Thought Leadership

My Unconventional Path to Building the Future of Supply Chain

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March 26, 2019
by Shastri Mahadeo
9 Minutes

This article originally appeared on Medium.

The Unioncrate Story: The people I’ve met and the lessons I’ve learned over the years continue to influence how I live my life and run my company.

This is how it all got started…

From the Caribbean to Queens

Like so many generations of New Yorkers, I wasn’t born here. I come from Trinidad & Tobago, the Caribbean island that brought the world Carnival, the steel pan, the world’s hottest pepper, and the limbo (you’re welcome).

When I was nine years old, my parents immigrated to New York City because they wanted me to have access to more opportunity. I wanted to become an astronaut; I was fascinated by the stars, the unknown. I still am.

We settled into a tiny basement apartment in Jamaica, Queens, an incredibly diverse and prideful neighborhood that raised the likes of 50 Cent, Nicki Minaj, and Pepa of Salt-n-Pepa.

Like many immigrant families, we came here with nothing. On Sundays, we’d walk the neighborhood looking for thrown-out tables or chairs because we couldn't afford to buy them ourselves. In the winter, we had to boil water just to generate heat. (Slumlords are the best, aren’t they?) My first Christmas in NYC, my father couldn’t afford to buy me anything so he took me to the bodega and bought me a “Win For Life” lottery ticket. I won $100! (Not for life though…)

My mother was a successful accountant in Trinidad but had to start all over when we came here. She became a babysitter and my father continued to build cars. They saved and fought for everything they wanted. When I was 14, my parents purchased their first house. Today, my mother is an Executive Director with the DOT and my father is an NYPD Lieutenant. I’m so proud of them!

First Hustles

My parents taught me hustle and true grit. They threw me into Karate when I was 11. My sensei didn’t mess around. He made us show him our report cards and learn simple Japanese if we wanted to train. He even gave us a reading list filled with business, history, and psychology books. If we didn’t show discipline, we couldn’t fight. And guess what? His lessons worked. I trained as a competition fighter for four years and earned a second-degree black belt in Shotokan. I stuck with it until I was 19!

As soon as I was able to, I worked. My first real job was at a clothing store when I was 14 years old. At 15, I was selling ADT security systems door-to-door (when that was a thing).
My 550 wheel horsepower (whp) Evolution 8 and Ninja ZX6r.

I also got really into race cars. I bought my first (cheap) car at 16. At 17, I worked at Radio Shack. At 18, I was buying and flipping cars, and selling real estate (I had a real estate license).

I learned a lot from these experiences. For example, when you build a race car, things will break. And when they do, you don’t just give up; you figure out what went wrong and rebuild. Shit happens. Not everything works the way you initially build them to work. You will win some and you will lose some. You don’t just stop because of the losses; you use them to fuel the wins.

The first official business I founded was a nightclub/restaurant in Queens (there’s another story behind that). In 2009, we generated around $1.2m in revenue. I was 23. Running that business was one of the toughest things I’ve ever done.

It taught me everything I needed to know about never doing that again!

From Tea to Tech

Fast forward to 2012. I was so scarred from the experience of running the club that I stopped drinking alcohol altogether. (I still don’t drink to this day.)

I got really into coffee and tea and was amazed that companies like Teavana could sell their products at such a huge markup. I decided to source teas myself and create a brand called Bare Tea Company that sold affordable, high quality teas. Later that year I began selling Matcha and the company took off.

But in 2015 we started to struggle with operations. I was using excel sheets to manage my sales orders, purchase orders, inventory, trade spend, and demand planning.

It was a nightmare.

We were selling on Shopify and Amazon, and to brick-and-mortar retailers. We had inventory in multiple places. And when it came time to putting together a demand forecast we had to do everything manually, factoring in various manufacturing, shipping, and lead times of our raw goods and components.

It. Was. A. Nightmare.

I couldn’t find any tools to centralize and simplify all these processes. Don’t get me wrong, there were a lot of tools out there to manage certain aspects of my supply chain, but I didn’t want to use five tools. I wanted to use one. I decided to try to build something to solve this problem for myself. I started looking for a developer to help me and I ended up at a Techstars Startup Weekend event in early 2016.

The Game Changers

I believe that life has multiple inflection points. They’re rare, and only in retrospect does it become clear that those moments changed the course of your life. Here are some of mine.

Game changer #1

So there I was at Startup Weekend, not knowing a single soul, when a guy walked in and asked me where the bathroom was. As one does, I pointed him in the right direction. We had a pretty casual conversation (after the bathroom) about why we were both there. His name was James Amable.

I thought nothing of it at that moment. Today, he’s my co-founder and the CTO of Unioncrate.

James was working as a software engineer and system architect at a trading software company. He was tired of the financial space and was on the hunt for something new. I told him about my tea company and that I was there to meet new people. Little did we know it was the beginning of something great.

Game changer #2

Then I met Jenny Fielding who was running the actual event. I told Jenny why I was there and she said my company’s supply chain management problems seem to be pretty big — and that many CPG companies were likely experiencing the same issues. This sparked something in me.

Afterwards, I talked to a few CPG brands in the warehouse I was working out of called the Organic Food Incubator, formerly located in Long Island City, Queens. They said that they were also facing the same problems. This turned my spark into a small fire.

A few days later I reached out to James to grab coffee. I told him more about the operational problems I was trying to solve and the idea I had based on the conversations I’d been having with other companies. I asked him if he would be interested in building something with me to solve the problem.

James was game. We started to meet in coffee shops around the city, working from 6:30 p.m. to about 11 p.m. every night. On weekends we worked all day.

I kept Jenny updated along the way. She told me that she was going to be starting the Techstars IoT program at the end of 2016 and that supply chain would be one of their areas of interest. She then introduced me to Angelia Müller, the Program Manager of that cohort. Angelia was and remains immensely supportive of us.

We applied and were accepted to the program! James and I had identified a problem that needed solving and we had begun to create a promising solution. But there was a lot we didn’t know. When we got into Techstars, James and I both decided to push our chips into the middle of the table: I made decision to transition away from Bare Tea Company (it later shut down) and he made the decision to quit his job.

We went all in.

During the Techstars program we learned a lot about focus: We decided to specifically solve the demand planning problems CPG companies face today. To do that, we thought we needed to sell a tool to retailers so we could get the point-of-sale data to train our models. I was getting data from retailers like Walmart for my tea brand so I knew there was a way. But what I didn't know was that CPG brands were buying a large set of point-of-sales data from 3rd- party companies. We learned this when I met Cris Haskell.

Game changer #3

Cris and I met through an early stage investor (1517 Fund) who put us in touch for a diligence call a few months after Techstars. I understood from experience how small brands worked but I had little insight into the operations of a multi-billion dollar company. Cris had sat in brand management and innovation roles at Kraft-Heinz and Reckitt Benckiser. He also was the COO, and then CEO, of a medium-sized consumer goods brand (Pellon).

Cris was extremely excited by what we were building. He told us that demand planning was an issue even for large enterprises; they couldn’t use their data in a meaningful way.

Unioncrate Takes Shape

We called our company Unioncrate. Why? Well, the name embodies the very ethos behind its existence: unity in form, function, and execution.

In other words, a platform that provides the operational “glue” CPG companies need to run an efficient supply chain.

Today, our mission is to become the building blocks of our clients’ entire supply chain. One platform to automate daily operations and significantly improve demand planning accuracy. How much can demand planning issues cost CPG companies? Consider the following statistic:

For every $1 billion in sales, a 1% over-forecasting error can produce approximately $3.52 million in losses. The same 1% error, as it relates to under-forecasting errors, can result in an additional $1.43 million loss.

Now think about this when considering the average forecast error rate today of 40–60%. Mind-blowing, right?

This problem exists because CPG companies still rely on past internal sales performance and a simplistic version of historical consumption trends to try to predict future demand. They manually analyze this data using methods from last century. This results in huge financial losses.

Automation and Accuracy Is Everything

To solve this problem we created an integrated business planning (IBP) platform that unites artificial intelligence with human intelligence so CPG brands can plan, execute, and pivot supply chain strategies at the click of a button.

This tool tackled one of the problems that I faced running my brand—the one that I knew was the most important.

The Results

We currently work with customers that range from startups and SMEs to large enterprises. (You can view a small list of existing customer on our homepage.) In two just two years,

Our Integrated Business Planning (IBP) platform has been proven to predict sales and shipments with a 79.1% - 93.9% accuracy level with just the click of a few buttons. This high-accuracy forecast and automation has already enabled our CPG clients to capture millions by improving working capital and capturing lost sales.

And we did all this in two years!

Looking Back, Looking Ahead

We’re helping to create the supply chain of the future. We‘re a team of CPG veterans, data scientists, and rebels with a common mission. Our goal, as a team, is to make Unioncrate the leader of this transformation and become the industry standard for demand planning and supply chain management.

I hope this story inspires you to always keep moving forward. No matter the hiccups or roadblocks. Build a great team and keep moving forward. I’m grateful for my team and our investors who include Google, Susa Ventures, Bain Capital Ventures, Laconia Capital, Founders Fund and other notable angels. Stay tuned for more!

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