Disrupting the ship brokerage industry

Intro 0:01
Welcome to the ‘How We Innovate’ podcast presented by Applandeo hosted by me, Wiola and my co-host, Bryan. On this podcast, we talk with leading innovators, pull back the curtain on their industry, and get to know how they use technology to achieve success, as well as share the stories behind them and their businesses.

Host – Wiola 0:24
On today’s episode, we are excited to speak with James Kellett, the CEO and co founder of Spot Ship, a shipping technology company that decided to change the industry forever. James, it’s great to have you with us.

Guest – James 0:37
Thank you very much for having me.

Host – Wiola 0:39
Before we jump further into the discussion on innovations Spot Ship brings to the industry, why don’t you tell us a little bit about yourself?

Guest – James 0:47
Sure. So yes, my name is James Kellett. I’m one of the two co-founders of Spot Ship. we launched Spot Ship about three years ago, we’re now 24 people and we cut the time it takes a ship broker to find the optimal ship from about six, six days to just two hours. And in the course of which by improving ship selection, we expect to save the industry not only $25 billion, but also 90 million tons of co2, roughly a quarter of the UK, total co2 output before founding sponsorship, I own MBA degree from INSEAD and natural sciences bachelor’s from Cambridge. And I spent the first six years of my career as a deep value investor in hedge funds before moving across to run partnerships at a unicorn called Improbable that is one of the metaverse companies.

Host – Wiola 1:32
How did you get into the shipping industry in the first place?

Host – Bryan 1:36
Yeah, it’s a bit of a deviation from what you were doing. So you know, if you gave me what you would be doing after what you were doing, if they said shipping? I would have never guessed that.

Guest – James 1:44
Yeah. So nobody, I think was more surprised than me. So I think the the move from value investing to Improbable was was quite a big one. And that was driven mostly by friendship. That founder was a very close friend of mine. And we’d been talking about me joining Improbable for more or less day one of my investing career. And it came to the point where there was an opportunity to work on our top secret project, which was actually launching a captive billion dollar private equity fund within Improbable. So I think this, this hasn’t happened. So it’s, it’s okay for me to share it. But I came on board primarily to get that launched. And the other stuff was not exactly cover, but it wasn’t why I moved across. And essentially, that’s where I caught startup bug. But I really wanted to have my hand on the tiller, and build a little bit more of a commercially driven culture rather than just pure deep tech engineering focus. So kind of, as I matured into Improbable, I started looking around for people with business ideas to join as as a co-founder. And it was actually Henry, who had the idea for what eventually became Spot Ship, which he came across in a two month internship between leaving the British Army and going to Amazon. And when he first told me about it, I didn’t actually believe it. So we went in to talk to about 200-300 shipbrokers, mainly in pubs, because that’s the easiest place to get hold of them. And it became clear, actually, things in the industry were even worse than he thought they were. So that was when we when we launched together. And it started off with just two of us. And I would say neither of us had the domain deep domain expertise, neither of us could write code neither of us had been founders before. So all of the typical boxes of VC looks for we completely lacked. And we kind of did it anyway.

Host – Bryan 3:34
And maybe there’s just a jump on that a bit. Right. So you talked about how, you know, the situation was a lot worse than you expected, right? From a tech perspective. And you know, I think, why do you feel maybe the logistics or sector or shipping or anything? Why do you think they’re so behind in some technology phases? Right, maybe in terms of optimization, like, what do you think specific about that industry that’s kind of dated?

Guest – James 3:54
Yeah, so I think there’s, there’s probably two different threats. So shipping in general, you can cut into two different things that they both float, but they have very little in common. One is containerized freight. And the other is is commodity shipping, and we only deal with the second, I would actually say in the world of containerized freight, you’ve seen a lot of startup activity from 2015 to 2020. I think you’ve got two DECA corns now, one of them’s FlexPod. You’ve got to have a center, you’ve got a handful of unicorns, we think there’s five to 10,000 startups in the containerized free market. So I would say in 2015 that actually looked a lot like how commodity freight looks now. So the reason the two of them were quite bad, I think just culturally, mariners are quite a superstitious and not a very innovative bunch. And I think specifically, you got it as well with containerized freight but with with bulk freight it was there was no exposure to kind of innovative hubs of the world at all. You didn’t see shipbrokers in Berlin, you didn’t see shipbrokers in Silicon Valley, they’re sat there almost non in America, the ones there are in Texas or in Connecticut. You know, you’re seeing quite a lot in the UK, you’ll see quite a lot in Singapore. And that’s Hambone. It’s, that’s, that’s the kind of markets. So I would say this is just culturally not not a very innovative place to be. And I think you then have the deeper problem for bulk freight, which is why it’s five years behind containerized freight is because it’s super unfriendly for doing Lean Startup. If I look at containerized freight, the three of us could launch a startup tomorrow, we could eat put $3,000 in, we could buy for $5,000 a container, we could purchase transport from Shinzon in China to, to to LA for about another $5,000. And we could call up a bunch of young e-commerce startups, and sell them space on this container. And we can be profitable with container one. And that is how most of these five to 10 startups and container freight started. It’s such a nice way of doing startups, it’s almost built for it, you can start with nothing. The problem with bulk freight is it works like a taxi, not like a train. So you have to charter the whole ship. So we’re talking about a $500 million ship containing $200 million of cargo. And if the three of us tomorrow said we’re starting a new startups, trust us with $700 million of assets, people look at you like you’re mad, which is why it took us about two years to get to our first paying customer. Because the MVP for that market is it’s actually basically enterprise grade tech. So for getting in, it’s horrible. But that’s why once you are in it’s actually very fluffy and a very nice market to be in.

Host – Wiola 6:43
Okay, and yeah, so speaking of an MVP, so when you started building the product, so what were the, like the main features that had to be included in this MVP?

Guest – James 6:54
Yeah. So for us, were we I mean, at first to get the name of the firms in their own time to silly, but one of Henry’s experiences. He saw the idea that you could simulate the shipping market, find the best ship using actually Improbable derived tech, and potentially even being a client or a partner of Improbable. And when he said to the the MD on his desk, I think we should simulate shipping, the guy said, we’ve already got that come around and have a look. And he showed him the screen in which there were what was called positions. So these are commercial availabilities of ships, this ship becomes available in Singapore on the 25th of September, that could be that could be a commercial position. And these, these positions that he showed him was six months out of date and had such detail as the ship is in the Atlantic. And this was just so bad that we thought, okay, well, what we want to do these.

Host – Bryan 7:44
There’s got to be a way to innovate that, no?

Guest – James 7:47
Exactly, this is this is not rocket science. What Improbable was doing is rocket science. So that was probably why I was so excited. It’s like this does not need the world’s fine, you don’t need engineers from Google DeepMind to make this work. So what we’ve viewed as the core problem, and I would say still do is brokers are receiving 10-15,000 emails a day with these commercial positions. And they have a choice either to try and manually enter them into an Excel or just to kind of ignore them. And I’d say we could probably the more sophisticated brokers enter them into an Excel are less sophisticated, just ignore them. And when they get to cargo, they ring the last ship owner whose name comes to mind, the more sophisticated ones have this big Excel sheet, you can do Ctrl + F for Singapore. But let’s say the vessel that is actually the best match is currently at Kuala Lumpur, which is like a half day sale, you can’t do that with Ctrl + F. So even if they are spending, you know, for every single shipbroker, you’ve got a shadow person entering positions 24/7, even then you can’t really query this, these positions, you need a calculation engine. So for us, the core MVP was two things, something to take these positions into a SQL database, so an AI parser. And then the second bit was something to enable you to do maths on those positions to find out which ship would fit. And when we first released it, it was actually done just by back end engineers. The front end was an exposed back end, it looked horrible, but it kind of did the job enough for people to begin to play with it.

Host – Bryan 9:13
And how long did the MVP take?

Guest – James 9:16
So we went down a slightly strange path, which I think if not unique, is there’s probably three to five other people who’ve done it in the world. We persuaded and outsourced that agency to build our MVP to 5% equity and 80,000 pounds of debt, which we didn’t guarantee as founders. So we have this deal that was essentially a free option. But somebody in the world would love this technology, which is arguably the guys who gave us this deal. They should never have given us this deal. Since then, every VC we’ve spoken to have said why did you let those guys the guys who gave us that deal? Why did you give them such an amazing deal? And so back then what they wrote was a deal way no one else in the world would have written that deal. So you know, it’s there. It’s the benefit of time that they took the restaurants, so they ended up doing quite well, I don’t, I don’t think I would take risks on people like that I want a personal guarantee or something on that form. So those guys working through it. So we did that rather than get funding because I think we were essentially unfundable when we started, because we were two months of shipping experience, no technical experience, we’ve never been founders before. So we took that route, and those guys took about a year to deliver what they thought of as a delivered MVP. Looking back, I would call it a cardboard box prototype. It didn’t really work. And certainly when it did work, it didn’t work with any reliability. But it gave us that start, and it gave us something to put in front of customers to say, Do you think this would help you? Which I think is the most important thing to getting that feedback iteration cycle go?

Host – Bryan 10:53
Yeah, especially you know, you know, we’re a software company, right? So we develop software, right. And you know, the main basic function function of an MVP is just to show validate your idea, right, to show that we could make something this and obviously, you build out features further, right? So so let’s take a step back, right? I think we kind of jumped in pretty, pretty heavy. So why don’t you just tell us what Spot Ship does? And what problems is it solving?

Guest – James 11:15
Yeah, so we help shipbrokers find ships very, very quickly, in a way where the ships are cheaper and more environmentally friendly.

Host – Wiola 11:22
As you said, like you, you collect data on ships. And as I understand, it’s both static data on the ships and dynamic data, and disposition data. And it’s so much information. And and I can imagine that, obviously, when you take this data on the larger scale, it’s like 1000s, or millions of numbers.

Guest – James 11:49
Without we we’ve recently tipped into what, what one of our engineers says is officially big data. We never want it to be big data. I’ve recently learned.

Host – Bryan 11:59
Congratulations James. [laugh]

Guest – James 12:01
Congratulations to the engineers for the most efficient way. We are, we are the proud holders of a very large AWS bill.

Host – Wiola 12:11
So, you know, just the question is, so how do you process this data? And also, what’s most important – how do you make this data useful and easy to digest for shipbrokers who deal with them on daily basis?

Guest – James 12:30
Okay, very complicated question, a number of different parts. So at its most basic, you’re right, we bring in three different sorts of data, which really come from wholly different places. And we put it together in one place where you can make sense of it. And the three types of data are the static data stuff that doesn’t change at all, when the ship was built, how much it can carry, what sort of cranes it has, with the dynamic satellite location data. So where it currently is, what speed it’s going out, what heading it’s going out, which is the next board it’s going to go with the commercial information that is unique to each broker. So that is this vessel becomes available for booking in Singapore on the 25th of September. That last piece of data is not shared between brokers. That is that bread and butter, that’s how they feed themselves. So they don’t want to share that between each other. So a database architecture has to have this enormous static SQL database, Mother database with daughter databases coming off it through chip showing what each broker sees. So it all lives that all lives in the cloud. And essentially, how we try and make that easy, is we pull, we pull on the data that is needed to run the calculations of what the brokers really want to know. So a core question a broker will be asking if I have 500,000 tonnes of iron that wants to leave Port Kembla a week on Tuesday? Can I find a ship that will do that? And instead of showing them just massive long tables, we give them a very big, what was the first screen? So we now have five, six different screens? But the first screen is a where’s it going from? Where’s it going to? What type of cargo? Is it? How much? What date? And it will then do using a sea route algorithm. So that’s one more piece of the platform, calculate for every vessel in that table that they can see the commercial position, how soon they can be in Port Kembla, Australia. And then we’ll then see if those vessels finish their business somewhere else, how many days empty sailing do they have to do and the results of those will be in quite a small table that’s customizable. So brokers can avoid actually digging into 95% of the data we have and allow the machine to forward it needs. So for that calculation, and this is quite nerdy, but it’s one of the things we’re particularly proud of. If the ship becomes commercially available. Before the date, we’re looking at moving the iron. We run those calculations from the date, time, date, time and location that it becomes available to the port that you want to learn from. If, however, the boat is already available today, we use the live satellite location. And it’s that type of thing that, you know, a broker would have to be spending hours on in Excel and doing a lot of thinking to work out that kind of thing. Whereas if you brute force it, and then you do a cut off that show me, for example, show me no ship that sails empty for more than two days, you can quite quickly go down to your five most environmentally friendly and supposedly cheapest ships without doing anything. And the fastest we’ve ever seen is eight seconds. But we think you could even get faster than that.

Host – Bryan 15:35
And and so in all this data collection, I think, is this where the AI and machine learning kicks in. Right? So from our perspective, right, you know, when we talk to clients or potential clients, right, ‘hey, I want AI. I want machine learning.’ You know, I don’t really think they know what goes into it. You know, they just hear the buzzwords. Right. I want the buzzwords. Right. So how is Spot Ship utilizing AI and machine learning in data collection?

Guest – James 15:58
Yeah so generally, we would say the less machine learning we can use, the better because it tends to be more complicated and more temperamental. And many technical brains have looked at this problem and said, just tell the ship owners to enter that commercial data in a repeatable format into a nice interface. And then you don’t need any machine learning. And that’s completely right. But these people have never met a ship owner in their life. And our clients are the ship brokers so that clients are the ship owners. So you’re now going to a rather unfriendly, probably potentially stressed guy in a suit, and saying, ‘tell your most important line, he asked to enter the data. And this year, I mean, they would lock you out of town. So we get these emails in a massive array of forms that are really painful. And we started off with regex code. Now we have several different machine learning engines between them and the SQL database. So the first one classifies them based on everything we’ve seen before we have quite a large data labeling function in Manila. Is this email a commercial position? Or is this something else because sunblinds just bought us 100% of their emails, they just sent an order forward for everything. So we want to know, firstly, is this something the machine should even be looking at to train itself further. And then we have what’s called the simplifier. And then we have the piece that does it based on confidence. So there’s fuzzy matching, and we don’t want it to be too fuzzy, we would rather fail than give a wrong results. So if it fails, we have we send it to human review, basically. So that’s a piece of machine learning one that we always expected to have. And I would say that has been the most painful development problem in the business, we do have a data scientist who was graduated top of our class at Imperial College applied machine learning and is now a guest lecturer. So without her we’d have no chance. And we’ve tried some consultancies before. It’s just a painful piece of tech. Then she has also developed for us a convolutional neural network model, which I gather is also machine learning to do co2 emissions. So part of our output is co2 for every vessel in the world. That was that was sponsored by the British government, they paid for that very finely, which was helpful. And as we move to a market where you will have to pay for the co2 you’re met, that’s going to be necessary, that’s commercially very interesting. Whereas so far, it’s more for the ethically minded people, you are seeing people already voluntarily offsetting this year too, we’d like to see more of that, but we’re very excited by the Regulus market. So that’s piece number two, piece number three. Again, we have the uncooperative mariners in that satellite data that gives you the destination. So destination of the boat and speed of the boat, or not automatic feeds from the captain’s computer, the the mastermind of the captain steering the ship actually type something in and hits press send to the satellite. These guys again, they don’t really care about software engineers, they type in all sorts of crap in there. So if you’re just looking for the port codes, which some people do, you get about 15% of ships destination is usable. So we’ve gone the machine learning route to try and draw order out of chaos, we can now get about 85% of those correct. So it’s still 15% of ships, the master mariners sufficiently grumpy to to confuse our machine learning. They are we are, we will probably end up doing more and more machine learning. But we do avoid whenever we can do something simple rather than something complex. We do.

Host – Bryan 19:21
Yeah, just follow. I think a lot of people just don’t understand how complicated like those sort of processes and how complex they are. Right. So you know, as you said, you’re lucky fortunate enough to have someone who graduated top of their class and pure luck, right? So but other companies aren’t, and they’re still trying to implement stuff like this, and they’re in for a hell of a time.

Guest – James 19:39
I mean, I have almost no understanding of how any of this stuff works. I only know it’s complicated. We paid for consultancies in the past who have miserably failed to deliver and I know how long it takes takes and and I’ve I’ve had to put on through trying to explain it to me several times. And even that I think it’s very painful.

Host – Wiola 19:57
You’re actually reducing the time time and cost of finding a ship from six days to two man hours.

Guest – James 20:05
Two man hours. And most of that is negotiation on the phone rather than actually finding the ship. The Binding Machine, we’ve got it down to single digit minutes. But yeah you still need to call the owner and go through the pleasantries, I actually, I spoke to one of our super users. So we use, we use a software called log rocket, so we can see how intensively we’re being used by different clients. And this up is a add in India logs on. I think it’s 4.9 days a week, out of the last three months. So we know Spot Ship is now a part of his daily routine. It’s not a nice to have occasionally, this is a continent without, so we sat down to discuss how it’s impacted things. And I would say where we are on our company’s journey, we will we want to be able to save say we’re confident we’re saving people a meaningful amount of time, maybe half an hour, an hour a day. But we would also expect they’re still going to be running Excel in the background. We’re very impressive, sorta, but we still have started very early in our journey. However, when when I was speaking to Sarah, he actually said it’s saving him three hours a day, and he hasn’t opened Excel for two months. So as far as he is concerned, we’ve completely replaced Excel, he doesn’t do any manual stuff at all, it’s all spot ship for finding ships. And that, that was one of the few times that Spot Ship was way ahead of where I thought it was. Normally, as a founder, you will constantly you know, say yes, it does everything. Yes, it has to do everything now, but when you have it like it’s delivering way more than you can afford, it’s a pretty uplifting moment.

Host – Wiola 21:42
Nice. So there is. So from your perspective, like, as you’re reducing or your your goal is to reduce this waste in the shipping industry. So where is the biggest waste?

Guest – James 21:56
So the biggest waste is what’s called ballast days, which is empty sailing days. So this is so globally today, roughly 250 billion is spent on chartering ships to move commodity cargoes around of that round about 25% to 75 billion is funding empty sailing days. Roughly a third of those are entirely avoidable. So if you imagine I give you a an Excel sheet with 20,000 ships, and I tell you, please can you find me the closest ship to this port, but I’m also giving the same task to 10 other people around the world. And you only have to find a ship in the top 50. And I will do the deal with you. Okay, ready, set, and whoever gets back first, wins the deal ready set up, you are not going to be trying to do your very best to find the best ship. You’re just a these guys are running around like crazy people trying to find a ship that matches. And we allow you just click click, click Sort by empty sailing days, and. So that’s how we expect to take our 25 billion of course, each empty sailing day also puts 110 tons of co2 into the atmosphere. And that is serving no one. And even even the guy selling the fuel will say this is wrong. We’ve got to focus on this. So that’s it’s one of those easy, easy, safe wins for the environment where nobody good is losing money. Nobody has to make sacrifices, we just have to be less stupid as as the kind of human people, which is really nice.

Host – Wiola 23:25
Yeah. Just so it brings down the carbon emissions and the time.

Guest – James 23:32
Exactly. Well, because you’re not doing selling routes you don’t need to do. That’s that’s why it works. So we actually, we’ve been lucky to have a lot of trade press. And the first interview we ever did with with an editor called Marcus Hand. We said this works because we stop people being Muppets. And then we happen to end up with number one on Google search results for the term co2 muppet. Which is either the best or worst interview ever.

Host – Bryan 24:03
And maybe just to take it back a bit, you know, during the pandemic, obviously, you know, whenever we saw some news story on logistics, it was just the ports, you know, the ports were packed, they were full, you know, anything related to that, you know, so how did that affect Spot Ship at all in terms of maybe a something like that, you know, in terms of those sort of stuff.

Guest – James 24:23
We also had the the Suez Canal being blocked by the Evergiven. All this chaos largely caused one thing, which was great for us, and that was charter rates going way up. So for containers, they were up 5x But dry bulk I think at one point they were up 3x oil up as well. And brokers earn a flat commission on any Grenfell they achieve. So for for us, it was essentially putting money maybe five times as much money directly into our clients pocket. And at the same time, that meant people were competing harder for voyages, so to speak. He became more important, and they had more money to spend as an industry. So I actually think that’s driven adoption of these kinds of technologies and also interest in the VC sphere. When we first set out on the road and 2019 nobody was interested in maritime now there’s been three or four maritime only VCs founded in the last 80. Yeah, I personally know two more that have tried to get us as their first deal. So this, I can take no credit for this whatsoever. We got lucky here. Like we used to have to try and pitch and say why the time is now for maritime to become modern. I haven’t had that question for a year and a half people and people now say the time is clearly now.

Host – Bryan 25:39
So you guys are like the prettiest girl at the ball? You know, it’s just, you know, you’re just.

Guest – James 25:43
Exactly. We are on the dancefloor but all the ballroom with the ballroom around it.

Host – Wiola 25:49
So apart from that, what what actually, what do you think what makes you successful, or what makes you moving faster than the others.

Guest – James 25:58
So we do have a competitor that with second time founders. And we kind of judge ourselves versus them quite a bit, I think what we have done really, really well is we have a very distinctive culture. So my, my co founders, former Army and former hedge funds be the vibe is not like any other tech company. This is not a place where people come and and, you know, arrive at 10 o’clock here to to our breakfast peeping on for an hour to an hour of software engineering, and go home, while everyone tells them how brilliant they are. This is really hard driving. But at the same point, you know, we do our Christmas social at the cavalry and guards Club, which is very formal, and people say it’s the best meal they’ve ever had in their lives. There’s there’s this very militaristic Band of Brothers vibe, which I would also say is, somehow we’ve also made it healthy. Like with 50/50 board of directors, half male, half female. We’ve got people from I think 12 countries working from for us now, which fits what I learned as an NCAA, which is diversity is almost always a profit driver for companies, this is something you always want in terms of your decision making. So we’ve managed to somehow glue together the idea of we’re on a mission, we’re going there fast, we’re all special. And we come from a lot of different places. So people have said, it’s like a family, but with none of the bad bits. And I think we’ve also been absolutely relentless at incorporating customer feedback. So I think some of what our competitors have done is they built some really pretty agents. These are, these are beautiful, and I sat down, I think it was in February, and I watched for their ship search capability. You click the button, and you see the ship pull into the port, like a little cartoon of it, you see it load with cranes. And it’s like, wow, that’s, that’s probably six months, six man months, the front end engineering, how are we ever going to compete with that, and then I thought about what shipbroker in the world actually needs that. So we have been brutal. And we sit down, I think we ended up sitting down for two and a half hours a week to discuss everything we’ve heard from the market, and what people really need. And we’re classifying them as these are the features that will unlock revenue right now, these are the features that will make our current customers really happy. And if we don’t do we might lose them. And I think that is meant, we like to categorize ourselves as 10 times more efficient per dollar spent than our competitor. If you look at marketing awareness metrics, if you look at actually head to head tech comparisons with the same same pricing, we’ve been winning all those having spent 1/10 for data, which for me is amazing. I don’t I don’t know whether I could copy it, I see some of the trends of what we’re doing. I would also say the last one is a maneuvers management style. So it’s Spot Ship. The person who’s closest to the decision takes the decision. And they have both the responsibility for it and the authority to take that decision. Some people love that. Some people absolutely love that because you’re treated as an adult, you know, you are respected. You can speak at any level in the company. A lot of people that people we try not to hire would hate that, this is this is the opposite of the kind of work nine to five and they do a relatively good job.

Host – Wiola 29:13
So much stress.

Guest – James 29:14
Exactly. It is it is stressful.

Host – Bryan 29:17
And not enough ping pong.

Guest – James 29:19
No ping pong. Lots of chicken wings. We’ve got karaoke next. We have great, we’ve had X growing, we’ve had indoor shooting, the X growing is great. Yeah. But I would say there’s this vibe that even with holidays, we’re infinite holiday. But don’t speak to a manager about authorizing your holiday, you have to think ‘is now a time I can go?’ or ‘is now a time where I need it?’. But this is no, this allows us to not have layers and layers of HR and not really interfere with people’s lives. We make it quite clear what’s important to the company and then we let people get on with it. So we had a guy join us from ING Bank, who was hating his life there and said you I’m strapped to one tiny little task until they can never go outside. And I get line by line of instructions, you know what Orange is the right orange. And for us, I would say is what Herman from Improbable would call a 10x higher, like, he completely redid the front end of our platform in two and a half months. And it was because we said, we trust you, you’re the expert now. And so I think for people like that, it’s amazing. For many people, that nightmare will be working to Spot Ship.

Host – Bryan 30:28
So James, maybe going back to the UX UI, you spoke about, you know, your competitor may be using all this pretty stuff that you know, it’s pretty, but it’s not functional for the clientele that you have. Right. So. So how do you build an interface that’s so complex and data rich? Right, at Spot Ship, but making it both functional and user friendly, right? Because, as you said, you know, your clientele isn’t tech savvy, really? Right. So how are you? How are you dividing that between functionality and user experience?

Guest – James 30:57
So I think it comes down to a little bit with the feedback that that Ford quote, ‘if I’d asked the people what they wanted, they’d have said faster horses.’ So you had to decide to build a car rather than faster horses, you really need an intellectually, you need to put a car together and say, What do you think of it? Once you’ve got a car in a certain shape, you can then A/B test. Okay, here’s one that’s black. Here’s one that’s green, which one do you prefer? And I think the aesthetics of a platform are far more important than I ever thought they would be. So if I look at what happened to our conversion between demo and trial, when you react interface came out, conversion fraction went up, somewhere between five and 10 times. So it how something looks is incredibly important. I think how it looks in general is art rather than science. So we brought a designer in I think you need, you need somebody with an eye, I can tell you if something looks fugly or not, I can’t, I can’t tell anybody how to make it pretty, I just don’t have that part of my brain. Neither does Henry, potentially even less. But we do try to poke holes and things like I don’t like this. But we can’t do that art element, I think we get that odd element, right. And then the science element, we try and show the absolute minimum amount of data and buttons, anyone needs to make a decision. And then we have what is really quite an unattractive menu for the columns, that allows people to add, I think we now have about 220 columns of static data, they can add them all, if they wanted, they can make they can make a beautiful interface with a call, we encourage them just to choose the four or five that they want, unless they need a specific thing, which then they turn it on and turn it off again for one of them. But we’ve we’ve kind of said we think it should be like this. But at the same time, we trust you. And we haven’t put that same effort into beautifying this menu because we hope people should only use that menu once or twice in their entire lives. Whereas the rest of it they’re using all the time, in the fullness of time. I imagine we even work on that. But we are very much listening to people saying we really, really need this. And then we make sure they can have it.

Host – Wiola 33:03
But sometimes, like you have this difficult part you have to deal with when like, based on your industry experience and your product. Like you know what direction you should go. But then you have the customer telling you no, no, but we don’t want that or it’s not what we want.

Guest – James 33:21
So I think for us, as I understand your business, you you develop things to order more or less. Is that right?

Host – Bryan 33:30
Yeah, yep. Yeah.

Guest – James 33:31
So for us, we’re a platform that everyone uses. So there is there’s an element of customizability. And we have these ways that you can set up your own interface a little bit. But I would say for us, we are not looking to please everyone, we’re looking to gain a lot of market share. But fundamentally, if somebody who has a one license customer says I want it all to be the other way around and in Arabic. So now we probably say thank you, but that’s not going to happen. And I’ve read a lot and what’s the Y Combinator is in right around the startups, that over customization can be killed to early stage companies. I’ve actually been very surprised the how few people have asked for either customization support additions, you know, enhancements for certain features that everybody else doesn’t want as well. So almost everything that we’re seeing in our feedback bucket, it’s does this have 60% of the clients have said they already want it. And it would be you know, a new column of data better owner or operator data, or on 70%. We’re not largely seeing half of the people saying I want it in green and the other half saying I want it in blue. So I expected that to be more difficult, largely the industry, I think likes what the core version of what we’ve built, and it’s mainly just couldn’t do this as well. And everyone else also wants it to do that as well. So it’s just how do we prioritize the features in our pipeline rather than how do we deal with people wanting to fork it. So maybe that’ll become a problem later. But so far, there are no signs of that.

Host – Wiola 35:05
So So what’s the future of Spot Ship? If we are talking the next three years.

Guest – James 35:15
Yeah, so the future of sponsorship, so the next

Host – Bryan 35:19
World domination.

Guest – James 35:20
World domination, it’s always going to world domination, or even even better. We were we really here to elevate the world’s concepts. And so where are we are we’re trundling along nicely with the sales, we need to get to a big juicy US style series A middle of next year, which will spur on next stage of growth. Probably until end of 2024, or maybe mid 2025, we will be more or less sticking to our knitting will be certainly serving shipbrokers better and better and better. The very long term view is something we call the nexus of shipping. So this conceptual moment when a ship broker, and owner and charter decide how a cargo is going to move from A to B. And we want to be the only tech provider supporting that decision. We also want to be the first to the data because other people need to know about that as well. So we want to capture this moment completely. There’s a number of products that were already specking out and have kind of early stage prototypes for for that the most basic is cargo insurance. So we’ve already had people say, Can we not click on insurance at the time of transaction, the Lloyd’s syndicates want this they have, they’ve insured many of these ships hundreds of 1000s of times before, one of my favorite phrases ever. If it’s not going through pirate waters, I actually get to say that they would love to insure these ships over and over again. So it can just be a button with a risk limit and disappears when too many people press it. So super easy product revenue stream as large as our target market today, we’re also looking at, we’re partnered with a firm that allows us to sell carbon offsets for the exact amount of carbon being generated by the voyages. So we imagine we’ll start doing that more as well. And so there’s, there’s a number of other ones as well about, you know, using data to forecast cargo movements. But these things I would say all become very easy. If we do our our core work very, very well. So it’s that transition. Yes, we’re going to conquer the world. But we’re going to conquer the world of that particular nexus of shipping. And we’re going to do it not tomorrow.

Host – Bryan 37:24
Yeah, that sounds very exciting to me. And maybe So based off you maybe your current clients are, are a lot of them in Europe, the UK, or you know, is maybe the focus mostly maybe for the future, the US or, you know.

Guest – James 37:36
US is the least important, which is lovely. It’s the Americans deserve to be least important. So the traditional hubs of shipbroking are UK and Singapore. Germany is also very strong. India, for some reason has been a fantastic market for us, I still don’t fully understand why it’s been so good. I heard people cautioned me about selling software in India. But I think Indian shipping might be even more of a mess than in other parts of the world. So I feel the need for the product might be offsetting cultural factors that don’t work so well for us. That would be my best guess. Middle East also very important. We’ve got customers in Italy too and Germany, we’ve got, and Greece, obviously, we’ve got customers in most of these markets already. So I think we were courtesy of COVID were a moot team from day one. So we’re now in UK, Monaco, Poland, and Philippines. We’re going to be in Singapore very soon. And probably Dubai, quite soon after that. Because almost all of our meetings are virtual, that we we didn’t really favor our markets at all, there was a little bit of tax certificates to get specifically for India. But we found it is a very international market, which means we’ve just said Who needs this product and most as opposed to whose offices near ours.

Host – Bryan 39:00
Very cool. I think you’ve quoted or maybe your co-founder, Henry said, ‘we want to be the future of the shipping industry. We need the shipping industry to trust us.’ Why should the shipping industry trust you?

Guest – James 39:11
The shipping industry should trust us, because we’re looking to save waste, we’re looking to help everyone make more money. And compared to some others in the industry. We are a third party that is independent. And I think this is very important. Typically ship brokers in the past, there’s one larger ship broker and not going to mention who they are. And if you’ve lost lost a cargo more often than not, you’ll have lost it to those guys. Those guys have invested a lot in tech. And rightly the industry has avoided that platform play because having lost having lost meals in the last version of the industry to them. People sure as hell don’t want to in the next. So I feel the fact that we have this sustainable core mission about reducing co2 And also that we’re not these guys. We also don’t own ships. So there’s two other competitors. We’re actually the economic interest. It’s more of According to get better prices for the shipowning family than it is to deliver great tech, compared to any of that we are with quite ethically white. And our motives are clear and honest.

Host – Wiola 40:12
So you’re the good guys.

Guest – James 40:14
We’re the good guys. [laugh]

Host – Bryan 40:16
Yeah, so now we just have some rapid fire questions, some awesome ones. So so for a running theme for the first few episodes, I think our first five and then someone broke it we forgot who. So have you ever been a DJ before?

Guest – James 40:31
Not in a professional capacity, no.

Host – Wiola 40:33
Oh, no, it doesn’t have to be professional.

Host – Bryan 40:35
Doesn’t have to be professional.

Guest – James 40:36
Okay, I’ve been a party DJ. Yes.

Host – Bryan 40:37
There you go! Perfect. [laugh] We’re back on it. It’s appreciated. What else we got? What is your favorite cocktail?

Guest – James 40:46
French 75. Which is champagne spiked with gin.

Host – Bryan 40:49
Woah, I’ve never even heard of that.

Guest – James 40:51
That’s great.

Host – Bryan 40:53
Yeah?

Guest – James 40:53
So I know, I know, we’ve got limited time, but I love the story. So it’s French fighter pilots in the Second World War. Bound champagne was no longer taking the edge off after flying missions, so they said they needed something stronger. So they started mixing the string, which is the bottle of champagne glass, you chuck in some gin, some lemon, some sugar and then top it off with champagne. And somebody said, drinking one of those felt like getting hit with a 75 millimeter mortar. So this drink was created. That’s kind of like hardcore champagne. And it’s delicious.

Host – Bryan 41:23
And it’s called French 75.

Guest – James 41:24
French 75. Exactly.

Host – Bryan 41:26
Yeah, I will take note. Have you ever like fur? Especially for you, James? Like have you ever thought about or is it some sort of like, I would assume maybe working especially like a pilgrimage to go on like a cargo ship to just to see how the journey is? Is that something in the future? Or have you had any inkling to go on a cargo ship?

Guest – James 41:45
Absolutely. We’re hoping to take a whole team.

Host – Bryan 41:48
Yeah! That’d be awesome.

Guest – James 41:50
That would be fantastic. I think that that’d be some good marketing.

Host – Bryan 41:56
And a lot of a lot of French 75 too.

Guest – James 41:59
I think it might be more of a run thing.

Host – Bryan 42:03
Exactly. All right. Wiola, one more. What do you got?

Host – Wiola 42:07
So what comes to your mind when you think of Poland? I’m only asking this question because we are based in Poland.

Guest – James 42:13
Absolutely. Well, I mean.

Host – Bryan 42:15
Well, have you been to Poland before? James, have you been to Poland before?

Guest – James 42:18
I have been to Warsaw.

Host – Bryan 42:20
Okay. We’re based in Krakow.

Host – Wiola 42:22
Just come to Krakow.

Guest – James 42:24
I’d love to come to Krakow. I’ve mean I have. I have one person working for Spot Ship at the moment in Wroclaw which I’m gonna put it wrong, but I’m trying and one in Lublin. And I think we’re looking to hire two more. So I would say the boring version is what comes to mind. Incredible developers. From my from my trip last time, it was very it was out pierogi and hangovers.

Host – Bryan 42:46
[laugh] Fair, pretty good. And that was James Kellett, CEO and co-founder of Spot Ship. James, thank you so much for joining us today.

Guest – James 42:57
Awesome, guys, thank you so much for your time. This was a lot of fun.

Ending 42:59
Thank you for listening to ‘How We Innovate’. A podcast by Applandeo. Get your apps and web apps built today by visiting applandeo.com We’re Applandeo!