Thoughts on Covering a LogTech Down Cycle
Welcome to the 92nd edition of The LogTech Letter. TLL is a weekly look at the impact technology is having on the world of global and domestic logistics. Last week, I compared well-intentioned initiatives like software investment and green goals to the reality of reshoring. This week, I’m address the disconnect between how founders see between how they view their business and how journalists view it.
As a reminder, this is the place to turn on Fridays for quick reflection on a dynamic, software category, or specific company that’s on my mind. You’ll also find a collection of links to stories, videos and podcasts from me, my colleagues at the Journal of Commerce, and other analysis I find interesting.
For those that don’t know me, I’m Eric Johnson, senior technology editor at the Journal of Commerce and JOC.com. I can be reached at eric.johnson@spglobal.com or on Twitter at @LogTechEric.
Let’s address something I’ve been wanting to write about for a few months, but that’s especially pertinent right now. From time to time, I’ve written about how I cover the logistics space and what the industry should know about how journalists work. In fact, it was the subject of the very first edition of this newsletter nearly two years ago. The subject is even more relevant today because we’re in a weird market. After two years of unbridled enthusiasm about the direction of LogTech, investors are taking a more measured approach to new investments, and being pretty tough on their existing ones. The days of up and to the right forever are over.
But in the midst of that, as Schematic Ventures General Partner Julian Counihan told me last week, “supply chain technology can be viewed as countercyclical, which provides further support for revenue growth, margins and the resulting stable valuations.”
Any way you slice it, the market is noisy. Layoffs at one company are announced days after a hefty round at another. If you follow some VCs on Twitter, we’re entering Lord of the Flies territory. If you listen to others, deals are happening and the ones that are bemoaning the market are just being left on the sidelines.
Now what does all this have to do with the way founders perceive coverage of their companies? Well, there was no shortage of people in tech feeling that companies from Coinbase to Away to Amazon were getting a raw deal in the press the last few years. The thinking goes: journalists only want clicks and the puppeteers controlling the world of media have instructed them to write provocative material loosely based on fact in order to drive engagement.
As Neal Peart wrote: “A planet of playthings, we dance on the strings, of powers we cannot perceive.”
This manifests into the supposed process of journalists building up a company - “these guys are gonna be huge!” - and then tearing them down - “the culture there is toxic and they’re wasting investors’ money.” Theranos, WeWork, Fast, the list goes on. In LogTech, we still don’t really have a bunch of breakthrough companies, meaning ones whose brands would be recognizable to someone outside of the industry. My wife knows what Square is, knows about Salesforce…she has no idea what Flexport or project44 do.
So, to a certain extent, any descent in LogTech would be happening off a lower crest, at least from a public awareness perspective. Now, inside the industry? There are undoubtedly a bunch of people hungrily awaiting the downfall of high-profile names to emerge in the last decade. There are others who hope there are some success stories alongside the flameouts. My view: as journalists, we can’t play to the masses. Clicks are not the be-all end-all, especially for subscription-based journalism, where your credibility is on the line every day and renewals are the proof that your writing is valuable.
If we in the logistics press are to cover those who end up being unsuccessful, it has to be measured. It can’t be about layoffs purely for the sake of layoffs. If we cover layoffs, it has to be because the company has reached a point where it is used by a wide cross-section of the industry. Or we have to link layoffs at several companies to paint a picture of a broader trend. As I covered the innumerable funding rounds that LogTech companies received the past few years, it was always on my mind to contextualize those rounds. The same has to be done on the downside.
We’ve focused on layoffs here so far, but the bigger question is, how can journalists be true to their profession and cover the ups and downs of early-stage companies fairly? Can we get to a point where founders don’t feel that their stories are being told inaccurately? It’s clear that social media has opened up channels for founders to tell their own stories. But journalists can’t get drawn into situations where they are placating the companies they cover to convince them to let their stories be told through their publications rather than the companies’ own channels.
I think there has to be a bit of compromise on both sides. Founders need to trust reporters to tell their stories fairly. That requires giving up control in a way many don’t like. But reporters who gain that trust will seek to understand the companies’ businesses in a much deeper way. And the payoff for the company is an independent validation of their business - threaded tweets and LinkedIn posts and blogs are still marketing content, not journalism.
Reporters who innately understand the pressure that founders are under - especially those that have taken venture funding - will have a better appreciation of why founders are loathe to surrender control of their own narratives. It doesn’t mean we write verbatim what the founder wants, doesn’t mean we don’t take a critical eye to their business model, doesn’t mean we can’t conclude initially that they’re on to something big and realize later that view was wide of the mark.
But founders and the journalists that cover their companies both benefit where there’s more trust in the system. Those bonds are stressed further when an early-stage company moves into a more mature phase. A plucky upstart is easier to cover than one that has built name recognition. The bigger the company gets, the more it means, and the more newsworthy any developments (like funding rounds or layoffs) are. It doesn’t mean that a reporter built the company up to cheer its downfall. It’s that as a company matures, the stakes are higher.
To wrap this up, Neal Peart’s lyrics were ironic, about how people give in to conspiracy thoughts too easily at the expense of realizing they control their own destinies. The lyrics are not meant to suggest that the illuminati is behind everything. Let’s bear that in mind as we enter a period where we’re likely to see more coverage of struggling tech companies across sectors. There is no grand engagement plan out there. It’s just that the companies who rose fast the last few years have become big enough to encounter problems, and that’s newsworthy.
Here’s a roundup of recent pieces on JOC.com from my colleagues and myself (note: there is a paywall):
More electronic bill of lading (eBL) news this week, as the DCSA said it has enlisted ExxonMobil, seven container lines, and four eBL vendors to test interoperability between all their systems. The project should be completed by the end of the year, but bear in mind, eBL adoption - to this point - remains very low.
Forced labor legislation is one of the least talked-about, but potentially most impactful issues out there. Altana AI, who I’ve written about a few times, is tackling multi-tier supplier visibility, and last week, it announced a partnership with Maersk’s US customs services unit.
And here are some recent discussions, reports, and analysis I found interesting:
RPA Labs CEO Matt Motsick with a great blog on the difference between natural language understanding and natural language processing.
Looking forward to this series from Dynamo on supply chain unicorns. At TPM21, Dynamo partner Santosh Sankar was on a panel and I asked him about how many unicorns there would be in LogTech by 2030. This series should explore that.
We're starting a new series on the @ThisIsDynamo blog called The Unicorn Brief We will breakdown the story and business of the world's supply chain unicorns First up, @convoyteam by @warrenwang_1 dynamo.vc/blog-posts/the…
Santosh will be on a panel at our upcoming Inland Distribution Conference Sept. 26-28 in Chicago, talking about the state of VC in logistics. Register here for that event.
Had a great time this past Wednesday talking intermodal and trucking with Chris Jolly, The Freight Coach, on his morning show. Catch the replay here.
DAT’s Dean Croke was the guest on this LinkedIn show last week and did his usual super rundown of market dynamics across modes. Well worth a watch. Dean is also a speaker at the Inland conference, on the North American Freight Outlook Panel.
This opus from John McCown on spot rates has been doing the rounds this week, but it’s worth reading from top to bottom. McCown’s view (one I agree with) is that spot rates in ocean get far too much attention relative to how little volume moves on spot. Relatedly, encourage you to read this JOC piece from Monday about how the decision to move away from contract and onto spot isn’t merely a matter of price shopping.
Some upcoming events I’ll be involved in:
At 10 am today on LogTech Live, I’ll be joined by Eytan Buchman, chief marketing officer at Freightos, to discuss the wild world of digitizing international freight, how airlines and container lines are adapting to online rate environments, and Freightos’ decision to go public via a SPAC. You can catch the episode here, via my Twitter feed, or on Let’s Talk Supply Chain’s LinkedIn page.
I’m joining Philip Blumenthal, chief transformation office of ECU Worldwide, for a discussion on forwarding technology at 10 am ET July 26. Register for the free discussion here.
As noted above, our Inland Distribution Conference in Chicago Sept. 26-28 is coming up fast. I’ll be doing a one-on-one with Emerge CEO Andrew Leto and then leading four tech-oriented discussions, including the one on small carrier tech, as well as sessions on LTL tech, freight procurement advances, and venture’s future role in trucking. Don’t miss this - it’s the most substantive surface transportation conference in the market.
Disclaimer: This newsletter is in no way affiliated with The Journal of Commerce or S&P Global, and any opinions are mine only.