Why Supply Chain Innovation Fails (And What to Do About It)

Why logistics innovation fails inside enterprises—and how to fix it. Real talk on integration, change management, and building tech that sticks.

Despite billions in investment and a flood of promising startups, innovation in logistics continues to struggle inside enterprise environments. That’s not a tech problem. It’s a reality of organizational complexity—and a frequent mismatch between how startups build and how large companies buy.

On a recent episode of Supply Chain Connections, Interwoven Ventures General Partner Erez Agamoni shared what he’s learned from both sides of the table: as a former Head of Innovation at Maersk and now as an investor guiding the next wave of logistics startups.

Here’s what most people get wrong about innovation in supply chain—and where the real opportunities lie.

1. Selling to Enterprises Is Not a Tech Problem—It’s a Change Management Problem

Most startups underestimate how long it takes to get a large company to say “yes.” Not because the tech isn’t valuable, but because the internal process is more political than logical.

Startups show up with strong ROIs, impressive demos, and confident projections. What they miss is how many departments have to be convinced—often in sequence, not in parallel. “Don’t just find a sponsor,” Erez says. “Find an operator and an innovation champion. Then win over IT. Then get legal. Then finance. Then procurement. And don’t assume they’ll all have the same goals.”

And if you're promising “integration in a week,” stop. “People will laugh at you,” Erez adds. “Large companies can’t move that fast, even if you can. They don’t have the time, resources, or organizational clarity.”

What to do instead:

  • Build an onboarding plan that includes your own change management resources.
  • Budget for enablement, training, and internal comms.
  • Assume your first enterprise customer will take 9–18 months from first conversation to full rollout.

2. Without the Right Integration Strategy, Innovation Dies on Arrival

Too many startups assume integration is a data exchange problem. In practice, it’s a trust problem.

Brian Glick, Chain.io CEO, shared an early example where a quoting platform failed—not because the tech didn’t work, but because the business process hadn’t been considered. “What worked in Southeast Asia fell flat in Southern Europe,” he explained. “Culture matters. Stakeholder buy-in matters. Integration isn’t just APIs—it’s people.”

Even when there is appetite to try new solutions, integration often hits a wall because internal teams are already at capacity. IT is buried. Ops is firefighting. Innovation teams have limited budgets and influence. The bottleneck isn’t technical—it’s organizational load.

What to do instead:

  • Design integrations that don’t require IT to be heavily involved—or offer white-glove support if they do.
  • Provide detailed sandbox environments so enterprise teams can test safely.
  • Include documentation that speaks to business users, not just developers.

3. Startups That Avoid Services Miss the Real Problem

Some VCs push their portfolio companies to be pure SaaS plays, avoiding anything that looks like services revenue. That’s a mistake in supply chain.

“Startups need to stop thinking of implementation and onboarding as a distraction,” Erez argues. “That’s the product. That’s how you earn trust and learn where the value is.” He distinguishes between services that support the product (good) and services that distract from it (bad). But ignoring services altogether? That’s how good ideas get orphaned inside global enterprises.

What to do instead:

  • Think of services as a growth enabler, not an accounting liability.
  • Use early implementations to find patterns and guide product roadmap.
  • Budget for in-person onboarding if the customer is large enough to matter.

4. If You Build for Everyone, You’ll Solve Nothing

The sweet spot for early traction isn’t solving a broad category—it’s nailing a specific pain point with a lighthouse customer. Erez described multiple startups that came to Maersk with a generic product pitch. “We’d say, ‘That’s not quite our problem.’ But they wouldn’t want to adjust because their investors were saying, ‘Stay focused.’”

The irony? They weren’t focused at all. They were missing the exact use case an enterprise was ready to pay for.

“You’re not pivoting,” he says. “You’re tightening. You’re solving the problem with the budget behind it.”

What to do instead:

  • Build your product with your first enterprise customers, not for them.
  • Avoid overfitting to one customer by layering in feedback from a second reference client.
  • Prioritize use cases that connect to existing budget lines—compliance, cost reduction, or operational KPIs.

5. Digital Twin, Real Opportunity

Erez is bullish on digital twin technology—but not the kind that lives on pitch decks. “Don’t try to build a full digital twin from day one. Start with a single system view that replaces 15 spreadsheets,” he suggests.

His team at Maersk used this approach: visibility first, then optimization, then simulation. “We broke it into three phases so we could generate ROI along the way, not three years later.”

Done right, digital twin tools can power decisions across trucking, warehousing, and cross-border logistics. But they require real operational data, not generic templates. That’s where integration and process design come back into focus.

Complexity Creates Opportunity

It’s tempting to see geopolitical risk, tariff shifts, and regulatory headaches as threats. But as both Erez and Brian agree: “If everything were easy, no one would need us.”

When you’re solving hard problems for global supply chains—ones that don’t get resolved by a feature release or a clever UI—you create real defensibility. The most enduring companies in logistics tech aren’t the ones with the flashiest demos. They’re the ones who know how to work inside complexity.

And that means showing up not just with technology, but with empathy, clarity, and a plan that works inside the enterprise—not just outside it.

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Molly Evola, Director of Marketing
By Molly Evola
written on April 2, 2025

Molly is the Director of Marketing at Chain.io.

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