In 2006, three engineering students at Kalinga Institute of Industrial Technology in Odisha, India, were wondering what to do with their lives. “After 14 or 15 years in full-time education, we really wanted to get out into the world, solve problems and create real impact,” explains Kushal Nahata, one of the three. While a job in a big engineering firm or consultancy might have given them the opportunity to work on some tough real-world problems, Nahata and his friends Gautam Kumar and Gaurav Srivastava wanted something more – the chance to really “own” the challenge they set out to address.

There was just one question: What problem should the group try to solve? The answer came knocking at the door. “At the time, e-commerce was really starting to take off in India,” recalls Nahata. “But if I ordered something online, I would get a call from the driver every time asking where my house was, even though my house hasn’t moved for many years. Then, when the driver eventually arrived, everything was done with pen and paper. It was obvious that there really hadn’t been a lot of progress in the way logistics was organized.”

When the three set out to solve the problem of e-commerce logistics, however, Nahata admits they had very little idea of the challenges involved. They started by looking at the issue from both ends. “First we talked to the drivers, we asked them how they planned their days, how they spent their time, how they managed everything from breaks to ensuring they were paid for their work.” In parallel, the group also went to visit the CEOs of some of India’s fast-growing e-commerce companies. “They gave us a perspective on their logistics expectations,” he says. “We could see immediately that there was a huge gap between those expectations and the real processes on the ground, and there was an opportunity for a product that would fill that gap.”

After finishing their studies, the three set up a new business, FarEye, to create that product. Nahata become the company’s CEO, Kumar its COO and Srivastava the CTO. “Right from the start, we knew we couldn’t build the business in isolation, and we needed a source of revenue, so it was imperative that we found a customer who would be willing to work with us to develop and validate the product,” says Nahata.

Their choice of industry sector proved fortuitous here. “The e-commerce world was very entrepreneurial, and people in the sector were willing to try new ideas and engage with a startup like ours,” says Nahata. FarEye found its first customer and began to develop its product, a system that would replace the cumbersome paperwork used by delivery drivers with an app on a mobile phone. In tune with changing times, the system was developed to run over the internet in a “software as a service” model, with the customer paying a monthly subscription for its use.

Developing its product “live” was a valuable learning experience, recalls Nahata. “Our first prototype had lots of features and options, but when we showed it to a driver, he just put the phone down, bemused, and showed us the paper he was using before. We realized that the driver experience had to be stripped back and simple, with just the critical information: details of the package, the address and the recipient’s name, in a large font and clear colors.”

The e-commerce world was very entrepreneurial, and people in the sector were willing to try new ideas and engage with a startup like ours.
 Kushal Nahata, CEO FarEye
EYE CONTACT: FarEye’s software ensures speedy delivery.

From one to two

After working with its first customer for a year, FarEye’s second big learning experience came when it took its product to customer number two. “That was when we learned that different companies have very different processes and operating frameworks,” says Nahata. “They might use a hub-and-spoke delivery model, for example, or need to handle cash on delivery.” In response, the FarEye team rebuilt their software from scratch, adopting a flexible design that made it easy for customers to adapt processes and workflows to suit their specific needs. That decision was a “gamechanger,” he notes, since it gave FarEye’s customers “speed and competitive edge,” allowing them to create new products and service offerings and rapidly deploy them across their networks.

Global growth

Now firmly in growth mode, FarEye expanded rapidly over the next few years. While most of its early customers were logistics service providers, the company now supports shippers too, and its customers might be anywhere in the world. Nahata notes that while customers in developed regions may have less to gain in percentage terms from automating and digitizing their last-mile logistics, the higher cost of services in these regions means the absolute benefits of its software can be substantial. Today, its products are used by more than 100 enterprises in more than 20 countries and its systems track anything from 5 to 10 million shipments every day.

The company has expanded its service offerings too. “At first our customers mainly wanted to automate previously manual processes,” explains Nahata. “But once they have their data in digital form, people want visibility into that data. Then they want to optimize their processes, for example by moving from static to dynamic routing. Finally, they start to think about predictability, they want to know not just where a shipment is, but when it is going to arrive.”

FarEye’s software now provides all those features. Its offering also incorporates some of the latest innovations from the world of artificial intelligence, such as machine learning capabilities that identify customer habits based on the outcomes of past delivery attempts and use those to tailor future plans.

There’s more innovation to come. FarEye now employs more than 250 people and it is still growing fast. Its developers are working on solutions for emerging logistics challenges, such as systems to handle “elastic” logistics models where companies use a constantly changing combination of their own delivery fleets, third-party operators and crowdsourced services.

For Nahata, however, the biggest forthcoming challenges lie in finding better ways to help customers maintain the competitive edge that comes from continual innovation and rapid evolution. “With technology, you can build almost anything,” he says. “But our customers can’t stop what they are doing today to implement a new service, they need to keep everything running while the whole enterprise moves and adapts. Right now, we are working with partners like DHL to figure out the best way to do that.” Jonathan Ward

Published: June 2019

Images: FarEye