ArcBest created a breakthrough freight handling system to improve the efficiency of its cross-docks. They instantly saw the potential to change warehouse material handling on a much bigger scale.
How could they externalize the solution and provide it as a revenue-generating service in their customers’ warehouses?
PX brought a B2B SaaS-experienced venture team to ArcBest, with a playbook that could achieve a stealth launch of a very complex solution. This let ArcBest avoid distractions to the core business during a period of global supply chain uncertainty. Together, we created a first-of-a-kind B2B SaaS solution in logistics tech that adds a high-tech halo to ArcBest's reputation as a premier logistics provider.
The original Flash solution was focused exclusively on cross-docking. From that narrow use case, we expanded the view to include all warehousing and material handling. Each sector had its own customer requirements and competitor dynamics. The possibilities were then distilled into a sequence of commercial steps that could fit a venture investing philosophy; reach a key milestone before seeking additional funds. The result was the commercial roadmap that Vaux is following today.
The first thing the Flash venture needed was customer validation. Going to market as a startup, we used cold email outreach to 15 companies to get 6 qualified meetings. During our initial web meetings, we showed small elements of the Flash solution without exposing our IP. These web meetings were followed by pitch deck meetings with the most promising customers.
For the best prospects, we invited them to co-create the version of Flash that would work best for them. That process requires a delicate balance between being confident in our technology, and being humble and curious about how best to deploy it.
We used a visual map of a transportation network to let customers guide us to their highest-priority use cases. This gave us the opportunity to learn how well their technical team would work with us, as well as insight into the benefits they would expect.
A key metric for the venture was willingness to pay (WTP). We look for WTP signals throughout the customer acquisition process. Once we developed the top use cases, we translated it into a "benefits calculator." This was also presented as a co-creation activity. The customer was invited to plug in their warehouse and volume specifications to see what the potential annual savings would be. The result provided a crucial input to pricing for Flash.
Flash involves hardware, software, and algorithms. With this level of complexity, it was important to develop a pre-sale "test fit" process to assess the customer readiness. This process included both (1) physical warehouse infrastructure and (2) data and computing systems. The venture team used these meetings to architect our solution roadmap, as well as to plan the specific customer deployments.
In March of 2023, the solution was launched publicly as "Vaux." It has received widespread recognition, including becoming a FastCompany honoree as a best-designed product in the enterprise domain.
