. I have read the GSW website and what I can see is that GSW is not providing its own drivers or deliveries. All it is doing is providing a SaaS (Software as a Service) app that can be used by companies to optimise the routes that the companies drivers take to deliver the companies products to its customers. GSW's customers are the companies. They charge the companies a fee per delivery through the use of their proprietary app they provide to those companies. Their business model is based on selling their app to companies on the promise it will bring those companies happier customers (because of the tracking) and lower costs and faster delivery times (more deliveries in a day at lower costs) making it worthwhile for the companies to continue using GSW's app.
The risk for GSW is in market penetration. The more companies they get to sign up to use their app the more money they make. In principle, this is the same sort of model as Uber. Uber provides an app but doesn't provide the drivers or cars. Another risk for GSW is that someone else comes along with an even better algorithm-based app that optimises the routes even better than what GSW can do.
The only execution risk is how many companies and how fast they can sign them up and for big customers what sort of per delivery pricing discounts they offer.
GSW is just an app. You couldn't even really say its disruptive. Could they get a Toll, DHL, UPS or big logistics company to sign up? Maybe not as those companies have been working on optimising the last mile delivery for decades. If anything I imagine that one of the big logistics firms might just swallow up GSW or alternatively create their own apps to drive customers to use their services (and provide the cars, trucks and drivers as well). Am I right?
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Your assumption is that there is some barrier to entry. Why would a big logistics firm pay $500m for some tech they could make for a fraction of that, IF they don't already have it?
I would assume that is why competitors like Bringg have also not signed up big logistics.