The Crunchbase “Female Founder Series,” is a series of stories, Q&As, and thought-leadership pieces from glass-ceiling-smashers who overcame the odds and are now leading successful companies.
Lidia Yan is co-founder and CEO at NEXT Trucking, where she oversees the company’s vision and growth strategies.
With a background in logistics and e-commerce in the U.S. and China, Yan recognized a market need for a simpler, technology-enabled marketplace to match freight with capacity when she and Elton Chung launched NEXT Trucking in 2015. Now her company is connecting shippers with available capacity based on driver preferences, allowing drivers to be more efficient, haul more loads, and make more money.
We asked Yan about her biggest inspirations and motivations for launching and building NEXT Trucking in a typically male-dominated industry, as well as how she has integrated her values and mission with the company structure.
Q: What inspired you to start your company?
My family has been in logistics for 15 years, but what really inspired me to get into trucking was a particularly impactful event. While I was working at my family’s business, a driver for a multibillion-dollar trucking company came to the warehouse to pick up his load. All he had with him was a piece of scrap paper with the load number jotted down, which he’d received from a phone call with his dispatcher. It took the warehouse team three hours to search every square inch of the facility—only to come to the conclusion that his load wasn’t there. An incorrect digit in the load number was the culprit of this fishing expedition, which wasted the time of both the driver and the warehouse workers.
At that moment, I thought, “We can create a solution to streamline this process.” After talking to many drivers, my co-founder and I came up with NEXT Trucking as a marketplace that connects shippers with carriers. We use smart-matching technology to make the flow of goods from ship to shelf easier for shippers and more profitable for drivers.
Q: What problems were you trying to solve?
NEXT Trucking created the first drayage marketplace, connecting small fleets and owner operators with shippers. Port drayage is the process of moving a container from a port to a local warehouse, and returning the empty container to the port. We call this the “first mile” in the delivery process, because it represents the first mile in the journey of every single imported good.
The drayage industry is extremely fragmented; 88 percent of drayage companies have fewer than 10 trucks, and the top 20 drayage companies only account for 20 percent of the drayage market.
Trucker shortage is the No. 1 problem in the industry.There is an 89 percent turnover rate caused by low pay and forced dispatching, or dispatching a driver to a location that is less preferred.
Additional delays at port terminals are caused by the broken port infrastructure, the increasing number of mega ships, and shortages of chassis, which are the undercarriages used to transport containers. To put the impact of these delays into perspective, every year, terminal congestion and poor efficiency results in 9 million gallons of wasted fuel and 15 million hours of wasted time for truckers, the equivalent of $1.2 billion.
In addition, there is a huge lack of technology in drayage. With the dominant systems currently in place, there is very limited data sharing among all the stakeholders in the drayage ecosystem; from terminals, to chassis providers to yard operators.
We built a marketplace that allows drivers to haul the loads they want at the time they want. We provide visibility and transparency to both shippers and carriers, and vastly improve efficiency for all of the stakeholders in the drayage ecosystem.
Q: In 2019, only 3 percent of venture capital was invested in female-only founded companies. Did/do you feel welcome and accepted as an underrepresented group in the VC space?
When I started NEXT, I was the exact opposite of what everyone expected. When I first started pitching the idea to people within the industry they loved it, but didn’t believe that I could make it work; I didn’t fit the build of someone who looked like they had a background in trucking or logistics. I’m a five-foot, two-inch Asian woman who looks completely out of place near an 18 wheeler.
At the investor’s table, however, it’s all business; what they value is performance and hard numbers, so at a certain point, my gender, my looks, my height don’t matter anymore. Respect is earned through hard work and I continue to push those boundaries within the industry.
Q: What is your advice for other female founders at the beginning of their entrepreneurial journeys?
My advice for other female founders is this: Work for a cause, not for applause. Especially in male-dominated industries, qualified and talented female entrepreneurs should place their efforts into pursuing a mission they feel genuinely passionate about, and gaining the respect of their professional peers. Ultimately, the respect of your colleagues will far outlast the momentary gratification that attention can provide, and be a much more valuable asset in your career.
Q: What is the most valuable lesson you’ve learned as the founder of your own company?
I have learned a lot from the past five years. NEXT grew fast from a few employees to a few hundred employees. The company culture changed when we reached about 100 people—it’s no longer a scrappy, hungry group, but a large company that requires a lot of structure.
I am continuously learning to strike the balance between showing strengths and being transparent about vulnerabilities.I am still tempted to have my hand in every piece of the business and be involved in every detail, but I am learning every day how to let go and delegate more.
Q: How have you integrated your values and mission into your own company structure?
From the beginning, my vision for NEXT Trucking has been driven by a desire to improve the quality of life for today’s truck drivers. I’ve been personally inspired by these incredibly hard-working individuals. Drivers spend all hours of the day on the road, often far from their families and loved ones—they dedicate their entire lives to the job. Drivers are at the heart of what we do; when I founded NEXT Trucking, I built it on that goal of taking my personal mission to improve the working lives of drivers, and turned that goal into the mission of the company.
Q: How did you connect with VCs? Can you describe your process of raising your latest funding round?
I have pitched over 600 people in the last five years, and for my first institutional round I spent four months on the road. The investor meetings are typically between 45 minutes and an hour long, so I’ve learned it’s extremely important to keep your presentation between 20 and 30 minutes in length, in order to leave ample time at the end for questions.
In my experience, two factors were critical: Spend time to build a strong presentation deck and prepare well for your data room. The pitch deck doesn’t need to be particularly long; about 10-15 well-thought-out and informational slides will do. My process during pitch meetings began with some industry background to explain the drayage issues NEXT is solving, which investors are typically unfamiliar with. Next, I’d dive into the product, benefits, performance and other competitive advantages before introducing the product demo and financial details.
The data room requires a meticulous overview of relevant company information, including any contracts, legal matters, business licenses or property. Other details can include product and IS, performance data, sales and marketing information, IT systems and networks and HR materials such as financial tax matters.
Over hundreds of meetings, I learned that it’s best to schedule all of your meetings within two weeks to avoid dragging out the process—which can certainly be exhausting. Especially for first-time founders, rehearsing the presentation and preparing for investors’ questions is critical; it can be most comfortable to rehearse with friends and family, but practicing in front of other founders can deliver valuable insights. In terms of travel, the COVID-19 pandemic has made it easier for founders to present remotely. For founders who do plan to go on the road, my advice is this: Wear sneakers.
Q: How did you know you were choosing the right investors? What have they brought to the company?
Choosing investors is like choosing a business partner. You want someone who can help you and support you during good times and bad times. Your board is an extension to your executive team. A good board can help you with company strategies, source talents and provide you with resources to be successful, on top of the capital that they bring.
