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September 13, 2017

I like pain. I love Localz.

Notion leads Series A investment in Localz, to transform the last mile delivery experience and define a new category, the iconomy.

We have been following Localz for two years and I find building the relationship early can be critical. It’s been great to see their progress from a strategy and execution perspective during that time but in Q1 I really started to engage aggressively – here’s why.

During this time we have been observing a massive shift in consumer expectations which is now at a tipping point and with converged themes leading to Generational Existential Threats =  The Pain.

So let’s start with the pain

The industry pain is complex but mouth-watering. Pain always forms the backbone of my investments. Pain creates momentum and speed to value for all stakeholders, Localz, customers and investors like me.  

In this instance, it is actually a convergence of many existential threats converging on Enterprises in key verticals.  

Firstly, Amazon (aka the scariest competitor in the planet) because they are hoovering up market share in retail and want to own the customer from end to end.

Secondly, mobile first consumer plays like Deliveroo, Uber & our friends at Amazon again – because they are screwing with the minds of everyone’s customers, constantly raising expectations of a slick instant and mobile experience. Amazon Fresh = same day two-hour delivery slots in London!!

Thirdly, automation is transforming the economics in networks, like Uber, but the next era will see these benefits across wide interconnected networks in the supply chain. Take Logistics, which is gearing up for $500billion in SAVINGS right now through Automation – eye watering numbers. There are 100 enterprise logistics companies in Europe and 1000’s of small firms. Localz already has 2 of the top 5. We estimate 50% will disappear in the next 5 years. For those planning to survive joining the digital revolution with Localz.com is an imperative, not an option.

Or to put it another way, in simple English – I no longer need to stand in the rain competing with fellow travelers for a taxi because of Uber, I place my order, watch my driver and step inside, dry and happy. It’s cheaper, cleaner and a fully automated experience.

BUT If I’m pre-occupied in the shower when a delivery arrives or an engineer comes to fix my boiler then I might as well be living in the 70’s. I get a card. That card shouts – F*** YOU!

 

My consumer response is “you’re a dying company, I’m going elsewhere”.

 

I think my response is natural and contagious. If I can get a takeaway at my desk, verifying its journey every step of the way, then that’s what I expect for every single product and service experience.

In a mobile first world, the consumer has all the power. They can and will change supplier or service at will if their expectations are not met.

Enter Localz. They ship an Uber-like experience as a code to any enterprise, enabling them to give their customers what they want, when they want it and where they want it and with the ability to change their mind. They remove all the complexity and deliver a superior experience at a lower cost.

Tim Andrews envisions this as the iconomy – an entirely new category and economic reality based on this heightened consumer expectation, hence the Individual Economy, or iconomy for short.

If a company does not offer an Uber like experience and they are interacting with a mobile end user then they are dead. They just don’t know it yet.

Chris x

PS, The tsunami is ripping through Logistics and Retail but mark my words it’s also hitting Services companies. Construction and Healthcare will get hit seriously hard soon. In the long run, no one’s immune.

Posted by Chris Tottman, Partner at Notion Capital.

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