Smart System Technologies — a startup that optimizes railway transportation

We are sharing an interview with Anuar Sarsembinov, founder of Smart System Technologies. He talked about how he got into entrepreneurship and shared plans for the company’s development.

About the company

Our main product at the moment is “Multicode.” We create AI products for businesses. Companies can turn to us for implementing computer vision, AI analytics, or other AI technologies.

How it all started

I started creating startups in my third year of study at Nazarbayev University. I went through the ABC Incubation program, where I received basic information on how to build my own business.

First, I worked on a smart heating project. Then, with a friend, I built a system that recognizes road defects, potholes, and cracks. That’s when we founded Smart System Technologies. Our AI product operated throughout Kazakhstan. Over time, we realized that this was a government project that didn’t scale well to other countries. So we decided to create something bigger and more useful for the market. At the NURIS corporate acceleration program, we learned about the problem with planning freight transportation.

My partner is a PhD in artificial intelligence. He had already studied the problems of smart logistics, so we decided to work on a project in this area. We established a partnership with a park of 3,000 wagons and started developing the product.

About the project

There are thousands of companies in the world that own and manage wagons. They need to oversee movement and plan everything so that wagons don’t run empty. This is the first problem we solve. We also provide transparent analytics for companies and help them create reports correctly.

Previously, tasks related to unloading wagons were handled by people. A dispatcher decided where to send them after a trip. Making the right decision requires knowledge of hundreds of different variables. It’s hard for humans, so we created an algorithm that takes all criteria into account.

Our technology reduces the rate of train movement without cargo by an average of 10%. This allows saving tens of thousands of dollars and reduces harmful emissions.

Over time, the situation in the market changed: a shortage of spare parts led to companies receiving more money for sending cargo. The need for optimization decreased, and we realized that there were fewer problems with planning. At the same time, we discovered another challenge: closing transportation deals, where you need to calculate payment for wagon rentals. Companies lose money due to human errors. We created an algorithm that calculates everything automatically. Clients pay us $2.5–5 per wagon per month, saving $20 or more on each wagon.

Target audience

Our target audience is operators and owners of wagon parks. We develop software that optimizes their work and helps them earn more.

Our system includes 71,000 wagons — that’s more than half of the Kazakhstani market.

Acceleration programs

Incubation and acceleration programs are necessary to teach people how to build a business. ABC Incubation helped me understand how to create my own startup and test hypotheses.

I participated in the Skolkovo acceleration program. It helped me understand how to scale an existing business.

I went through the Seedstars International Acceleration program. There, we learned how to attract investments and were explained what venture capital is.

Challenges

An entrepreneur must sacrifice certain comfort now to gain much more in the future. If you go into employment, you can receive a stable salary even with not the most efficient work. Business is a game of survival. If you don’t do anything here, you won’t get any money.

When there were no funds, we had to work on enthusiasm alone. Sometimes we ran out of money or borrowed to pay employees. That’s the entrepreneur’s path.

I never worked in corporations. So I didn’t understand B2B sales. And I didn’t know that signing a contract could take six months.

There were also technical issues. It wasn’t easy at first to create a product that was both useful and ready for use from a technical standpoint. Good knowledge of project management and Agile methodology helps me.

Achievements

In one year, we grew 30 times, from 3,000 to 71,000 wagons. We doubled the team.

Plans

We plan to grow and enter international markets. We want to make a lot of money and invest it in new projects. Our immediate plans are to fulfill current obligations with new clients.