#StartupsEverywhere profile: Leonardo Bonanni, Founder and CEO, Sourcemap
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Enabling companies to map their supply chains through technological innovation
Dr. Leonardo Bonanni—Founder and CEO of Sourcemap—was conducting product research at MIT when he came across the challenges companies were facing in developing a concrete understanding of their entire supply chain. This led him to develop Sourcemap—a platform that enables companies to network with their suppliers and understand vulnerabilities. We sat down with Bonanni to discuss how Sourcemap works, the impact of COVID-19 on their business and supply chains, and how the government can better partner with startups that are innovating supply chain technologies.
Could you tell us about your background and how it led you to Sourcemap?
I was working at the MIT Media Lab on green design and sustainable product design, and I was immediately struck by how little information was available on the impact products were having, specifically in terms of their sourcing. In brief, there was little to no information on where products come from, and without that information it's impossible to accurately measure their impact on the environment.
I approached this challenge as a media problem and built a media solution, one that would crowd-source the missing information through a sort of social network for supply chain transparency. We had so much access to corporate data and feedback, and working hand-in-hand with activists and corporate communities slowly built up our platform into a supply chain software company.
Tell us about Sourcemap. What is the work that you are doing?
We help companies figure out the origins of their raw materials and map their entire supply chain. It works similar to a social network like LinkedIn. Companies invite their suppliers to join, who in turn invite their suppliers, and so on—until every single component, subcomponent, or raw material that goes into a subcomponent has an origin, and our customers can be sure of where it comes from.
Along the way, the platform collects all sorts of useful information, input by users, to help determine if there are any risks to the environment, to communities, or to product quality, or the overall dependability of the supply chain. Then, we can help our users analyze and verify information in this large social network. This is particularly important because a lot of our customers have programs in place to ensure against things like forced labor, unfair wages, or harmful environmental practices in their supply chain. When they make those commitments, they want to stand by them and communicate about them. Sourcemap can show how our users are managing their risks and making progress. They can then share what they have done with their stakeholders and customers.
Has the COVID-19 pandemic affected Sourcemap? What have you learned over the past year?
We were always on the side of helping companies to digitize their supply chains and move more and more into the cloud. One of the earliest assumptions behind Sourcemap was that if you wanted to know your global operations as a whole—there was no way you would do it by visiting everyone. You're going to have to implement some sort of cloud-based communications. We took supply chain management, which usually involves companies trying to have the least number of suppliers to deal with, and instead built a new approach that allows companies to deal with tens or hundreds of thousands of suppliers all at once through software.
So what actually happened with the pandemic? We were already accustomed to working with customers halfway around the world who we've never met in person, and to connecting those customers with their suppliers halfway around the world. What we really saw with the pandemic was more companies moving to the cloud as a way of doing business collaboration, and that becoming more normalized.
At the same time—with the global disruptions of the pandemic— it has hit a lot of industries very hard when it comes to the supply chain. Companies are realizing that they need to invest more in knowing who they buy from and being able to check in with those suppliers to see if they're okay and able to continue operations. So if anything, there was a redoubled investment in supply chain digitization and mapping. Some of our customers took a hit, but they used that time to regroup and make their supply chains more efficient. Part of that is moving into the cloud and managing the supply chain better.
You recently testified at a Congressional hearing. Can you tell us briefly what that experience was like? How did you get involved in that process? Why do you think it is valuable for Congress to hear directly from founders like you?
This wasn’t something we expected. A lawyer working with one of our customers asked me about a Senate Finance hearing on enforcement of the forced labor ban. This bans the import of goods into the United States that are made with forced labor or child labor. It's received a lot more attention since Customs and Border Protection (CBP) issued a regional ban on all cotton and tomatoes coming from the Xingjiang region of China earlier this year.
I was asked to provide a technology perspective because we've been around doing this work for ten years. CBP, like many companies, doesn't really know that it is even possible for a company to know who supplies its suppliers, map their products down to the raw materials, and figure out if there's a risk of forced labor—all through technology itself.
This law is the most meaningful and strict law preventing supply chain malpractice—but it is being enforced in a very unpredictable fashion right now. The government can keep this law on the books, keep enforcing it, and do it in a much more effective and uniform way if they use the right technology. The hearing was an opportunity to explain how companies map their supply chains, which companies do that well, and how CBP could use this information. I think most of the conversation was around whether it should be done, but I was there to say, “This can be done. When you're ready to do this at scale, this is how it should be done.” I think our customers were certainly happy to see supply chain mapping get this kind of attention from policymakers because they've been investing in it for years.
Overall, I would say it was a great experience. Some of the technical details were a little hard to convey in a hearing, and I tried to make it meaningful by having follow-up conversations with members and staff. There's no question the government could benefit from source mapping technology at scale.
There has been significant focus on the strength of U.S. supply chains at all levels of government in recent months, including an executive order from President Biden on the subject. What role do you see technology startups playing as part of these efforts?
Part of the push is making sure we're not doing horrible things halfway around the world through the goods and supplies we purchase. Another part of the question is how do we make people favor U.S. sourcing and U.S.-based supply chains. They sort of go hand in hand.
One of the solutions I know all of our customers are looking for is any ideas or guidance on who they should be looking to source from. The government might ban something from somewhere, but there is no approved list of ethical, reliable alternatives available. One thing that contributes to this problem is that supply chain traceability technology is not yet widely adopted, and there are only a few startups in the space. At Sourcemap we are building partnerships around supply chain transparency. This not only enables customers to map their supply chains, but explore alternatives to their current suppliers if needed due to ethical issues. For example, we have a partner, a New York-based startup called Ulula that collects grievances from global factory and farm workers. We have another partnership in Texas with a company called (En)visible and they trace fresh food using a blockchain. There are probably half a dozen more partnerships that we have developed. It is kind of a constellation of plug and play solutions.
But the solution everyone is currently depending on is companies like us going out, finding the few other companies working in this space, and building these partnerships. In my experience, the chances that the government would find these startups and have them participate in crafting solutions is almost zero. It would be great if the government could convene those of us who are developing technological solutions to the supply chain issues. There's a whole world out there of tiny companies that might never get found and brought into the conversation if we don’t try.
Are there any tech startup issues and concerns that you believe should receive more attention from local, state, and federal policymakers?
I think one area is having the government partner with startups on pilots, and to innovate solutions to the government’s problems. Usually, if a government agency does anything big, like CBP might consider when it comes to enforcing the forced labor ban, it requires some proof of concept first. And I am not aware of an agency like CBP doing that sort of conceptual piloting with startups. And if the government has to wait around for a big company, like Microsoft, to offer a tech solution at scale, that’ll come too late. There should be more opportunities for the government to engage in pilots with startups. Policymakers should be thinking about and lifting up better, more innovative procurement targeting startups. Because if the choices facing the government are just do nothing (don’t move forward) or wait until Microsoft or Amazon can offer the full solution, that’s not great.
What are your goals for Sourcemap going forward?
Supply chain mapping has to become the norm, and not just for food and apparel companies, where we are very active today, but also with aerospace and defense, pharmaceuticals, semiconductors, and transportation. It's the only way to manage global disruptions and make sure that products are reliably and responsibly produced. We're going to expand our product offering so that the software plugs into processes in these and other verticals going forward until supply chain transparency becomes the normal way of doing businesses, and companies can feel as confident about what happens halfway around the world as they do about what happens within their walls.
All of the information in this profile was accurate at the date and time of publication.
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