The Freight Pod
The Freight Pod is a deep dive into the journeys of the transportation and logistics industry’s brightest minds and innovators. The show is hosted by Andrew Silver, former founder and CEO of MoLo Solutions, one of the fastest-growing freight brokerages in the industry. His guests will be CEOs, founders, executives, and leaders from some of the most successful freight brokerages, trucking companies, manufacturers, and technology companies that support this great industry. Andrew will interview his guests with a focus on their life and how they got to where they are today, unlocking the key ingredients that helped them develop into the leaders they are now. He will also bring to light the fascinating stories that helped mold and shape his experiences.
The Freight Pod
Ep. #41: Chadd Olesen, CEO of AVRL
Chadd Olesen, CEO of automation technology company AVRL, joined us this week to discuss his company's journey. AVRL started in 2017 focused on natural language processing, but pivoted in 2020 to automate spot freight pricing for brokers.
Chadd shared how AVRL had to rethink their approach and technology to better fit the needs of freight brokers, rather than trying to force brokers to adapt to their original product. He emphasized the importance of being consultative and collaborative with brokers, allowing their domain expertise to shape the automation rather than fully replacing the human element.
The conversation also touched on the evolving API pricing landscape, the challenges of change management when implementing new technology, and Chadd's personal growth as a leader in navigating the complexities of the freight industry. Overall, the episode provides insights into building a successful freight tech company by deeply understanding the industry and empowering rather than replacing human expertise.
***Episode brought to you by Rapido Solutions Group. I had the pleasure of working with Danny Frisco and Roberto Icaza at Coyote, as well as being a client of theirs more recently at MoLo. Their team does a great job supplying nearshore talent to brokers, carriers, and technology providers to handle any role necessary, be it customer or carrier support, back office, or tech services.***
Follow The Freight Pod and host Andrew Silver on LinkedIn.
*** This episode is brought to you by Rapido Solutions Group. I had the pleasure of working with Danny Frisco and Roberto Icaza at Coyote, as well as being a client of theirs more recently at MoLo. Their team does a great job supplying nearshore talent to brokers, carriers, and technology providers to handle any role necessary, be it customer or carrier support, back office, or tech services. Visit gorapido.com to learn more. ***
A special thanks to our additional sponsors:
- Cargado – Cargado is the first platform that connects logistics companies and trucking companies that move freight into and out of Mexico. Visit cargado.com to learn more.
- Greenscreens.ai – Greenscreens.ai is the AI-powered pricing and market intelligence tool transforming how freight brokers price freight. Visit greenscreens.ai/freightpod today!
- Metafora – Metafora is a technology consulting firm that has delivered value for over a decade to brokers, shippers, carriers, private equity firms, and freight tech companies. Check them out at metafora.net. ***
Hey listeners, before we get started today, I want to give a quick shout out and word to our sponsor, our very first sponsor, rapido Solutions Group, danny Frisco and Roberto Acasa, two longtime friends of mine, guys I've known for 10 plus years, the CEO and COO respectively, and co-founders of Rapido Solutions Group. These guys know what they're doing. I'm excited to be partnering with them to give you a little glimpse into their business. Rapido connects logistics and supply chain organizations in North America with the best near-shore talent to scale efficiently, operate on par with US-based teams and deliver superior customer service. These guys work with businesses from all sides of the industry 3PLs, carriers, logistics, software companies, whatever it may be. They'll build out a team and support whatever roles you need, whether it's customer or carrier, sales support, back office or tech services.
Speaker 1:These guys know logistics. They know people. It's what sets them apart in this industry. They're driven by an inside knowledge of how to recruit, hire and train within the industry and a passion to build better solutions for success. In the current marketing conditions, where everyone is trying to be more efficient, do more with less near shoring is the latest and greatest tactic that companies are deploying to do so, and Rapido is a tremendous solution for you. So check them out at gorapidocom and thank you again for being a sponsor to our show, a great partner. We look forward to working with you To our listeners. That's it. We look forward to working with you To our listeners. That's it.
Speaker 2:Let's get the show on the road. I'd rather just talk to you anyways. Well, I appreciate it.
Speaker 3:Thank you. How have you been? I've never met you. This is the first time. It's nice to meet you. I guess I met you briefly for a second at TIA.
Speaker 2:We met for a second. Yeah, it's nice to meet you too, officially, I guess, or more formally. Um, I'm good, I'm, uh, I'm I'm a year and a half into this, you know. I think you and I are similar in how we kind of pour ourselves into the business and make it kind of a part of who we are, almost to you know, maybe to a fault.
Speaker 3:Definitely to a fault for me.
Speaker 2:And so I think that I think some people can walk away from a business they've sold, whether they're fired or or or choose to and be very comfortable and like walk away and be at peace with that and just move on to the next thing. I think other people, who maybe fall in more of the camp of how you and I engage ourselves with the business, it's a lot harder, especially if it's done in a way that it wasn. You have to look at growth from a fun way. I spent 45, maybe an hour reading through your LinkedIn posts this morning.
Speaker 3:Oh, no, great More time.
Speaker 2:I've ever spent on one person's LinkedIn profile time. Have ever spent on one person's linkedin profile? Um, it's a free. I got that. I got through four months of linkedin posts, holy cow, and um, uh, what was I just saying? Because I forgot there was one post in particular that struck me about what we're just talking about right now, but I just lost my fucking train of thought, pouring yourself into the business to a fault.
Speaker 2:Yeah, but I don't know what the hell it was. I don't know, I lost it. My brain's fried. I just spent the last week on a golf trip and this is my first day back.
Speaker 2:Did you play well, anyways? No, no, it was a member guest tournament was the member? My guest was a really good golfer. I'm like a 15 handicap, um, so my game's improved. That's one benefit of getting. Canned was a year and a half of golf, um, but I was my. I had a low benchmark of 22 handicaps. So it's you know I'm improving, but I showed up and just was awful. I mean, I just choked under the pressure hard and my partner played well, but we didn't get done. Not some interesting people, but no Ws for me.
Speaker 3:The social circle that you golf in. Is it a freight community or is that a different community?
Speaker 2:It's a little bit of both, it depends. I think a lot of my old buddies, um, some of them are in freight, I golf with them all the time and then others are, you know, from michigan, um, and then if I'm down in mexico, at our club down there, it's it's just a whoever's in that community and there's not many freight people down there. But yeah, um, yeah, still. Anyways, that's cool, god, what the fuck was I just thinking? I can't remember which goddamn postage orders I was thinking of. It made so much sense. Um, I don't know. Anyways, we'll let it go and then we can start start talking. Do you have a hard cut in hour 20? No, we're good. Okay, I don't have. Like, we'll just. Yeah, I don't really know how I want to do this with you, to be clear. So that's fine. Uh, which is? I'm comfortable with this, cool, I, I, I, you know, I typically have some idea of how I want a conversation to go. You know, I generally have a couple themes. That's like murky from a social media perspective, linkedin perspective.
Speaker 2:I think we start there, that's fine and and and work our way through and just see where that takes us. Yeah, because I think a little bit of that. The challenge with this is. I think a little bit of this will be about the content of LinkedIn posts, in which case we could end up down any number of rabbit holes on any of your posts. But the other piece I think that is interesting to me because you and I both use LinkedIn a lot and I think we do it in an interesting way. And I think we do it in an interesting way and I think we are not afraid to share our opinions, and there's a side effect to that, there's a benefit to it. But I just think it's interesting. So let's start there.
Speaker 2:So, without further ado. Without further ado, I'm your host, andrew Siller. This is the FreyPod. I don't have Andrew Silver. This is the Frey Pod. I don't have a microphone today. I lost the cord to it, so this feels weird. I will feel a little naked, not having a microphone right in front of my face. But I am joined today by I'm going to try to say your name, right Mr Chad Olison.
Speaker 3:You got it, you nailed it.
Speaker 2:Really, yeah, okay, yeah, okay. Where is that name from? Because you got the double D on there, which I don't know if that's just your parents were feeling funky or if that's some European origins.
Speaker 3:I think they had been hanging out in Sedona and were like we're going to do this a little bit weird. So they did that, but Norwegian and Danish. So the Olison is Norwegian, son of ole, or something like that.
Speaker 2:I don't know, but yeah, all right. Well, what's the? Uh, the from the show vikings, uh, ragnar, son of ragnar, chad, son of exactly right so I'm I am joined today by Chad, ceo of AVRL.
Speaker 2:I always forget to mention the company, but not today. A bit of a mysterious company, I would say. I wanted to start with the LinkedIn, but I'm going to go to the website first because I just remembered this. So I think this maybe has something to do with your general persona and I'm curious about it, this let's talk about. So when you go to avrlio, um, and for those who are listening, just pop on your phone and do that. Look at me, drop, we're just driving traffic to your website right here. Uh, the day this releases will be the highest volume traffic day on your website. Not that you ever look at it because your website doesn't have anything on it.
Speaker 2:So, uh, when I go on avrlio, I see a landing page. It says AVRL, it says Automation Technology at 4.0 scale and it says, over the course of every year, we identify 18 companies to work with us to automate their processes. And then it says call us at 512-387-4820 or click here to email us. That's it. That's the entire landing page. You wouldn't know it has anything to do with freight transportation. You know there's something that's automated here and technology, and I guess there was a one, two and a three and now we're at four. But help me understand the thought process behind this type of website.
Speaker 3:This is not going to be a stab at freight tech.
Speaker 3:However, I'm going to kind of poke at it a little bit.
Speaker 3:When we used to have a website pre us entering the freight market and what we started to realize is like every time that I would post something or write something, it felt like someone else was like hey, we're doing the same exact thing, and what we look at in the industry is that there's a lot of transfer of product. Someone's like, hey, we're now doing automated invoicing. Another company, like two months later, is like hey, we're doing this as we're coming into the space. We're like, okay, if we're early, which we thought we were we still feel like we were. The only way for us to create competition is for us to talk about what we're doing externally, and so what we did was we took like a full outbound approach to go and connect with the right people, and that's really what the website was based on was that we didn't know if we could trust the competitive nature of the industry, not to just say that they could do the same thing as us, even if it was different. That was it.
Speaker 2:Do you think that's a little bit of paranoia or do you think it's valid? I don't want to say it's not valid because I think I'm taking myself back to situations where I felt similarly and I think it's different at the brokerage level because there is so much competition that it's like most of the brokers aren't doing anything. That's like that crazy, unique, different. But I was always like there was always that kind of fear in the back of my mind, like if I say this to the world, someone's going to try to take it and replicate it. In fact, I remember at one point someone actually copied our website word for word once. So people do that. But I, so I resonate with the thought. I'm just curious, as you thought about it, like how that played into that.
Speaker 3:I think definitely started out as paranoia, like were we really doing what no one had like thought of? Definitely not. The use case was even pitched to us. Right, we just figured out how to do it. The interesting thing is that as we went deeper through this, we were like holy cow, this is working with us, not marketing what we do.
Speaker 3:What ended up happening was it started to tap into this inner, more inner circle core of freight. Like you know, a lot of people in freight I start working with, like jay gussets and he knows like all of his friends, and so we started to like just dabble on that. We've actually talked about removing the website and putting a real one up, and every time that we think we're going to do it, we're like we just have so much inbound coming in right now, because it creates this like really mysterious, like what do they actually do? And I think that if if everyone was doing that type of like marketing, it probably wouldn't work, but because we're the only ones in in transportation doing it, maybe that's why it's working yeah, I mean, it's definitely different and and I I I resonate with your comment around people knowing one another, because I I don't.
Speaker 2:I think people take for granted or don't realize how often guys like myself who were running brokerages whether it was a 50 million revenue brokerage or a 500 million revenue brokerage or in the billions, I mean we were having these same conversations, but when we were unsure of something or when we were considering trying something new or looking at a vendor or trying to solve this problem whether it was inbound phone calls or the volume of them relative to how many people could answer them at any given time, or API pricing, whatever it may have been when we were unsure, we call a friend I mean it was who wants to be a millionaire phone a friend, but you didn't have one lifeline, you had as many as you wanted, and I think the reality is that you could start a business like yours and know five people and if you know the right five or you know, I don't need to throw out a bunch of names but and someone else comes out to me and says, hey, we're trying to tackle this problem. You know, we all share that information. Hey, you should try these guys. They're great. It helped us a ton.
Speaker 2:So I don't know if that's true in every industry, but maybe it's because freight is I don't want to use the word incestuous, but there's so much crossover. I mean there's so much. Companies get big and the next company comes along that's got a bunch of capital invested in it or a little bit of a different idea, and they just need the right leadership. And then boom, you're pulling from that place. And when you have these organizations where people really enjoy working together, and then those people even start new ones or join other ones, it's like those friendships live on. But now you've got people and decision makers at a hundred different companies and someone like yourself again, you know five or 10 of them and you have a business for life.
Speaker 3:Yeah, we like to just echo that a little bit. Like we worked with BNSF logistics pre that JB Hunt acquisition, we were like devastated, we're like damn it that's going to go away because it's going to get consolidated into a singular contract.
Speaker 3:However, in a positive note, all of those people who left ended up pulling us directly into their new organizations, and so I definitely believe like I also don't want to use the word incestuous, but I do think that that the freight industry is more like more of a core group than any other industry that we've looked at.
Speaker 2:So your business didn't start in freight? I didn't know that um until recently. You guys started with with BMW, correct?
Speaker 3:Yeah, so BMW was our first uh, first customer company's original name was Advanced Voice Research Labs and we were going after core voice technology, much like you're seeing some of these new entrants coming into the freight industry today. We started working with like BMW, and then SAP gave us some money to come in and connect disparate systems. We started working with a lot of their blue chip customers it was like you know, the Shell, the Chevron, those guys and we actually worked really heavily into oil and gas brokerage first, so literally processing chats, filling out the ERP system fully automated. And I started working with a massive retailer in Arkansas. They introduced me to somebody and like the rest is history.
Speaker 3:And what's funny is that when I went in to pitch JB Hunt their first one who ever looked at us I thought I was going in to sell them something differently. I like went in and sell them something, spent two days in a room with Terry Turpin, who was their like former chief commercial officer, and he's like, hey, this is all great, but like could you help us do X? And it was automating their transactional spot freight and we were like I don't know what that is. We looked at it and we were like, oh, this is way easier than the stuff we're trying to do. Yeah, let's go do that. And we did a pretty decent pivot Same product, but just pivoted into the market. And that was December 2019. When was the company founded? We?
Speaker 2:founded the company in January 2017. And how many people were there day one, and what does it look like over those first?
Speaker 3:two years before that JB Hunt meeting. So we had raised money in 2017 and then again in 2018. And we were so focused on natural language processing. So, for those of you who aren't as familiar with natural language processing, think of like when you speak to like an Amazon Alexa or a Siri there's a microphone and it measures pressure waves and then, after that, pressure waves convert that into text. So, like a text message doesn't mean anything to your phone.
Speaker 3:After that, there's a conversion of unstructured data into a structured data format that a machine can read we were doing that type of work and we had a pretty big team like our team probably got up to the size of like 40 before we pulled this like really decent, like pivot. But we were doing all the like stupid startup things, man, like we had. We were like, oh, we got to bring in in-house legal, we got to do this. You got a higher for like what we thought we were going to need, versus now when we hire, we're like, okay, do we really need this person? If so, what is the real value they're going to add to our organization? And we're probably around 120 now, but just completely different business. Just from me being better at running a business now, I think.
Speaker 2:So when you make that pivot, though, you're sitting in that meeting with JB Hunt and they say, hey, we want you to think about this problem, walk me through what that was like because you were two years into building a different business yeah, what that was like Cause you were two years into building a different business. Yeah, and I want to understand, you know, was? Was there any part of you that that mentally wanted to fight that idea? That thought, hey, you know, I don't know enough about what is this spot for. I don't even I don't know anything about this. What's the market? I mean, walk me through that process of how you got from I'm here to sell you this to. We're going to change who we are and this is our new market yeah, um, we're in this like meetings.
Speaker 3:What I went in to pitch them was this as a use case that we were working with some big uh transportation companies on where you do like vehicle inspection. So if you've seen some of these like new companies coming in, like fleetworks or Happy Robot, where you're they're doing like check calls via voice, we had this idea where we were like oh my gosh, like 360 inspections on trucks, like how awesome would it be to walk around the truck and fully do an inspection and then have the voice system fill out the maintenance system and auto all the parts. And so we were already doing the automation of the execution on the back end. Just the input was differently. That's what I thought I was going to go in and sell into JV Hunt. They were like this is super great.
Speaker 3:We have a bigger problem and the challenge that a lot of these 3PLs and carriers have been having with connecting these third party systems. So if you work with like Costco and you have to go into Costco's system is that if you don't own the system that you're automating, any change will just break the automation right. And so what was happening was that like it wasn't like our technologies just fit the problem so well. We were like, oh well, since we own our own browser, we could just deploy and insert HTML into the shipper system. That's a perfect fit. But the transition of this like big pivot was COVID happened right In like February. When was that? February? March 2020. Yeah, march 2020.
Speaker 3:Yeah.
Speaker 3:That's 13th when we all went home. So, like we came in, we were like a couple months into this deployment and some data analyst at JB Hunt was like you've already made us like 11 million bucks. And I like look at my CTO on the camera and just like shut the F up, don't say anything like, don't smile like, don't do anything. This is not just like a small, like nice to have. If we can deploy it and figure it out correctly, then we could, like this could be much larger business than we were thinking. And so we started working with them. We worked with them for I don't know eight or nine months before we took it into market. And then it was some immediate adoption from some other top 10 players and we're like we've got something that's really special. Let's go and execute on it. We still support a lot of our other use cases. We just don't go out and sell them in the market.
Speaker 2:So how many core products would you call it that you're offering today, or core solutions?
Speaker 3:We think of these as we call them business add-ins or bodies, and there's probably about 40 of them that we deploy, but it depends on the transportation management system and how advanced that system is right. So if someone ran McLeod, we have specific use cases that are for gaps that exist inside of that system. If we have someone that runs like a Rebinova or a Mastery, like we, would have a different solution solve. Some TMSs you know this better than anyone are way more complex than others, and so some of our use cases wouldn't exist there and wouldn't be needed and so does that mean with each new tms you have to kind of re-architect the thing to an extent, or it's so.
Speaker 2:It's just a matter of figuring out how to fill the gaps it's more about filling the gap.
Speaker 3:so what we do is we build like proxy systems. So, like, my connection into like atms is through a proxy, so I always build standard to the same one. The workflow stays pretty much the same. Where it would differ is that if someone was able to like title the columns or change the fields of their TMS, that's when we would do some existing mapping.
Speaker 2:But the product itself is built for how it's going to function mapping but the product itself is built for how it's going to function and since you made that pivot, how have you seen the business change or grow? So that was, you know, early 2020,. You know, four years later.
Speaker 3:Yeah.
Speaker 2:What is what you know? Are we ecstatic with that choice and we're still moving on the same path that we evolved more Like? Give me a little bit of an update there.
Speaker 3:We really ripped the whole business down to zero. For any of you who have like listening to this, who have ever like built something and then ripped it all the way down, very like, mentally difficult to do, but we actually brought it all the way down to four employees from 40 and then have scaled it now I don't know how many years it's been four years now to about 120, and we're mostly engineering group, so probably 90% engineering. There is this huge lesson that we had to learn, which is freight is really complex. It's it like it's. It's really complex on why someone does something, a specific way, why they use very specific terminology, and so we've hired some people out of the industry as well to come in and help our customers, like review their data, et cetera.
Speaker 3:Fast forward, like where we're headed. We're probably going to become more of a market intelligence tool. I think that you have really good companies that understand their cost modeling and I'm going to focus on a very specific use case, which is like spot transactional, spot freight. Like if you don't know your costs, how to hire out of the market, how you hire capacity and what those costs are to hire capacity it's really hard for you to automate something, because you're talking about going and automating, like, 10,000 lanes when someone's traditionally bid on 10,000 lanes when someone's traditionally bid on 10. And if you don't have your cost model correct, then you're going to lose a lot of money 100%, and just to go back for one second because I think this is really interesting.
Speaker 2:but you raise money. I think you said SAP gave you some cash and I don't know who else. But when you tell someone like that or your investors I'm about to cut this group from 40 to four and we're starting over, what's the response and how do you navigate that kind of adversity?
Speaker 3:It's crazy, because I actually tried to raise money during that time and they all gave me this much right.
Speaker 2:We're worth more. We're actually. I know I've fired everyone, but we are worth three times what we were yesterday.
Speaker 3:So like I was like we got to go and raise, like I was trying to raise money during that whole time and everyone on my current like cap table was like absolutely not Any of our safe holders, like absolutely not. And I don't think that anyone thought we could do it. Like I think if you asked any of my investors, like if you asked like Chris Stallman at Fontanelis, he'd be like no way they would have done it and we did it. I don't know how we did it, but we did.
Speaker 2:Talk about that, though. Like how, what? What do you think was like the crucial piece of that? Like, I mean, it's, that's a big, that's a big undertaking and you know, there certainly seems like even your own investors are doubting your ability to to do something. You cut your team by by 90%, um, to to chase this new vision. Help help the audience understand. Like, how do you go through something like that and come out the other side, like what is it that drives that success for a small team to rally and find the success that you had?
Speaker 3:If I could pin it on like one thing that we did that sucked, was that my CTO, who's one of my founders, and I every Sunday. So Sunday is like your day of rest, of rest, and like you're supposed to be the day that you're calm. We would go in and look at our financials every Sunday and then look at projections, and sometimes it takes doing that like shitty thing, like if you're running out of money or something, you just like avoid your bank account. You know, in a lot of cases and you're like I don't want to do that, but I think sometimes you have to like, like force yourself to do the thing that you don't like to do, to maybe create some anxiety internally that like pushes you to go in and give it all, you're all yeah, I respect that comment.
Speaker 2:No, no, I think there's. There's some stuff there. I mean, for one, it takes me immediately a guy, ryan dent, who we hired, who was, I think he's he's helping run Molo today and he was running Molo's carrier side for a year or so and he had this notion I think he might've gotten it from Bob King of eat the frog. And I actually have no idea what the hell the origin of the comment is, now that I say it out loud. But I do know the meaning, and the meaning is essentially that every morning when you come in, what's the hardest thing on your to-do list? Just get it done. Eat the frog, get it done right away.
Speaker 2:And it's interesting because your comments about you're running out of money you don't look at the bank account. That's that kind of avoidant mentality and I've been there. I think I've had it in my personal life. Some you just want to avoid that stuff because it's easier not to deal with it. But I think there's something. Really I think that rings true the way you think about it. And your comments about a Sunday I've noticed too. You like to post on LinkedIn on the weekends and talk to me a little bit about what some people would say. The weekends are for rest, as you said.
Speaker 3:Some people would say the weekends are for rest, as you said, why Sundays? What about the weekend is meaningful for you with respect to how you work, like always trying to find like the easiest way to do something For me. Like I'll use an example of yesterday, veterans Day I did all of our compliance stuff like that I like wouldn't want to do or that I have like queued up in my email that I just like avoid over and over. And that's how I tend to think about like Sunday or like the weekend is like hey, maybe I do some prospecting for my sales team, because that's like really terrible work, it's like really grunt level work, but I also want to be part of helping them identify who the best class targets are for us. Do our compliance stuff that has been sitting on my desk that's holding someone back from like finishing their work. That's really what I try and do on the weekend. It's like the not fun stuff, but it's probably the most important stuff for our business to like continue to run.
Speaker 2:I always like the weekends for just kind of the clarity of thought. I mean there's just fewer distractions. Yeah, I mean it was too easy to be in the office during the week and want to be thinking about something maybe bigger picture or deeper thinking and then your email is just one after the next, or for the next if the next, and I'm easily distracted. So, um, it's, you know I like selling on the weekends. Um, like that was when I felt like I could put some really good thought into a well-crafted email that showed a really an understanding for what this potential customer's problems might be, why I think we could help you know.
Speaker 3:so and such no offense, but when you sit down and take time to write, you're a very good writer, so I can actually like see that that would be a good play and a good use of your time on the weekend.
Speaker 2:Thank you. Where is that coming from LinkedIn?
Speaker 3:Yeah, some of your LinkedIn comments like I can tell when you haven't written something in a long time and then it's clear that you put a lot of thought into something that would normally be like very dense and it's just very well articulated and it does very well. Usually, like a lot of of people's writing, when they write large format, it becomes too dense and it dies. I think yours is really fluid.
Speaker 2:Thank you. I appreciate that I like writing and I don't do it enough. I don't know why I can't get myself to do it more. I've been fighting it. I've been fighting my therapist and my coach on journaling and just doing it consistently. And LinkedIn I have a relationship with LinkedIn that I need to figure out because I hate it and I value it. I value it and I hate it, I think, are the two feelings I have towards it. There's no part of me that likes it. I think.
Speaker 2:You know when I first started posting on LinkedIn I think it was during COVID and it was largely because I just couldn't spend as much time in front of customers and I thought I'm a big believer in kind of vulnerability and, you know, just stemmed from it's done for Brene Brown, frankly. But I've seen that if you're willing to kind of put yourself out into a space that most people won't, oftentimes I think good things come from that and there has to be a level of discomfort for it to, I think, play the way you want it to, because that's what's giving people a taste of something they haven't seen, or a side of you they haven't seen, or a side of something they haven't seen. And so I think for me, I figure, why not try to just sell on LinkedIn the way I would sell face to face with someone? Can I block out the concern of people judging me and just focus on what I care about, which is, you know, promoting my business and helping people understand what our business can do? And that was the origin for me of posting on LinkedIn. And then, you know, over time, I start developing a following. I remember at one point, you know, I posted like a five minute video of what I called I think it was the four. I had like a four box theory or hypothesis on, on, on brokerage, and it was essentially like where I thought were the four things that you needed to have a great freight brokerage. Um, and you know, I, I just spent some time thinking about it and then came and made a video and did it, and a few weeks later someone told me that I won't say who, but one of the larger, the fastest growing brokerage in history was forcing their salespeople to watch it and then try to play it into their own sales processes. Interesting, so, like I just.
Speaker 2:But like, linkedin to me over the last four years has evolved into something totally different, not totally different. I still try to use it for the same thing. I just have grown to hate it and I don't know if that hate is valid or if it's something more deep rooted inside me. That's an issue. But I feel LinkedIn has turned into a place where people are going to just kind of be self congratulatory and it's like kind of you know a series of Google search inspiration quotes but aren't representatives of like people's real life stuff and real feelings and real thoughts and whatnot.
Speaker 2:I'm curious because you have a very engaged LinkedIn presence and I've definitely had some judgmental thoughts about your LinkedIn in the past. I think that's more an issue about me than it is about you, to be honest, and I'm comfortable saying that. But uh, we've traded barbs and yeah, I think we're both willing to speak openly, even if it's controversial or something that people would disagree with. And maybe we both argue that that's part of the, the strategy and and that it's it's something that you know, it's almost like trump strategy.
Speaker 2:I don't want to go that far, but, like trump, has, kind of um, become an expert in polarization and recognizing that it's okay to polarize because that leaves you in a place where half the people, or some large contingent of the people, are big fans and if that's the case, like, that's fine. I said a lot there, so talk to me about how you think about LinkedIn, what you agree with, what you disagree with about me and what I'm saying right now.
Speaker 3:Someone once told me that a very interesting thing about me in the freight industry is that almost everyone has an opinion about me and that's interesting. But that is what LinkedIn has done for me and I think that, and AVRL and I think that that's. I'm okay with that. And a lot of times I write things off the cuff where, like I don't prove them, I always have like spelling mistakes that I come in and like clean up and stuff like that. But I like want it to be representative of my authentic thought, maybe not necessarily representative of who I am, but like my thought.
Speaker 2:That's how I feel, and so like for an example, I again, again I think I said this while we were recording. I may have before so I'll have to repeat it, but I spent more time on your LinkedIn profile today than I ever have on anyone's Just reading through your posts. It was 45 minutes an hour of. You know, I went through four months of posts and there's a lot of posts. I think you're a once a day guy, sometimes twice. Yeah, and there's a lot of posts. I think you're a once a day guy, sometimes twice.
Speaker 2:But some of the things you say it's like you came up with a quote, like one that I fought you on was if a prospect asks for you to send sales collateral as the next step, that deal is dead.
Speaker 2:And of course I jump in and I'm like, ah, I disagree.
Speaker 2:And I had an exact example for why and this was a mastery related example and it was more like early stage of a shipper who's using a kind of next round where they get more serious, and so they wanted to start with hey, send us your collateral and then we're going to figure out next steps from there.
Speaker 2:And this is a very specific, simple example. And I think the point that I think becomes contentious or controversial about some of your posts is like you'll take something that can be way more complex and just simplify and just throw it in your face and it does charge people because it's like well, no, I have an example that proves that that's wrong. Do you not care about the nuance of that? About the nuance of that? Or because you know, and maybe that's part of again the strategy, knowing that it's gonna, it's gonna incite, because I think a few days later there was another post you had that was like oh, people think they can talk about you but and it'll hurt you. But boom, and it was like 400 new followers yeah, so the uh.
Speaker 3:I remember this post and I actually think that you wrote in there. I haven't gone and looked at it since, like that day or whatever, but you wrote in there like part of Chad's strategy is he throws something in and like lets people argue over it, or whatever, and that that is kind of my strategy. My point of this post was really like whenever I hire like a new sales rep and they're like cold calling someone's like hey, send me stuff, I'll check it out like that deal's dead. They're not. I don't like.
Speaker 3:And so like I agree with you that content or collateral as a step, you're very important. You probably couldn't sell anything. But in my mind when I'm writing this, I'm only thinking about like hey, you, I cold call andrew silver. He says this is great, send, send me some information. I want my employees to be like hey, you and I both know you're not going to read that, so if you're not interested, that's cool and we don't have to move forward. If you are, then like, let's set up some time to also go through the content together. And so, yeah, you hit it like right on the head like what I do.
Speaker 2:That's what my strategy is. So that's an interesting point, though, because I so I have struggled in the past with when I was communicating and this, I think, largely played out in my company-wide speeches where I would be articulating a message to what was 200, and then 300, and then whatever, 600 people, yeah, and the numbers kind of just matter from the context of as the bigger the group got, the harder it got for me to feel comfortable with anything that felt somewhat generic, because, or any generalized comment, because I always was thinking who's going to disagree with this, who who's going to be upset by this? Where? Where does this thought not apply? But, like you can't, it would kill a message to in a, in a speech or in a story, to make a statement that is meant to be more meaningful and then go through every single nuance of I'm saying this, but also I understand that it's very specific to this four things. And these eight times, I know it's not going to be like that, and these three times it's going to be different.
Speaker 2:But I'm curious from your perspective, because this is something I've thought about a lot. Like I see that you're willing to just go off the cuff and say something, I guess if that specific situation you were referring is not well detailed enough in the post and therefore it's maybe lost in translation, because you're getting the mind and how we see something to translate with words that everyone else will see exactly how we see is a hard thing, especially in a place like LinkedIn where you're blasting it to 30,000 followers and for everyone that clicks on it that's another couple hundred people. Who's going to see it and who knows how they look at the world?
Speaker 3:Yeah, I don't know how to respond to that. To be perfectly honest, it's not necessarily something that I've challenged myself mentally thinking like should I be providing context for what this means? I don't know. I probably means I don't know, I probably should.
Speaker 2:I don't know if I'm going to, but the thing is, though your posts are, I can tell by the way you write. It's meant to pack a punch. Yeah, because when it packs a punch, that's what charges people, I think, because that's what gets the people to think. Okay, for one, it makes you feel something. I've got that too in my writing, like I want you to feel something from it. I want it to. I don't want to get lost in it, I don't want it to just kind of die on. I want you to feel it, and so I think you have to kind of like you know another post, fyi you can't manage out of a crisis. Your option is to roll up your sleeves, get your hands dirty and lead out of a crisis. Your posts are meant to be written in a way that, when I say them, you can feel it. I agree with that concept, but if you start adding a bunch of context, it will lose a little bit of luster.
Speaker 3:Yeah, I mean, I'm trying to. I don't know if you've ever met Madison, I think you have. I'm trying to like coach her on how to write, because she'll write like a statement and then another statement. That's a clarification of the statement, and when you read it in that way, it's like, ah, you know, like you're like ah, skip, and so like, if you can write in a way that makes someone feel something, regardless of what that is, that's what I'm trying to achieve.
Speaker 2:And when you said that someone told you everyone has an opinion of you, I think you're wise enough to know he's not saying everyone has a glowing. Yeah, I don't know that. He. I don't know if the number is 80 glowing, 20 hate it, or 50, 50 or who knows, I don't know if it even matters. My point, though, is I'm curious how do you personally navigate that like, does that not eat at you at all? Not at all worried, like I don't care? Are you really at a place where you're like I don't give a crap what someone thinks of me, because I'm impressed if you are, I I can't sit here and tell you I'm there, yeah, yet I would like to get there, but, um, I curious.
Speaker 3:I think that it's. There's also this interesting play with assuming who I am online as a persona, but then getting to know me on an individual level and being like, oh shit, this person's actually human and this person is not this like pompous, arrogant person that he writes on. He's really trying to do good, trying to deliver like really good tech for the industry and trying to actually like I really want to do great things for broke freight brokerages and so I believe that.
Speaker 3:I like that play. That's kind of psychotic of me, I'm sure, but like I like the play of people thinking that I'm going to be a certain way and then they get to know me and they're like holy shit, that's kind of a mind trip.
Speaker 2:I mean, I imagine people have described me in similar terms and it probably stems from a overly confident stream of posts over the years, kind of tooting the horn of Molo and our team and brazenly saying as much the horn of Molo and our team and brazenly sang as much. But there's something about what I always felt I was doing was showing how much I believed in the team, and I understand that that sometimes came off in a way that someone might describe as arrogant or pompous. But, um, I was hopeful that I could get more from my team, seeing how much I was willing to go out and fight on their behalf and speak on how great they are. Then I was losing from people who said, god, that guy won't shut the hell up about it, about moloolo and his team. They're not that cool, they're not that great.
Speaker 2:You know, I don't know if there's a little bit of jealousy of people, but I just didn't have the. I think part of the reason I don't post as much as I used to is because I still struggle with that and feeling like I don't know. I don't want people to think I'm disingenuous. I don't want people to think I'm just blowing smoke or whatever it may be, so that's a struggle for me. I won't allow myself to post on LinkedIn more than once a week, and I don't know if that's the right way to think about it. Probably not.
Speaker 3:I think you have a lot more to offer the industry than you probably give yourself credit. I was literally on a podcast, I think last week or the week before, and I was talking about this exact video. I had hired this person from CH. They were like maybe my 10th employee when we were going to come into transportation. I really needed to learn as much as I possibly could about transportation. And he was like, hey, if you really want to learn about brokerage and carrier and shipper relationship, you need to watch this podcast. And it was you, Dan Lewis, and, I think, this guy from, like, Monster Energy.
Speaker 3:And there was this point in this podcast Ron Kane, yeah, where, legitimately, it was either you or Ron Kane who was like look, I don't care about Dan Lewis, the moment he can stop paying for my freight, I will find someone else who will pay to move my freight. And I'm like sitting here and I'm like, oh my gosh, I have to build products for like, an industry where no one likes one another or no one really gets along, and so, like, our whole product has been shaped based off of like okay, I got to create a product that is like broker centric, broker centric that helps push their agenda deeper and only do that, and then if I come out with a carrier product, it cannot be the same. Because it cannot. It doesn't work like that and I think that more founders that are operating in this space I don't know if they realize how much negativity there is on all sides, but that's a really important thing if you're going to build product for this industry.
Speaker 2:It's hard to serve multiple parts of the equation. I'm watching someone else who I don't think is a competitor of yours today, but as you pivot to be a market intelligence platform, they may become one, but they were a broker-centric product that is coming out with a shipper-centric product. Oh, yeah.
Speaker 2:They're not saying goodbye to the brokers, but they're creating a separate product for shippers and the brokers are not happy about it and I think there's risk of them. I talked with their CEO about it and was, and and you know, I think there's risk of them. I, I talked with their ceo about it and was like, just be careful like you know, your bread and butter is there and make sure they're not gonna get too worried about what you're doing with the shippers, because unless you're ready to say, unless you see a bigger market there and that's where you want to go, you know, you, just it's a delicate dance to try to try to do both the first time I ever met jordan graff.
Speaker 3:He told me you can only serve one master. It was like three years ago.
Speaker 2:I think about that statement all the time when we're creating product so that's a good point and let's pivot to that for just a second. Um, and that's more the concept of, like just leadership, I guess, and your kind of value, not value system, but like, how old are you today?
Speaker 2:I'm 35 35, so I'm 34 so and you starting 17. So we both started our companies around the same age 27, 28, 28 years old, which you know. I don't know many people at that age who I think haven't figured out, and I don't mean to say that I think that we did. I definitively did not have it figured out. My point is more to say that, like we really don't know what we're doing, starting businesses at that age or at least I felt like I didn't have like a leadership style that I had crafted and was ready and I didn't have like a series of mentors and quotes that I was living by, certain things that are like a creed or motto or quotes that, like really have shaped kind of how you try to lead your organization, how you try to show up in your organization, like kind of can you walk me through this piece of kind of Chad and how you've approached kind of managing your team and building the team and growing the business?
Speaker 3:Yeah, I want to revert to something that you had mentioned, though In 2017, I did think I had it figured out and I was playing house the entire time, and I think that most founders think that they have it figured out and they really, like you, look back, like I go and look at the decks that we had in 2017 and how we were selling and communicating, and I'm just sitting here like I don't understand how anyone bought anything from us, but that's, I guess. Um, I think the there's this really interesting concept of every message that you can communicate with someone either brings you closer to that closer to them or pushes them away, and this is a concept that I think about all the time, and when avrl first came into transportation, we were kind of like a-holes, like we would tell a customer like you're wrong. There's even a glass door review about me. That's like our ceo yelled at a customer in front. You know, and like over the past like two years, we've really been trying to like change that, like change how.
Speaker 3:We're not here to fight you, we're here to like help you. We're here to even bring tools in my path to market intelligence. I understand that if I want to go after mid-market brokerages, I have to help them understand how to price, how to review their data, how to do these things, and so for us, right now, I can access really great talent. I probably should hire a VP of pricing out of the industry to come in and help mid market brokers look at how their costs are on specific lanes, why they lost money on a specific load, etc. I honestly think that that's like starting to become our responsibility, but it's in this path to like bring us closer to the brokerage, not push us further away as being like they're like. I don't want to be the company that's like we are smarter than the industry. We're not. We're literally just trying to be a part of the industry and help companies actually leverage automated automation, which is which is, a really interesting thing from the change management perspective.
Speaker 2:So some interesting commentary there, because I remember again in the four months of LinkedIn posts of yours that I read this morning. One of them was around. I can't remember how you said it, but the essence of the post was that you want salespeople who are comfortable telling a customer they're wrong, yeah, and you want salespeople who prioritize above all else the customer's best interest, and sometimes that means you have to tell them they're wrong, and I agree with that wholeheartedly. But it is a delicate line to tell because for one, I think my advice to any freight tech company freight tech has been stigmatized in the last few years, not in a positive way, and it's more felt like a cash grab, like a race to value and just wherever we get our hands on it. First we were going to be kind of not freight brokers but also freight brokers who call ourselves freight tech, and now it's like, okay, everyone understands that wasn't the way, so now it's like a race to being a very specific freight tech company. But the piece of advice I would give to people is don't come in and, as you said, arrogantly kind of tell people you know everything and act like you know everything, and that is you know.
Speaker 2:Freight brokers are very leery of that today and I think that's an easy way to to to just lose an opportunity before you even get a chance to to start it, um, but I, but I do agree that you.
Speaker 2:I think what you want to be able to do is leverage your superpower, your niche, your you know, in your case it's it's going to be a tremendous amount of data and a very specific history of automating pricing that no one else has.
Speaker 2:No one else has the timeline that I think you guys do, of how long you've been focused on this solution, yeah, or, at a minimum, you're as experienced as anyone in the industry in doing this, so you can leverage those things to be extremely consultative and help, especially as you think about I like breaking up mid-size, mid-market brokers from especially the big guys, because the mid-market, the 100 million dollar, the 50 million dollar brokerages those guys are way more open to solutions and advice and perspective, especially because, more often than not, the people running them are guys like me who don't feel like we have all the answers and, uh, people who just knew how to hustle and had the itch and the drive and the grit to go, start something and build around a team without all the answers in front of them and just keep putting one foot in front of the other, knowing that you can build a community of people that will help you continue to build a better and better business.
Speaker 3:Yeah, I think what we want to do is like if you're like, if you're that founder, say it's you, you're really great at building culture Like we want to be a part of the tech, like part of the tech. I'm not here to solve every challenge. I'm not here to solve like every single problem that a broker exists with, but I think that for us, we want to take a better approach on how we help them with the change management of it as well, because implementing tech is really difficult and it's really stressful and it creates, like awkward conversations and especially when you go after something like transactional spot bidding like that account rep's been bidding on this forever and now you're going to fully automate that that's a really difficult thing. When you look at how do we compensate our brokers, how do we like structure someone that's cradle to grave in that model versus a split model. It's easier to do in split but like there's a lot of conversations that have to have, I originally thought that brokerages were having those conversations when we would come into play and the big guys do have that we go into mid-market, they don't have that conversation.
Speaker 3:So we need to promote it and we need to foster that conversation and literally be like hey, before we start working together. Have you thought about this? Have you thought about this? Have you thought about this? I honestly think it's tech's responsibility to be doing that. I just don't know if anyone's really doing it.
Speaker 2:What would you say? You mentioned onboarding and I recall again from one of your posts. I think there's a lot of pride that you take in your organization's onboarding process. I think you said that a customer recently told you the implementation was the smoothest they'd ever seen of a freight tech org they'd worked with.
Speaker 3:Yeah.
Speaker 2:I imagine when you started, the process wasn't as smooth as it is today. No, started the process wasn't as smooth as it is today. Can you talk a little bit about one, some of the pitfalls you had over the years in onboarding and lessons you've learned, and then what you've done to really shore up that, to make it a strength in the business?
Speaker 3:Part of our challenge is a little bit different than a lot of freight tech. My first five customers in transportation were in top 10 brokerages, so they had really sophisticated data science, really sophisticated pricing, really sophisticated leadership. Our product that we brought to market and that we tried to sell through was not designed for freight brokerage. It was designed for big data teams that had really complex resources, that knew javascript. And we went into not the mid-market, but like top 25 3pl and we failed like twice and we were like what is going on? These people aren't smart enough. That was a bad mentality for us to have. It shouldn't be. They're not smart enough. It should be that our tech was, too, either sophisticated or designed incorrectly.
Speaker 3:So we did like a full pivot on that product to try and meet the broker where they needed to be met. That is what stimulated all this like, oh, we're going to focus on training, we're going to focus on onboarding, and I feel like, for us, we're really we're kind of like drive, being driven with like the like we will not lose, because we're kind of like being driven with like the like we will not lose because we're afraid of failure type of mentality. And so, for us, we're constantly tweaking onboarding, constantly tweaking how we're going to roll this out. I'm really proud of that post.
Speaker 3:I was Justin at Veritas, because they were one of our first mid-market companies that we actually started to bring on, and he wrote me this email and it was like titled like worst experience ever. And he like wrote this email and he's like just kidding, this is super great, like blah, blah, blah. But like when I got the email, I was like oh no, massive failure. I think we're just trying to like get better at every step and focus on only focus on that our external like or, sorry, internally, like, how do we get better? Not focused on external pressure.
Speaker 2:Yeah. So I think there's such a valuable lesson there and it's applicable in every aspect of our lives, whether it's your personal life, whether it's work, whatever it may be, and that is the example you use that your first problem with the implementation, your first thought, was they're not smart enough. Yeah, they are the problem. To be explicitly clear, you can never solve a problem that someone else is accountable for, but if you can view a problem through the lens of your own accountability, you can always solve it. If you can view a problem through the lens of your own accountability, you can always solve it.
Speaker 2:Yeah. And so to take the perspective of they're not smart enough, there's nothing you can do about that, yeah. If they're not smart enough, there's nothing you can do, yeah. If you take the perspective of my product isn't simple enough for anyone to understand, yeah, then you can solve it. Yes, you can make your product more in line with their capabilities. So I think there's a lesson there that anyone can take, and we can always find a way to create our own accountability in the issue and at least solve for that. And if you're working towards that, you're putting yourself in the best possible position you can for that. And if you're working towards that, you're putting yourself in the best possible position you can, and if you then feel like you've done absolutely everything in your power to own your accountability and create solutions within that and it still is not happening because of something someone else won't do, that's when it's time to cut and say this isn't meant to be.
Speaker 3:That's kind of like led to this onboarding situation. Right, like we make a change in product working really well, meet a customer who maybe doesn't, isn't as successful, and we're like, shoot, we need to go in and teach everyone, like up front, like you need to be thinking about this, you need to think about this, you need to think about this, and so like like, unfortunately, if you're, if you work in product or if you work in industry, like your customers, problems are your problems plain, plain and simple.
Speaker 2:So yeah, how have you seen the API pricing environment evolve in the last two to three years? What have you seen change?
Speaker 3:Super interesting. Api pricing is really interesting From a couple of different perspectives. I'm going to split them up. First, you have certain shippers that are forcing API pricing so no more load board and if you want to use API pricing you have to also accept API tendering. Now you look at a TMS like Mastery. That was built like product first, looking towards the future, You're like, yeah, we can support API acceptance or API tendering, not just EDI. You go and you look at a product like McCloud. That was built 50 years ago. They don't have the ability to do API acceptance. That's a massive fundamental challenge that the industry is going to run into At some point, the more shippers start to adopt APIs. It's like is your TMS ready for this? That's one, I think.
Speaker 3:Two, a lot of 3PLs rely too heavily on market data tools like a DAT, like a green screens, in the sense that they don't understand how they need to price per lane and as you look at a human being looking at like a DAT high, a DAT average, a DAT low, they know they don't use, just buy at the average.
Speaker 3:You might buy 150% to DAT on, like out of Maine, because of the data points that exist there. You need to be thoughtful of that everywhere. One of the things that scares me about API pricing is there are probably 30 or 40 3PLs who have been doing it for five years now and they're really dialed in on how they look at data and how they're thinking about this, and the rest of the industry really needs to look up and be like okay, this is going to come. Even if we don't believe in it today, we still need to figure out how we are going to support it in the future. There's this interesting thing that's happening, however, right now. So you've got some shippers and this existed when you were running Molo they're using like real-time rating for a routing guide and then they have like a secondary API for their transactional like spot freight. We're seeing some shippers right now massively limit the number of customers that you can have on a specific API, so like L'Oreal six.
Speaker 2:Six carriers total. What's the thought there?
Speaker 3:I think the thought there is that they want. I think that there's a lot of um. I think that there's a lot of nervousness around will a3pl go bankrupt and so we're going to push volume to billion dollar 3pls or large carrier groups. I think I really think that that's. It's real. I think dhl cut all of their customers that were below a billion in uh for transacting on the spot freight on the spot market.
Speaker 2:Um, that was interesting to see wait when you say dhl cut, cut their customers.
Speaker 3:Oh sorry, brokers that were calling for them yeah, cut the brokers. Yeah, if you don't got a brokerage doing over a billion. You cannot haul for it.
Speaker 3:They won't work with you, yeah, and I don't know if that's super specific to the shipper, but if you looked at some of the mattress companies, 100% happened, and I don't know if it's a fear for fraud or a fear for bankruptcy or a fear for not being able to secure capacity, I don't know what. What. What drives that? I'm not a shippers, I don't know. Yeah, it's interesting though. Yeah, I think, um, I think the other thing that's really maybe more concerning for me is if you're a TMS provider on the shipper side say, you're like a MercuryGate or an E2Open or a BlueYonder or an Emerge and you're charging the carrier access to your API Some of them are really expensive, some of them are like 20 grand annually Can the broker really cover the margin in order to pay for that API pricing? Is that one thing? But the other thing is like, does the shipper know that the tms is also charging their capacity?
Speaker 2:I don't know so I know the answer. I know for a fact the answer is not always yes to that last question, because I had a situation where we got in with a new shipper. Uh, they were a friend of the contact with a friend of mine who had worked somewhere else and they were using a tms that is a newer one from the last five or seven years, that's for shipper a shipper facing tms and they were charging us per EDI transaction. I think it was like a buck a load, or two bucks a load or something like that. And I was like this is insane. I've never seen this from from one of our providers, like from a TMS. That's. That's not supposed to be. Like I'm negotiating here, pricing everything, and these guys are just the vehicle through which we have our relationship. They shouldn't be charging me anything. And I went to my contact and I was like this is ridiculous, I'm not paying this. And they're like why are they charging you that? I was like what do you mean? Why you?
Speaker 3:don't know they're charging you that.
Speaker 2:Yeah, I said let me introduce you to E2O, and they signed a contract with E2O to open three months later. But I think that stuff is very shady and I don't think it's right, I think that I don't know. Okay, so there's two ways to think about this. So for one, the example we just used of a TMS provider charging the carrier without the shipper knowing that is absolutely ridiculous and you deserve to lose your customers if you're going to try to play that game, yeah.
Speaker 2:The other question is okay if Blue Yonder or someone says, hey, walmart or L'Oreal or whoever, we're happy to do this with you and, by the way, we're going to charge Molo and RXO and all these other guys $2 a load or $20,000 a year or whatever it is, and they say, okay, that's another story. I still don't like it, yeah, but at that point at least you know the rules of the game before you sign up to play. And then you've got to decide how to play and I think that the right thing to do is probably to make sure you're communicating effectively to your shipper that I'm going to be sending this money right back. You're paying for this, I'm not paying for this. Like it'll come up in the rates I'm charging you.
Speaker 3:So I've actually had that feedback from some of my customers that they are sending more expensive rates through to cover the comp on that.
Speaker 2:Why wouldn't they? The truck driver is not going to pay for it. He's not saying okay, I know I usually run this lane for $1.90, but I know you're going to API price this load for me, so I'll do it for $1.85. That's not a thing. The driver doesn't care. I mean, his price is his price, based on his cost. He's not involved in the API pricing. That's going on two levels above him.
Speaker 3:Yeah, I feel like we're really early in on the API. They've been around for a couple of years, but I think we're really early in on the strategy of how they're going to get used. Like the shipper, if you can get a better rate by sending an email quote versus a load board versus an API, why wouldn't you hit all three? And I really feel like certain shippers will end up doing unique gamification of how they're sourcing rates.
Speaker 2:Yeah, my hope and ask, I guess, to the broader community is just we are transparent about how we're playing the games we're playing. I think you know, pitting my system design against my sales reps thought process, you know, in a world where you try to do an email and a API price on the same lane, is not a game I'm hoping to participate in, right, and you know, I think actually, as I say, that there's some accountability. Again, this is where do you want to own your accountability or do you want to pass the buck? But I do think it is our responsibility as the broker to, if there are three methods through which a customer may ask me for a price, I need to make sure that my system is structured in a way where I can be consistent in delivering a price based on the three methods, because I'm fairly certain the means by which I procure capacity is completely independent of the means by which I quote the lane. So I think, if we're going to be accountable but that's the hard thing, I think is I'm going to pivot here, but it makes sense is how have you navigated the kind of man versus machine battle that I know?
Speaker 2:You know the decision makers you're dealing with who are coming to you because they want API pricing solutions. They're not the people who necessarily some of them, probably, but it's more often the people three levels below them who own the relationships with the craps and the l'oreals of the world who are doing the quoting, who have managed that freight for a decade, yeah, and feel like they know the rates inside now. Those are the mistrusting folks who don't just want to pass all the quoting that drives their take-home pay. They just want to pass. They don't just want to pass all the quoting that drives their take-home pay. They don't just want to pass it to Chad and say that Chad's got a system that will procure the right rate for us, based on our own history and all that. How do you think about that developing buy-in from salespeople who are on the front lines, who know the business and that kind of tribal knowledge that has always been so challenging to automate?
Speaker 3:I think that as API pricing, or automated pricing, becomes more prevalent throughout the industry, you almost have to run it like you would run carrier sales as an organization, and so our best customers I'll use an example traditionally have an analyst that is reviewing data and then they meet with the account team on like a Tuesday and they review the next week for the next two weeks out. And I think it has to be this more collaborative workflow with the account rep. You are 100% right. The account rep knows very unique things about like the account. They know what happens when it's about to be Christmas tree season, et cetera. Like they, they have so much internal knowledge. Now they should be setting the rules for the automation. I firmly believe that. But they also should be the one driving the strategy Maybe not the one tweaking it, but literally driving the conversation of hey, we need to think about this.
Speaker 3:Like hey, diwali is coming up, we know that carriers are going to be heading back into Fresno, heading back up into Columbus, ohio, and then on Tuesday they're going to be heading back out to Dallas. Like, we need to go in and adjust rates to think about that. But I think that it is a much more collaborative approach than people might tend to believe it needs to be.
Speaker 2:Yeah, so you're saying that you're not really taking the man out of the equation, correct? You want to give the man control of the machine.
Speaker 3:Yeah.
Speaker 2:And I think that's maybe what is most misunderstood about. The most effective way to do this, yeah, is the goal is to make it so the person who knows the most doesn't have to manually leverage that every day, yeah, but rather can more effectively weekly manage it. More effectively weekly manage it, and that's maybe it's every Friday at four o'clock I send an email with all my thoughts for the week on what's going to happen in the freight market in my lanes. Yeah, and it could be. You know it's, it's it's April 15th and I move a lot of freight throughout the entire country van and reefer pretty, pretty spread out and coming into this next week.
Speaker 2:My email to my analyst is hey, we're expecting surge rates out of Florida and Georgia and maybe South Texas with produce starting. Yeah, expect to pay probably 20% to 30 percent more on any lanes we have out of there. Yep, and conversely, anything going into those areas we should maybe buy 20 to 30 cents cheap, better, 30, better, yeah, um, and then you throw that into the machine and then the machine does with it what it does, so that you don't have to spend all day doing that. That's probably, and that's just one example, but a way that this should go.
Speaker 3:Correct and I think the reason, the importance for the analyst you hit on something that a lot of people don't necessarily think of in their head, which is like, hey, capacity is tightening in Florida. What I want the analyst to do is question like, okay, cool, but what's going to happen in Georgia? What's going to happen in South Carolina? Because it's going to inverse and we are going to need to reduce, we're going to need to buy below the market in those regions if we plan to win any freight there. And that's why I say it should be more of a conversation.
Speaker 3:And then, looking at the data, I think what tends to happen in a lot of cases is the broker like, when we give the broker a control, like a control, they're like, hey, I lost money. Outbound Georgia, increase the rate. And we want the analyst to look and be like well, that was actually out of Douglas and we used like a DAT average, but they had a deadhead 200 miles to get there. We actually probably should have priced at 20% premium to the DAT average and that's why we lost money. Let's not go in and kill all of our other rates. Outbound Georgia, let's go in and adjust that and tweak it. And so I think it needs to be this combination of looking at the data and the broker definitely being the smartest person at bidding, yeah.
Speaker 2:So I'm curious how do you know when a piece of information becomes meaningful versus an outlier? I think we can use the exact example you're talking about, which is the loads out of Douglas. On this example, we booked a guy out of Atlanta. How do I know? Did I only book a guy out of Atlanta today because I got unlucky and that 200 miles deadhead was just one bad, bad day versus? This is going to be a theme for all loads we ship out of here, like what's the thought process? If you, if you can? This is probably a hard question to answer, maybe, but I think it's applicable in a lot of cases.
Speaker 3:So we tend to go in and look at rates from a fundamental level and I'll use like Douglas Georgia as the example. So the rates that come out of Douglas actually are sourced from Savannah, but we can't necessarily use that as our exact rate. We might need to create a float that lives on top of it and so with us we traditionally have a cost to hire model, like call way upfront when we're onboarding a customer to be like hey, where do you buy really well, where are you buying not as well? Let's go in and do an analysis on this up front so that we can help them start to think about where there might be inconsistent flaws in data and they're really prevalent. I'm going to use an example a little close to Chicago.
Speaker 3:Rates in ALSEP come from Juliet, but capacity probably comes from Chicago. Like, can we really use that as a rate or do we need to go in and do some data manipulation to come up with a better rating structure for how we think about cost? And that's what we're trying to go in and tweak and change and teach them on. Hey, you didn't just lose money at Alcip or into Alcip. That this is why and I think Maybe this is a reason why people have been resistant to automation is they don't understand the why. If I don't understand the why, then I think it's just bad, versus being like oh, that makes sense. Same thing happens with me out of Denver. They tend to draw that correlation. That's what's relevant to their experience not.
Speaker 2:It's interesting to me because, as I think about your role and the value you provide, so there's you hinted at almost like a consultative initial approach, like let's, let's just get a baseline for where you are. And what I think is interesting is I had a conversation at tia with another freight tech vendor and they were telling me all this traction they were getting and then they were telling me how essentially part of their solution was to take all of the data that, let's say, they have 50 customers, they aggregate all of that data and it's available to the 50 to use. And I think that's interesting because for one you you know, just like your website had nothing on it out of fear of competitors copying your stuff, brokers feel like they have developed an edge in the capacity they've developed or the lanes they've got, whatever it is. And I don't know how brokers would feel about knowing that their data is being used to help other people, even if they're getting the benefit of other people's data helping them. And I just don't know if there's a morality issue or if there's an issue at all, or if this is part of what should be.
Speaker 2:A differentiator for someone like you is, as you look at, your five automated pricing competitors. If you can say I've got eight of the top 10 brokers amassing I don't know $40 billion of spend. I use all of that data to determine what market pricing should be on lanes or something like that. Is that beneficial to everyone? Is that problematic?
Speaker 3:How do you think about that aspect of this? So, for me and AVRL's perspective, we don't own our customers' data. We pipe it directly to them. We want to just help them analyze it and look at it. I do see that there would be a massive problem with me sharing pricing data across all of my customers. It doesn't mean I'm not going to go in and share best in class strategy with them on like, hey, you're buying really bad here and this is the reason why. Or hey, you should be thinking this way, this way and this way. Right now, we probably think we automate about 25 million spot transactions a month right now. I think that there would be a big problem if I was sharing that data across my customer base, because everyone does source capacity differently, which means that everyone does have different rates in specific markets.
Speaker 2:And, at the same time, that you would agree, though, that it would be helpful for me to know that I'm buying. You know, maybe you don't give the exact, but it's like I'm buying at an f grade relative to my competition in this market. That tells me I should be really working on buying better there. Yeah, I just don't, I don't know. It's an interesting thing because it's a, it's a one, it's. You know, if I were to say, and I'm going to ask you this, but because I'll just ask you, how many different ways are there to skin the architecture of the automated pricing cat?
Speaker 3:So many infinite.
Speaker 2:So many brokerage where, when you look at how Molo procures capacity against, forget Molo. If you look at how Trident procures capacity against Axel, it would be hard for them to prove to me something is like substantially different about how they're doing it. But if I were to compare you to any one of your competitors, is it likely? It's going to be very different how you guys are architecting the process.
Speaker 3:Definitely, because we believe in full base rate transformation. We don't believe that the rate that a DAT gives you or a green screens gives you is the rate that you should be using to procure on a specific lane, and that's lane specific. So I'll give you like, just like an example of something um, you might buy 25 below the dat average based off of where you have available capacity, whereas you go to like a tql, maybe they don't have as good of pricing structure on that lane. They buy 15 to dat, and so what we want to do is help them understand like, where do you buy below the market at still positive margin? And so it's kind of like depends on the strategy that you want to run. So what we do is we come in, we're like hey, you want high volume, low margin, low margin, high volume. Let's find the floor in the ceiling. Let's lift off here.
Speaker 3:Let's not play this like shotgun approach to the market. If you play like the shotgun approach, you don't win. When you do win, you probably lose money, and you also don't understand how you could make minor tweaks and changes. So if I understand what it costs for me to hire out of the market, then I only have to add small premiums because my cost structure doesn't. Maybe it changes by mode or accessorial or certain things like that, but it's relative across a much larger grouping of customers. And so when I'm focused on automation, I'm not focused on automating one or two accounts.
Speaker 3:How am I going to come in and help you automate 500 accounts or 300 accounts at scale one, and you have to be able to manage it, and we can't, and we need to use it as like a profit center as well, and so we're trying to architect it in a way where, like you know, you take like blue triton, blue trident or nestle, like they'll pay trend brands yeah, they'll pay more on a lane than somebody, than an anheuser-busch imbev. We can't have the same cost structure, yeah, or can't have the same cost structure, or maybe we have the same cost structure, but one needs a discount, not just an increase in rate. And so for us, what we're trying to really help them understand is what does it cost for us to obtain capacity or procure capacity out of the market? That's what we're really focused on.
Speaker 2:Yeah, I guess that makes sense that how you look at the problem is way more strategic, and it makes sense that how you might approach that versus any one of your competitors would be very, very different. So interesting, yeah. Where do you see this business going in the next three to five years?
Speaker 3:It's a difficult question, I don't know. I like I had this like quote like pops in my mind. It's like planning is it? Planning is arrogant. Um, and it's very specific to that question because when I first started abrl, I was like, yeah, we're gonna sell this company and then, like you, we would do awful. And like, right now I'm really just focused on doing like a very good job. We like immediate.
Speaker 3:Next, like 2025, we are going to be hiring data people from inside industry and outside industry to come on and help our customers be better at buying, so not just literally be automate their pricing. But how do we get dialed in to exploit the most yield in an inflationary market? If that's where we're heading, that's a really difficult thing to do, because the rates that you get today for seven days out are not going to be the rate by the time we get seven days out. You will probably lose money unless you're really focused on how the market is shifting. That is our number one thing. This pricing team that we'll be bringing in is probably going to help us come up with some pricing tools as we push in towards to the market intelligence level. This doesn't mean that I'm going to come in and compete against, like DAT definitely not, but if someone wants to use.
Speaker 3:DAT, how do we get better at using it? If you want to use a green screens, how do you get better at using it? If you want to use an ITS like, how do you get better at using it? How do you get better at using that in conjunction with highway? How do you get better at using that in conjunction with other items like maybe like gen logs, etc.
Speaker 2:And so thinking about pricing as this more ecosystem around capacity versus just pricing and how do you feel that, like ai, plays into all of this conversation, given the hype around it today?
Speaker 3:ai is me or I don't know man. I think, um, I'm not as bullish on ai as a lot of other people are, and I'll use an example like if ai could be used in a way to really augment pricing, we would have people using machine learning and ai on the stock market. There's maybe one or two funds that are doing it, but there's so, so many external pressures to freight that I really don't think that you can use it in a way that I that would eliminate the human. I think that there are certain things with like weather that you could probably augment, or capacity, like like tender rejection, volume data etc. Or benchmarking data, but I really think, at the end of the day, the human being is going to have to control transactional spot freight. I really believe that there's no way around it. I really believe that.
Speaker 2:Yeah, I don't know when. I do think I think there's hay to be made with how AI can interact with carriers for brokers. I think there's a lot of opportunity there, but I'm still unsure on a lot of it, so I'm curious your thoughts on it.
Speaker 3:One of the challenges that existed pre-pandemic is that machine learning and these long language, like these LLMs, were really expensive to deploy. One of the things that we look at when we're looking at new tools, like we've talked about, like, oh, do you come out with like an email coding tool? And we're like, ah, that's such a race to the bottom. Whoever is going to be the cheapest wins that game, unless you do something very unique. You look at like the guys at vooma they have product ties, each individual use case whereas you go and look at like a happy robot they're a platform.
Speaker 3:Well, I personally have seen like challenges with giving someone a platform and being like go build whatever you want on it. Especially in this space, I think people need more help getting to the actual deployment of the use case to create like real value there. That was the challenge that I ran into where I thought everyone was too dumb to use this platform when it was like, ah, we need to go in and productize and deliver the actual product. And so I think that AI has a long way to go into meeting the broker or the shipper or the carrier where they need to be met.
Speaker 2:What would you say is the most valuable lesson you've learned in the last eight years in building your business?
Speaker 3:Seven years, oh my gosh, most valuable lesson.
Speaker 2:It's a hard question.
Speaker 3:It's a super hard question. I have one, and it was when we were first coming into the market and we were doing like super well, we got money thrown at us like crazy and we didn't take it. And so both of my funding rounds that I had taken were safes, which means my CTO and my ownership stake are 100% of AVRL. We retain like full control, and I have some friends that went and raised like really big A rounds and B rounds and they got put in a really difficult spot and now I've had some of my investors come back to me and be like you were really smart about not taking that money and doing that.
Speaker 3:And I constantly think about a lot of the content that's written online about venture capital and how you should fundraise and how you should build a business, and a lot of it's built based off of what the VC wants you to believe and what they want you to read.
Speaker 3:And I really think that you need to spend a lot of time with other entrepreneurs who have gone through it, learned the hard lesson taking the money when they shouldn't have and so I think building a community of people that you can call and ask questions to is really undervalued. I really think that it's really undervalued. The only reason why I raised a safe the very first time was one of my buddies, michael Greenberg, called me and he was like don't raise an equity round, raise a safe instead. And I was like almost had already raised it, we had done capital calls and we changed the position on our deal, or like we changed the terms on the deal like last minute, and that really saved me. And ever since that time I just like really felt like having a network of entrepreneurs that I can call and ask them what they would do because of an experience that they've gone through.
Speaker 2:Yeah, the experience is so valuable. It's one of the reasons I really, really want to run another business someday soon, because I just, you feel like the second time around. You've just got to have so much more confidence in yourself, having done it once and knowing where you screwed up and knowing what not to do again. So I definitely relate to that idea of being able to talk to people who have done it before, because man is it different when you're doing it for? So I definitely relate to that idea of being able to talk to people who have done it before, because, man, is it different when you're doing it for the first time, or talking to somebody who's done it? What would you say you're?
Speaker 3:most proud of. I think that we were told that our model wouldn't work, about us not advertising and not marketing and not doing that, and I'm not sure that that's what I'm most proud of. I think us being able to recruit really good talent and not marketing and advertising is something that I'm extremely proud of, and the more that our name gets out there, we've been getting like like a lot better talent. But the first couple of hires that we had to make, people just thought our company was like fraudulent or like that it was a scam, you know, and so like trying to recruit really good talent and get them to believe in something that they can't see publicly has been really, really challenging and I'm like and I'm really proud of that.
Speaker 2:And what about for yourself? In what ways are you most proud of yourself and in how you've where you were seven years ago versus where you are today?
Speaker 3:I don't know if I'm like super proud of myself yet. I think that I still have a lot to learn and a lot like to experience. I think that I'm really happy with myself that I made some of the more hard, like the harder, choices and went down that path like not taking a lot of venture capital, not overextending my cap table, not giving up control. All of that really set us back to be harder, but the point that we're at now is much better from us being able to pivot on a decision or roll out a new product or do something like that. Going through those moments by myself or with just my CTO, where we're like, oh, it'll be so much easier if we do that. There's a lot of growth that I've experienced going down like the more, the harder path.
Speaker 2:Yeah, but like specifically, if you were to look at your like leadership style or your communication style, how you manage people like where have you personally seen yourself grow in the last seven years? What is something that, if you were to look at how you are today versus how you were seven years ago, that you're like I'm proud that today I do this. Before I was like this.
Speaker 3:This is a difficult question um, I think I deep is the point I think I ultimately care more about doing the right thing now than the money and I think that when I started avrl I just wanted to be rich, like that's. I think why a lot of founders they like say freedom, blah, blah. I really believe that like one of the only ways to be like you get a defined success, but like the ultra successful, is to start a business and sell it. And now I care so little about that's, been scammed so many times by other technology providers that I'm here and I want to be a company that didn't scam the industry. We came in and actually lifted it up and helped support it and move it into its next place. And so like this mental shift of like caring about money versus caring about legacy, and where we go and what we do and what we accomplish is is much different, like I, I would say like black and white, from where I was yeah, welcome, welcome to a mission driven mindset.
Speaker 2:Yeah, it's beautiful, it's a good place to be.
Speaker 3:Sometimes it sucks right because you're like that's not the best decision I should be making for my business, but I know it's the ethical decision that I should be making, which ultimately helps my business.
Speaker 2:Last one when do you still need to grow? What are you working on for yourself that you still need to develop, to mature, to improve?
Speaker 3:um, everywhere, um, but I'll be like very specific. I think ryan trapper is going to kill me, because I haven't finished this book that I've been reading, but I'm also rereading it. There's this book called ego is the enemy, and it talks about every single essentially entrepreneur who wants to start or someone who wants to do something great has to have ego. It's on one of these shelves somewhere, but then, ryan, ryan, holiday, right, yeah, exactly yeah, and that. But then, like, ego can also be the thing that defeats you.
Speaker 3:And so, finding balance between when to leverage ego and when to not leverage it I'm nowhere close to being good at that yet, and it's something that I being good at that yet and it's something that I hope to be really great at, but it's something that I'm, like constantly thoughtful of. Every day is like, ooh, is this getting the best of me? Is this doing this? Should I write someone and be like hey, you know, I've kind of been a dick to you, can I clear that up? And and not, you know, and that's something that's really important for my future growth.
Speaker 2:We share that. We share that I, uh, I think I think ego is fascinating. Um, I think people don't understand it enough. We don't understand enough. I don't understand enough today.
Speaker 2:And how it? You know, we, we, we, we, we use our ego to protect ourselves and it's, it's all just like an image, it's all, everything's just this manufactured perception in our own mind of how people see us and how we think they see us. None of it's necessarily real, and if people see us, we have no idea how people necessarily see us ourselves. But our ego is there to, like, try to protect us and create this layer of protection, I guess. But there's just, I don't know. There's so much to it and I've definitely been someone who's been accused of having an overinflated ego, which is really just an underdeveloped ego, I think is what I've come to learn about it. An overinflated ego, um, which is really just an underdeveloped ego, um, I think is is what I've come to learn about it and it's, there's a lot there.
Speaker 2:I my my therapist actually, as I was starting to read to this podcast journey, when she and I were talking about ego, she asked me to read Howard Stern's book. Um, because, yeah, he, you know, I haven't read it with like a really interesting celebrity or famous person, but you see his style and how his ego transforms over the years from being someone who really just cared about himself and getting the big story and calling you out on the big thing you're dealing with or whatever, versus being someone who can be compassionate and care for someone else and try to lift them up, versus pushing their own initiative and agenda. So I don't know, there's a lot of work that I think a lot of us could do on that and I think the first step is really awareness. I appreciate you sharing that because it starts there and once you get there it's like now.
Speaker 2:I start to like when I first started doing the ego work, like a year ago. You know you're almost fighting the idea because you don't want to admit. That's your problem. But then once you're ready to say, okay, I think there's something here, I think I have work to do here. You then start to notice it in your daily interactions and you notice where, like, something you said may have been driven by ego more than by what you convinced yourself was the reason you said it definitely, um, and that's just one step. So I don't know.
Speaker 3:I'm on that journey and I've got a lot of work to do, but, um, I think it's interesting it's a hard concept because it's also what makes someone, can make someone, great and like that's what's such like a this is like such a double-edged sword, is like it's a thing that can make you great and get you to a certain point, and you got to find balance in it, or it does the opposite of what you need 100%.
Speaker 2:So Well, we've been an hour and a half, so you know that's how we feel and you got any parting thoughts for our audience here. I feel like we've I've tried to tap, like we've tried to tackle, I think, as much as at least was on my mind.
Speaker 3:No, it was great I had a great time.
Speaker 2:Well, listen, man, I appreciate you coming on to our audience. Thanks for listening and we'll see you next week. Thanks, man, have a good one. Thank you.
