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I first met Brian Laung Aoaeh, CFA when he was a Partner at KEC Ventures.
By: Leah Kinthaert
Laung Aoaeh was creating really compelling content about digitalization and the maritime supply chain; his extensive Industry Study: Ocean Freight Shipping (#Startups) at his blog “Innovation Footprints” was a first-of-it’s-kind in the industry. Since then he’s been involved in many projects including cofounding The Worldwide Supply Chain Federation, The New York Supply Chain Meetup and REFASHIOND Ventures “an emerging venture capital fund that is being built to invest in and champion startups refashioning global supply chains”.
Earlier this month Laung Aoaeh shared some exciting news about The Worldwide Supply Chain Federation to his social media followers that caused me to sit up and take notice. The organization’s co-founder Lisa Morales-Hellebo had been interviewed on Varney & Co., the highest rated market program on American television, about the supply chain work they were doing in the wake of the COVID-19 pandemic. Morales-Hellebo is a VC, seasoned entrepreneur, product strategist, and community builder who’s passionate about helping fashion tech and supply chain startups achieve growth and industry adoption. With 25 of years of experience ranging from startups to F500s, and her network connections and knowledge, Morales-Hellebo could not have been a better partner for Laung Aoaeh to jumpstart The Worldwide Supply Chain and take it to the next level.
Host Stuart Varney introduced Morales-Hellebo on Varney & Co. explaining how private enterprise, including companies such as New Balance and Brooks Brothers, are stepping up to create protoypes of masks for healthcare workers in the crisis, with plans to transition their factories into making masks, both fulfilling a crucial PPE need and providing much needed jobs in this time of record breaking unemployment.
Lisa Morales-Hellebo described in detail the urgent job they have right now: “We are creating a clearing house to match vetted buyers and suppliers because there’s been so much fraud and price gouging and hoarding of supplies… we’ve been working with a number of grassroots organizations directly with hospitals… (and) local governments. We’re looking to produce scale and volume that is sustainable, by creating jobs with paid workers here in the US making the PPE… Nike has their own initiative, Tommy Hilfiger, Vera Bradley, a number of American brands have reached out to us and are producing masks and PPE. We’re talking specifically about the deaconess masks and hospital gowns which are also in short supply. Across the US and around the world, for example there are some textile mills in the Carolinas that are producing fibers which are similar filtration as an N95 mask. If we can spin up that fiber production we can innovate and get FDA clearance on new types of masks”.
Brian Laung Aoaeh and Lisa Morales-Hellebo are bringing true leadership to the business world at a time it’s needed most, taking action to help organizations cut red tape and make key connections to solve the shortage of personal protective equipment that the World Health Organization has said is endangering health workers worldwide. The WHO explains the crisis on their site: “Since the start of the COVID-19 outbreak, prices have surged. Surgical masks have seen a sixfold increase, N95 respirators have trebled and gowns have doubled… Based on WHO modelling, an estimated 89 million medical masks are required for the COVID-19 response each month. For examination gloves, that figure goes up to 76 million, while international demand for goggles stands at 1.6 million per month.” I was thrilled that Brian Laung Aoaeh and Lisa Morales-Hellebo could take time out of their busy schedule to speak with me about their critical work.
“I was somewhat familiar with what you do, but I have definitely just received a crash course in what you do listening to your partner Lisa Morales-Hellebo on Varney & Co. I will admit, sometimes we think of innovation as a bunch of people sitting in a room talking about doing. But you are actually doing stuff, really important stuff to put it simply. Can you tell me the story of your last 3 months? What happened, how did you end up doing this crucial work, how did those grassroots organizations and companies find you and how did Varney & Co find you?”
“Ha! That’s funny. The Worldwide Supply Chain Federation’s COVID19 Emergency PPE Supply Chain Project is really a very recent development which started on Friday, March 20. It builds on work that Lisa has been doing since 2015, or so, to understand the fashion and apparel supply chain and to tie that to localized manufacturing and supply chain networks in the U.S. Coincidentally, she was working on a collaboration with a large, multinational fashion brand on that topic starting in late October. As you might guess, those conversations fell away once the extent of this crisis became evident. At the same time we both were becoming increasingly dissatisfied and impatient with the lack of PPE for frontline medical personell. So on March 20 we decided to call on the community we have been building through The Worldwide Supply Chain Federation and The New York Supply Chain Meetup over the past 3 years to see if we could do something to contribute meaningfully towards solving the problem. From our point of view a meaningful solution would be repeatable, scalable, and sustainable for the duration of this crisis, however long it lasts.”
“We think America’s doctors and nurses deserve better than having to rely on charity and donations for PPE as they lead the effort to save lives during this pandemic. We feel we can do better, and we must do better. The alternative is unacceptable.”
“We both believe in the power of grassroots-driven networks to serve as a means for widely propagating information pertaining to innovations that have not yet reached the mainstream market. Lisa put up a page on our website. We sent a message to all 3200+ members of #TWSCF. Within a few minutes people started responding, and some of the organizations found us through posts on social media and word-of-mouth, and we found some of them through our network.”
“We have decided to adopt a team-of-teams approach to developing the COVID19 Emergency PPE Supply Chain Platform because we believe it would take too long for a single entity to build the entire thing from end-to end starting from scratch. So we are working with partners like Joor, AirTable, FleetOps, Masks for Docs, Distribute Aid, and many other grassroots organizations working to solve this problem in one way or the other. We are also coordinating a team of volunteers who wish to help with the various tasks that need to be completed in order for this to work. Many people have told us that they feel fearful, anxious, and helpless. We believe that volunteering towards solving this problem is one way to take control of one’s emotional and mental wellbeing. So we are doing everything we can to enable as many people to volunteer as we can.”
“On Monday, March 30, a member of our community sent an introduction to a producer on Varney & Co. We responded and got on the phone with the producer. Within 2 hours they had greenlit everything. We are told it’s the highest rated business show on daytime TV. We still can’t believe how quickly it all happened or that Lisa got to talk about what we are working on, and why we are working on it on TV. It still feels like we are dreaming.”
“I am so happy for you. What do your next several weeks look like?”
“We expect to complete our first transaction this week by securing one purchase order, and executing it through our partners on the JOOR platform. In startup lingo we are beta testing our minimum viable platform. We need to prove that given a purchase order from a hospital or government agency, we can source, procure, and deliver compliant PPE, on time and at a reasonable cost, given market conditions. What do we mean by ‘market conditions’? Some of our members with expertise in international freight logistics tell us that because of the imbalance between demand and supply, air freight costs are between 10x to 30x what customers would normally pay, depending on the service desired. So we offer guidance on how organizations seeking bulk PPE purchases should think about staging freight to account for the urgency of the present situation, but also recognizing that they do not have bottomless buckets of cash to spend on transportation costs. For example, deliveries to the West Coast from Asia by container ship can occur in about 2 weeks. So a small portion of a very large order could be shipped by air, while the remainder is transported by container ship – which is much much less expensive.”
“Once we have those results, we will start testing it more broadly the week after that. If all goes well we should be increasing the volume of transactions consistently at some point in early May. We believe there may be a second wave that is just as large, if not larger than the first. If our intuition is right about that, this will be a problem that we have to contend with for longer than most people now realize, and so we want to build the platform to be as robust as possible to give hospitals and government agencies an alternative to their long-established supplier and distributor relationships. I mean, the reason we are contending with this shortage of PPE is that those long-standing relationships were not designed to withstand a crisis like COVID-19, they are proving to be brittle at the time when they are most desperately needed. If we succeed, our end-to-end platform can serve as a viable and scalable alternative for sourcing emergency supplies without having to compete on an open market.”
“Obviously this has thrown you into the (much deserved) national spotlight and may give you access to organizations, companies and people you may not have had access to. What were some of your goals and plans for 2020, 2021, how have they changed since COVID-19 has thrust your work onto the national spotlight? Or have things not changed as much as I am assuming?”
“That’s a great question. We’ll tackle it in two parts.” “First, the easy part. The Worldwide Supply Chain Federation’s COVID-19 Emergency PPE Supply Chain Project was started specifically as a response to the current lack of PPE for America’s frontline medical personnel. Given that The New York Supply Chain Meetup is our founding chapter, it is uniquely painful to see what’s happening in New York City, and New York State. We can’t predict if there will be a need to maintain this platform specifically once this crisis is behind us. However, given Lisa’s work on the topic of localized manufacturing and supply chains in the United States there’s a possibility that this can be transformed into a more permanent platform with applications for the fashion and apparel industry, for example. Her study of fashion and apparel supply chains is the genesis of the approach we have adopted. We believe that supply chain is a national security issue that should be addressed more holistically at the federal level with appropriate national policy. We addressed this in: An open letter to the Supply Chain Caucus of the U.S. House of Representatives.”
“Investing in localized supply chains is not just crucial for our national security, but also for our economic security. We’ve been seeing millions of Americans furloughed and laid off while numerous businesses have been closing down over the last few weeks. Just like during WWII, we see an opportunity for much needed job creation, like Rosie the Riveter was called into action to build tanks. If we prioritize economic stability and job creation, we should be paying American businesses to shift their factories to production of our most urgently needed supplies. Many U.S. factories who laid off their employees weeks ago have seen their former employees volunteer to come back in to produce PPE at their own personal risk, without a paycheck. How can we be bailing out huge enterprises that just offered massive stock buybacks, paid out dividends to shareholders, and are now asking for more taxpayer money to keep them afloat? We should be investing in our American factories, raw materials, innovators, public health infrastructure, and regionalized supply chains. If we can get government buy-in on these priorities, we can save the economy, save jobs, and most importantly, save lives.”
“Second, as you may know in addition to building The Worldwide Supply Chain Federation and The New York Supply Chain Meetup as co-founders, we are also co-founders of REFASHIOND Ventures, a seed-stage venture fund that we are building to invest in the innovations that will define industrial supply chains as they are refashioned in the future to meet the challenges with which our world must contend. We have been fundraising since Q1 2019. Fundraising to get a new venture capital fund started is always challenging. For many of the limited partners that would invest in a venture capital fund like ours, meeting us is the first time they have ever thought about why innovation in supply chain matters, much less why they would invest in a supply chain venture capital management firm. It should be apparent that, in this environment, fundraising is even more challenging than normal. However, we believe that if the COVID-19 crisis has made anything painfully obvious, it is that the world’s supply chain infrastructure is due for a major upgrade, a major refashioning as we prefer to put it. Our ambition is to become one of the best venture capital funds, if not the best early-stage venture capital fund investing in early stage innovations for supply chains across all major industries and economic sectors. So we are thinking about what we need to do in order to enable us to continue fundraising despite the ongoing challenges everyone must contend with. We believe supply chain innovation is the biggest opportunity of our lifetime, so we feel confident that we’ll eventually make progress. We explained our thinking in: The World Is A Supply Chain – 2020 Booklet. It would be great if we could close some capital in 2020 to enable us to start making investments. Through our community we have uncovered some amazing innovations. We are eager to back those founders, and others that actively seek us out.”
“We are hosting virtual meetups until the crisis is over, and we hope to launch additional chapters, and for some of our chapters that are still dormant to become active. Building a community that lasts the test of time requires pain-staking, careful, and methodical work. So we are not in a hurry. We will grow the community slowly.”
“Brian teaches Operations Management as an adjunct professor at the Tandon School of Engineering at NYU. Hopefully that will continue – he comes from a family of great teachers. He writes a weekly column for FreightWaves. Hopefully that will continue too. Lisa is a seasoned tech entrepreneur, formal advisor to a number of startups, and a sought after thought leader for her expertise on fashion tech and fashion supply chains.”
“We are always looking for partners who can help us with handling the complexities of large-scale international logistics as well as the regionalization of distributed, collaborative supply chains here in the USA. We could figure it out ourselves, but having partners that already have years of experience moving freight around the world and the United States would greatly reduce our learning curve and would make it possible for us to respond to the need for PPE much much more quickly.”
“The Worldwide Supply Chain Federation has been a self-funded effort to date. So we continue to seek support from sponsors and other organizations that would consider backing an organization like ours. We have had conversations with a few people and organizations who are turned off by the fact that we are set up as a for-profit entity. So perhaps we’ll establish a non-profit foundation at some point. But we have a crisis to contend with at the moment, so we can’t say when that will happen, if it happens at all.”
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