BrightDrop isn’t just selling electric vans — it’s redesigning delivery, with CEO Travis Katz, on this week’s DecoderPod
Yeah. Andy Hawkins was there for the whole thing, which was really fun.
Probably job number one when I came in was to really sit down with the leadership team at GM and talk about how tech companies think about talent. What talents do we need that don’t exist in the company today? What do we need to do to bring them in? That wasn’t a quick conversation. We had to go through a few rounds, but like I said, Mary is a pretty sharp woman, so we got there pretty quickly.
Probably the simplest way to think about it is that we are running like a tech company. We have a hardware business, a software business, and a vehicle business. Let me explain what those things are. As you can imagine, there have been companies delivering stuff to our door for a long time, but the pace of that has been growing dramatically. With the rise of Amazon and the rise of e-commerce, we’re seeing just massive double-digit growth year after year after year.
Let me describe the Trace for your listeners. Imagine essentially a big box or a locker on wheels with electric propulsion. It can carry 250 pounds of packages. With the electric propulsion, it feels effortless. Instead of dragging along this dolly with things strapped onto it, it’s effortless, it’s easy to maneuver, and it fits in an elevator. When a truck pulls up, instead of doing five trips back and forth to the van to serve a single high-rise building, you can do the entire thing in one go.
It’s exactly right. If you’ve studied the history of containerization and shipping containers, it’s really fascinating. In the old days of shipping, a ship would pull into port and it would take days to unload everything and stuff would get spoiled or lost. It was really complicated. A lot of people say, “Well, why would you want to sell fewer vehicles? Isn’t that one of your revenue streams?” The reason we want to do it is we want to make the system work right. If we can make the system work more efficiently and better, everybody wins. It’s a massive opportunity and it’s one that’s very timely, because like I said, the system is starting to show cracks. We just can’t keep throwing trucks at the problem.
You do need good engineers. One of the things very unique to the software world is that it’s not linear from a mediocre software engineer to a great software engineer, it’s an exponential curve. A really great software engineer is not 50 percent more productive than an average software engineer; they’re five or ten times more productive than an average software engineer.
No, you’re absolutely right. You can build smart connected cars with internal combustion engines. I think part of it is just sort of a coincidence of timing that we’re living in the era of software in the moment when the economics of electric vehicles suddenly became viable. So part of it is just a timing issue.
You have a unique perspective. You’re close to a big company, but you’re sort of outside of it. Are people just excited about batteries, so they’re willing to reconsider everything? Do you shove everything into that opportunity, or is there a rational connection? It seems like with the logistics — and charging in particular — there’s a rational connection, but then everything else just comes along for the ride.
GM owns this company called Cruise, run by a guy named Kyle Vogt, who is absolutely brilliant. Those three things — electric vehicles, big data, and connectivity — can actually create cars that can drive themselves. They’re no longer prototypes, and they are doing commercial rides with no driver in them. In San Francisco, you can order a taxi with no driver today. It’s real. It’s a super exciting moment to be living in.
Whenever I talk about EVs to a car executive who’s focused on consumers, the first question my audience asks is, “Charging sucks. How are you going to make the charging better?” Obviously, a fleet approach, an enterprise approach, doesn’t have the same set of challenges, but you still have to install a lot of charging infrastructure. That’s a big startup cost. How are you handling that?
Correct. Not to minimize, there are still some major challenges there. You have to install the chargers. A lot of times if you’re going to charge 50 vehicles at once, you need more power coming into that depot than you may have today, which might mean you need the utility to come and upgrade their network there. A lot of times the depots where you’re parking these things are not owned by the delivery company, but they’re leased, so there’s a landlord involved.
We’ve done 100-plus episodes of the show, you’re the first person to come on and say 5G is important to you, even in a roundabout way. So that’s exciting. Everyone else is like, “Yeah, that’s this thing that happened.” When you build something from the ground up as an EV, it allows you to really design the vehicle around this form factor. There are a lot of benefits to doing it. If you’re sitting in the backseat of a traditional car, there’s that lump in the middle of where your feet are supposed to go because you have an axle there. You don’t need that in an EV, so you can get rid of things like that.
To make this clear, there are traditional cargo vans that you see driving around and then there are delivery vans. Delivery vans look very different. They have these high seating positions so it’s easy for couriers to get in and out of the vehicle, and they have a big bulkhead door so they can go from the driving cabin to the back to get packages.
On the software side, a lot of it comes from taking the software and connectivity that we have in these things at the starting point and saying, “Hey look, here’s what the data is telling us about how you’re working, and here are opportunities for you to do more with less, get more done, take more advantage of these electric vehicles, think about your charging differently, and think about how you could incorporate these e-carts to allow you to scale to more packages without adding more vehicles...
Even though they have a system that works for them and they’re getting by, they know the system isn’t perfect and has challenges. If we can bring them solutions to the real pain points that they’re feeling in the field, they’re all ears. They’re happy to hear it and they’re happy to try things. The van is the more mature product. We started on it earlier, so it’s a little bit more of a known product, and it’s faster and easier for a customer to adopt. They’re switching out a van powered by gasoline to a van powered by electricity — but it’s a van. They understand what a van is. The software and the e-carts are new products, and we’re still bringing those to market, but we’re a little behind the van in terms of manufacturing that stuff because we started it more recently.
When you think about a FedEx and a DHL, the big customers, they want to be differentiated. What are the points where you can tailor the product to their needs? Amazon is the one customer I can see saying, “Look, we don’t want any of your software, we just need the vans. We’re really good at software.” Would that be the customer that says, “Okay, we’re just going to sell the vans. That’s a big enough opportunity, and we can try to do something else everywhere else”?
Do you look at Rivian’s challenges in scaling and say, “Whew, it’s a good thing that we have GM behind us,” or do you face the same challenges? Elon has talked a lot about how hard it was to get Tesla off the ground and how they almost went bankrupt multiple times. It is a very hard space to do it and you need a lot of capital. There are some great startups out there and some really smart people and I would like to see a lot of them do well, but it’s going to be a tough 18 to 24 months in that space. I think we’re going to see a lot of companies really challenged.
If you have more demand than the Ultium division can supply, are you allowed, as a division of GM, to go source other batteries?The Ultium platform is a really great platform, and you’ve probably seen some stuff about it. It’s an overall architecture that allows you to configure different battery sizes and shapes, and you can use different types of cells: pouch cells, prismatic cells, or traditional cylindrical cells. It’s a very flexible architecture.
We absolutely are in a state of crisis from a planetary perspective. We’re seeing the effects of climate change with tornadoes, the flooding in California, the droughts in Colorado, or the fires that are happening. These effects of climate change are affecting everyone, and these disasters are getting stronger. We really need a concerted effort.
You’ve sketched out a really big vision for how you want BrightDrop drop to work. You containerize the packages that go on the trucks, those trucks park in the middle of the city, then an army of worker bees on e-bikes and motorized carts takes the packages to their places, come back to the trucks, and then the trucks leave. We’ve made everything cleaner and more efficient. Is that happening yet? Have you run that test? “Okay, we want the biggest vision we have to work all the way end-to-end.
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