Maarij Rehman and Jamal Mehdi – Envoi
If you have 100 packages to send to 100 different addresses, what’s the best way to deliver them?
It’s classic math problem called the Travelling Salesman Problem that was first recorded in the 1800s (though, from a non-mathematical perspective, it dates back even further). And it’s woven through the fabric of Envoi, a company that crowdsources delivery for same-day shipping.
Co-founder Jamal Mehdi was working at a large courier company during the holiday crunch when he first questioned whether shipping was being done in the most efficient way.
Each morning, packages would arrive at the facility to be distributed to each driver. “They would literally go to the back of the truck and write down on a piece of paper all the addresses that they would have to visit, and then hop back into the driver’s seat and open up a physical map,” he noticed.
“In 2013. A physical map of KW. No GPS, no nothing.”
This was his “there has to be a better way” moment. He certainly had no intention of solving the optimization problem itself – it actually falls under one of the Clay Mathematics Institute’s Millennium Problems that’ll net you $1,000,000 if you do – but he wanted to dig into improvements to its real-world applications.
So, one day, while bouncing ideas back and forth with friend, classmate, and fellow co-founder Maarij Rehman, he shared what he had noticed. They decided to investigate.
They were certainly in the right place to do so – the mathematics department at the University of Waterloo hosts one of the world’s leading researchers on the Travelling Salesman Problem, who was happy to share his work with them. “We thought, okay, we have his help, he’s made some great suggestions. Let’s take that knowledge and let’s see if it applies.”
They tested and tweaked the professor’s algorithms to fit with the needs of courier companies – knowing the minimum number of vehicles they needed on the road each day, scheduling en-route package pick-ups, and taking variables like time limits on shipping into consideration. The result: a software suite that would reduce manual work, optimize the fleet, and potentially shave millions off of operating budgets.
In November 2016, they were ready to shop it around with major couriers. And that’s where they hit roadblocks at every level.
Maarij summarizes them well: “Drivers said, ‘what do you mean the software can do what I’ve been doing for the past 15 years better than I can?’ Dispatchers had the view, ‘okay you’re shortening my job; that means I have to find work for the next 6 hours or I’m going to get fired.’ And at the director and VP level, we ran into, ‘this is a problem we spend $40 million a year trying to solve, but we have been trying something in-house for the past two years, and we’ve been running pilots and we’re just on the cusp of releasing that to the general market.’”
(He adds, those in-house solutions never launched.)
Fast forward to the summer of 2016, when Envoi took the first steps toward doing something daring: becoming a courier company themselves.
At that time, Maarij joined Next 36, NEXT Canada’s innovation and entrepreneurship program. Over the course of those four months, he spent 15 minutes chatting with a professor of entrepreneurial strategy who changed his way of thinking entirely.
“He said, ‘okay, if I were an entrepreneur and if I had the solution that you have, I would just use it myself. I would just be a better courier company,’” Maarij remembers. “And he said, ‘The way that I’d compete, is I’d do it where nobody else is doing it. So instead of doing it from 9 a.m. to 5 p.m., do it from 5 p.m. to 9 p.m.’”
They ran out of time after that, but it got him thinking. “It wasn’t so much the insight itself, it was the attitude that really stuck with me. It was the attitude of, okay, there is a problem. I will not accept that there is not a solution to this problem. I will keep working, and I will be creative, and I’ll just make the most unorthodox solution possible if I can get around it,” he says.
In their case, the problem was a market that was unwilling to adapt and adopt. So the solution became: beat the courier companies at their own game by making same-day, after-hours delivery a new base standard of shipping.
“It was kind of scary at first because we had been working on the original idea for a year,” says Jamal. They had to stop sales to run numbers and scenarios on the new approach, because they had to be absolutely sure it was going to work. “But as soon as we saw that this is potentially huge, it was kind of a no-brainer then.”
With the majority of e-commerce packages shipping to home addresses, delivering after regular work hours made sense. People are much more likely to be home in the evening than they are during work hours. “That, and even in their evenings we’re just giving you a very specific 15-minute, 10-minute timeslot. You just have to be available in that timeslot,” Maarij says.
That takes missed deliveries out of the equation, and is part of the reason they can operate at a lower cost, no warehouses required. The competitors don’t or can’t offer it, he adds. “There’s so much red tape and bureaucracy to get through. We don’t have that. We have the flexibility to do it.”
As for the crowdsourcing part, that was a natural solution in an industry where the cost of entry is astronomical – from warehousing to running your fleet, it’s not easy to get started, much less compete with the big players.
Combined with the algorithms they created and marketed the first time around, “we need about 30% less vehicles and our routes are about 30-40% more efficient. And we don’t incur the cost of warehousing and we don’t incur the cost of vehicles,” says Jamal.
Which, in turn, means better shipping rates, with faster turn-around time.
So yes, Envoi started with a spark, through noticing inefficiencies in the shipping industry. But, Maarij says, “after that it was mostly just the tenacity to not accept no.”
Learn more at:
https://envoinow.com/