Leaders in Supply Chain and Logistics with Radu Palamariu Podcast Artwork Image
Leaders in Supply Chain and Logistics with Radu Palamariu
#36: Karl Siebrecht CoFounder & CEO FLEXE
February 08, 2019 Radu Palamariu

Karl Siebrecht CEO of FLEXE

Flexe offers on-demand warehousing through an AirBnB-like network. They currently have more than 1000 warehouses connected by a single software platform. Unlike traditional solutions, FLEXE makes warehousing available on-demand and uses software to streamline the entire process. They has raised more than 20 million dollars, have consistently tripled in size every year in past 3 years, and were awarded 18th overall on Deloitte's Technology Fast 500 companies.

Karl Siebrecht is the co founder and CEO, and is a seasoned technology executive, with leadership experience in both startups and large, global corporations. Prior to co-founding FLEXE, Karl was CEO of AdReady, a Seattle-based advertising technology company. He is also a founding Board member of EnergySavvy, a SaaS-based solution for energy efficiency management. Previously, Karl was President of Atlas at aQuantive, before its $6B acquisition by Microsoft, and earlier in his career he was a Manager at Bain & Company in Boston and a Diving Officer in the U.S. Navy.

Episode Transcript

Speaker 1:0:01Okay,

Speaker 2:0:01hello and welcome to the leaders in supply chain podcast. I am your host throughout the Palomar you global supply chain practice head for Morgan Phillips Executive Search. I am very happy to have with us today. Carlos Seabrook CEO flex flex offers on demand warehousing through an airbnb like network. They currently have more than 1000 warehouses connected by a single software platform, and unlike traditional solutions, flex makes warehousing available on demand and use software to streamline the entire process. They have raised more than $20,000,000 to date, have consistently tripled in size every, every year in the past years, and have been awarded 18th overall fastest growing companies on deloitte technology fast 500 companies. Carly's is the CO founder and CEO. He's a seasoned technology executive leadership experience in both startups and large global corporations. Prior to Kohanim flex, he was the CEO of Ad Ready, a Seattle based advertising technology company. He also, uh, is a founding board member of energy savings, which is a software as a service based solution for energy efficiency management. Previously Carla was also president of Atlas at eight quantative before it's $6 billion acquisition by Microsoft and earlier in his career he was a manager at Bain and company in Boston as well as a diving officer in theU , s navy. Carl, thank you for joining us in a blizzard.

Speaker 1:1:23Capital B here. Rodney. Thanks.

Speaker 2:1:25Um, and I'd love to start. You got, you got me really curious with a, with a little bit about yourself and you know, starting from you being a diving officer in the US Navy and ended up

Speaker 1:1:36to be a CEO of a technology company. So walk us a little bit through your story. Sure. Happy to do that. So that, so you're saying that's not an intuitive path from diving officer to a logistics text?

Speaker 2:1:50Typical and I, I've, I've seen one or two other people but not the look.

Speaker 1:1:53Right? Right. So I studied economics and Russian in an Undergrad actually. And uh, I was there on a navy rotc scholarship that paid for my school. And so I served four years in the US Navy and sought out the diving program as the way I've wanted to build my career there. Um, it was, uh, a bit of a niche. It was a highly sought after team, so something to compete for it, which is kind of part of my dna, uh, and also a very small team that was very close knit and had a really important mission. So I loved, I'd love that stage of my career and learned a lot, learned a lot about teamwork, learned a lot about frankly industrial operations. A lot of what we did was, was salvage and ship repair work. And along with that there was quite a bit of logistics.

Speaker 1:2:47That was my first exposure. And then also learned a lot about, about leadership. Uh, after I got out of the navy, went to Grad school to get my Mba and then took a job with baining company. That's a great consulting firm, uh, and specialized. They're in their private equity practice. After several years at Bain, I was, had a calling to come out to Seattle to work at a tech startup. A good friend of mine had started a business about 20 years ago in an very early emerging category, a, which was advertising and marketing technology. So as the Internet started to initially gained traction and eyeballs were migrating from more traditional forms of media to online media, there was an early disruption in advertising and an early opportunity to go build a technology company that could help translate some of the old traditional needs that were still current, uh, at the time, finding audience, finding relevant audience and a building a sales growth and brand by capturing that audience and delivering the right messages so that, that was a need that had existed for a long time and still existed.

Speaker 1:4:00It was just that the needs to do that was changing because the audience behavior was changing. Moving from so called offline media to online media. So that was a business that I joined about 20 years ago. And, uh, it was an opportunity to really innovate in a large category a. and that's where I spent about 15 years of my career up until the point where we started flex. It's m and a at the same time, there's maybe some thread that, some common thread because of the flexible, you'll kind of starting the new contemporary in many ways in the logistic space, right in from an angle of a platform and software in an Airbnb for four warehouses. So maybe that's the, with, with the diving right into like the deep dive into a new segment from your us navy days. Mental. That's exactly right. I mean the comparison between the business we've built in logistics and the business we built and the advertising and marketing space is actually very strong.

Speaker 1:5:02So in each case, as these businesses are fundamentally technology software, businesses, software platform to be more explicit, we didn't actually sell software licenses. We built software to enable a better model for purchasing services. And that's exactly what we've done with flex. I was very familiar from my past deep dive in, um, advertising technology with ecommerce and the change that was happening at the retail level. So what I was also very aware of is that the back end of the retail business, if you will, the logistics part of the stack was also uh, going to need to go through a transformation to keep up with all the change that was happening on the front end of the retail model. I eat ecommerce. So you know, the founding story of flex is a, is a great one, a full of serendipity. A good friend of mine had built a, a, a, a consumer products business specializing in home barware.

Speaker 1:6:01So Martini glasses, coasters and the like. And he had built quite a successful business over the course of about 10 years. And I felt that one of the things holding him back was warehousing in terms of how he distributed and fulfilled his products. And the way he put it was this. He had been running his own operation and had been leasing warehouses on the three to five year term. And every time he'd signed a new lease he have to try and forecast how much he was going to grow. So he could figure out how much inventory he would be managing. And therefore, how much space he would need, but the way he put it was, you know, he was in a high growth business. He was seasonal and so it was very difficult to forecast multiple years ahead. And so we always ended up with too much or too little capacity in terms of warehousing and he felt like many other businesses had the same challenge. And he came to us and said, myself and my two cofounders who were also technologist, he said, hey, you know, couldn't you build a marketplace type of model like an Airbnb and build software? Uh, so that other warehousing operators could manage my goods when I was short on space, uh, and they could fill their facilities with more capacity and generate more income off of the fixed costs that they were already a saddled with in their current business. And that was the genesis of the idea.

Speaker 2:7:25Uh, it's, uh, it's a, it's, it says, always write them into the best way to do start something is by addressing a very clear pain in the market. Um, so it's, um, it's kind of a case study of, of doing that is just that I, I got this question and I think a couple of our listeners were, were wondering because maybe, and I know that you have a couple of clients on the retail side, so maybe you can give us some examples of how you currently. So this was one of your, your friends, um, and currently what, what some of the largest scale or, because I think now you, you, you've obviously been around for quite a while. You have quite a large, a large network. So what are some of the large scale clients that you have and how, how, how are you currently help helping them with this challenge of seasonality or lack of space issue?

Speaker 1:8:12Sure. So maybe I'll preface that just with a, with a very brief, hopefully plain English language, a way to describe what our model is, just so we're all clear on that. Flex effectively created the on demand, a warehousing and fulfillment category. That's the, namely we gave it a few years ago. Um, so what this means is we provide warehousing and fulfillment services. Uh, to large enterprises and also to high growth ecommerce companies and we do this through a network of more than a thousand warehouse operators who are all connected to the same software platform. So very specifically we provide the services we provide to our clients, our ecommerce pick and pack fulfillment, a retail fulfillment to replenishment to brick and mortar stores or marketplaces and bulk distribution of inventory. So think from maybe a port to a regional distribution center, etc. And the types of customers we serve, specifically our large retailers like a walmart or walgreens, a large cpg companies like a, a procter and gamble. And then high growth ecommerce companies from line bike, uh, to some of the mattress companies like a casper in the states. Uh, even a consumer product companies like a hims which is building a great business and kind of men's health category

Speaker 2:9:42go to. And I'm thrilled that comes to my mind. How do you see a statistic? How do you see that the distribution in the future in between, on demand warehousing. And at the same time, you have the classic, let's say, model where a client, and let's take the example of proctor and gamble, right? Or something like that. The consumer goods company, longer term contracts, and then you have the traditional three pl players which tend to operate on that model. Where do you see this kind of distribution? Because, uh, obviously there are certain things that you will not, warehouses will not be on demand everywhere in all the time. And at the same time you've created this integrity that is, this is growing. So how do you see, is it like a, I don't know, 90 percent, 10 percent, 80 percent, 20 percent or, or I think you mentioned that the number of 30, 70 percent, 30 percent. I'm kind of split between, let's say proctor and gamble would use 70 percent stable longterm contracts and maybe 30 percent on demand. Is that still where you see it and why? What's the reason behind,

Speaker 1:10:51right? Yes. We do believe that that on demand warehousing or flexible warehousing will be a complement to the existing kind of fixed infrastructure and traditional solutions, um, that are prevalent today. We don't think those are going away. I'm a metaphor. I like to use that. That can be helpful is, uh, when, when amazon's aws, uh, amazon web services first launched into the marketplace about 12 years ago. Um, what existed prior to that, uh, that did the same job, was a data center in companies would either build these data centers and staff them up with their own employees and by the servers and by the backup generator, power generators, etc. And uh, so they would be first party run data centers or they would outsource that to a third party who would lease the space by the equipment, hire the employees to take care of the servers, etc.

Speaker 1:11:48And then they would contract those services back to their customers, but those contracts had term limits to them and fixed costs because the provider was, was covering a lot of fixed costs. right? And that solution Worked quite well. But one of it's, one of the things that lacked was flexibility. So if you are a startup and, uh, you were built a website and you forecasts that your traffic would increase a bunch a, you would have to guess at how much server capacity you would need to handle all of the volume of visitors to your website. And in very similar to that, um, is, is the dynamic with warehouses, um, where if you have a high predictability that can close to guarantee high utilization of a fixed term contract can be a great solution. But if there's something dynamic about the need, whether it's high growth or uncertainty around a forecast or changing product mix or seasonality, it makes those fixed investments.

Speaker 1:12:53I'm not very productive or at least not very capital efficient. And so, again, going back to the data center analogy, when aws launched, they basically were able to replace that high fixed costs, capital investment with a service and that service was available on a pay as you go. Or I eat on demand basis. Um, and they were able to offer effectively infinite scale, you know, as much bandwidth as you might need. We can provide that as much geographic distribution of that, of that bandwidth that you need. I eat data centers, east coast, west coast, europe, north, south, etc. And they could provide all that on demand and again, in a purely unitary cost basis. And so when you fast forward today and you look at that, a cloud based it infrastructure category that's now about a quarter of all it infrastructure, of course google has come out with google cloud, which is great.

Speaker 1:13:54Microsoft has microsoft as euro, which is great and there are other competitors as well. And it is now part of the fabric of it infrastructure and the usage comparatively by company. Uh, I eat how much a flexible capacity do they use versus fixed capacity really varies depending on the nature and the needs of that company. A startup, maybe a 100 percent cloud based, uh, like we are, are like probably most startups are, we will never need to build a data center. Even very, very lArge companies like netflix who can certainly afford to build their own data centers, chooses to use cloud because their volume is highly variable in their growth trajectory, has been very high. And then in contrast, you take a company like a big bank, say capital one, they are one of the aws is a kind of marquee reference clients and of course they data centers and, but they also are a large customer of aws, uh, and they keep, uh, their usage of aws keeps going up over time as the needs of their business continue to evolve.

Speaker 1:15:09Uh, but they also go up over time because aws has capabilities keep advancing in terms of the sophistication of their data security and other sort of add on, uh, applications or services that they're able to provide. So that's a bit of a long winded explanation, but I think it's important too to understand that metaphor because we see warehousing playing out the same way. Um, and I would, I would, I would next just quickly point to, you know, transportation, the other big category and logistics, you know, if you think about that business, there are companies that own their own assets, there are companies that have long term multiyear contractual agreements with asset providers, uh, so kind of long contracts if you will. And then there are a whole host of, of a truck brokerages that offer capacity in more of a spot market or on demand basis and different companies choose to allocate spend across those different capabilities depending on the needs of their business.

Speaker 2:16:12Excellent example of carla and, and, and um, and I think you'd be really brings the point to life and it makes a, makes a lot of sense. Um, so basically basically also another way to put it flexes a warehouse as a service type of model. Maybe you'll, uh, you'll go into trucking as a service type model as well. I know that there's a couple of companies that are doing that to kind of link it to your, um, uh, joe's on the transportation and trucking side. Um, there's, there's a, there's a few platforms trying to do that. Actually there's a very large one in China that is incredibly valuable. I think now they've breached the valuation of a 1 billion plus is just that. It's still, it's still highly, uh, under the radar, but they are doing exactly that tracking as a service and they have, I don't know how many thousands and thousands of trucks, trucks already on their platform.

Speaker 2:17:01So for sure another category that is growing and I'd love to go a little bit than some of the questions that would go a little bit into the how does it practically work? So his warehouses, the service you have, the technology you have that from flexes there. Um, but in terms of the practical nature of, you know, who is accountable for meeting the standard operating procedures, dwell time, loading windows, who is the, who is liable in terms of ending storage, um, in, in the warehouse. Is the warehouse owner, is it flakes? How does that work? how do all this?

Speaker 1:17:33Yeah, so the, at the, at the very operational level of our model, yeah, the warehouse operators are responsible for and liable for the same things that they are a, if flex is not part of the equation. So we understand customer's needs, our customers that come to flex their needs and requirements are captured in a scope of work. Um, and we help curate a match to the right warehouse operator or operators. Many of our clients work with multiple providers, uh, through flex. I'm in part of the value we bring there is not just curating the right match across all these, a thousand different providers, um, but once the different partners are selected, we provide a centralized way to manage your operations across this distributed network of providers. Very specifically, this goes back to the software platform, but very specifically, um, you know, orders or your inventory flows into the flex system, whether that's through an api connection or edi connection.

Speaker 1:18:38Um, item master inventory, everything is part of the flex system which is connected to our customers software platforms and systems. Uh, and then the order management and inventory management is executed through flex out to all the different warehouse providers. So on the warehouse side of our, of our services marketplace, our providers use the flux software as their wms and that's what enables our customers to have that single point of control and single view of all their inventory and activity. Again, on the mechanical side, our customers needs are also captured in an sla which is very similar to identical to an sla that they would have with any particular provider. And so at the point of, of, of contract, uh, just to be very discreet, you know, the sla is agreed to by the warehousing partners by the customer. And then there are elements of that sla that flex signs up for as well.

Speaker 1:19:39Because remember, all of this activity is riding on top of our software. And then the final part of that is we act and behave as an extension of our clients' operations team is in fact, you know, I love getting feedback from customers. Sometime it's constructive feedback and we jump on it because my view is feedback is a gift. And we can always learn and then, and then oftentimes, thankfully we get compliments back from, from our customers and, and my favorite one of all is when a customer will say, I view the flex team as an extension of my team, that's how we operate and we believe that we can add a lot of value to help a client sort of through a, almost like a control tower mechanism manage this, this bigger and more distributed network that they can create through our model.

Speaker 2:20:32And it's interesting that you mentioned that you act as if you were a wms system centralized and basically you offer that, that visibility and, and all the, all the other elements that come with it to the clients because that was a common question that people who are asking, you know, do you also offer the wms? But actually you are kind of a wms in itself. So thAt's good to know. There's good to make that clear. And there was another specIfic question that they'd raised. Also a lot of interests which was kind of like also with airbnb, how do you audit the physical conditions of the warehouse? Right. Because you want to make sure that the warehouse is in a good, in a good condition. How do you do that currently?

Speaker 1:21:18Absolutely, yes. This, this happens in stages or phases with us. So the first phase is at the very beginning of a potential relationship when a warehouse operator reaches out and says, hey, I'd like to be, or I'm interested in being part of the network. We have a, uh, an initial screen or filter. And so it's a set of questions where we will understand the, both the physical attributes of a warehouse and also a bit about the operating history of the operator. Um, we then, uh, so there's a filter there and companies that sort of past that screen. The next step is a conversation where our, uh, what we call our network development team will engage with that warehouse operator to get a little bit more color and more finely tuned a screening and filtering of that provider. Uh, those you kind of see this screen then are free to list as a potential warehouse operator in our network.

Speaker 1:22:15Um, so those are kind of the first two phases of screening. THere's a next screen that happens and that's at the point of a, the first potential operational engagement with a warehouse provider, um, because up until that point they're listed, they have their physical attributes as part of our database they are available to be potentially matched with, with one of our customers. Um, and then if there's a match that wants to happen, there's another round of screening that we will do and depending on the nature of the engagement, the complexity of the project that could very well include an onsite visit both by us and slash or our customer. And so there's additional vetting that happens. The last kind of phase of validation here is what happens when we're up and operational with all of our warehouse partners. One of the other advantages of a common software platform is that we can manage and you know, well I should say measure and manage the quality performance of every operator across all of our clients because everybody is using the same software.

Speaker 1:23:24So key where kind of plastic warehouse quality related metrics like a order accuracy on time shipment. We're measuring all of that for our clients. Again, we're measuring it relative to their sla that we've signed up for and the warehouse operator signed up for and can provide not only the metrics data back to our customers but also this control tower, a kind of view to help make sure that all of the operators are hitting their targets and where somebody may be a slipping, we can inject ourselves and go in and help. We can refine the sop and just make sure that the customer is getting a what the customer needs and working with our operators collaborative collaboratively, uh, to make that happen.

Speaker 2:24:16And there was a follow up question in terms of the true flexibility of flex and basically because again, the, you, you can deal with retailers. You mentioned ecommerce now, some of the ecommerce players, for example, it might be a smaller shop that may be only cells that many or maybe four for the new year or for christmas, they might have more or others and they need a little bit of a more space and then it goes down again on wednesday since it's coming up. And I, the question was how truly flexible are you in a sense of others and minimum commitments in terms of time, quantity movements,

Speaker 1:24:51or how does that work exactly? Sure. YeaH. The typical minimum at the very, very low end would be one month, but even that is pretty rare. Um, it all starts for us with a scope of work, which is effectively what is the client's need. Um, you know, if somebody is looking for a trans load for a weekend, that's not the business we're in. We, again, we provide, whether it's ecommerce, fulfillment, retail fulfillment slash replenishment or bulk distribution at a practical level, given the customers we're serving, um, the, the, the low end of a, of a need is typically a few months, uh, if not several months. And then at the high end, you know, it's just continuous. So we have clients that have been with us almost since inception of the company, um, and what they're doing, what they may do, in fact most of them do, is they reconfigure their network as their business needs change and grow.

Speaker 1:25:53Um, so they may start off, if they're a high growth ecommerce choir, they may start off with one warehouse because that's all they can really manage to start, but then as they start to scale, they need more capacity and a delivery promise likely becomes much more important if it wasn't already important at the onset. And so what that means is to get a two day ground delivery, you need at least a few warehouses in your networks. So they may add different facilities to the network, then their product skew mix might change. And when that happens, sometimes you need to have a different warehouse provider. To use a simple example, maybe your first skews as a small company are small and light, but then you launch products that are large and bulky and you need a different capability. You may want to add a dedicated returns center.

Speaker 1:26:44Uh, so the point is your business grows and changes and your, your logistics network should also grow and change. And that's really what we provide. You know, the name flex is not an accident. Uh, that was our value prop from day one and we think of ourselves as really providing structural flexibility and what that means is no matter how your business grows, changes, evolves. Your logistics back end of your business should also be able to evolve and change to meet the needs of your business. So that's really, that's, that's the value prop. And again, going back to this customer examples, um, it could be a short project to start, you know, we may start with somebody for holiday season and then that rolls into a, hey, I'm launching a new set of products. I need three different types of fulfillment centers to support a different skew mix. Uh, and then from there it rolls into a, I'd like to expand it to Canada or rolls into, I'd like to cut my delivery time, I know 30 percent, so I need to expand my network. That's how they sort of configure and reconfigure their networks in a very agile way through flex.

Speaker 2:27:59I mean it's, it's, it's, it's almost, it sounds like it's, um, yeah, maybe over simplifying it, but it sounds like a no brainer that this is useful. But of course, like all the things, right, like I could have started facebook, iphone and I put in the work, um, and I guess this leads because the way you described it, the analogy with the, with the amazon web services and the cloud, and pretty much I think by now everybody or this is quite clear that, that it makes sense and it's also gives, enables really a potential, uh, and your clients and the, the, the, the case that is that you have mentioned that enables them to basically flexibly model, uh, there, the logistics operations, it depending on their needs, which is tremendously important than it. It's a very significant option to have a in terms of doing that and invest in warehouses and all of that.

Speaker 2:28:51Then, and having the trulia network, I mean actually you have access to a network if, if this works well, you actually have access to a network of warehouses that you can model depending on your needs and you don't have to invest any money in it. So it makes a lot of sense. It seems, uh, you know, it seems so straightforward. Now the question, the million dollar question is, what's your challenges in terms of growing and scaling and because I can imagine like anything and we'll start the new degree. There's a lot. Um, so, you know, you have 1000 warehouses. Why don't you have $10,000? What's your, what's your main main issues,

Speaker 1:29:24right? Yeah. You know, um, very early on when we heard this idea and started doing our diligence even before we found that the company part of the diligence was just go out and talk to people who are deep in the industry. These are both senior leaders from three pl organizations, a logistics leaders, supply chain leaders for big companies, medium sized companies. And, and the response was very similar. It was, well, you know, have you thought about this and what about this and what about liability and what about quality? And these very, very impOrtant questions, difficult challenges to solve, you know, particularly through a marketplace model where you don't have direct control over the assets. Again, very again, you know the, the questions from the listeners here reflect a very much in this vein as as to the questions that come from pretty much every panel I sit on.

Speaker 1:30:16These are really important questions. If you can't have quality here, it's just fundamentally not going to work. If you can't figure out liability, if you can't figure out, you know, the software to really make all this stuff happen, it won't work so it's very hard, but at the same time if you can figure it out and we have put in years of hard work here in both on the engineering product fund and also on the business side of our business through our field team, our operations team who all have very, very deep and extended experience in the logistics industry. If you can figure iT out, you can create something that is really, really valuable and that's what we've done. And so what's, what's different now than you know five years ago is we have wonderful clients who have trusted us enough to get started with them and now have grown and evolved to where we are.

Speaker 1:31:13A very important part of their business and they're now references and so when, when we have happy customers who are still, by the way a very discerning and they challenge us every day and they should, but they can stand up and say, you know, I've used this solution and it has worked very well. Here's the problems that solve for me. That goes a tremendously long way in proving credibility, uh, from the standpoint of, you know, we're this, this quote unquote startup, uh, in this very mature industry. So that probably ahead of everything else is what has started to even further accelerate our growth is that many of our prospects now have confidence that it actually works because they don't need to hear it from me. They hear it from our customers. And that's a very classic dynamic in any kind of innovation or new business model.

Speaker 1:32:18We went through the same thing in my past life and in advertising technology, there's just a lot of, you know, your first reaction was, wow, that's a great idea. And your second act reaction was, well, does it really work? And it takes a while to prove that it works and then given that there's something unique, if there is something unique and valuable about the new solution, so the is there, once the credibility catches up to it, that's when growth can really, really take off. And that's what we've experienced here at flux is, I think you mentioned, uh, we, we were recognized by deloitte is as, I think it's the 18th fastest growing tech company in north America. Um, you know, that's a reflection of the uptick in usage of this new solution. I say new, it's not that new anymore, but still relative to the maturity of the overall logistics industry is new. Uh, and I think that growth is, is, you know, sort of proof of, of the fact that this is really taking off now.

Speaker 2:33:19And based on what you're saying, it led me to think about the airbnb, the airbnb story as well, where they, they had some incidents at the beginning or when they kind of launched. It seemed to be going okay. Then they had a couple of houses burned by the or I think there was a major, major public scandals because one house was one of the rented places was, uh, was really burnt or, or damaged badly by the person who rented it because it was a fake identity and then they had to fit to fix the identity issue on, on airbnb and as we know today, you need to put your id there and they did a lot of permutations just in terms of making sure the compliance, safety and, and all of that is basically in place for airbnb. So it kind of led me to understand that it knew you were kind of going and have gone through those hoops as well, which would make, makes a lot of sense and it does take a bit of time. Um, so my followup question then would be, you know, you seem to be almost at the tipping point or hopefully at the tipping point or reaching there. When I'm coming to asia, a lot of people are asking, the are asking us when are coming.

Speaker 1:34:22The short answer is we don't know yet. The slightly longer answer is we believe this is a global business. We have tremendous demand from both, uh, many of our customers who are global corporations as well as our warehouse operating partners, many of whom also have a global presence. Um, and, uh, we have heard from many, many folks from those markets who might have interest in being a partner of ours and entering those markets. So we're very bullish on the opportunity. There were just a, you know, you'd asked earlier about growth, you know, what are our constraints to growth? Um, you know, part of, part of the trick here is you want to obviously keep growing quickly, but you've got to keep a governor on it because if you grow too quickly, you run the risk of, uh, of not living up to our standards from a quality perspective.

Speaker 1:35:20You mentioned some of the airbnb examples, uh, from that marketplace. Um, you know, there are growing pains and as you elude, you guessed correctly, you know, we've had a lot of things we've learned along the way. You know, knock on wood, we haven't had, um, any sort of major disruption from a surface perspective. Part of that has been because we proceeded very, very carefully. Um, and the same goes for international expansion. We intend to do it. We just don't want to move too quickly because at the end of the day we're still a relatively small company. I'll be growing very, very rapidly, um, and we don't want to extend ourselves too far, uh, at the expense of sort of not delivering the type of quality that we have built our brand around up until this point. So I'll share an anecdote actually. So I dunno if you were. Any of the listeners have ever heard that facebook had a saying a which was move fast and break things and alluded to just test to try stuff and if you make mistakes, you know, fail fast and learn and keep going. Well our version of that and actually have posters on our wall is move fast and don't break things. So exactly what you want to move fast but not so fast again that we put quality at risk.

Speaker 2:36:42Yes. Good, good, good, good point. And moving a little bit on the people, the people side of things and it's our business and tons of talent and skills and executive search and recruitment and it's also the main challenge that the load of mncs have, but especially when you've come a long way in flex and you've developed the team, but where did you find some of the most challenging, let's say phases of your journey, right? Because you start to three, you were your, yourself and your co founder I think, or you were a team of core team of three and then you had to grow. What have been the main challenges in terms of attracting, finding people and getting them onboard of the flex story? That's a great question. Yes, you're right. I have two cofounders, edmond, you and francis too long. They're both software engineers by trade,

Speaker 1:37:28uh, earlier in their careers. They had worked at microsoft on big platforms. Edmond, who's one of the first to work on azure, their cloud platform. Uh, and then they went on to found a startup together a few years before we started flex. So they had this experience of, of working in very, very large scaled platform, sort of global technology platforms, um, but also, uh, helping to lead the, they co founded before flex another company and helping to lead and grow an idea from scratch. So it's a great balance. Um, so we were like the founding team, so what have challenges, but know part of it is, uh, you know, early on if you're long on vision and short on, you know, actual results, that's just the sort of physics of the, of the, of the problem. Right. Um, and so we from very early on, as I said, had a really deep conviction in the vision here of, you know, we could build something that would, it would, it would really help businesses in the world that would help them kind of solve a, a key challenge around a agility, you know, we can help you make your enterprise more agile so that you can compete better a ship faster, respond to customer demands or quickly, etc.

Speaker 1:38:46So deep passion and the vision around the vision. But you know, the results we had to show in that first year were, okay, here's our very small book of clients and the rest of it, you just have to believe. And so in that context, uh, of course you don't want to settle and hire people that you don't think are going to be future leaders in your company and people you want to work with for the next 30 years. You want to hire the best talent in the world. So you got to find the rare combination of incredibly talented people, but also people who could be convinced to, to stop whatever they're doing currently. And if they're really talented people, you know, they're in very comfortable jobs because they've been very successful. So you've got to win them over largely with vision and get them to join the team and help you build a of the actual business that will fulfill the vision that we set out for ourselves. ThAt's very, very difficult. It takes time. But you know, my two cents on this is never settled, you know, much better to be patient. Um, then to pull the trigger too fast on somebody who might be willing to come but may not be as likely to have all the characteristics of what you're looking for.

Speaker 2:40:01Um, it's a, it's a catch 22 and again, back to the principle of, you know, move fast, but don't break things that you're trying to embed in the culture of flex a lot of, uh, I think a lot of, a lot of companies operate the other way and pull the trigger and make a mistakes. Should a person. But that is not the luxury that you can afford that the beginning of the journey, right? So it's not a when you're 1000 people company or 10,000 people company like microsoft, maybe it's easier, but the, you know, at the beginning it's a little bit. So thank you for that input. And I think it's useful for a lot of listeners who are maybe in that situation. Um, and final question from, uh, from, uh, from my side, carl, um, you know, in terms of your journey so far and you've been through from a us navy to, uh, running very large businesses to now inventing and developing the new contemporary, let's say in itself with flex and with the platform that you're building, they're looking back at your career, what would be one piece of advice or sharing or story that you would want to tell the audience and, and, um, I dunno, what was something that really helped you and, and you found it was very useful to know in this journey and helped you be successful?

Speaker 1:41:17Sure. I'd say probably the best piece of advice I've ever had is I try to surround yourself with great people. Um, you know, different businesses and frankly, different people could have different definitions. What great is, uh, you know, for me a great is a somebody who shares a similar conviction or passion for what it is we're setting out to do. Um, you know, one of our core company valueS is passionate. And what we mean by that is, uh, you know, at the, at the point of interviewing a candidate, you know, this is one of the things we, we literally try to screen for a, with everybody and you can't just ask somebody what are you passionate about or I guess you could, but it may not go all that well. Um, so what we look for is what has the person been excited about over his or her career or even extracurriculars, if it's particularly for somebody earlier in their career, uh, what gets them excited?

Speaker 1:42:18What have they gone deep into? We think that's incredibly important because, you know, a buIlding a company, it's hard and you will have a upc days and down days. And to be sure that somebody could really have conviction and passion helps people pull through. Uh, and uh, and then the other thing about passion is it's an infectious, you know, you get people who are really excited and motivated and guess what, they attract other people who are really excited and motivated. So surround yourself with great people is, you know, finding folks who have shown in their careers that they're passionate about something and then in particular to this business are very passionate about jumping on board and helping to drive towards the vision that we set out for ourselves. Another part about great, uh, when I think about great people is I'm looking for people who are great leaders and by great leaders, I mean, you know, someone who will lead a, I call it.

Speaker 1:43:20And again, I borrowed all this lead from the front, uh, lead by example. Um, and uh, that means coaching people, nurturing people, that means, uh, owning the decisions you make even when they're wrong. You know, leading by example. I think it's an incredibly important quality for any organization, but particularly in a dynamic kind of high growth environment that is a critical. That is a critical thing. So I think if you can surround yourself with great people and the, your definition of great kind of fits the conditions of, of what you're trying to do and also fits kind of the personal values that you hold a, that is probably the single most important thing you can do, whether you're building a company or starting a new division inside a large company or accepting a new job, uh, uh, to run a new team or any of those scenarIos. I'm

Speaker 2:44:16really, really good points and thank you for the, for the sharing and um, carlos has been a pleasure. I appreciate your time. Thank you for joining us. We wish you a lot of continuous success. Keep moving fast and then not breaking things flex and uh, we will be following your story and uh, and uh, hopefully we will be welcoming you to asia in the near future. Thanks randy. I appreciate being invited on the, on the podcast here. thank you for listening to a podcast. If you liked what you heard, be sure to follow us on rapala.com/podcast. For all the show notes, links, and extra tips covered in the interview, make sure also to subscribe to our mailing list to get the news in the nick of time. If you're listening through a streaming platform like itunes or stitcher and you like what we do, please kindly review and give us five stars so we can keep the energy flowing and get more people to find out about our podcast. I'm most active on linkedin, so do feel free to follow me to stay tuned for our latest articles as well as future guests for the podcast, and if you have any suggestions or any other idea, please feel free to write to me. I respond to all and also please make sure not to miss our next episode where we will be having a few other c level and top leaders in supply chain joining us. Stay tuned.

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