Hello and welcome to the Bootstrapper's Guide to Logistics, the podcast highlighting founders doing it the way that doesn't get a lot of attention. We're here to change that by sharing their stories and inspiring others to take the leap. It's a roller coaster ride that you might ultimately fail. That's when I kind of knew I was on to something. It was very hard.
Speaker 2:It truly is building a legacy the more life you live, the more wisdom you have, because we are where we're supposed to be kind of answering the call. Don't shoulder entrepreneurship on your own.
Speaker 1:I'm your host, Nate Schutz. Let's build something together from the ground up. Hello everybody, and welcome back to the Bootstrapper's Guide to Logistics. We're moving into the back half of 2025. We're well past the 100-founder story episode mark and I love getting to talk to folks who have started their business post-COVID. There seems to be a dividing line of folks when they start a business and they've been in business for 15 years and then they went through the COVID challenges and then now kind of the freight recession that's seemingly endless. And then there are folks like our guest today, Justin McKessie, who started a company in the middle of all of that and has a slightly different perspective because he went right into the fire day one to start his business and so happy to have him on the show today. He's the founder and CEO of First Choice Freight, based in Chicago. Justin, good morning, how are you today?
Speaker 2:Good morning, nate, I'm doing well, how are you?
Speaker 1:I'm doing great. There seem to be three or four companies that just about every freight broker has come out of. It's either CH Robinson every freight broker has come out of. It's either CH Robinson, tql, coyote I'm drawing a blank. Who am I missing? Tql, coyote, ch and the other big one, xpo, and a handful of others. I'm drawing it. Yeah, having a bit of a senior moment here, but you came out of the Coyote family and there's a really big number of entrepreneurs that have started their careers at Coyote and then went off on their own. Can you maybe unpack a little bit of your early years, of your career in logistics, how you got the bug for freight, and then when did you feel like you had learned enough to start to have some dangerous thoughts about building something of your own?
Speaker 2:Yeah, yeah, the Coyote lineage is talked about a lot and it's definitely out there. We go a lot of places and everybody says like, wow, everybody I've met is in some way shape or form from Coyote my background. I actually went to school at Central Michigan for logistics management, so I had logistics in my intentions. I never thought it'd be in the brokerage space. I always thought I'd be at some big manufacturer or something and figuring out the hard puzzles of supply chain. I got an internship my junior year of college at a place called ALS in Michigan Automated Logistics Systems in Jackson, michigan, my hometown. Fantastic group of people. And that was my first endeavor into brokerage space. And then the Coyote thing kind of came by happenstance and, it's funny, one of the colleagues there in the office randomly said oh wow, this news article says Coyote's opening an Ann Arbor Michigan office. And I said what is Coyote? And they said, oh, it's this. You know they do the same stuff as we do, they just have all these. You know young people and the office environment. So I Googled Coyote logistics. I had one year left of school and I decided like, well, if I'm going to do another internship, maybe I'll reach out to these guys Did that and was accepted in. You know, I took my next summer to Chicago. I actually pulled out a $2,000 personal loan to move myself to Chicago for an internship. I also had to pay Central Michigan for a credit. We had to have internships, but that was my foray into Coyote. So I got there as an intern in 2014. Immediately knew I was going to come back and was accepted full-time.
Speaker 2:The year following Getting to Coyote I was in the traditional carrier sales role, kind of growing through that. We were acquired by UPS shortly after my entry there and that is kind of where my career took the most interesting turn and really was a springboard for what I've done since then. I was lucky enough to be part of the early group of folks that were dedicated to the UPS side at Coyote, got to basically play in their sandbox and have a ton of different roles, building teams and building new endeavors all around just how we could create synergies with UPS. Literally, my first role there had no job description. It had the name of one gentleman that said work with Rock to find synergies. First hour I was Googling like, is this one of our employees, is this a company? And a gentleman by the name of Keith Hargarten, walked in and said hi, I'm Rock, we're going to be working together. So he was in charge of a lot of the intermodal side and I got to work with him and it was wide open, which, as someone that's a self-proclaimed like builder and tinker my whole life, this was a space where I could really shine and say you know, whatever is out there, go find it. Go find a way that Coyote can help UPS do it on the asset side, on the intermodal side, and everything was fair game. So that was really where my entrepreneurial spirit was able to shine in the world of Coyote UPS.
Speaker 2:So I did that for quite a long time, had a lot of success there and always knew in the back of my mind it was going to turn into, you know, for my career, something that I wanted to do start another business. I again, by stroke of luck, had some friends from Detroit that had been in contact with me and the timing was right, where they said hey, we're thinking about starting a brokerage. I had plans mapped out, I had multiple business plans put together, different names, different areas we wanted to focus on. I flew out the next day and pitched them what I wanted to do and told them my vision and it was okay, let's do it. So I was at BP Logistics at the time.
Speaker 2:It was a short stint between Coyote and what I'm doing now and I told them exactly what I was doing Another great group of people, very honest with them and they told me go do your thing. It was no hard feelings, it was. We see where you're coming from. So that was my. My jump into entrepreneurship was okay, it's go time. There's some other people that I know that are ready to go as well. And I closed the laptop at one place and the next morning I opened up my new laptop and got started on the dream that we had set out in front of us.
Speaker 1:And that dream is now First Choice Freight. You're in your three, four years in. It's been a tough climate for a lot of companies in that space, so you have to be able to have a high pain tolerance to do what you do, but also be somebody who is chronically not satisfied. When you start talking about being a builder and a tinkerer, I'm getting pictures of you as a kid and if you had multiple business plans and multiple names. So you're somebody who likely has a very active thought life and has been that way for a long time. So what were you like as a kid?
Speaker 2:Oh yeah, that's absolutely correct. Growing up I was always messing with something I probably drove my mom crazy Like a VCR that was eating the tape speakers that weren't working, that were left behind in our garage. I would find them, take them apart, find a way to make it work, and usually I would leave half the parts out and it'd be working better than before. Anything that I could get my hands on, I was constantly messing with it and trying to build it, improve it. I think in hindsight we probably just had a lot of voided warranties sitting around after that, but it worked out sometimes we might have to explain what a VCR is too.
Speaker 1:We got a younger audience. So keep going, so you did you find ways, then, to make money doing things like that? Also, I did so.
Speaker 2:I think from that stage that carried into my you know my driving stage where I was messing around and tinkering with my vehicles, my first entrepreneurial endeavor was I built these light kits for the bed of my truck that went under the rails and they shine in different colors at nighttime. This was I don't even know what year it had been before. It was like standard in trucks today Got a lot of comments on it and I was like, well, gosh, this took me $30 to put together. I started buying up the parts for it. I assembled instructions on how to do it. I created a eBay motors page and I posted them on there with different thoughts and instructions, and it took me a while to find the price point. But I was testing it out and lo and behold, I started selling them for $60, $70. And I'm like, okay, I'm making money.
Speaker 2:I was never serious about it. It was just something that, again, I was playing around with, but without even knowing that that was entrepreneurship at the moment. It was something that I was like well, I can do this for $30. People like it. I'm seeing companies sell it for $200. Maybe I can fall from the middle and make a little profit.
Speaker 2:So I think that was my first leap and you know, from then on out, there were actually a period of time where I would buy and sell cars that I was even driving, or if I just knew something random like it's. You know, it's October and there's a four-wheel drive SUV that's for sale. It's gonna be worth a lot more in December when people want it. So if I could pick that up and sit on it for a while and wait until the time was right, I can make a profit on it. So my mom would help me clean things up in the yard and repost them on Craigslist or anything like that. So yeah, there was always that like what can I do to make money, to improve something, to find a different way to make money, to make money and be profitable?
Speaker 1:So that you mentioned price testing on eBay. Pricing is a complicated thing. On one level, there's a bunch of theory behind it, and then there's also just the value that somebody places on. Whatever the thing is that you're selling, and they get to decide what it's worth, not you. And so when you say I knew what my costs were, I knew what my competitors were doing and so I wanted to test it, did you just increase the price by five bucks every time and see where demand stopped? Or how did? Was that just another way to tinker on something different?
Speaker 2:Yeah, and I actually hadn't thought about this until you brought it up. But on eBay it would show you if I posted at a hundred dollars, you got five views and no buy. It now clicks, right. So I think I posted it like $120 and no views, no anything. So I'd go back in and I'd give the old price cut right. Oh, this is on sale for 99.99 and might've gotten 25 views. And then I think when I dropped them to like $68, the views went up and all of a sudden I had the first purchase and then the second and the third and the fourth and fifth. So I was like, okay, I just found my sweet spot where I can sell some of these things. And it never went more than a dozen or so, but it was a fun at the time. It was just fun for me as a young man to say, like all right, I just made money off selling something on eBay.
Speaker 1:Out of thin air.
Speaker 2:Out of thin air.
Speaker 1:And that is the beauty of entrepreneurship is the market. There's a scoreboard. The market tells you how good your idea plus your execution is. There's no subjectivity left. Somebody made the decision and voted with their dollars that they want what you sell. And in the freight world, yes, on one hand it's a pure commodity. Transportation is transportation, and yet some companies have a lot of success selling transportation and others don't. And there's going to be a relationship component to it, of course. And then there's also going to be knowing what the potential customer or your existing customer values and trying to price it right. So how do you think about tinkering with price and costs within a freight brokerage in a volatile world?
Speaker 2:Yeah, great question. For us. We're in the drayage space international containers, imports, exports. It's a space that has lacked a lot of ingenuity or improvement, really, since day one.
Speaker 2:Our hardest endeavor is trying to prove real value. It's a space that a lot of people are just middlemanning right. They get a response from a customer, they copy and paste it to the carrier. I've watched it happen. They get a response from the carrier, copy and paste it back, and it's because it's a very complex part of our industry. The costs don't make sense.
Speaker 2:The jargon that you hear in and out of every conversation it just it doesn't add up. So we're doing something different where we're showing them the data can be useful. We're showing them transit time on the water, things that people aren't usually offering. So for us and we're not even trying to necessarily charge a premium for it but we're trying to buy our way into their, their company, at the same or lower cost, but to tell them we're doing something that truly is more valuable or bringing a new angle to the industry.
Speaker 2:It's incredibly tough to break through the noise of the industry and say, hey, spend your dollars here because you're going to get more bang for your buck. That's our biggest hurdle and that's what we hone in on is if we can show them the value that they can get more for their money. You know they're spending With us, we're winning. And when we do finally break through and show them, all we hear time and time again from the customers we do have is like wow, I can't believe you guys are actually doing this. You're doing what you said you were going to do, and that seems so simple. But yeah, so our value proposition has been exactly that. Like we're going above and beyond, not even necessarily to charge you a premium amount, but just to do what we think is kind of table stakes today in most parts of the industry.
Speaker 1:And that's the bridge, I think, between sales and operations. You take a potential value prop and put it out into the market and hope somebody is interested enough to try you and you've generated interest. But now is interested enough to try you and you've generated interest, but now you've got to follow through and deliver. And that's where I think it is frustrating. I'm an operator myself. It's frustrating to see the hype that gets thrown out and marketing messages that get attention when you know some of the companies behind it can't actually back it up.
Speaker 1:And when you're an operator who does things really, really well and maybe doesn't have the flair or the dramatic pitch, you can't always trust that the work is going to speak for itself. You have to. The customer has to in some cases, be shown the value that they're getting. And I'm curious for you also, knowing that you have a co-founder in the business. Most of your career up until starting First Choice looks like it was in ops, and now you're having to do ops and sales. How did you and your co-founder decide who was going to do what? How did you set boundaries on this? Is my area, stay out of it or no? I really need your help on this because you're better at that thing than I am.
Speaker 2:Yeah, I think you just described me to a T. I've always been the operator and builder behind the scenes, extremely proud of what I can build and do and put together great processes. But I was never that person trying to be out in the spotlight and necessarily great at showing or talking about what I was doing. My co-founder, tyler Billings, has been a sales leader his entire career, so kind of a great duo in terms of like, hey, I'm going to build this product that I know there's a market out there for you. Go, you know, boots on the ground, show people what we can do and talk it up and get their engagement. So in a lot of regard, that's a you know, probably a dream scenario where you have somebody that's super sales focused and someone that's super ops and building focused.
Speaker 2:Now, that doesn't mean that we're not all selling all the time. Right, everybody in every seat. I have to be selling the vision behind why I wanted to build it this way. And gosh, even in the accounting seat they're selling right the end experience for our people on the other side of the equation. If there's bad billing scenarios, that can be as terrible of an outcome for a customer as the front end experience. So we're all selling all the time an outcome for a customer as the front end experience. So we're all selling all the time. But I think having that split where it's if there's something with the product to be improved or the operations or the overall business, that's me and I will go do that and having somebody that is on sales, I can get this message out there and see what we can bring home.
Speaker 1:And that sounds like you built it with intentionality. You built your team with intentionality from day one, and I know it's easy to romanticize entrepreneurship and yet I also know it can be a complete grind and a lot of companies get close to not making it way more than people will ever know. Were there any lessons like that that you had to learn along the way or learn the hard way yourself?
Speaker 2:Absolutely. You know, to rewind and something that was completely skipped in the first choice freight intro. You know I mentioned going to Detroit with my partners at the time and that was the beginning of it Flew out. We had great plans. The goal was just to grow and see where we could take a brokerage in one to five years.
Speaker 2:At that point in time, the market being what it was was coming off of the COVID high Margins weren't there. Business was hard to come by and you know my two partners at the time, very successful entrepreneurs in their own right from the Detroit community. This was their fifth, sixth, seventh, uh, dive into business. Right, they've already had successful businesses. I was the one in the logistics space. So we got six months in, realized the cash that would need to be on hand to continue growing it at our pace and we were growing pretty quickly. Right off the jump they were like, hey, this is kind of not what we signed up for. Let's maybe just scrap the plans and move on to something else, right? And that's, in all honesty, probably the right move for them. There's a lot of other places where they could have parked their money outside of logistics at that time. That would be a smarter move and I was leading with passion for the industry and the vision they were leading with smart money. So, luckily for me, we were able to come up with an amicable solution, had great partners in them, to where I would continue on and take the business over entirely, make them whole and from that point forward.
Speaker 2:So we went from months one through six, growing hiring, realizing it wasn't going to work the way we wanted it to, to saying like all right, I'm going to take this solo, I'm going to correct course, essentially make sure this thing is sound enough to work, and then kind of refound it again six months later. So it was the highest high, followed by a reality check instantly. And I think that was the biggest lesson. Was you know, I think from a big place like Coyote, you know how to pull levers to grow, or what you think is growth? Right, if you want sales, I can pull a lever that'll drive sales and drive revenue and we'll get people in.
Speaker 2:Well, what's happening on the back end of that? Is it profitable revenue? Is it taking us 10 hours to cover a break-even load? Right, there's a cost associated with that and the struggles of growth? Right, we didn't know where some of our receivables were at one point where and when you're running out of cash, you're saying, well, we have to go find that right. So everything, aside from the logistics piece I knew very well, it's the boring stuff that you don't know about that will come back and get you, and that was an instant lesson where it could have been the end. Six months in and luckily for the partners I had that were willing to let me continue, we were able to correct course pretty quickly and get this thing back on the right track and grow from there.
Speaker 1:I love the candidness that you share with that. People think businesses fail because they decline. Sometimes businesses fail because they grow too fast and their cash flow gets away from them, because it takes a lot more working capital to run a $20 million freight brokerage than it does a $2 million freight brokerage, and so more sales faster can actually speed up the end of a business if they don't have good accounting. And it's a healthy reminder for everybody who is maybe listening and is passionate about an idea that they have been thinking about for a long time and want to get into their own business or start their own thing.
Speaker 1:The secondary things are what you end up spending a lot of time on. I use the example of like a bakery somebody who is a really good baker and is like I want to make donuts because I or you know pastries, because I'm really, really good at that, and so they open a donut shop. Well, they end up spending the least amount of time actually baking. They spend the rest of their time dealing with a landlord and with vendors and customers and chargebacks and HR issues and all of that other stuff, and so if you it's kind of the don't follow your passion advice unless you have people around you that can fill in those gaps, because, especially in logistics, the dollar amounts are too big. It takes a lot of cash to run a even a medium-sized freight brokerage. You've got to have millions and millions of dollars available um, should a customer not pay, or you have to front money to the carriers before you get paid by your customer in maybe 45 or 50 days. And those aren't sexy things, but they are the building blocks of a company that lasts.
Speaker 2:Anything to add to that? Yeah, I think you nailed it right. I knew it about six months in. If we were going to fail, it wasn't going to be because I didn't know logistics or I didn't know what I was doing. It was the stuff that you're not seeing and you're not aware of you haven't been trained on. There's nobody to train you in these environments.
Speaker 2:Right, I think, being open and honest with yourself about what you don't know as you jump into entrepreneurship, obviously you have to go figure out everything, right? So my mentality was I'll figure this out. Oh, the accounting, I'll figure this out. I know where to look. I know it'll figure itself out in some way. Like, the things are going to come to me that are issues, and that's very naive, right? I think if you can't be honest with yourself and say, wait, this is beyond my reach, maybe I should tap a resource for help. You my reach, maybe I should tap a resource for help. You can end up in a lot of trouble very quickly and sometimes irreversible. So that's probably a trap that a lot of people fall into. I'd imagine it's one that I almost fell into myself is not being able to say to yourself you can't necessarily do this one. Let's find some help.
Speaker 1:You're a very thoughtful person, justin. In all the time that I've known you, I know your mind is constantly working through things. Do you consciously think about the difference of your professional life and your personal life as an entrepreneur, or is it just one big ball of yarn? It's all mixed up together? How do you look at the different parts of your life, given how large of a role entrepreneurship can take and just dominate?
Speaker 2:Yeah, I think year one was a big ball of yarn Because there was no other way. I had to juggle whatever I could find a way to make things work. I try more than ever to be very intentional about the time that I spend, you know, with my family, with my loved ones, with my friends, how I show up for them versus how I show up for the business versus how I show up for myself. I need my own time where I'm a big fitness enthusiast. I need that time and making sure that the other areas don't impact the rest of them, and it's extremely difficult trying not to bring home the stresses of work, trying not to, you know, have the carryover from personal life into the business world Right. So, yeah, I do think a lot about segmenting them and trying to understand how they factor into each other and making sure that they're, all you know, coexisting in a peaceful manner. That is also not running me completely ragged.
Speaker 1:How do you think about goals, then, for the future?
Speaker 2:Yeah, I think those they have to intertwine right. It's you could set goals individually and say, well, I want the business to do this. How does that affect my personal life and marriage and kids and all the things that come, which I'm not there yet, but I will be in the very near future? So it's trying to understand does this business goal align timing wise with what I do with my personal life? Can my personal life sustain what I'm doing with the business? It's a tight race between all of them together and I think you have to be intentional and, again, honest with yourself in the business world, honest with yourself in the personal life world, to know where you're falling short and where they're going to work well together helped you form that kind of a mindset and the ability to be that mature and wise about how you want your life to go.
Speaker 2:Yeah, great question I would. I mean my mother first and foremost, who raised us as a single parent, myself and my older sisters. I think a lot of my intentionality comes from that Extremely supportive right. I knew that she was the one that was going to help me understand things in a way that made sense. If I was sporadic as a kid or even as an adult, I think she gave me that courage, if you will, to say like okay, go do what you want to do, but take care of your responsibilities. Make sure you're not doing something that's going to hurt others if you're taking a leap of faith on something. But I would give most of the credit to my mom and to my sisters. They were like second mothers my entire childhood. That trio of women definitely gave me a strong ability to be intentional, first and foremost, about my actions and my desires.
Speaker 1:Well, and I'm sure they're all very proud of seeing what you've done so far and knowing that you've got a lot of runway ahead of you, because that's part of why you do what you do Knowing you, I know that's true.
Speaker 1:It's not just about money. It's not just about solving cool problems, although that's a part of it too. It is people that want to have an impact in a positive way and prioritize what matters. And when you can find that overlap between your chosen career, your finances, your friends, your family, your relationships and something bigger than yourself, then that's a pretty good place to be. I mean, you've got to feel very fortunate, and I know you shared with me beforehand that you haven't had a lot of chances to stop and think about this journey that you've been on. I hope this provides some of that a chance to pause, reflect, recharge for the next stage of what is coming, for First Choice and for you and we're grateful for you for opening up and sharing your story I always like to ask is there any advice that you would give to somebody who's maybe a couple of years behind where you are right now, so that you can pay it forward to somebody else who's on their own entrepreneurial journey?
Speaker 2:Yeah well, I definitely appreciate all the kind words. I think the thing that I would give the most advice on is protecting your time, time management and it's something I've always preached before. Entrepreneurship as well. There's a lot of fires that are going to be thrown your way any given day, right as the guy that has to be the one to you know the end all be all. Your day is going to be pulled in a million directions, and if you can't be, again, intentional with your time and protect it and decide what fires can be left burning for a little while while you focus on the main fires, it's a quick recipe for disaster. So I think the one thing that has helped me the most is time management making sure that I am focused on what I need to be focused on and letting those small fires burn, knowing that I'll get to them. It's not ignoring them by any means, but if you don't be very intentional with your time, you will quickly run out of time and then realize you didn't get anything done in that day.
Speaker 1:I once heard the analogy of owning a business is like riding on the back of a lion it's really powerful and it can take you really far, really really fast, but at any point it can also turn around and bite your head off.
Speaker 1:So it's this beautiful contradiction of risk and reward, and using the time management part of it and prioritizing what you're going to focus on gives you a greater likelihood of being successful, and I love that you brought up health.
Speaker 1:It's underappreciated, I think, that to be at your best from a performance perspective, you need good sleep, you need exercise, you need a healthy diet, and it not only manifests itself in your physical body but in the way that you show up for others, how much stamina you have to make it through the day. Your mental clarity and the happiest entrepreneurs I'm not necessarily going to always say the most successful, because that's subjective, depending on how people define success but the happiest entrepreneurs that I know tend to be the ones that prioritize their health, and so that's another good lesson. It's a reminder for me too. That's why I love to do. What I do is I get to learn from dozens and dozens of people doing what you're doing, justin, and we're grateful to you for sharing your story and we are definitely all rooting for you. Awesome, I appreciate it, nate, always great talking to you and thank you so much for having me.
Speaker 2:All right, are definitely all rooting for you. Awesome, I appreciate it, nate, always great talking to you and thank you so much for having me.
Speaker 1:All right, take care, my friend. Thanks for listening to another episode of the Bootstrapper's Guide to Logistics, and a special thank you to our sponsors and the team behind the scenes who make it all possible. Be sure to like, follow or subscribe to the podcast to get the latest updates. To learn more about the show and connect with the growing community of entrepreneurs, visit logisticsfounderscom. And, of course, thank you to all the founders who trust us to share their stories.