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.
Speaker 2:It was very hard. It truly is building a legacy the more life you live the more wisdom you have.
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Speaker 1:Don't shoulder entrepreneurship on your own. I'm your host, nate Schutz. Let's build something together from the ground up. Hello everybody, and welcome back to the show. We are sticking on the theme of freight brokerages this week and bootstrap founders, as always, but I always love just like we did last week to get to highlight the Midwest a little bit, and so this week we're going to chat with Rich Kruel, who is the co-founder and CEO of Hoplite Logistics. Rich, good afternoon. How are you?
Speaker 2:Afternoon Nate Doing good man. Thanks for having me on.
Speaker 1:Thank you for being here. I got a chance to see your co-founder, brian Rakowski, a little over a month ago at one of the PGA events that we get to have in Minnesota once a year, so it was great to see him and a couple of folks from your team. So why don't you start with just an introduction of yourself and where you're based out of and what your business is yourself?
Speaker 2:and where you're based out of and what your business is. Yeah, ridge Cruel, based out of Grand Rapids, michigan. I just recently moved back, about eight months ago, from Chicago. I was there for 14 years, had a couple of little detours with my time there in Denver during COVID for a bit, and then the UK. I had a pretty cool opportunity to work over there with Coyote for a few months, so that was really neat.
Speaker 2:But Hot Plate Logistics we're a freight brokerage. As you said, our niche is cross-border Mexico. We have an entity down there in Guadalajara. I have some teammates down there. I've been hiring down there recently, which is super exciting for us. We're kind of approaching the 22, 23 months in business now, so doing something right. We're still still plugging along. But, you know, finally being able to hire and get over some humps has been really fun for us. But, as you mentioned, like Brian, couldn't ask for a better co-founder. He's a man, he lives near you in Minneapolis and that's where our headquarters is based out of. And even though we're kind of spread out all over the country and the States, you know it's usually with people that we've had a previous relationship with that Coyote branch runs along and so we're kind of spread out, but everyone still feels connected. That's been pretty cool.
Speaker 1:Well, you're one of the few that chose to do their startup in the depths of a freight recession, which obviously takes a ton of conviction depths of a freight recession, which obviously takes a ton of conviction. And I also like to tap into founder stories at particular points. It's obviously really fun to talk about somebody who's made it past $100 million and they've got a wealth of knowledge and lessons that they can share with other people. That's awesome. I also really like the very, very early stage stories, where they may be only a couple of months in and they don't even know up from down.
Speaker 1:But I also really, really have a soft spot for the place that you guys are at right now. You're two and a half-ish years in from when you had this conception of an idea to you spent eight months planning and getting ready to launch, and now you're getting close to that year two mark of actually being a real business and you've gotten to go through two annual cycles of budgeting and hiring and managing cashflow and all of that. And so to me that's especially fertile ground, because you still don't know what. You don't know a lot of the time, but you've got enough bruises and scars accumulated already that you still retain all of the optimism of the startup phase, and so there's something special about that that I love to get to connect with people like you on. What is that? How would you describe the place that you're in?
Speaker 2:I mean we're excited with the growth, for sure, but I do laugh because there's part of this where we're at a stage where I look back at this interview or this podcast in like two years and be like man.
Speaker 2:That was a dumb thought, Because you're right, you would interview me right when we launched, I would have probably been saying a bunch of things that you know. Looking back now, I'm like, yeah, we, we didn't go about that the right way. But, um, I mean, for anyone mulling like the leap, they've had this thought that's burrowed in their head of like I really want to try that. The best education is just to do it, because you're going to make those mistakes and it's scary for sure. I mean, there's plenty of nights where Brian and I are on the phone at like 11 o'clock being like how are you going to get through this? But you figure out a way. If you have the will, you can get through it. And I think there's something to like karma in terms of you know we treat people a certain way and you know, if you operate the right way and you take care of people, then typically it kind of comes around your way.
Speaker 2:We've had a lot of people looking out for us too, so that's been great. But you're right, the stage we're at has been exciting because we're getting to a point where we've just hired five people in the last two months, and so that's awesome. Our team's at 14 now and we have some more planned hires, probably in the next three or four, if we can keep growing and hitting kind of the metrics we're looking at. But yeah, the first six months, seven months, is just a constant rotation of well, that didn't work, let's try this round.
Speaker 1:That's so good. What was the eight months of preparation? Can we unpack that a little bit? Some folks will say, oh my gosh, it took eight months to launch a business, and I mean that's before you actually opened the doors. What were you doing in that eight months to help set yourself up for success? Because I know you to be a diligent and thoughtful person. You're not impulsive, so there was a plan behind everything that you did. What were you and Brian, I'm sure, talking through in that pre-launch period?
Speaker 2:Yeah, no, and I appreciate that too. You know, eight months might have been a little long, but the due diligence piece was important because there was a lot of things we thought of wanting to get right, because you can only make one first impression. You really can't. And if we launched too early and things looked janky, the website doesn't look a certain way and we don't have like the most sophisticated website. We're redesigning it right now, which is also exciting. But no, you want first impressions to be that's professional and if you don't have all that together, that's going to creep into the business, like you know. If this was too fast or something doesn't look right, well then, how do things look under the hood? So it was very like let's take our time, make sure our first impression is oh wait, you guys are a startup, because you know the experiences we're getting is just as you know, the Coyotes or RXOs or whatever. That's the experience we wanted to give them. We wanted them to be surprised at our small size. So, you know, definitely the image was a very important thing. But I had a little bit of experience with Mexico cross border, just bit at Coyote, but not a lot. But if we were going to kind of focus on that. I wanted a little more information so I could at least have a better idea of what we were building. So getting a little education with that making sure, like the back office was taken care of, because we'd never dealt with benefits or an HRM platform or what the hell is a. Excuse me, what's a PEO? That was new terminology because we've never had to set up that structure before. So that was a lot of education of how to actually build a business, not just the brokerage, but actually like the bones of it, of just a business.
Speaker 2:And then the big piece of it was funding. Sure, we needed money to do it, and that was a long, stressful, arduous process. Where you're there's one thing being told no, um, when you're trying to sell, to try to go get a customer, you hit no, you know, all the time. It's another thing when you're hearing no about like this baby that you really believe in, like this idea works, like it, you know, trust me, like we're gonna work until it works. Um, but you know it's money. Like people are like, yeah, what's well, what's the? It's a brokerage. Okay, there's a million of those on paper.
Speaker 2:True, yeah, it's, it's tough to sell that you're trying to sell yourself as a person, but as a first-time business owner too, that's doubly as hard because I have no track record. It's like this is my background and I was successful in these roles, but what do you do without a safety net? Um, so that was really tough to finally get the funding. Um, and then, once we had the funding, it was so close to the end of the year that we're like let's make this very easy from a tax standpoint and our employees that we're bringing in let them finish the year out so they can enjoy that with the families around the holidays and let's just make it clean Jan 1. And that's what we did.
Speaker 1:QuickBooks or whichever accounting package you're going to use or are using. That's just going to be a great story. You'll be able to do annual reporting and there is no pro forma that you ever need to do because you don't have a half of a year. How did you choose the name Hoplite?
Speaker 2:That was a funny one, man, so I wanted, first of all, I just wanted a name that you could say with one word. There's a lot of the big scale brokerages and companies that I wanted to scale down from logistics. I didn't want to be ABC or 123 Logistics, it kind of blends in. I wanted something unique that, okay, like you know, you go on safer sis and you type in any word, there's a million companies that have that word, and so I started looking up things from like a position of strength. I wanted a story to go behind it too, and it was funny how quickly Hoplite popped up on my radar. I'd never heard that term before. Um, I don't know why a lot of people, of people who we've spoken to, is like oh yeah, man, it's like a Greek warrior, never heard of it before.
Speaker 1:I did not know that. Please explain.
Speaker 2:Yeah, so I think I typed in synonyms for warrior or something like that and hoplite came up and it sounded like, honestly, it sounds like a piece of equipment and logistics, like put it on a hoplite, it just literally sounds like a truck. And I was like, well, that's interesting. And started looking into it. And hoplites were Greek warriors. They're essentially what was in the movie 300.
Speaker 2:Okay, so there are smaller armies that are more tactical, you know, more strategic, and they can defeat vast armies because of that, that strategy and that working for the person next to them. And you know, we look at what we're trying to do. It's like we don't want to. We want to be able to compete with these massive brokerages and companies, but we don't want to hire in the same number of employees. We want to be smarter, want people to be bought into the culture, and we want to be smarter with our technology and just do more with less.
Speaker 2:Efficiency is like at the front of everything and like what better story for that than this? And it just hits so quickly and you're like, okay, from a branding standpoint, you can do some pretty cool things with like a spear and a shield, and so it just kind of worked out perfect. Man, we get a lot of compliments on the branding and then you know not that this has anything to do with it, but I had a little marketing background. So, like, when it comes to like aesthetics, I'm very OCD with how things look, and that plays well with the business that you don't want things to be clean and look a certain way before we roll it out, and those are some of the decisions that everybody has to make when they start a business.
Speaker 1:Some folks choose not to focus on a logo or a website. Depending on if you're hauling or if you have a gravel pit, it probably doesn't matter as much, but when you're presenting out in the marketplace, oftentimes it really does. And that's one of the 4,000 decisions you have to make as you get ready to start a company and then, after you've started it, for the stage that you're in now, as you look back on your first couple of hires, what was in your mind of? I'm sure there was a couple of folks that you knew from your prior lives, but how did you approach our first three or four or five hires have to be perfect, and perfect looks like X.
Speaker 2:I mean one, a trust built in. We didn't go out and hire anyone. We didn't have a a personal like background with um. There was one. There's a salesperson that I didn't know him extremely close, but he was he. He worked at coyote as well and like we had enough people that could vouch for him.
Speaker 2:Then it was like okay, um, but it was difficult, right, because as a startup, anyone who has a large book of business as a seller is typically making pretty good money and they don't typically have a huge uh need to move unless you're going to offer them more money, and with a startup, we couldn't offer that. I mean, there's, you know, there's other things you can offer at a startup, but, um, you know that's, that's a little more tricky down the line. So, um, so we really went after, like our personal network and just said you know, if we only have one shot at this because I do kind of view it that way A lot of companies fail early and you don't know if you ever have a shot at going out and raising money and doing it again we only have one shot at it. I want to be in the bunker with people I know are going to do everything to make sure.
Speaker 1:And that goes right back to the 300 illustration.
Speaker 2:Yes, yep, no, like half measures, like if we're going down, we're all going down swinging, and I can trust that that person doesn't need to be like micromanaged, that they're out doing whatever they have to do. It's not a nine to five anymore, it's a 12 to 12. And then you know, as we grow it, lessons and lessons and lessons, and um, and we just nailed I think I do think we nailed it. I mean, um, you know, my, our carrier team lead, ryan Servos, has been a good friend of mine for a really long time and he turned down multiple offers from other companies when he was looking to leave Coyote, before we even had funding. It's like I will wait, and I can't tell you how much that meant to me personally that that sort of trust was out there and he's been a rock for us. And um, you know, we, we have four carrier reps and they're all absolute monsters. And um, they, they were all from coyote, they were all people that I knew outside of our Mexico booking rep, but he's a beast down there with cross border and um, but then our first customer rep was actually a carrier manager for me at traffic tech and I just was like I've seen you on the phone with customers.
Speaker 2:Name's Rob Conard, for anyone looking for any shippers listening that are looking for a salesman who goes above and beyond. But I saw him on the phone with some shippers. Sometimes I'm like you're so eloquent, you keep people at ease. Have you ever thought about the other side of the business? And he's like actually I come from a family that is in sales and I have thought about that. I was like I think you'd be awesome at it and I'd be willing to take that risk. It's like our first sales hire is not even someone with the book of business, it's just someone I think would be really good in sales and he's our top sales rep right now. Like he's, he's done really well, um, and he will continue to do well Cause he he really, you know he works hard and fits the culture of what we're trying to do.
Speaker 1:Well, and if you can see talent, that can be. That translates to any subject matter doesn't have to be the carrier side. Um, and you're, you're willing to be creative like that and just recognize when somebody's got game, then yeah, they're going to have your back and you're going to have theirs and that's a. That's a good place to start, because culture in the beginning is the thing that holds you together. It's not the business. The business isn't really it. You have to have belief in something bigger than just AP and AR.
Speaker 2:Yeah, I mean everyone's got to feel like they're rowing towards something together. That's really big for us and like I can go back to Coyote. I didn't join right when they launched. I keep going to this cause.
Speaker 2:It was pretty formative time. I was there nine years, um, and saw that company change, like you know, over the years into behemoth. That it was, but they were already pretty large by the time I got there. But everyone there still felt like they were. You know, no offense to any CH Robinson people, but that was the enemy. So you're trying to take down CH. Everyone felt like they had a hand in that and at that scale. I mean I remember when they hit a billion that still had that feeling. It was like man that's accomplishing something when there's that sort of culture. Maybe everyone didn't feel that way, but I know my teammates did and we were just one little part of the org. So you know we can keep that going for a while we hire the right people and everyone's motivated and happy. I'd think that you know the business will keep growing just based on that.
Speaker 1:You got the right people well, you know, I spent 12 years at ch right, but I think I was probably. I was probably gone by the time you were competing against them um.
Speaker 2:It wasn't personal man.
Speaker 1:No, it's all good, it's just a different team. You got a different logo and different colors. But yeah, we're playing the same game. But now you're in this next stage. I'm imagining you're not going to be able to always hire from your known network of people and you have to start thinking about scale, and that presents a completely different set of challenges and opportunities. So when you start thinking about how do we double in size from here, what do you think you're going to have to do differently in the next two years than you've done this first two years?
Speaker 2:Yeah, definitely stepping out of that comfort zone of hiring known quantities per se. But I think being in the industry long enough and you could probably speak to this too someone with a background and we're focused on veteran sellers just because there's there's a quicker return there for our stage. But, um, they're going to know someone who knows that person If they've been around a little bit. The industry is huge, but it's it's really not that big. It makes sense. Like normally, we can get feedback directly on if someone's a good candidate or not, or you can get the, you can get the skinny on someone. So how you work, how you treat yourself, how you treat your teammates, all that stuff it comes full circle. And if you're someone who works really hard and people like you, they're not shy to say that. And if you're someone who treats people bad and you're you're kind of a loafer who jumped, who hops around jobs, a lot, people are pretty quick to to tell that truth as well.
Speaker 1:Your reputation follows you, no matter whether or not you want to acknowledge it, and it builds for a long time. It's not. I get phone calls from people that I interacted with 10, 15 years ago and haven't spoken to much in between, and the things that they remember from when I was in my 20s I'm embarrassed by. I was a young, cocky guy who thought he knew everything and thankfully, you grow out of that.
Speaker 1:Hopefully at some point I did, At least I think I did. Can we talk about the cross-border piece for a minute too? That is a obviously growing segment, but it's also much more complex and there's different kinds of risks. When you were doing your due diligence and said, okay, that's what is going to be our core, that we focus on, what did you leave out of, like we're just not going to be a straight drive-in brokerage, or we're not going to do this or we're not going to do that. This is going to be the thing that we hang our hat on. How did you find conviction on that?
Speaker 2:Well, the easy answer is partnering with Brian because he's he knows this. He knows this area of the business so well. I mean, he was one of the first people helping, you know, integrate the UPS border solutions team, uh, with coyote down there and, you know, having that long track record of Mexico knowledge. Not that, you know, cross-border is a new thing by any means, but it's kind of exploding down there near shoring with the China trade tensions for a while, like people are moving to Mexico and so more and more companies are spending time looking into it and vetting out Mexico and deciding whether or not they want to uproot their supply chain to move resources down there. I mean, he's been doing it for eight years, so we have a little leg up on connections and relationships are so important down there, and so we started talking about it and doing research. And some of this had to do with I'm building a deck for us, a nice flashy deck that shows why you should invest money in us and it's like, well, we need to build out why cross-border for someone who's not in logistics and doesn't know that well why this is such a smart decision to invest and it's going to be a trillion dollar segment here soon. It's just growing year over year over year over year. And can you say that about a lot of segments in society right now? Like this is a smart investment if you know what you're doing, he knows what he's doing.
Speaker 2:I've been able to run large departments. When I was at Coyote I had 230-some reps reporting underneath me at one point. That was obviously making a lot of mistakes there throughout that process. That sort of scale. You have to make those mistakes. Now I've done that a little bit. You have to make those mistakes. Now I've kind of done that a little bit.
Speaker 2:And the next challenge is like growing a company. But so you know the overseeing a large team, his Mexico knowledge, like it married up really well and we see eye to eye a lot on how we run around the business. So that's been a fruitful thing as well. But yeah, it just seemed like I've mentioned this before. A lot of people say it. But there are riches and niches, right. Like if you're just a run of the mill brokerage and you're just focused on relationships, that can work because you know people like to be taken care of. But if you do something that not a lot of others do and you do it better than them. Well, it's a lot easier sell, so we wanted to position ourselves that way.
Speaker 1:I like it. Speaking of going to Mexico, I know you're going to Mexico next week to get married. First of all, congratulations.
Speaker 1:Very very happy for you. Having a younger business and your personal life doesn't stop. It continues, whether you. You just can't separate the two sometimes, and I was just chatting with my good friend, chris Brewer earlier, and he was sharing how his superpower is his wife, and she is who enables him to be able to do what he does as an entrepreneur, because it's a different lifestyle. It's a whole family affair. And you're now about to go all in for a second time, first on Hoplite and now now on your future wife, your fiancee, um how, and you're going to mexico, of all places. So that's, that's a great coincidence. I just wanted to say congratulations. I don't have any questions from there. I'm just really happy for you and I want to share in your, your celebration no, no, thanks, man.
Speaker 2:It means a lot. Um, you know I'm approaching 40, you know you wonder, are you going to find the right person, I guess when you start getting towards the end. But she's been awesome. We had a long. We've known each other for a long time but reconnected a few years ago and it couldn't be better. And you talk about, you know, being a superpower.
Speaker 2:She's so supportive of, like when we were dating I was spending a month here in Michigan and then going back to Chicago for a month because I didn't want to keep driving back and forth and like living two lives, essentially because you go from she's got a five year old, so like stepdad kind of life, to now it's just me and the dog for a month, to back to that and it kind of it's kind of different lifestyles. You know it's tricky, but yeah, it's. It's now that now we're kind of moving into a more stable piece. It's now that now we're kind of moving into a more stable piece and you know it's the weddings this week but it feels like, you know, things are kind of already steady in that regard. So it's, it's a formality, it's a celebration, but you know we've we've been together, we've been living together for almost a year now, on and off, so it's it's solid. She's super supportive of of Hoplite's growth. Um, cause, I got to travel all the time, so you got to have someone who's okay with that.
Speaker 1:Well, again, I'm very happy for you and thank you for making time to do a podcast right before you get married. That's commitment to the business and I also just personally appreciate it, because we were supposed to do this a week ago and I wasn't feeling well and you were gracious enough to allow me to reschedule, so I appreciate it. What advice would you have? Last question what advice would you have to somebody who is contemplating should I take the leap or not in this specific moment?
Speaker 2:If you have that conviction, like it is something that is burrowed in you and will not go away, just do it. That is the advice, because I believe strongly that a life lived where you're always looking back at what if, is a very terrible feeling to have and like, look, maybe this doesn't work out, maybe a year from now, like things go belly up and I'm living in my parents' basement and the whole family's down there, but I will look back and be like I tried it. Now I know I would hate to have just kept going down the road I was going down and which wasn't a bad one by any means, but I had that pull and to always wonder, like man, that was a great opportunity to do that. I had this idea like I wonder what would have happened, and that sucks, that's, that's a bad place to be in. So if you got, if you have the uh, you have that thought, that pull, and you have the drive, just know that, whatever it is, you can figure it out.
Speaker 1:I love it, figure it out.
Speaker 2:So yeah, my advice is just go do it.
Speaker 1:Where can people find you rich if they want to connect with you um either online or through email?
Speaker 2:Yeah, pretty active on LinkedIn. That's huge for freight, obviously, but our website is shiphoplite H-O-P-L-I-T-Ecom. We'll respond quickly. I always love meeting new people, so that's where to find me.
Speaker 1:Awesome, rich. Again, thank you for opening up and sharing this part of your journey. I want to follow up in a couple of years and before we do this we'll re-listen to this conversation and see what the new learnings and experiences have been. But again, congratulations, so happy for you and your family, and we're wishing you nothing but the best. We're all rooting for you. Thanks, nate, appreciate it, man. Thanks, my friend. Thanks for listening to another episode of the Bootstrapper's Guide to Logistics. Thanks, my friend. Entrepreneurs visit logisticsfounderscom. And, of course, thank you to all the founders who trust us to share their stories.