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Build a Business Worth Buying brings you candid conversations with industry leaders, M&A experts, and successful founders. Learn advanced strategies to scale, optimize, and prepare your business for an acquisition—because building a business worth buying starts with smart decisions today.
STEVE ROBINSON (00:00)
I call it the pizza shop and it is build your pizza shop. Make sure it's on a college campus.
location. You have a small but essential assortment. Your suppliers are close enough to kind of replenish
that you
crap out on game day.
Aaron Alpeter (00:50)
Today we have one of my favorite operators on the podcast, Steve Robinson.
Steve has operated in lots of different environments where mistakes don't stay easily hidden. He was at Walmart where if there was any sort of inefficiency or problem, scale exposed every week assumption. He was at Starbucks where complexity forced the discipline across the global network and any inconsistencies would show up immediately in the customer experience. And he's also been in the startup world. He's had three exits.
Air Road Express, Transplace, and Gobble. And that gives him a practical lens on the difference between building a business that works and building a business that someone else can trust, underwrite, transfer, and own. We talked about what it takes to actually scale something in practice, what breaks when companies move from scrappy to systemized,
what enterprise disciplines are worth adopting and how early operational systems show up later in diligence and integration. And we also touched on some of the nonprofit work that he's doing today
I think you will enjoy this episode. And with that, let's welcome Steve to the program.
Aaron Alpeter (01:49)
Steve, my friend, thank you so much for being on Build a Business Worth Buying. I have been looking forward to this for a long time.
STEVE ROBINSON (01:50)
Thank
Same here, Aaron. Thanks for having me.
Aaron Alpeter (01:58)
Yeah, so I think I've told lots of people you're one of my favorite people in supply chain. ⁓ Not only because you played football at Ohio State, but I think just everything you've done, the things that you've been able to accomplish, the work that you're doing today in the nonprofit space is just really fascinating. Why don't you just give the listeners a overview of who Steve Robinson is?
STEVE ROBINSON (02:20)
Well first I'm a grandfather. My grandson's graduating high school today, so if that doesn't date me nothing nothing does. But you know 45 years you know Aaron in supply chain. I set it out in a very intentional way to try to see the entire piece. So today I like to say 360 degrees. My first 15 years was in transportation working for United Parcel Service, Roadway Express, Consolidated Freightways, Asset based.
Aaron Alpeter (02:25)
Oh my goodness.
STEVE ROBINSON (02:45)
transport, then on the retail and, work for a couple, small retailer in Bentonville, Arkansas, head of transportation, VP of supply chain, another retailer in Seattle, little coffee company, where I was the, global VP for supply chain and I ran the supply chain center of excellence. But a lot of time in ⁓ non-asset based.
so you know logistics as well as the CEO of a private equity backed leverage buyout at air road express you know bought it sold it and spent some time at trans place you know them today is is uber freight and a lot of years building technology i mean you just can't be curious about supply chain without really dipping your toe i put my whole leg in so i was
EVP of product marketing and product strategy for IT technologies. You know them today as Blue Yonder. Also EVP at One Network Enterprises. You also know them today as Blue Yonder and that they were acquired. For me, it's like getting the band back together. so really just 360 degrees transport, everyone's largest customer, service provider, technologist, and still just as excited about supply chain today.
as I was, you know, 45 years ago.
Aaron Alpeter (03:57)
Amazing,
when you're at Walmart, you're operating at a level where really small inefficiencies can compound quickly and there could be large dollars behind them. ⁓ Is there a specific moment where something that should have worked broke under scale? And what did you do or learn about how large systems reveal those issues?
STEVE ROBINSON (04:17)
Yeah,
so for the record, Aaron, everything, everything breaks scale. I think for me, it was, moving aggressively into transportation. My first role was in the Walmart private fleet.
We were driving like 900 million miles a year. 38 % were empty. We got inner and interstate authority for the fleet and that took us down to like, 17 % empty miles. And then we stood up center point operations where we can handle our own LTO internally as effectively and quite frankly, more cheaper than, uh, than anyone else. Uh, and still the empty miles went down, but even at scale, we couldn't get them below double digits and you get the
aha
moment where you recognize that if you're going to run an SLA for pickup or delivery in your logistics rolling stock operation, you do so at the cost of 100 % driver utilization and equipment utilization. So there's always some empty miles. And so even a scale where there was great improvements, there were some challenges. But the real issue happened when I took over the third party transportation and we started
really leveraging in fact some new technologies and some new capabilities and we saved a lot of money and that was like yeah.
But we drove our rates down so low that a carry would effectively, accept our tender and then sit and pray that someone would offer them a penny more a mile. And if they did, they give it back to us. Well, what does that mean in supply chain terms? That means inbound supply variability went crazy, went crazy in the distribution centers and ultimately that impacted the stores. so pursuing low cost and transportation suboptimally
Something you read about in the textbook today. It was a major challenge.
Aaron Alpeter (06:11)
I imagine that scale reveals cracks that probably don't form at smaller companies. At the same time, it allows you to do other things as well. So is there anything that comes to mind of just some of the things around Walmart that allowed you to do things that you probably didn't expect not to do elsewhere?
STEVE ROBINSON (06:31)
think it was mid to late 90s, everything. So maybe just following the previous story. So you're the head of transportation, you're driving massive hundreds of millions of dollars in transportation savings. And then the supply chain breaks and you're given like nine months to fix it as the new head of supply chain. So what do you do? You look for ways to sort of reintroduce that predictable supply component and reduce the inbound variability.
drive by date. ⁓ We did the math. We work with a couple of key suppliers and then we drove must arrive by date. And when I tell you that we were able to sort of implement design, implement and operate at a speed and at a depth and breadth that is almost unheard of today, it happened very, very quickly. We got immediate adoption of our must arrive by date.
initiative, something you can only do when you're at scale.
Aaron Alpeter (07:34)
Yeah, I remember being
at Unilever and being on the other end of that. know, was Walmart says jump and you say, how high?
STEVE ROBINSON (07:40)
I'm sorry. ⁓
Aaron Alpeter (07:42)
let's talk a little bit about Starbucks because it's a very different supply chain profile. obviously it's more brand driven, it's experience sensitive, it's globally distributed. What are some of the examples where operational discipline directly protected the brand, not just the
STEVE ROBINSON (07:58)
Yeah, I spent I spent three years at Starbucks and a very interesting time. And when I think about operational discipline, protecting the brand, you know, during that 2013 to 2016, we were pursuing a lot of changes, right? it's becoming more than sort of a coffee supply chain. We're moving aggressively into in the fresh food pastry, fresh squeezed juices with short shelf life.
really expanding CPG, moving into K cups and a Via Instant product, acquired Tivana, so now there's teas opening Roasteries, which was a whole new format, and with that came this big push in the e-commerce. And then there was this little thing called Mobile Ordering and Pay that changed the speed at which we would recognize, like, know, demand.
And, you know, store operations, the supply chain, everything was potentially available to crack, except that we really put very solid operational disciplines in place very quickly to protect
brand promise. So the brand promise was, you're the third place. There's this home, there's work, and there's Starbucks. And as we sort of interview why people came to our stores, they said, we come to the stores because of
the experience that you create, how the baristas make them feel and the ability to actually lounge and have the third place. so creating that type of panic for the baristas where they really didn't have the time to be engaging the customers the way the customers wanted was just a top down initiative. So we just rapidly created scalable.
repeatable processes and systems that could not just handle the complexity but take some of that complexity off the backs of the baristas to free them up to continue to be sort of that that differentiator and the reason why people came to stores but Launching new items launching new products launching 300 new SKUs launching new moments during the day was a tremendous amount of
of complexity, but thinking about the customer experience back through the supply chain, we were able, let's just say that to really double down and focus. was each of these was a unique supply chain, Aaron, which means that we had to go back and rethink the ecosystem, the business process, the distribution, the transport, the order creation, order capture, order administration, all the small detailed parts of
the process and the system. So it was operationalizing and not just one experience, but blended multiple experiences sort of all at once.
Aaron Alpeter (10:51)
these are two very different industries. You've got coffee, you've got retail. What sort of things were consistent between the two when you're operating at Megascale?
STEVE ROBINSON (10:57)
Sorry.
high level, I'd say that supply chain systems and specifically processes and operations, they either create, preserve, or destroy value. There's absolutely no neutrality, right? And that, uh, again, 45 years since the supply chain,
I own the URL that says supply chain saved the world. So that's my perspective. Okay, is that the world is a supply chain. Supply chain is everything. What you tried it without bringing your supply chain team. Okay, good luck with that. And so what I would say is that supply chains really create or destroy value. They're that essential and that important. And that can be applied to
any business if it's a distribution intense business like retailing or quick serve restaurants, it's just that on steroids, but it's just paying attention to the linkages dependencies the planning the execution the things that happen before during and after the customer experience but from a supply chain orientation there's opportunities to improve it. But if you ignore it
you're likely destroying the value that you really had planned to deliver.
Aaron Alpeter (12:21)
Yeah, you've shared so many interesting stories about some of the things you're able to do with scale that you wouldn't be able to do anywhere else. can you share the chicken story? That's one of my favorites.
STEVE ROBINSON (12:29)
Thanks.
It was like maybe, you know, mid to late 90s and our Supercenter division brought our supply chain team a chicken breast and said, hey, we're going to do a great promo, but we need to reduce kind of the inbound cogs by 35%. And I said, well, that's what we always do. Let's have a meeting, bring a supplier to Bentonville and explain, the features, advantages and benefits.
of the program and why it's in their best interest, you know, that worked pretty good. And they said, well, this particular vendor has relationships at the company that would be, sensitive if we use that approach. Is there something else to do? so we looked differently at the problem and we started out, how do we unlock supply chain value while preserving the vendors, let's say, initial, initial margin, you know, which is a common problem.
⁓ And we really had to go back explode the BoM explode the bill of material and say hey, chicken breast Well, okay. There's the chicken kind of principle to that but the chicken feed was a big expense item so we were able to actually come here to Salinas go into the valley that Del Monte it created and negotiate with farmers to
get almost 200 acres of product. And we just guaranteed to buy their product and took the middleman out and lowered the cost of the chicken feed, you know? And then, who knew the chemicals that were being put into the chicken? These were way before the, range-free, but, years ago, renegotiating with pharmaceutical companies to get a lower cost on, what, it took to...
keep diseases at bay within the chicken population. Another big, big line item. Another line item were the veterinary bills to actually kind of do the regular inspections and the chicken checkups. We were paying way too much money for chicken checkups, Aaron. So we were able reduce the cost of chicken checkups. And then finally move the provider that was leasing the chicken coops.
to the company from like a two year lease with a lot of deferred maintenance into an agreement where we basically provided five or more years. Totally re-engineered inbound cogs, we were able to de-risk the supplier's investment on all sides and take that dollars out. And it's just amazing what happens when you can de-risk the supplier's upstream investment and
Part of the way to do that is to give them long-term visibility of cash flows
decent margin. Didn't touch the initial margin, but significantly de-risked the process, lowered the cost, asked that they pass the cost through, and that was ⁓ the start of something that I know they do at scale today.
Aaron Alpeter (15:27)
I love that story so much because a lot of people when they're thinking about negotiating or lowering costs, is like playing around, up, see what you can do from a negotiation point of view. But the big thing here that is just so smart about what you did is you went backwards and looked at all these other things that you could tweak and manage in order to take cost out for both sides. And you can only do that because
people at trusted Walmart, you knew you were gonna be around. And so when you say, hey, we'll sign a five year lease or a 10 year lease, like, okay, yeah, I'll sign up for that.
STEVE ROBINSON (16:01)
Aaron, that's a really good point. When we talk about scale, there's another key point is that when you're subscale, you tend to manage toward the quarter. Maybe a little bigger, you can
year. But large enterprises tend to manage five and 10 year started investing in the M1 silicon
2010 for 2020.
go to market release, right? Amazon spent 20 years building their competitive moat around, Prime and Amazon Web Services. So, you tend to look at scale differently. And, you move away from like negotiating unit costs with your supplier as effectively the cost per unit, because unit cost negotiation is the only thing on the table.
When you get the scale, you have both unit cost and then you have capital that you can deploy and you can deploy a one and a half billion dollar, A.S.R.S. robot for your distribution center. But if you pick up a 10 cent per unit cost advantage, right, and you're doing 50 million units, then you've got a pretty good return,
and you're going to see that return, over years. And so I think enterprise players get to bring, their scale, but a different sort of competitive moat better data, the ability to actually deploy capital and risk as levers to lower costs over time and, engineer a different outcome.
Aaron Alpeter (17:33)
Yeah, that's fascinating. what's so interesting is you spent so much time at scale, you moved into startups. And so you've got this big scale thinking mentality that's, that's in your mind. And now you're going to look at things on a smaller scale, although the startups you worked with, candidly, were not very small. And so I guess I'm curious to know what were some of the things that jumped out to you when you first started working with founders, where you're like, hey, that's not going to scale, that's not going to work.
STEVE ROBINSON (17:35)
you
Thank
Yeah, know, really interesting and great you did. When I said that I was being intentional about, what I did and, where I worked first, success is working with people that you like. I would tell your entire audience, make sure that regardless of how fascinated you are by the tech that you have a passion for the business, but you love the people, right? Aaron, I think most...
particularly startups, my observation, even sitting here in Silicon Valley, and I advise about six startups right now. Most are kind of AI. And the pension is to want to build everything because the assumption is that ownership equals a competitive moat. But if you own something and it's sort of a mediocre version of what the market has, is it really a moat? So the learning there for startups, I hate to say it.
is to have a smaller focus, a smaller footprint for the things that you feel are important and essential and then partner or orchestrate for the other pieces. Right? So, I was the chief operating gobble at one company that, we exited and we were a meal kit company and our initial differentiation was, three steps, one pan, 15 minutes, a hot delicious meal.
on the table at a time when Blue Apron was sending you like cans of soup and potatoes you had to cut. We did all the mise en place. We had over 700 recipes for sauces, risottos, combinations, butters and and other things that we could really customize. And we thought, wow, speed was our differentiation. Well, what it turned out is that that didn't scale as we attempted to, move from.
local to regional and regional to national, that speed was really challenged. And the real constraint began to surface, which was freshness in the box. So we had to pivot. We had to rethink every process, every agreement, every touch point, every supplier and engineer around a smaller focus that wasn't this comprehensive portfolio of capabilities, but just
one thing that we could nail and own that was critical to our brand promise. Okay, so I would say that, people get to an MVP and you can either get deeper into that one thing that is critical to your brand promise, or you can begin to add more features and functions and other things because someone has a vision of what a total mature solution looks like. Well,
Total mature solutions are great for enterprise, but most organizations can't consume it, right? I say, yeah, you you're not building Microsoft Word. What percentage of Microsoft Word do you consume before they release the next version? You know, likely 16 or 17 % because it's not built for you. It's built for any and everybody. Whereas you're trying to get to product market fit and commercialize around a much tighter subset of capabilities.
So I think you should think, smaller meaning a more focused point. I can't can't argue with Peter deals, you know, zero to one. It's like, yeah, let's identify a place where you can be very focused and dominate.
Aaron Alpeter (21:17)
think that there's a tendency to be scatterbrained a little bit when you start out because you're trying to find that product market fit. And so I guess what advice do you have in terms of people trying to find that product market fit? Because it could come across as not being very focused, right? If you keep cycling through and trying different things. And so what's the difference between being focused?
and changing your focus versus being disciplined.
STEVE ROBINSON (21:46)
I think that is the secret sauce, because, we're saying focus, focus, focus. But yeah, you have to pivot. You have to pivot. You will pivot every successful Silicon Valley that is exited at some point has had to, recognize, when and where and how and how to pivot. I think that a part of it is just first principles in that,
Are you in a business that
solution? And that means that you're able to bring a core group of people along and there's a sufficient value and sufficient differentiation. And then you're able to layer in systems and processes that are repeatable that can
simultaneously reduce time, touches, cost, expense and friction while also, sort of expanding the value prop to that, core group. And so when you see that you've pivoted toward a solution that has lots of run rates, got the addressable market, your unique, point of view is something that can continue to mature in a way that continues to add value.
that you can monetize, then I think you got it. And so there's a requisite amount of experimentation, A-B testing that's required. The discipline is to just sort of stay focused on true north and you just can't be a phone call away from your next best idea. You are gonna have to be married to.
market, a strategy, customer target long enough for you to really explore if it has legs.
Aaron Alpeter (23:23)
so often you'll hear about startups or people who leave big companies like I'm a startup to talk about bureaucracy. And I think there's probably no dirtier word in startup ecosystem than, than bureaucracy. And a lot of times when people think about enterprise, they think of bureaucracy, they think of slow inflexibility, things like that. Is that a fair assumption or do you think people are conflating one with the other?
STEVE ROBINSON (23:36)
you
I think it's an earned title. I think founders should fear bureaucracy, but they shouldn't fear, discipline. And that, there's this thing called the law of unintended consequences. And if,
The world is experiencing
peak of innovation and the ability to do things today that we can do even 12 months
sort
exploded. What we don't take as much into account are the risks. And no one's got the meter, but at It feels
risks
out.
numbering the number of, valid innovative opportunities. And so a certain amount of bureaucracy, caution, diligence, risk mitigation is inherent in this concept of that people call bureaucracy. But if it's something that is an appropriate risk and you're for your shareholders, your employees and or your customers.
You should pursue it even if it costs a little bit more time and a few extra nickels but if you're sub optimizing around a function and ego and an opinion Or if you don't have a really, tight RACI model or Elon Musk says hey, If you're not needed in the meeting don't come to the meeting then everybody's all the kids are around the soccer ball Yeah, chances are there's a little bit of bureaucracy there. There's some performative things that aren't really adding value
and you're with your precious burn rate dollars that should be adding value instead of creating waste. So it's a good watch out, but you have to stand up for the critical few things that are adding value
protecting your protective competitive moat.
Aaron Alpeter (25:38)
Yeah, because on the one hand you do want process, do want SOPs and things like that. But I think bureaucracy is probably when you're married to the SOP you don't understand why. It's kind of one of those things there.
STEVE ROBINSON (25:45)
Thanks
Well, there's bureaucratic drag, there's internal egos, there's politics, there's turf protection. You get all those things where you get people, they bring great stuff, but they also bring baggage. So again, it's well deserved, but you can use a knife of what I call clarity to separate, informed best practice or, risk mitigation,
from politics and turf protection.
Aaron Alpeter (26:16)
had three exits that you've been a part of. I'd love to maybe focus in on the most recent one, which was Gobble. When you were a part of that exit, what were some of the elements that actually mattered operationally to the business where someone else could own it?
STEVE ROBINSON (26:32)
I would say because we built repeatable, scalable processes that didn't require the Avengers to sort of show up and sort of save the business. that, rigid discipline, in fact, a culture, not just internally, but permeated throughout the ecosystem.
where everybody understood where value was created and was value was destroyed and all the measures and the incentives were kind of aligned. our investors wanted a business that would survive, the management team because the processes were there, the contracts were there, the metrics were there, the technologies didn't just exist, but they were fine tuned.
to identify value creation. The reward and compensation systems
to win. We dialed in
marketing, right? And that we would start every Monday with this conversation.
stop, start and continue based
our True
We pivoted a lot, right? But at the end of the day, we created a sustainable process that was true to our brand promise. And it turned out it wasn't speed, it was the freshness in the box. In fact, in 2019, we won the most innovative supply chain in America award from
executive platforms for the differentiation. Because we stopped everything and leaned into how do we create a box where we were cutting food right? fresh meat, fresh produce that had been cut and sliced fresh veggies where the foodborne pathogens were just going to explode if it dropped a degree below the USDA standard.
But we could ship that box anywhere in the US and it could sit on your stoop for up to 96 hours in the full heat of Las Vegas, 120. And then when we open that box and you present it, for cooking on your table, the meat still had ice crystals, right? So that became our standard. So engineering how the item selection, the procurement BoM
the time and route, the lead time, the order quantities, everything about that, the experimentation with different types of ice and internal chamber configurations in different heat chambers for like almost a year and a half to get to the engineered, best infrastructure. It required all of that and more. And it required a group of young people that worked for me.
that didn't know what we were asking them to was impossible. And so they just did it. ⁓ And so it required a lot of that. But that's really what people were buying. The ability to actually deliver that brand promise consistently, anywhere in the country at a price that the consumers felt was a great value that we felt, could generate.
a reasonable return to our investors.
Aaron Alpeter (29:46)
Yeah, you just dropped so many gems there. think there were two that stuck out to me in particular. One was building a business that can survive the management. oftentimes you do see your founders, your C-suite coming in and seeing themselves as the Avengers, as you mentioned. And so that can be a very difficult thing to do if you don't have that process that isn't going to require them because sometimes a business will be unviable for that reason. And then the other thing that was interesting was just
this idea of making sure everybody knew about where value was created and where it was destroyed and kind of understand what that true north is. And I'd love to dig there a little bit more because you talked about how you basically built the supply chain around speed and I'm sure all your marketing was there. People, had that association. But then you kind of made the difficult decision as a company.
to say, hey, you know what, what you build is great, and the speed is there, but we don't want that anymore. We want something different. And so just talking about what was it about the maturity or the data or the way that things were presented where the business ultimately said, you know what, we're gonna put this to the side and focus on something different.
STEVE ROBINSON (30:54)
Yeah, that was sort of a combination of areas. a chief operating officer. I ran customer service and so you know always having to look at well, what are the customer complaints and a lot because we change the meal so frequently it was meal specific. The chicken here, the salmon there, whatever. But. we really start seeing it sort of like disruptions. If there was a storm and transport was disrupted or FedEx or one of our.
service providers had a disruption. Our biggest complaints was around this lack of
And
what we had sort of engineered quickly didn't have, ⁓ there's the shelf life and then there's a number that we use, the stoop life. It didn't have the stoop life.
that that we needed and we had a fairly robust CRM so we could sort of define what issues we had, where we had to refund or discount or we would offer cookies if it was just a minor infraction. So we really started capturing the data, but we started doing some work.
literally eat what you cook. My customer service team started on a regular basis ordering the food internally themselves and then cooking it and then started ordering our competitors food. internally, were literally, you know, sampling internally every meal. So before a customer would call and tell us what the issue is, my customer service team already knew and it already formulated a plan and it already sort of, we're swimming ahead of anything.
because the meals change frequently. And that was the complaint. It informed us upstream, whether it was packaging, whether it's operational errors in our pickpacks, pick the light operations, or ⁓ whether when we switched from one salmon vendor to another salmon vendor, what kind of the quality drop-offs were. And it all revolved around
Some people unbox for aesthetics. Our unboxing experience was all about this perceived freshness that that really became it and we just embraced it across the entire business and internally in our entire ecosystem. We even created different contracts for our carriers to make sure that they had the right, contractual things that would lean into the things we wanted and lots of penalties for the things that
we thought destroyed brand value.
Aaron Alpeter (33:18)
Yeah, well, that's that expertise or history of working with at scale where you can be like, hey guys, let's get on the same team here. When we were going through the due diligence process, what were some of the aspects of the business that were more heavily scrutinized than you'd expected?
STEVE ROBINSON (33:27)
Thank
Yeah, I think it was some of those operational issues. some of the sensitivities around, procurement. Do we have redundancy on certain things that were kind of, essential critical elements? our own internal engine around new product development and introduction, because if you're going to be creating like new fresh, exciting recipes.
And not just recipes that taste good, but recipes that you can kind of operationalize each recipe carry the enterprise, promise, meaning contributed to or took away from enterprise value. And so the enterprise value for us was the customer promise. And they really want to make sure first if it was really intact and then second, if it was intact in a way.
to make it transferable. So it's the difference between writing a piece of code, Aaron, and then having an API, but also having an SDK. So, even if you're sort of a product company, if you're thinking about, selling your business, you want to just, yeah, you want to have the ability to make the product, but you've got to have something that is synonymous with an API that allows
whoever potentially your acquirers are going to integrate to. They've got to be able to integrate to it. And then other people have to be able to kind of do it. And that's kind of where that SDK was. And so those elements of, when all the if all the people left and they did not, but if all the people left, with the enterprise value where the customer promise, sat, would it be really transferable?
Aaron Alpeter (35:11)
sense. now you're into the third act of your career, and we've got to talk about the supply chain project. Actually, I this is one the coolest things out there. So can you just introduce kind of what this is, how it came about, and why you mentioned it?
STEVE ROBINSON (35:25)
Well, you know, as I think about it, Aaron, thanks for that. so first, let me tell you how it came about. And then I think it'll be, be kind of the context, I grew up in Cleveland. I'm from, I'm obviously a Buckeye, but I grew up in Cleveland and, and you know, my mother was a schizophrenic. We lived in a healthcare desert, a mental health desert, medical care desert. And there was a period of time in my younger years where, where we were homeless and
And I got to experience firsthand what life looks like when you have to depend on others and maybe kind of social services. And that was sort of important for now. But throughout my supply chain career, what really informed me is how when you're dealing with less, either because you don't have less, which is where I was in a startup, or you're a Walmart and you were just...
Everything's going to be at the everyday low price, which which means you are scrutinizing every penny, right? I got to say one thing about that. When I ran the private fleet, I remember feeling very comfortable because we were trying to manage miles per gallon and one tenth of an improvement in our MPG was like a 10 million dollars swinging on our P &L, right? And so I remember it was like my first job. I was like, my God, I'm at home because
whole concept of learning how to really count pennies and measure things, very carefully was just sort of in my DNA. But thinking about how resources get squandered and how things have to be prioritized and how you actually have to not just do more with less, but demand more.
from less, which is another important sort of discipline from a management perspective. So we started the supply chain project. our mission is to work with small, medium sized, mostly local nonprofits that are carrying sort of the essence of the burden to work with the underserved and what I'll call underprivileged populations. Of course, I live in California.
We've got 8 % of the US population and 40 % of the homeless. So we have a sort of a disproportionate, group that sort of, represented here, regardless of the politics, you just can't just drive by it every day without, some part of your humanity just sort of speaking up and asking the question, what if, what if we could do something different? And then when you read the headlines and you hear that the world is at peak waste, NRF said there was 950,
billion with a B, billion dollars of retail returns last year. The year before, 890 billion, right? The year before that, 748 billion, right? Landfill waste, all types of landfill waste, not necessarily returns, about 9.5 billion. We're wasting 45 % of the food globally today. And so how can supply chain people
and I talk to a lot of them, so we have this conversation every day. Supply chain people are uncomfortable living in a world that is at peak waste and simultaneously at peak need. That's just a good old fashioned demand supply mismatch. We live for that. So supply chain project is here basically to help build capacity. One of the reasons why the waste and the need of mismatch.
because the last mile is really constrained. So those small, local nonprofits, they lack people process technology. They don't have storage capacity. They don't have transport. They can't do cold chain FDA recalls. They don't have technology, right? And so building more capacity and more capability at the last mile is a problem. But there's also an opportunity to sort of reshape demand, from
where it exists and a lot of demand exists with manufacturers, brands and or retailers. And so working with them to sort of reshape how they think about what is today a philanthropic or an altruistic donation. Our point of view is that no we can identify that waste long before it's ever depreciated. in your Gapid County we can look historically and understand
where returns are going to be. We can help you identify that early on because all supply chain disruptions flow from the same thing. It's a lack of visibility to, changes in supply and demand and the inability to respond. So if we can help provide visibility to waste before it actually becomes waste and then provide alternatives, whether they're circular or humanitarian, then we can change the nature of the quote unquote
supply while we're also working sort of at the last mile in an attempt to change the nature of what demand looks like and how demand is offered. That's supply chain project. That's really what we're doing. We're looking to sort of reshape that demand supply by working at sort of both ends. We're in the middle creating community. We've got technology, WMS systems, TMS systems, order.
management systems, digital twins. We've got a workbench of just all the
as it relates to technology. ⁓ But we're working aggressively to help build capability down here at the last mile.
Aaron Alpeter (40:58)
That's fascinating.
if I remember correctly from previous conversations, it's nice to be altruistic if you're a supplier or provider of some sort. A lot of times they can get pretty significant tax incentives for doing this. Is that right?
STEVE ROBINSON (41:10)
Yeah, you'll hear a lot about that, because the IRS and the tax code has for, certain items and a lot of items. If you can identify it before you depreciate it and you can allocate it to a nonprofit, then you can get for some items up to 200 % of commercial value. But it just opens a wider theme here. And the wider theme is that what we've been calling altruism and philanthropy, once we really expose, how to provide more visibility and more options earlier.
We change that from altruism and philanthropy to your fiduciary responsibility. And maybe you don't own it directly, but if your competitors are doing it and they're finding ways to sort of repurpose excess capacity, waste, product, transport and changing their financial equations, some's gonna flow to the balance sheet, some's just gonna show up in net income.
then you're able now to separate the good companies that are focused on ESG and just basically say, hey, let's just be capitalist. And now this is on the table for capitalists. I need to aggressively donate that product at its maximum value. And that does what? It creates consistent supply for those local nonprofits that are just wondering where they're going to get the next donations that they need for that line.
that's like wrapped around the corner right now.
Aaron Alpeter (42:37)
Yeah. And do you have to be like a Coke, Pepsi or Walmart in order to participate with this project?
STEVE ROBINSON (42:43)
absolutely not. Absolutely not.
we've got about 250, nonprofits and really opened up right now our window for for donors. created a great what we call our marketplace app. We previewed it at the World Economic Forum in Davos and we use something called angelic intelligence. If you haven't seen our press release or seen some of our things, we're so excited. It's an AI based orchestration layer.
that basically does this optimized matching. But the AI agents have names like fairness and equity, and the agents help us do a
accurate match because they tend to do business through the lens of humanity, right?
Aaron Alpeter (43:28)
Yeah.
Ever since you told me about that, you showed me the video. I have loved that experience. I use that all the time, that example of just how you can make different decisions and optimizations. mean, the example you share with me was, you've got two food banks that are both looking for donations. You've got somebody who's got Top Ramen that they want to donate. And food bank A says, ⁓ we'd love to get some Top Ramen because of our afterschool program. And food bank B says, we'll take anything. We got empty shelves.
and traditionally the way an AI agent would work would be they'd say, ⁓ know, Top Ramen Top Ramen, keyword match, done, on to the next one. But what you're doing with this angelic intelligence is you're able to look at this and say, all what's the actual need here? And even though it's not a perfect keyword match, the best thing to alleviate human suffering would be to send the Top Ramen to the place with the empty shelves. It's such a beautiful articulation, not only of what you're doing with the Supply Chain project, but really what I think the future of AI and
AI agents is likely to be is to allow people to determine what it is we're optimizing for as opposed to just letting an agent quote unquote optimize.
STEVE ROBINSON (44:40)
Yeah, you know, Aaron, that's very well said. Your memory is really good. the feedback that we got from Davos was, yeah, the keyword piece was great. But the more important piece is that we were able to kind of help quantify the harm that would happen to humans. Because in the first example where it was just Top Ramen and the Top Ramen, an exact keyword match, it was 10 miles closer. And so the AI said the other one violated
all the norms for supply chain. It added incremental more miles both incremental more stem miles going out, which means empty miles coming back, right? It added more miles and it violated the keyword match and some of the other protocols because it put human need and suffering at the top of the decision Matrix. Okay, and it and it did it on its own and then you can ask it why and it says because
They didn't have enough stock and there's no way we were going to let a food bank that's a critical, factor for certain populations, be empty when we clearly have the product here. It was it was very, very powerful,
Aaron Alpeter (45:48)
Yeah, that's amazing. If people wanted to get involved with the Supply Chain project, what's the right way to do that?
STEVE ROBINSON (45:53)
Yeah, you know, you can DM me. I'm on LinkedIn or you can come to our website, thesupplychainproject.org. We've got just any number of places where you can click as a donor, click as a volunteer. Maybe you want to join the marketplace. All paths lead you into in the sign up. We're looking for gifts and kind donors. We're looking for nonprofits that, have some distribution intense element and
This is where I say there's great nonprofits. They're saving the whales and cleaning the oceans and doing a lot of amazing things. We're focused on humanitarian distribution intense nonprofits. They're distributing food, medical equipment, medical supplies, health and beauty aids, pharmaceuticals, clothing, maybe arranging shelter. But this is sort of a human first initiative.
Aaron Alpeter (46:41)
Yeah, this has been such a wide ranging interview. We started talking about scale, we talked about the exit with Gobble, we've talking about some of the nonprofit work that you're doing. If you had to land the plane for our listeners and you had to give them some advice in terms of what it actually means to build a business worth buying, what is it that you'd share with them?
STEVE ROBINSON (47:04)
I'd say the strongest moat is for you to take whatever the complexity is around your solution and codify it ⁓ into simple, easy processes that can work to scale. It may mean that initially you narrow the aperture, but in narrowing the aperture, you really hone in on
the essential differentiated value that your solution and what your business is. I call it the pizza shop and it is build your pizza shop. Make sure it's on a college campus. You've got the great location. You have a small but essential assortment. Your suppliers are close enough to kind of replenish you so that you don't crap out on game day.
that's really what you're doing. You're doing something that's scalable, repeatable, and that you can operationalize your brand's, core promise to the customer.
Aaron Alpeter (48:05)
Well Steve, this has been fantastic. Thank you so much for sharing your time and your wisdom.
STEVE ROBINSON (48:10)
Thanks, Aaron. Thanks for having me.