By Jerome Dubois
Co-founder and Co-CEO of 6 River Systems
Startup life moves so fast that sometimes it’s easy to forget about the big picture. We know what our big picture is at 6 River Systems—making the world’s best fulfillment solutions available to everyone. In the run-up to our funding announcement on Wednesday, I fielded a lot of questions from media about the big picture, and found myself answering the same ones over and over again.
Here’s why we chose to raise $25 million in our recent funding round and what we plan to do with the money:
Why are you taking the money?
We were going to raise money at some point in 2018, but an opportunity presented itself to take more money earlier. We generally pace ourselves based off of our customer feedback. If they’re happy, then we feel happy, and we feel more confident. We did it because we felt excited about what our customers were telling us. So, we made some decisions to accelerate hardware and software investments in our product.
Specifically on the hardware side, we’re moving forward with some things that will allow us to move into Europe a little bit earlier than expected. And on the software side, we’re making some very substantial enhancements around decision-making abilities with further investments in artificial intelligence and machine learning and deepening our functionality in the warehouse management space.
Is some of this money going to staff?
Yes. We plan on hiring up to 80 people on the next 12 months. The majority of those hires will be on the engineering side of things, but we’re making investments in our Go To Market and Operations teams as well. Thankfully we’re based in Boston, so the talent pool is very rich here.
What success has 6 River Systems had since its last funding round?
We’ve achieved a lot of milestones since our last funding round. We’ve seen substantial commercial traction. We’ve exceeded our booking targets last year by about 50 percent. That gave us the confidence to set pretty aggressive goals this year, and we’re on track to meet them.
Beyond that, we’re also seeing the market evolve. When we see news that big retailers are continuing to invest billions of dollars into fixing their fulfillment problems, we know this will have a trickle-down effect to smaller companies. There’s a tremendous opportunity here.
I’ll give you some perspective. When we started in 2015, the market estimate for our solution was somewhere between $1 and $5 billion by 2020. Now, as we’re approaching 2020, that estimate has ballooned to somewhere between $20 and $25 billion. It’s a very substantial swing in investment and we’re excited to be a part of that.
What is your perspective on robots stealing human jobs?
That it isn’t the reality our customers face. There is a very substantial labor shortage in this space. Jobs get unfilled every single day. If you survey 100 operations people, I guarantee you 95 will tell you labor is their top priority. They just cannot keep people in their buildings. As a response to that, warehouse wages have increased substantially in a short period of five to six years. Some jobs used to pay $9 an hour back in 2008, and now in you’ll see the same jobs offer $25 an hour.
There are two ways to fill this gap between demand and supply:
- Make the current employees more effective, which our technology does.
- Introduce a whole new labor force to do the work in the warehouse. Our technology allows warehouse operators to quickly onboard people with no training, or those who might have disabilities.
What are your biggest concerns for the business?
We’re from Boston and we’re proud of that. If we weren’t based in Boston, I would say that I’d have some real concerns about attracting the right talent to be able to continue the growth of the organization.
A lot of my concern for the business is making sure our customer base knows there are alternatives out there. They don’t just have to go with the status quo. The status quo is generally the same old automation options, out on a three-year agreement, or even sending product to Amazon to fulfill. Our solution really breaks the mold. It allows warehouse operators to get the productivity of an automated system with the flexibility of something that’s far more transactional—that they can pay on a monthly basis, if they wanted to. Just getting the word out is a big piece of this.
Learn more about 6 River Systems in this video interview with Jerome Dubois: