LONDON — Imagine, for a second, that you run a delivery company. You need to make sure your fleet of couriers run as smoothly and efficiently as possible, without wasting time and taking the fastest routes between stops. The more efficiently operate, the more money you make. How do you do it?
This is what’s known as the “Travelling Salesman Problem,” and it’s a famous problem in computer science.
But what if you realised that maximising the efficiency of your workforce meant that in the process you would unfairly distribute the work between your employees? If it risked causing resentment and bitterness, would you still do it?
That’s a decision that Optimoroute, a Croatian route-optimisation company, forces its customers to make.
“We have a slider where you can adjust how sensitive you are to this fairness, we call it balancing,” Optimoroute CEO Marin Šarić told Business Insider, “so you can decide for yourself how much this is an ethical issue for your business.”
Optimoroute wants to make deliveries more efficient — and doctors, and repairmen, and more
Operating out of Zagreb, Croatia, Optimoroute provides back-end software to consumer-facing companies that have agents in the field. It has customers spread across 15 countries, including an Atlanta food delivery startup, a Saudi Arabian bakery, a London laundry-on-demand service, and air-conditioning and heating repair businesses.
The idea was first spawned in 2012, but all three of the cofounders didn’t go full-time until 2015, and raised a previously unpublicised seed round in July 2016.
Investors include San Francisco VC firm Pathbreaker Ventures, London-based Hoxton Ventures, and the CEO of Yelp. Šarić declined to disclose the size of the round or the company’s valuation, saying only that Optimoroute had “several million in offers” in the oversubscribed round but ultimately chose to take less than investors were offering.
Today, the company is still small, with less than 10 employees, almost all engineers — though it’s continuing to hire. Marin claims it can work far faster than its competitors, recalculating complex routes on the fly as required, and can boost the efficiency of its customers by as much as 10%.
Route-planning has human complications
You can apply the Travelling Salesman Problem to just about any job with workers on the go, from doctors to delivery men — but there are varying human factors that need to be accounted for. A “salesman” might only be able to visit customers at very specific times. Or a company could need to avoid having its entire workforce clocking off on break at the same time. “These people are not robots, they need breaks,” Šarić said. Optimoroute “automatically calculates everyone’s breaks so it minimally impacts the whole operation.”
Plus there’s the issue of fairness. If the most efficient route means one employee “just idles around most of the day and doesn’t have to do anything … it creates a huge management issue,” the chief exec said. “It’s a human issue. Those [other employees] will feel it’s unfair.”
It’s led by a veteran ex-Googler
After university, Marin Šarić joined Google in Silicon Valley in 2003, “when it was legitimately a small startup.” (Google formally launched in 1998.) He helped create the Google book search project and ran Google’s library-scanning engineering team. His time at Google informed his ultimate approach to Optimoroute, which he cofounded with his brother Frane Šarić and Goran Kukolj: “What if I could take that experience and bring it back to Croatia?”
When raising venture capital, “I deliberately didn’t want to talk to any emerging market investors,” Šarić said. “I wanted validation from the same people that I knew of or met when I was working in the middle of it [in Silicon Valley] … I wanted those people to say ‘wow, those people are fricking cool, we believe in you, we’ll invest in you.'”
Rob Kniaz, another veteran Google employee-turned-investor at Hoxton Ventures, said: “When Marin was raising his first capital in California two other former Googlers, including one Hoxton fund investor, reached out to say we had to meet him en route back to Europe from the Valley. So we flew right out to Zagreb … He bypassed typical London venture firms entirely.”
Šarić says the company is currently “so close to profitability right now our runway is almost measured in decades,” but that it intends to raise more venture capital to fund further growth, with an “85% chance we’ll raise a Series A in 2017.”
Šarić pitches the work Optimoroute does as more important than ever, given the changing face of work. “When people think about logistics, they think about routing, they think about package deliveries, they might think about some ships or freight crossing companies,” he concludes. “But I think what people need really to understand is that we are moving towards this mobile world, where every every year, in every country, there are more and more people who are working on the go, and Optimoroute is in the middle of it all.”