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. #60: Jin Stedge, CEO & Cofounder of TrueNorth
Andrew sits down with Jin Stedge, CEO and cofounder of TrueNorth. Jin grew up in a family of owner-operators, including her dad, uncles, and grandparents, but didn’t see herself in the family business. Instead, she headed to MIT, earned an aeronautical engineering degree, and built her career in consulting, HR tech, and — autonomous trucking. But Jin knew truckers had more immediate needs and that's how the industry pulled her in.
In this episode, Jin also talks about:
- The evolution of TrueNorth, which evolved from being a carrier to an AI load board with a virtual dispatcher named Loadie, and what she hopes the business looks like five years from now.
- The biggest challenges of building a load board, the necessary features and qualities of an AI load board, how TrueNorth approaches fraud, and what new solutions could improve load boards.
- How technology should enhance rather than replace the human connection to make freight relationships more successful.
- Raising a $50M Series B with Sam Altman as an early backer, how she made the decisions to use the money and what she may have done differently, and best practices for staying in touch with investors, including her “Weekly Reflection.”
- Running the business through maternity leave and early motherhood.
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*** 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 FreightPod listeners. Before we get started today, let's do a quick shout out to our sponsor, rapido Solutions Group. Rapido connects logistics and supply chain organizations in North America with the best near shore talent to scale efficiently and deliver superior customer service. Rapido works with businesses from all sides of the logistics industry. This includes brokers, carriers and logistics software companies. This includes brokers, carriers and logistics software companies. Rapido builds out teams with roles across customer and carrier sales and support, back office administration and technology services.
Speaker 1:The team at Rapido knows logistics and people. It's what sets them apart. Rapido is driven by an inside knowledge of how to recruit, hire and train within the industry and a passion to build better solutions for success. The team is led by CEO Danny Frisco and COO Roberto Lacazza, two guys I've worked with from my earliest days in the industry at Coyote. I have a long history with them and I trust them. I've even been a customer of theirs at Molo and let me tell you they made our business better. In the current market, where everyone's trying to do more with less and save money, solutions like Rapido are a great place to start To learn more. Check them out at gorapidocom. That's gorapidocom.
Speaker 2:Welcome back to another episode of Freight Pod.
Speaker 1:I'm your host. Andrew Silver joined today by, per usual, a special guest. Today's guest is Jin Stedge, ceo of True North. Jin, did I get your name right?
Speaker 2:You did. I realize you probably never said my name out loud.
Speaker 1:I have not in any setting other than right now. You're right, and I typically just try to get it. I throw one guess out there and then I ask the guest if I did it right and I think I'm batting like 75%. Pretty good, your name's not hard, but there could be a miss there.
Speaker 2:Yeah, I get mistaken for Jim Stedge. A lot over email and then people expect to meet Jim Stedge and they see me and it's fun.
Speaker 1:You don't look like a Jim.
Speaker 2:I sure don't. Thanks for having me Excited to be here.
Speaker 1:Yeah, happy to have you. So let's start with your background, and I mean you don't have a traditional freight background and I think that's fair for a lot of people in your shoes in the kind of tech space supporting transportation, not always coming from freight directly. Yeah, but how did you end up in freight?
Speaker 2:So I'll start with where I started, which is not where I intended to end up, I guess, which is my whole dad's side of the family are owner operators. So my grandparents started in the 80s and then my whole dad's side of the family, so very blue collar working class. My dad enlisted in the army when he was 18, went to Vietnam when he was 20, if you can believe it. Like such different times back then.
Speaker 2:And I came back to the family business and so by the time I came around, it was all my like, uncles and cousins in trucking and I wanted nothing to do with it. I don't know if it was like that for you with your dad being, you know, like a legend in trucking and I wanted nothing to do with it. I don't know if it was like that for you with your dad being, you know, like a legend in trucking. Did you want to work in freight or did you want to get out?
Speaker 1:I was very interested early and most of my career that interest stayed at a high level, Like I just was. It wasn't like I wanted to do it cause he did. It was more. I was 16. I wanted to work, I wanted to make money and he had a business that coyote had just started and they could use interns, and so I kind of jumped on the bandwagon that way and you interned in high school my own kind of yeah in high school, oh cool.
Speaker 1:My first job was I was actually a baseball umpire when I was 13, and I did that for a couple of years. I always wanted to work, though, so I just wanted to make money, yeah. So I was an intern. I mean, Julian Haynes was the other intern. We were the first interns. He was three or four years older than me. We went to high school together. He works for RPM now, but had a long career at Coyote, moved out to Europe for them, but, yeah, it was one of those things where it was an opportunity, jumped in, fell in love with it kind of deal. Is that similar to your world or no?
Speaker 2:No, I wanted nothing to do with it. I was a total nerd growing up. I also wanted to make money and so the best way was tutoring. So I would like tutor under the table all through, like middle school, high school. And then I told my parents I wanted to go to Harvard and they were like, okay, I guess you better study more. And they were super open to it, even though, you know, they didn't go to college themselves and didn't know anything about it. So I got as far away from the trucking world as I could.
Speaker 2:I studied. I started in neuro and then switched to aerospace. Neuro was really cool. Neuroscience. I worked in this lab where we experimented on rats and we studied the basal ganglia, which is the very like center of your brain, um, and it's it controls a lot of addiction and ocd, and so I like tortured rats. As a freshman in college it was really, really tragic. You could, like you know, measure the brain, brainwaves, as you, as you you know, gave them OCD problems, and so I couldn't handle the lab stuff, so I switched into planes and rockets, which is cool.
Speaker 1:So so you were actually in. You were trying to create addictions for the rats.
Speaker 2:Yeah, yeah, it was sad. So what we did was so you get these rats and you input, like put a bunch of stuff on the brain like electrodes, and you measure their electrical activity and we would simulate OCD. And the way we did it was we put them in this maze and when we would give them food we would play this sound. And what we started to do was first it was good because, like food sound, you associate those with good things. What we started to do was first it was good because, like food sound, you, you associate those with good things. And then we started dropping water on their nose every time we played the sound and they would like wipe it. And then after a while you play the sound and you don't drop the water and they're wiping anyway, and so they become to associate the sound with something good food and something bad, like stuff on their face and they just like have problems.
Speaker 2:It was really really tragic, um, and, like you know, the postdocs got to experiment with monkeys, um, and I think they gave like cocaine to monkeys. It was just like all this crazy cool stuff. But I couldn't handle the lab work, so I changed one major yeah, I don't know if I love that.
Speaker 1:Once you get into the monkeys and the cocaine I think it feels a little too human and I don't know, I don't really like it it is, but that that's a good thing you changed yeah, that's how you make progress, though I think addiction is really interesting.
Speaker 2:Um, like a lot of like OCD is really tied to addiction, and especially in like really high performing people. They're like a high correlation and it's just this whole dark side of the human brain that's fascinating, but other people can study it.
Speaker 1:It's also highly correlated to ADHD.
Speaker 2:Yes, it is.
Speaker 1:And people with ADHD. There's an often a side effect of both OCD and addiction.
Speaker 2:Absolutely.
Speaker 1:More naturally wired to end up down that path. Yeah, I don't know if you got into that.
Speaker 2:They're more naturally wired to end up down that path. Yeah, I don't know if you got into that. It sounds like you know this from a personal experience.
Speaker 1:I'm also very prone to being addicted to things and going all the way in, and so I wanted to study it. Yeah, I mean, I have highly addictive tendencies, and when I learned about ADHD in the last year and in learning about ADHD, I learned about the connection to addiction and OCD, and I have Tourette's too.
Speaker 2:So it all kind of winds together into this kind of chaotic being. I guess that I am, but like I appreciated how honest you were, especially like someone like me. I've always felt an outsider in like almost everywhere, every situation, and I see you, you're like the ultimate insider, especially in this industry. And to see that you grew up you know like well-to and you're successful and you're athletic, sports, whatever. But to hear the personal side, I felt really connected to you, even though I, on the face of it, have nothing in common with you, and so I thought that was special and, yeah, I appreciated it.
Speaker 1:Thank you. I guess that was the point of it, right To some extent, was to try to connect with people and put myself out there in that fashion. I guess, yeah, you could call me an insider, in that I've had plenty of opportunities and have made the most of, have made as much as I could with them and networked, and certainly a different path to how we got to where we are now than yourself. But back to you and I will preface this because I will mention for the audience that doesn't know Jen didn't ask me before we started if it was okay for her to ask me questions and I said 100%. I said it's always okay for the guests to do whatever they want.
Speaker 1:Oftentimes the conversation is just me asking questions and the guests answering them and kind of telling their story along the way. And Jen was like is it okay if I do something different? And I said by all means so. As you've already noticed in the first few minutes here, there may be a bit of a back and forth as we go through this, but we will get through all of Jen's story, all of True North's business and all the interesting things that are tied in there and there may just be some bits and pieces of my own nonsense tied in, so figured I'd share that, as people are trying to figure out what we're talking about today.
Speaker 2:Yeah, it's fun for both of us. Okay, so back to. So I wasn't. I'm in college, I have no idea what I want to do. I joined this major cause. I thought airplanes were cool.
Speaker 2:I it like kicked my ass. I mean MIT. I was a medium fish in a very, very, very small pond in high school. And then you get to MIT and everyone is like the biggest fish in the biggest ponds, and so I got my ass kicked. But it was a really good dose of humility for me. Learning I wasn't the smartest and it opened like every door for me after that. You know, having a degree from MIT really, really helped my career.
Speaker 2:So after MIT I still didn't know what I wanted to do and so I like sold out completely and went into management consulting. I figured, you know, I'll learn some stuff, make some money. It was fun. We did get to concentrate in aerospace and defense projects. So, like for my internship, they sent me as a 20 year old to this rocket manufacturing plant and they got to see how the like the rockets were made and like find efficiencies and whatever, and it was. They really hooked me. So that was super fun.
Speaker 2:For a little bit I got to like be in rooms. I didn't deserve to be in. You know, like CEOs of Fortune 500 companies didn't deserve to be in, you know, like CEOs of fortune 500 companies, and I was, of course, like just in the back taking notes, but you get to observe all those things and, um, it was super cool and I lasted 18 months and I had to get out of there. So, um, I moved to San Francisco and I joined a company called Zenefits, which is no longer around, but, um, it was started by Parker Conrad, who went on to start Rippling, which is another big company now. I don't know if you've ever heard of either of those companies.
Speaker 1:Well, I've certainly heard of Rippling because of a fascinating lawsuit that they're now a part of oh yeah, it's spicy. With their biggest competitor. I mean, that is corporate espionage and for those that don't know, we're talking about rippling suing their competitor, deal del, and I guess the way this went down is like deal put an undercover employee into rippling, accused or supposed as, part of the lawsuit.
Speaker 1:That's what it says allegedly, I should add, and rippling, caught on to this like created the leverage slack to create, I think, like fake. They created something fake as like a, a paper trail that they wanted to see. If this you know trader employee, would you know walk down the trail, and they did and it got so far, as I think. When they caught the person they brought in I don't know if it was the cops or like someone to like a court person to like take this person's phone, and the person hid in the bathroom and was like I will not give you my phone.
Speaker 2:You read all of the notes.
Speaker 1:I read through the whole thing. Yeah, I mean I was fascinated because I also saw there's a similar case. There's a similar case I don't know if I should say similar but there is another case in our own industry right now where Flexport is suing two of their old employees claiming that they did something similar, where they downloaded a shit ton of their data and used it to build their own product.
Speaker 2:It's an interesting thing, I guess, going on in the space. I mean, parker parker is an absolute savage um, and what I really uh admire about him is how fast he moved, because a lot of this happened in january and february. Like stuff doesn't move that fast a lot of the time, like you often hear about these cases six months, a year after they happened yeah, I guess, like, if you think about it, though, like a a you know an, though Parker's an entrepreneur.
Speaker 1:I don't know him at all, but I'm just speaking as someone who's been a CEO if there's something on your mind that has got your mind, you're going to go after it very aggressively. If it's something as ridiculous as corporate espionage, with your competitor employing a person under your own roof, you're putting 100% of your attention on that and you're figuring it out in the most creative and aggressive ways you can. Totally, and that's what he did, and he was probably very happy to be publicly putting that lawsuit out there, feeling like he's got this person caught.
Speaker 2:A real life honeypot, if you can believe it. This is like movie shivs it's so fun, very spicy.
Speaker 1:It is like straight out of a movie. So I'm excited to see where that goes, but it is beside the point. So back to you. I actually had a question before you go further. You talked about management. You did management consulting for 18 months and I just am curious. You were straight out of college. You said you're at a rocket manufacturer looking for efficiencies. As a 21 year old, or however old you were coming out of college, is this kind of green management consultant? Are you in any position to be like giving advice to these rocket manufacturers on efficiencies you're finding?
Speaker 1:Or is there even a real playbook for how this makes sense?
Speaker 2:I personally, and the interns absolutely not, but my role there was like a data monkey for the more senior people who did make those recommendations. And so they would say the tools rotation breaks down at these three places and there are bottlenecks here, and I noticed that you know if you move to three shifts instead of two, you could be more efficient, and you know your pipeline doesn't make sense compared to how much capacity you have, whatever. And then they turn to someone like me and say here is gadillions of data, go crunch it and I, like, do this. And then I hand it back to them and then I learn how they draw insights from the data and then that's how, eventually, you work your way up in management consulting. So to start with I wasn't making recommendations, but I learned so much during it.
Speaker 1:So am I crazy? Or is what you just described the perfect example for how AI will be applicable in terms of chat, GP, know, chat, GPT and all these models? I mean? That's their goal. Right Is to digest like massive quantities of data and make sense out of it.
Speaker 2:Totally. I think I like I'm gonna sound old saying this, but I feel like the younger generations are at a disadvantage because people like me you could go just like be in a sweatshop and learn and work your way up, but now we don't really need that. Ai does it for you. Like I did a market sizing research thing with the you know it was a one deep research in like one hour when it previously would have taken me 20 hours um, and so the people high up who can draw those insights and write good prompts, I think will really benefit. But the like the peons in the workforce, um, who who need to do the you know the brute work to get there I think are at a bit of a disadvantage now. Same with coding, right, it's all. Junior engineers have a tough time now, but the best senior engineers are more productive than ever.
Speaker 1:Yeah, it's interesting, Cause it's hard to say that a younger generation would be at any disadvantage to you know our generation or the older ones, Cause it's the younger ones always end up smarter and more adept and capable. It's just we just haven't yet envisioned the world in which they're going to have to be good.
Speaker 2:Yeah, I hope so.
Speaker 1:Whatever they will be very good at won't make sense to us is what I'm pretty confident in.
Speaker 2:I know, and I don't want to get left behind, so I'm trying to keep up on everything. But yeah, you're probably right.
Speaker 1:All right, so back to your story. So you went and worked at Zenefits. And Back to your story. So you went and worked at Zenefits and you were just a normal entry level employee there.
Speaker 2:I was just a grunt. I came in on like product operations and I took a big pay cut because I thought this company would like go somewhere. You take some equity Right and you you make a bet that way where you take some equity right and you make a bet that way. And I think I guess, if I think about it, every job I've taken has been like one, a referral. So like I knew somebody there and I believed in the company and I took a paid cut or I just went lateral. So it wasn't like a huge like step up, but the company itself went like this and then I was able to kind of grow with a company and so I think the, the boss and the company really made a difference in my career.
Speaker 2:But yeah, as benefits it was like the Silicon Valley darling at the time. It grew super, super fast, it attracted a ton of ambitious, really smart people and then it kind of collapsed very fast. So it spit all those people out across the whole industry and like created this network, which was really cool. And Zenefits is actually where I got the idea for True North. You know, fast forward to when we started True North, parker was one of our first angel investors because we said we're building Zenefits for freight. You know, everything connects.
Speaker 1:At that point I was saying Rippling for freight, but it's the same concept, yeah, explain the concept, though in layman's terms, without the funky names of the company.
Speaker 2:So when we started True North, this was 2019. And we were kind of at the depths of the last freight recession. I don't I don't know if molo has started at that point, but like it was rough for carriers out there.
Speaker 2:Yeah, we were 2017, so we were yeah, we were two years in um, and so we said there's a ton of waste in the industry. A lot of it is at the carrier level but nobody's building for carriers. Because, um, at that time, softank was dropping like billions into autonomous trucks and all that Everyone thought autonomous trucks would be here tomorrow, so nobody was building anything for the drivers themselves. So we said we want to build the. Everything for the small carrier and everyone else is a spoke, so load boards and factoring companies and all trailers and safety and compliance and everything that it takes to run a trucking company just plugs into the like. Essentially, the TMS is what we had built and it's not easy but you have to do everything and that's what we're building.
Speaker 2:So, and that was a concept of, like Zenefits and Rippling is they run on the payroll system and building a payroll system is super complex, it takes a long time and has to plug into everything else. Think of all the integrations that Rippling has today. So that was a concept we applied to YC, which is the like a tech accelerator, and we launched in December 2019, you know, learned that, like, no broker wants to work with a carrier with an authority under 90 days, so that was really hard for a while YC is three months, it was January through March, and so in the most, in the time when you're like trying to be growing the most and showing all these good metrics, we were just trying to get brokers to work with us even.
Speaker 1:But help me understand. What was the company? Was the company meant to be a carrier? Oh, yeah, yeah, you wanted to be a carrier and you were onboarding drivers to work for you as a carrier, or you were trying to be a vendor of carriers.
Speaker 2:Yeah.
Speaker 1:Help me understand that piece.
Speaker 2:So we started as we pitched it, as we will be a vendor of carriers but we'll learn how to do it all by being a carrier ourselves. And so we had an MC, we onboarded. We go to 300 trucks in like 18 months. It was, it was nuts. And we, you know, built our own load board and had our own safety and compliance team and all that stuff and we said eventually we want to be the marketplace for all of freight.
Speaker 2:I even wrote about, you know, the big load boards in that time and we've actually come back around to being that now, where we took a bit of a detour because the carrier grew so fast. Honestly, we said this is working, we're going to listen to what's working and maybe we'll just be the biggest freaking carrier out there, take down Landstar and have all the owner operators under our MC and realized how difficult that was. Running a profitable carrier is really hard. It's so hard. Yes, it is Like I literally studied what is a rocket science at MIT and by far the hardest thing I've ever done is run a trucking carrier. I still like wake up thinking about it. It's so brutal.
Speaker 1:Are you looking to grow your brokerage? Are you struggling to land new customers in these challenging market conditions? Look within. So many companies that tender you freight throughout the domestic United States also have business coming out of Mexico. A year ago I understand why you might not have seen that freight as an opportunity, but today Cargado exists and that means any load coming into or out of Mexico is now an opportunity for you to support. In just over a year I've been able to see Cargado go from ideation to launch to rapid growth. It's amazing to see how many logistics companies have been able to use Cargado to expand into Mexico to grow their business. Cargado is the first platform that connects logistics companies and trucking companies who are moving freight into and out of Mexico. If you move Mexico freight or are planning to reach out to Cargado today at cargadocom, that's C-A-R-G-A-D-O dot com. So take me back again. You applied to YC. You had not yet raised any money or you had I guess you couldn't until after the YC process.
Speaker 2:Yeah, we had raised, like friends and family, like angel investors, small, a small amount Um. But the way YC works is there's this thing called demo day and the end of the three months, um, and you get, you know, up on a podium in front of a bunch of investors and you pitch your company and you're supposed to raise a bunch of money, Um, and so we had just crossed our 90 day mark, I think. At the end of February, beginning of March, we were starting to pick up. I think we had like seven or eight trucks at that time and then COVID hit and everything fell apart, and when you say you had seven or eight trucks, you're like out buying trucks.
Speaker 2:No, no Going out to market and buying trucks. No, these are owner operators who leased onto us under our mc okay, yeah, helpful information.
Speaker 1:Okay, didn't understand that. So you and mc, you were building the technology to be this kind of back-end yep platform for owner operators yeah just owner operators, mostly small carriers just owner operators at that time.
Speaker 2:So my cousin was actually our first and you know I was on like Facebook groups and, like you know, we did some Google ads and people would call the number and get my cell phone and I would convince them to join and then I would type up, you know, the PODs at the end of the day and like send invoices and do it manually the PODs at the end of the day and like send invoices and do it manually. And then every time something got to where I couldn't do it, I would go crying to my co-founder and he would automate it. So we just worked that way. I slowly learned how to run a trucking company, how to dispatch, how to handle load docks all of that how to factor.
Speaker 1:So the thesis was essentially, or the idea was hey, drivers, owner operators, all you got to focus on is driving and I'll take care of the rest.
Speaker 2:Exactly. We paid them 85%. We said we'll always treat you fair, We'll always be honest, and we just said we're going to build a good carrier, kind of as simple as that. Help you find brokered freight. We eventually expanded to shipper freight. We'll get you trailers for a fair fee. We'll never trap you into lease purchase agreements, that sort of thing. You'll see where every dollar goes, yeah.
Speaker 1:And why was this enticing for owner-operators? Yeah, In terms of what was available in the market. What was enticing about this offering?
Speaker 2:So owner-operators, I think you know it's definitely still the case, but it was more the case even five years ago they really felt left behind and they feel like people are out to screw them. It's tough with the broker relationship because it can be a zero-sum game, right Like whatever doesn't come out of your pocket comes out of mine, and so they're just really suspicious of everything, and to some extent they're still like that today, I think.
Speaker 1:Yeah, yeah, I mean, I think that's a product of historical behavior, totally, and one of the bigger challenges in the industry is every side has a reputation that they probably wish was better, not necessarily as a result of their own behavior, but as a result of the collective behavior of people with the same title.
Speaker 2:Job function, yeah I mean it's funny going to carrier conferences and then broker conferences and seeing the, the rhetoric, you know, carriers are like you know, brokers are making so much money, like here's how you don't get taken advantage of. And then brokers are like carriers think we make a million dollars per load and like they, they're stupid. Um and the uh.
Speaker 2:I think where I met you is the Broker Carrier Relationships Conference, where I think it was the first Broker Carrier Summit yeah, yes, exactly, and it was the first place where I actually found the two sides coming together and trying to build a relationship, which, in our new set of the product, is what we've really tried to focus on. So, yeah, I had a question for you around Molo, because you were. This was like COVID times were the thick of it for you guys too, and I remember something about you guaranteeing rates wouldn't change, or something, for was it for shippers? Or do you remember what I'm talking about?
Speaker 1:Yeah, I mean it could be a number of things. So COVID was an explosive time for our business. We were, you know, we were very heavy food and beverage grocery retailer and enterprise, and that was other than a two-month period in 2020 when things were all dead. That was the part of the industry that really exploded and so our business nearly doubled overnight. With some customers it tripled, yeah, and so we were very busy of guaranteeing rates.
Speaker 1:I think part of our MO was to execute on any commitments that we had made, and that could be on a spot basis or on a contractual long-term basis, and we did go pretty far in pushing that idea to at scale where, you know, even on a 20 million dollar annual contract, we told our customers, like, if we told you, we will hold the rate for the year, we're gonna hold it for the year. Covid was an interesting time because it certainly put that to the test and it put it to its strongest. Test is probably what I would say and what what I mean by that is. You know, the essence of that theory in in building your business that way, is that you feel you can get a pretty good product idea of what your pricing is or what your cost is going to be annually. If you're going to make an annual commitment on a rate let's call it Chicago to Atlanta If I say I'll move it for you throughout the year at $2.50 a mile, no matter what, then if I'm going to run a profitable business, I have to have a pretty high level of confidence that I can move that lane for less than $2.50 a mile, enough so that I can even make money on it not just make gross margin but net margin.
Speaker 1:And why COVID was the strongest test is because it saw the greatest volatility in rates. It saw rates drop the most for two months. Well, first it saw the rates go through the roof, then they dropped for two months and then they went right back through the roof. And so you saw both ends of the volatility. And in the two down months our rates were. We were making money hand over fist. Our margins were as high as they'd ever been In, like August, when August and September, when truck rates were at their highest, our margins were as low as they'd ever been.
Speaker 2:Yeah.
Speaker 1:And so it was like the true test, or the most significant test we'd ever seen, and we pivoted after that. To be honest, I mean, we didn't stand by that through the end of my tenure. Through the end of my tenure, and not because we didn't want to more, so because we wanted it to be more specific to the customers we were working with. I didn't think it was fair if I had this policy that said I will live up to every rate I commit to that we agree on, and I do that for 10 customers. If seven of the customers, when the rates are up or down, continue to give me the loads at the rates we agree to, I would continue to do what I said.
Speaker 1:Three of the customers, though, would only tender us the loads when the rates were really high, and then, when the rates would drop, the loads would disappear, and that became a disadvantage strategy for us, and because what was happening was the rates would go down in the market and, rather than continuing to pay us what we'd agreed to, they would just find someone 20 or 30 cents cheaper than us, and meanwhile, I'm not getting the loads when it's profitable to me, and then, when the market turns, all of a sudden, the loads are coming back to me. That was why we made a pivot from just saying blanket any commitment we live up to or we put out there we'll live up to, to saying we're going to play by the rules that our customers play by Totally. The customers set the rules and if 100% of our customers are willing to ride the wave with us, commit to a rate and stand by that rate through ups and downs, we'll play that game yeah.
Speaker 1:But if a customer is going to play the market and when things go down they're going to go down with them, as in they're going to find the cheapest capacity available, we're just getting screwed at that point. Then we're offering them capacity when the market's tight, at rates that aren't supported throughout the whole year. They're only supported during down markets when we're not actually getting the load. So that was kind of does that make sense? Kind of how we thought about it.
Speaker 2:Yeah, yeah, it definitely. It has to go both ways for it to work. What was it like telling that to your team and making that pivot?
Speaker 1:Well, for one, I don't know that the whole team loved the original strategy to begin with, because in some cases that was money out of their pocket Right. In some cases that was money out of their pocket right. And if you're the sales rep for X account or you're the account manager on X account and that account is, let's say, that account has a lot of consistent freight shipping out of Florida going to Chicago and we agree to a rate that, whatever the rate is $1.70 a mile For nine months of the year, that freight is making money For three months during produce season. It's not. It's going to lose money and a lot of brokers during those three months will do whatever they can to not haul those loads and my sales reps probably would have in some cases liked to find a way out of those loads or find a way to get more money on those loads. My problem with it was if we do that, we're just like everybody else and then I don't really know what we're selling here, how much, how much.
Speaker 2:Oh, go ahead.
Speaker 1:Go ahead.
Speaker 2:That made me think, like how much loyalty is there in freight Cause? You know carriers have the same problem with brokers that brokers have with shippers. You know everyone's looking to put food on the table, but they need these relationships to survive.
Speaker 1:Yeah, I mean it's a great question and I should actually spin it the other way if we're talking carriers, because we have the same situation on the carrier side. That was very heavy in enterprise freight. It meant we had a lot of contractual business, which gave us a lot of wiggle room to create a really good environment for carriers to partner with us. Because I had contractual freight, I had systems that allowed me to create routing guides Like the mastermind system.
Speaker 1:There's a reason it's the top TMS in the industry is because it allows you to be as efficient as possible in that we could set up contract contractual lanes with routing guides and never touch the system again, never touch the loads again.
Speaker 1:So if I get that florida to chicago lane five times a week and it's sent to me via edi, I can order however it's sent. If it's sent, my system can automatically build the loads and then it can actually tender them out into a waterfall routing guide. And I might have three carriers that I agree to contractual rates for and I say I'll give you each one load a week. They each get sent their load. They pick it up or they, they, they accept it and then they pick it up, deliver whatever, Um, by having that we were, we were able to do the same thing on the carrier side that we were doing on the customer side, and the deal was just kind of reverse in that for a carrier, they might want to take the load from us nine months of the year out of Florida and then, as soon as produce season hits, all of a sudden their trucks are disappearing and they're like, oh, we don't have a truck down there this week.
Speaker 1:It's like you don't have a truck down there this week or you don't have a truck for me down there this week at $1.50 a mile. You have a truck for three bucks a mile like produce. And so it put us in the same position where we would say to the carriers the way we wanted the relationship to work with the carriers was if you stand by us, we'll stand by you. You want the lane for the year, you can have it for the year. This is the rate. If you disappear six months in because all of a sudden the market is favorable to you, that doesn't work for us and part of my philosophy was we were going to get burned more than most. We had to accept that as a reality, that if you want to build trust, you have to put yourself out there first, knowing that there's a chance someone's going to take advantage of you. To put yourself out there first, knowing that there's a chance someone's going to take advantage of you, all you can do is, you know, pick up your stuff and keep moving forward. If someone takes advantage of you, you're not going to sue them for, you know, three weeks of the Delta on your expected cost versus your true cost. You know I wasn't going to be the one who went on to like carrier 411 and like blasted them and tried to ruin their reputation.
Speaker 1:My perspective was listen, you live and learn Every day. Our network should be getting better on both sides of the business. We should be learning more about our customers to know who our true partners are, and we should be learning more about our carriers to know who our true partners are, because every day we all get an opportunity to show the world who we are, and that's in how we accept loads, how we communicate, how we pick up and deliver. And you know, our job as the broker is to manage the relationships on both sides. And again, you're going to get burned, probably more often than you want, but like, you only need to get burned once by a carrier to know not to do that again and then find someone else to do it. Um yeah.
Speaker 1:So I don't know if I answered the question you had. I may have gotten lost in my own thoughts there.
Speaker 2:I mean, it's the, it's the same problem we've been dealing with on the carrier side is, you know what I've? What I've learned, you know, maybe I've spoken to a couple thousand different carriers at this point is there are just some people who want to be chasing you know spot rates, and that's just who they are and they're going to work really, really hard when they have to Um and they're going to burn out pretty fast. And then there are the people who really value regularity. You know they have, you know, a, a bowling meet every Thursday night and they want to be home. So we make sure they get home and it's just consistent. And so finding those carriers and matching them to brokers who value that as well, I think, is where we've we found our sweet spot. And so actually, the newest evolution of TrueNorth is, you know, so we started as a carrier, then moved to just all carrier tools. We took everything we built for ourselves and said, okay, let's open source it to all the carriers. And so, you know, a load board was a big part of that. Factoring and load docs is a big part of that. And what we learned is the biggest problem repeatedly is finding brokers, finding freight, and when we started. You know there's so many incumbents. There's all the major load boards. Uber Freight was coming up. At the time we were convinced the problem was going to be solved. But like fast forward five years, it's still not solved. And so we just said you know what we're going to build the biggest, the best load board. It's going to be native AI features built for the carriers, and now we go sell directly to brokers. So that's the newest thing we're doing is we're taking everything we've built for the carrier and we're letting brokers kind of look, in the way we have been, to what the carriers are doing. So what we have today is carriers.
Speaker 2:Call our virtual dispatcher. Her name is Lodi. She'll ask you your preferences, where are you now, where do you want to go next? She'll post your truck for you. She'll look at load boards and find loads that fit your needs and then she'll recommend those to the trucker. So that's a very basic form of our AI and we're giving Lodi more skills, which is really fun.
Speaker 2:And we started from the carrier side, but as we start working with more brokers, we find brokers also want AI tools. Of course there's Happy Robot is crushing it and Fleetworks and all of them, but they're really native to the broker side, where we started from the carrier side. So a question our team has for you is pretend Lodi is just a smart dispatcher who can be everywhere at once. What skills would you give her to help reach small carriers in a better way? I'm going on parental leave next month and I wrote a memo to the team and their whole problem statement for the whole month of April is to find fun ways to solve this problem Bookloads using Lodi and AI. So any ideas you give will probably incorporate into our roadmap.
Speaker 1:Okay, okay. So the question is how do we create? What are the skills that the best possible dispatcher would have? Okay, so they would have relationships with numerous very good freight brokers, and by very good, I mean they're sizable.
Speaker 2:Yeah.
Speaker 1:Big enough. They don't have to be like Robinson's size because you run into different issues as you get bigger. There's a sweet spot, I think, where brokerage has enough volume to keep a small owner-operator busy. Oak Ridge has enough volume to keep a small owner-operator busy and that's like probably at least $500 million of revenue. It might be more, wow, and there are ways to patch this together.
Speaker 2:Yeah.
Speaker 1:There are ways you could find more smaller ones. It just gets harder to navigate them all. Yeah, so I was a carrier rep for five years and worked almost exclusively with owner operators. I had a few bigger carriers Gold Country based in Eagan, minnesota, and Classic Express based in Cleveland, tennessee. Shout out, sherry Smith, I miss you. She will never hear this. But whatever, she was the best. She was like a mom. A lot of good trucks. It was Coca-Cola's old private fleet or one of them.
Speaker 1:Sorry, I'm sidetracked, but my point is I worked with a lot of small owner operators in the southeast and we got to a point with some of them where they almost exclusively hauled my freight and that meant anywhere from 15 to 20 loads a month. Pick up in Atlanta on Monday, deliver Tuesday morning in Tampa. Pick up Tuesday afternoon in Ocala or St Pete, anywhere in the central Florida area. Take a load back north to South Carolina, tennessee, alabama, to deliver Wednesday. Pick up another load in Alabama on Wednesday, deliver in Florida on Thursday and then pick up on whatever Florida going home for the weekend, whatever. I'm just giving you an example. But my point is a good broker-owner-operator relationship. There has to be enough to keep the driver busy. Because if it's a small broker that you're partnered with, they might have the load for you from Atlanta to Tampa but then you're stuck in Florida unless you go to another broker. And it's okay to work with multiple brokers. There's no reason you shouldn't. It just gets a little more challenging when you want to create a trip like a full week's worth of loads for a carrier or an owner operator, if you're working with three different brokers to make that trip work. If there's one issue now you're working on numerous points of communication to get the solution resolved and that's a lot harder than if it's all under one roof.
Speaker 1:Because my at least the way I felt was if I sent a guy from Atlanta to Tampa and he had an issue getting unloaded in Tampa that was going to make him miss my other load for him from Florida going back north. That's on me to help him figure that out. I feel accountable to that If I'm the second load from Florida to back up, but I wasn't the first load and someone else's load screwed up, that's not my problem and it's not to say I don't care enough to try to help him. But I certainly don't feel accountable to it If he's like I'm going to be four hours late to your pickup in Florida because my last load was delayed, my customer sales rep might say to me Andrew, I don't care, I've got to be on time for my pickup or I'm not going to get these loads again.
Speaker 1:So there's a lot of nuance that goes into the inner workings of making these loads work effectively and there are a lot of issues that come up and the way to put yourself as a carrier in the best position to win in these scenarios where people want to help you and take care of you is to be very aligned and partner with the right brokers, and you want the brokers to feel accountable to resolving these issues for you. So again, this is a long-winded answer, but just the start of the answer is having several brokers that you are very well connected to, and there's two parts to a broker. One is the company and the other is the individual. So the ways I think about that are I want to understand what are like the rules that a company like operates within, and at Molo I just kind of gave you some of those rules. Some of it is if we commit to doing something with someone, we follow through on it. That's for a carrier, for a customer. There are exceptions. You know, if I commit to moving this load with you but you're going to be late, my priority is no longer making sure that you're still on the load. My priority is making sure that we follow through on our overarching customer commitment to get the load picked and delivered on time.
Speaker 1:So you want to understand the rules of the game and how brokers operate. You especially want to know how they operate under duress or when things are not going well, and that's something that you kind of have to live and learn. You don't necessarily find that out on the front end. You can certainly try to. You can try to talk about it on the front end and get aligned. I think one of the most important things brokers and carriers should be doing before partnering with anyone, before moving a load with someone, is having a very thorough, upfront conversation around how you're going to operate. What are my expectations of you and what are your expectations of me. So if I'm Lodi, or if I'm building Lodi, I want to build something that has the absolute, perfect principles, or the principles that I feel are most aligned to a strong, performing, carrier-centric or carrier driver-minded dispatcher. And you want to be carrier-minded and broker-minded because you want to make, you got to keep both sides happy. If you can't keep both sides happy, you can't keep either side happy. Totally. It's kind of how I think about it.
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Speaker 2:So okay. So to distill that down, it's like, instead of a spray and prayer approach where we try to get all brokers in, pick a few and get really, really deep with them, that's thing number one.
Speaker 1:Kind of At scale. You want a bunch of the brokers. I just mean, if I'm thinking for a specific driver.
Speaker 2:Ah, okay.
Speaker 1:I don't need every broker. If I'm one driver and I'm based in the Southeast and I stay in the Southeast, I need three or four brokers that have dense business in the Southeast to support my needs. If I'm True North and Lodi and I'm accountable for 500 drivers, you probably need a ton of brokers. And just because a broker can't support a full driver on its own doesn't mean he can't be part of the overarching support that one of your drivers gets. You might find a small broker who only has $10 million of annual revenue, but they have a niche from we're just sticking with the Southeast, I guess from South Carolina to Atlanta, and that might pair very nicely with another small broker that has a niche from Atlanta to South Carolina. And your job as Lodi is to bring all of these routes together, all these opportunities together that brokers have, and create an efficient network for drivers. I mean that's an interesting thing to think about. That none of the load boards have done is, if I'm a load board, how can I and so I know what these brokers I'm getting enough of a broker's data to know a lot of their lanes, or I should be trying to get as much of their data as possible to understand all their lanes. And if I can pair that with other brokers to create the most efficient routes for a driver, then I have something interesting for a driver. Because if I'm a driver, that's probably one of the hardest things it is. And they have to piece they always have to piecemeal it Right. So I'm based in Atlanta. Again, that's our example. I'm getting ready for the week.
Speaker 1:I don't have a ton of great relationships I've. I've saw them that I can call and ask what loads they have. But by and large, for my load out on Monday, I see that RXO has a load posted from Atlanta to Tampa. And this was literally what would happen with me sometimes when I was at Coyote. I'd say, hey, calvin, my guy Calvin was based in Orlando, mc Martin Trucking and I'd say, hey, cal, I got a load, he's based in Orlando. I'd say I got a load tomorrow out of Atlanta going to Tampa. Can you pick it up for me? And he'd be like, well, do you have anything to get me from Orlando to Atlanta? And I'd say, no, not today. He'd say, okay, let me call a few guys and see what they have. And so that's what a lot of these guys are spending their time doing is trying to piecemeal routes together to create something that is more circular, at least gets them to and from where they're trying to go.
Speaker 2:I'm grinning like an idiot because literally, what is it? A week ago in our innovation week, the team came up with something like this. They call it, I think, like, just like route planning. But they take from a carrier, they say, how long do you want to be on the road? And they take into consideration hours of service and whatever, and they patch together a route from multiple brokers and suggest it and you know if halfway through a load falls through, it recalculates and helps you find a new load. But we could really easily adapt that and just say let's find you a permanent two-week rotation based on the brokers we have and where you want to go, and we stitch this together for you. Yeah, we can do that, super cool.
Speaker 1:Yeah, so there's two ways you want to think about that. Permanent's a tough word on a two-week. Is that an oxymoron? Permanent two-week. Unless you're saying perpetually two-week yeah, rotation, yeah, yeah. But there's two ways to think about that, because the interesting thing is, most TMS providers can't even do that internally. Really, this is something Mastery recently oh yeah, my old system before Mastery we could not create routes.
Speaker 1:The system certainly would not tell us what a route was I mean most of the TMS that brokers are buying off the shelf if they have a load from Chicago to Atlanta and then literally from the same facilities going from Atlanta back to Chicago two days later a perfect route. There would be no way to know that that is a perfect circle or route that you could set up to, from and then back. It's wild. The systems aren't designed that well.
Speaker 2:Yeah.
Speaker 1:Mastery came out with that. But even that is just internally. So yes, internally. If I know I have a driver in Chicago and he wants to go out for two weeks, I can plug in Chicago two weeks and it'll give me like 15 options of here's four loads together that make a route to get you home in time. That's great, but that's not solving the problem at scale for someone like you in your world or for a driver. It helps a driver with whatever broker they work with that uses mastery, but it doesn't help with any of the other brokers and it doesn't help give you a bigger like.
Speaker 1:If Molo is an example is on mastery. That's a billion or something. Dollar brokerage. That's good.
Speaker 1:But if I'm an owner operator, it doesn't mean that that billion dollars of revenue is enough to give me the perfect setup every week, moving in perpetuity. I want not I want to leverage their billion. I want to leverage Arrive's $2 billion and NTG's $2 billion, whatever I'm making up these numbers. But if you could get an intermediary that plays among all the brokers and can bring all their freight together, then you maybe have something there. And the other thing I was going to say that you have to keep in mind is there's kind of two ways to think about it. One is on the contractual basis, where most of the time you don't know, you can't guarantee unless you have contractual lanes, you can't guarantee that you'll be able to create the same route every two weeks. If you have contractual lanes say an annual committed lane from Walmart over here and another one from Kroger over there you can then create something that you could run consistently over and over again, and that's what you want to do.
Speaker 2:Yeah, Shout out to Jeff Resch who's now at Uber running Powerloop. Actually, he built out our fleet planning org back when we had a bunch of small carriers running under factoring and we've toyed around with this idea a lot over the years and I think finally, voice AI didn't exist back then, but now we can actually call carriers, ask them for updates, get it and reschedule it on our own without employing a bunch of dispatchers. So I think now is the time Cool.
Speaker 1:Yeah, I'm curious for you. I feel like your initial capital raise was like how much? 60 million or what was the first?
Speaker 2:I think we did a 50 million series B and everything before. That was roughly 10 million, so 60 total.
Speaker 1:So when was the series B?
Speaker 2:2021, november 2021.
Speaker 1:I want to say and am I right that Sam Altman was involved in that?
Speaker 2:Yeah, sam. Um, he led our seed and then um involved in our a and then co-led our B, so he's done every round for us.
Speaker 1:So that's an interesting nugget that I feel like we have to talk about, even for just a minute, right? So Sam Altman is now basically the face of AI yeah, one of the faces of AI and is an investor in your business. What was that process like? I guess maybe back then he wasn't as famous. Yeah, he wasn't the face of AI then, yeah.
Speaker 2:And I think he's definitely taken a step back from investing since, because he has a lot on his plate, as you can imagine. But back then he had been the CEO of YC and then had already started OpenAI and was multiple years into it and was angel investing. So, yeah, sam is a prolific angel investor. He's known for taking bets on really big ideas, and so he was one of the few people who were not scared of trucking when I came to him and said I want to be the marketplace for all of freight. And he was one of the few people who were not scared of trucking when I came to him and said like I want to be the marketplace for all of freight, and he was like great, here's some money. Like really had conviction really fast and, yeah, he's been a great investor.
Speaker 1:And talk to me about the process of raising. I mean, $50 million is a lot of money. So you know you are a young entrepreneur or budding entrepreneur. You were barely at the beginning of becoming one, yeah, and to raise that kind of money is some serious stuff. Can you walk me through what that process was like, what you learned through that process too?
Speaker 2:Yeah, oh, my gosh. Fundraising is really crazy, and this was all in the 2020 to 2021 era, which was particularly crazy for fundraising, I'm sure you heard of tons of people raised then and we got off to a really hot start and that's what investors look for.
Speaker 2:So, coming out of YC, we were growing super, super fast. We hit a million ARR in six months. I think we hit seven the year after that. People see the trajectory and really like that. They see the market. You know how much opportunity there is in freight. It's an enormous market. There's tons of waste. It's getting bigger every year and also it's really affected by technology shifts.
Speaker 2:Right, like think about when we started in 2019, there were still owner operators who had flip phones and like that wouldn't happen today, like we said, sorry, you can't use us because we're an app and you need a smartphone. And they'd be like, well, I guess I can't use you. And now everyone is embracing Gen AI and it's actually quite already pretty deeply embedded in most of the broker side and carriers are starting to warm up to it. So it is very tech friendly. Despite the, I think, stereotype that truckers hate technology, it's really impacted by tech. So, anyway, investors like that kind of huge market and I think I was lucky to build a really good team too. I had execs who were much more experienced than I and helped me with with all of that Cause. What do I know about? You know finance and product and engineering and all of that, yeah.
Speaker 1:And I mean, was there any intimidation factor? I mean it's just, you know, being such a young CEO in a, in a pretty, I mean, other than your family had worked in the industry, but it was foreign to you to some extent.
Speaker 2:Yeah.
Speaker 1:And taking so much capital, how did you decide what to do with it and how did you feel like you were making smart decisions on where you were deploying it?
Speaker 2:Yeah, I again will say, like hiring executives who know what they're doing made a huge difference, and feeling like there were adults around the table made a huge difference. But it is. It was a shit ton of money and I feel like I wasted a lot of it. But here we are, what, four or five years later? And we still have quite a lot of it left. And so I think we've managed to not waste it all and give ourselves enough shots on goal to really grow this to where we want to go.
Speaker 2:But I often think like what if I hadn't raised that kind of money? Maybe we would have had to be more scrappy, maybe we wouldn't have built a carrier and gone down that path for so long. You know, and owned 300 trailers and all the all the capital that is involved in that Cause. We had to raise debt to buy trailers and it was. It was a whole thing. What if no one had given me money? Maybe I would have had a really tiny team and gotten really good at one small thing and expanded from there. So raising a ton of money is not necessarily good, but I think we've made it work for us.
Speaker 1:I mean, I will say it feels like you have had a lot of different focal points, at least early on, and you were trying to do a lot. And is that what you mean by like wasted? Some of the money is like we kind of applied it to areas that didn't end up being part of what the business is today?
Speaker 2:yeah, and like wasted is. It is my, like you know, regretful look backward. We learned a ton in running a carrier, but it was capital intensive.
Speaker 2:we did, you know carriers. We didn't make money running the carrier, but it's not a ultimately scalable tech, a hundred billion dollar business. And so you know, on the one hand, um, like our entire team really understands carriers super well, um, even though they're engineers, like they've all spoken to hundreds of carriers and understand the, the, the pain, the customer pain, um. But on the other hand, you know, we, we had a hundred employees at one point, a lot of ops people, um, and I I had to do layoffs and that's just like the fucking worst. Uh, people who believe in you and they join and then you, your business model changes and it just doesn't make sense anymore. So that was really hard and you know, I wish I didn't do that.
Speaker 1:It's a necessary thing to survive in some cases, and I'm curious from the lens of having to go to investors who have put millions of dollars in the business and saying, hey, what we're doing it's not going to work, we need to pivot. I want to understand what that process is like and how you navigate that. And then let's start there, and then I'll go to my next question.
Speaker 2:Yeah, so investors have been really supportive. I think it helps to send investor updates and keep them along for the ride and not just let them know. Don't talk to them for a year and then tell them you've done this thing, and I think it also applies to the team. Like every Sunday, I send a weekly reflection. It has what we accomplished last week, our goals, some learnings, and then how much cash we have in the bank, how much runway we have.
Speaker 1:So everyone knows that every single week that goes to the whole team, whole team.
Speaker 2:I like that. Yeah, it really keeps you accountable and it keeps you focused on the numbers for sure, and I think that kind of transparency definitely helps. Our investors also largely aren't trucking investors. Your brother, matt, is our only freight related person on the cap table. Actually Everyone else.
Speaker 2:Yeah, it's a Silicon Valley, um, you know, either an angel or an investor. So, um, most people saw what happened in freight. They saw, you know, uber and convoy and flexport and all these things, and they get it, and what they want is a huge outcome, and so they want anything that increases the chance of a huge outcome. So so, to them, if we're headed in that direction, it's okay.
Speaker 1:And then talk a little bit about the, the, the. You know you went through a layoff with the team. That must've been really hard and you know what, what kind of. As you look back on that in some of your reflecting, how do you feel like you can put yourself in a position to not have to do that again?
Speaker 2:Yeah, so the the cause was our business model change, and I think about this a lot. We were so. We saw so much success, kind of on the back of COVID, with the carrier. It was just growing so fast and carriers loved it and we're making lots of money and we were, um, everything was just working that it was hard to say no. And raising so much money, um, investors want you to spend that money right so that you can grow and get a higher valuation next time. And so it was.
Speaker 2:We just got on this cycle, and this is where I think back and think like if I hadn't raised as much money, maybe I wouldn't have gone down that path, but it's, you know, hindsight is 2020. Listening to customers and following what's working is like that's how you run a successful company, and so I I don't regret it. Um, it was working at the time and if I, yeah, if I could change one thing, it would be to have been much more careful with hiring. I still think we were quite careful and quite conservative, um, but it's still, we still were hiring, you know, multiple people a week.
Speaker 1:It felt like for for months yeah, yeah, I get that, especially when you feel like, when you feel like the, you feel like you're attuned to your customers needs yeah and you're trying to support that. I understand why that would be really hard to keep going down that path and then realizing you have to pivot and understanding the human cost to that yeah, it is tough, we were making our drivers rich.
Speaker 2:you know, like I still remember, like I I appreciate that you still remember all the names of the people you've worked with, like it's like I remember it was Steve.
Speaker 1:I can give you their phone numbers.
Speaker 2:Call.
Speaker 1:Calvin four oh seven, four, five, three, seven four, nine zero. If you need a good owner operator out of Orlando.
Speaker 2:I hope Calvin's still in business, cause if he's not, he's about to get so much he is he is.
Speaker 1:I blasted him public. He needs help, so that's why I don't.
Speaker 2:Yeah, he should work with us. Yeah, but it's like you know, I remember the you know Corey with five kids and he was working so fricking hard and to provide for these kids and he bought like I don't know, we were changing people's lives and it and ultimately it was just like a huge carrier is hard to make a big venture back to business, and so we had to make that call and, yeah, it's one of the hardest things I've ever done at Molo, we built a great company and I'm proud of the work we did.
Speaker 1:We knew when to ask for help and sometimes that meant going outside of our own company. I'm proud we built an ecosystem of trusted partners like Metaphora. When we needed differentiated industry expertise in business consulting or technology services, we looked at Peter Ryan and the team at Metaphora. They've consistently delivered value in the transportation and logistics space for over a decade for mid-market and enterprise brokers, for shippers, carriers, private equity and freight tech companies. At Molo we use Metafora to solve problems we simply couldn't on our own. Metafora is the only partner you should trust to help you win, whether that's doing ops and tech diligence, growing revenue, optimizing spend or selecting and building software. Go check them out at metaforanet. That's M-E-T-A-F-O-R-A dot net.
Speaker 1:What's interesting is that your comment just there had me thinking. Earlier you asked about how to create the best dispatcher with Lodi. There's a piece that I just don't know that AI can solve and it does tie into the relationship. I just don't know that AI can solve and it does tie into the relationship, and I think it's possible that you can give a carrier so many of the tools they need with an AI dispatcher like Lodi, and those tools can better equip them to run their business than a lot of human brokers can, if it's well put together. But there's just a piece that's missing. As we talk about Calvin, my old buddy, and my relationship to him, he jokingly made me the godparent to his baby girl. There are elements to the relationship that forevermore, if he calls me and needs something, I will be, I will do whatever I can to help him. And similarly, if I called him right now and tried to help him, he would. He would do what he could to help me. How do you get that with Lodi? I don't know if that's possible.
Speaker 2:Maybe it doesn't need to be yeah, I don't think we should. Maybe it doesn't need to be yeah, I don't think we should. I think loady and anything ai or tech in general should free the humans up to do what humans do best, which is connect. But, like you know, you're not connecting with kelvin when you need to call him to check where he is. You know that that can be automated and you're not building a relationship with him when you want to know is he currently loaded now? Is he almost there? Where does he want to go next? That kind of thing. Humans don't need to do that, and so our goal is never to replace the human.
Speaker 2:I think if there's one thing we've learned, it's that relationships really matter in freight Drivers. Even company drivers, like drivers everywhere, they're used to being treated very transactionally and like a number, and they don't want that. And if you, as a broker or shipper, can make that connection, you've probably won like a lifelong or at least a long term capacity solution customer or whatever. So our hope is let Lodi do all the useless stuff, like right now. Lodi will call brokers and email them asking them if a load on the load board is still available, and if it is, she'll connect the carrier. Little things like that, where Lodi can do 10 things at once while a driver is driving and can't be like messing on their phone while a driver is driving and doesn't, doesn't. You know, can't, can't be like messing on their phone.
Speaker 1:I mean that's a great example, because there's a lot of time wasted of carriers calling into a broker to ask if a load still available and it just isn't time wasted on both sides, Totally. So I definitely think that's a great example of how AI can can support a care and a broker with stuff like that.
Speaker 2:Yeah, you know, support a carrier and a broker with stuff like that. Yeah, eventually it's going to be AI talking to AI, like we're going to call a happy robot AI and ask this, it's still available, and they're going to talk to each other and that's fine.
Speaker 1:Yeah, I mean, that's that. You know. I had a conversation with Dave Bell from clone ops and he said that's what he said he's building. He wants to build both sides of it. He said that's what he said he's building, he wants to build both sides of it. Yeah, I want my ai to be talking to my other ai on behalf of the carrier and the broker.
Speaker 1:Totally, um, and I definitely think that there's, there are that. That's a perfect example of a part of the job for a broker or a carrier that is a waste of time, yeah, is trying to understand if a load or a truck is still available because people forget to take the posting down or somebody covered it and didn't let somebody else know, whatever it may be, um, and that's time you can't get back. So I, you know, I just I remember distinctly spending time as a carrier up, thinking like how do I spend less time on the phone with some of these guys? Because when, especially with owner operators, they don't have anything else to do as they're driving, they want to sit there and bullshit with you. If you're their primary, if you're the primary source of freight for an owner operator, that means you are their dispatcher.
Speaker 1:Yeah, and they often don't have some. Like you know, calvin, for example, his, his wife did his billing but like that was it, it was her and it was me, and so I used to give him like 20 minutes a day. And then I distinctly remember like thinking I need to make a time calendar, like, cut off, tell him, like you get 20 minutes today and you can't have any more than that because I can't do my job. If I give you 45 minutes a day, cause that's you know, then I'm only covering like nine loads a day. If each of you gets 45 minutes to bullshit while you're driving down, you know 95 or whatever, because you got nothing better to do. I'd love to bullshit with you, but I've got other things I got to do.
Speaker 2:Yeah, but, and to him you might be one of the two people that speaks to him that day, and so we want to think about how do we make the job less lonely for drivers too, because it's brutal. I could never be a driver. I would lose my mind and yeah it's a super tough job and underappreciated.
Speaker 1:So back to kind of True North. The load board idea yeah, how do you get to scale? Because a load board is useless without scale, is it not? Like it's? Just until you have enough freight to make it worthwhile, nobody comes. And if nobody comes, you can't get to scale, and I think that's why the few big boys have really never had much competition. It's because it's too hard to get to that scale. How do you think about that problem?
Speaker 2:because it's too hard to get to that scale. How do you think about that problem? Yeah, I think about this problem in my sleep, in the shower, like every moment of every day, and there are a couple ways we're approaching it. First is the classic like marketplace way, where you focus on a region and an equipment type. So we're finding that like out of the Midwest North area, like you know Minnesota, chicago we've got some of our core early brokers and we look at where their freight is and we go find carriers for them. So it's a very like concierge white glove service. We have people actually like going to carriers and helping, like alongside Lodi like sometimes Lodi calls, sometimes Lodi calls sometimes our dispatcher his name is Kelvin, not Calvin, so it's very close. Somebody's Kelvin will call and you just like do everything that doesn't scale until you make that customer happy and then you build the carrier network.
Speaker 2:The second way is you build tools. So there's a phrase come for the tool, stay for the network. It's how Dropbox grew. You didn't join Dropbox for the network. You joined because they helped you store files on your computer, but you stayed because now everyone else is using Dropbox and it's easy to share and that kind of thing. And so, since we've built a lot of Lodi features for carriers, we're since we've built a lot of loady features for carriers, we're thinking loady features for brokers. Um, will draw, will drop brokers the same way. You know, like happy robot is a great example, they don't have a network, but you don't need a network to be successful with happy robot. You just need to install them right and have them answer, answer your phones for you. And so we're approaching it in those two ways.
Speaker 1:What do you see as like the biggest challenge to getting to where you're trying to go with this?
Speaker 2:Yeah, the market being so unfavorable for carriers really sucks. This would be easier to build in the hot market, for sure, because brokers, if they needed carriers more right, they would use more tools like load boards. But that's kind of like an external challenge. The challenge that I like don't know how to solve yet is how do we get carriers to trust brokers and to really want that repeat freight versus you know, just staying on the spot market and you know, just chasing the highest rates and so like we're approaching it again in a very unscalable way. Is we are happy right now if a carrier and a broker, if a carrier finds 100% of their freight through a broker and they leave the platform, like right now we're just going to like live with that because we've made that carrier happy and we're learning along the way. Um, but you know this, this is why the big load boards don't do relationship contract type of freight is because they'll lose their customers because of it. So I think that that's a problem we need to solve. Does that make sense?
Speaker 1:Hmm, yeah, problem we need to solve. Does that make sense? Hmm, yeah, I'm just, I don't know the answer. Yeah, I was contemplating, contemplating that. What do you see as kind of the biggest challenges with load, the load board concept today, like, what are, what are the things that you think you could potentially bring new solutions to the table for to make load boards a better option for any of the parties participating?
Speaker 2:yeah, I think the transactional nature of load boards is a big problem, um, so, like right now I'm like trying not to say the names, but everyone knows I'm talking about right um, the big load boards are incentivized to have spot freight only again, and if a broker has contract freight with a carrier, the load board loses that carrier as a customer.
Speaker 2:And so I think what we are trying to build and actually the first thing I pitched to you at BCS and you were like thoroughly nonplussed by it is this relationship management tool where a broker finds repeat carriers we called it trucking relationship management and they keep tabs on where all the carriers are, where they're empty next, and the broker can be the first to rebook with that carrier and, ideally, set up a contract lane.
Speaker 2:Broker can be the first to rebook with that carrier and ideally, like, set up a contract lane. And so that's actually where our load board concept started is on the relationship side, and we kind of moved upstream to connect the two. And I think, as long as we have enough brokers who will always have a mix of transactional and contract freight and enough carriers who will, you know, yes, they have contract freight, but they need transactional freight once in a while. I think we can make it work once you get enough density, and so we're just betting that if you do both the transactional and the relationship side, it will work where the traditional load boards don't do that today.
Speaker 1:What about fraud? Because you can't say load board without fraud being mentioned closely there behind. It's arguably the biggest drawback from load board usage. It's a big reason why shippers want nothing to do with load boards. So how do you navigate fraud in a way that makes people feel comfortable?
Speaker 2:So there's fraud on the carrier side and there's fraud on the broker side Because if you're a carrier, when you get defrauded on the load you lose a lot more than a broker does and one instance will bring you down where, for a broker, one instance will hurt you but it won't kill you. And so carriers actually also have the same worries about brokers. So for brokers, right now we're like demoing and personally meeting every single broker who posts, um, and that that is a pretty good like we've. We've had to turn away some like. We had some weird conversations where it's really clear that you know like they're, they're probably not, they're probably not right, and maybe we've turned away more people than we should, but we think it's worth it.
Speaker 2:On the carrier side, I think this is where us having been a carrier, us having worked with so many carriers, really helps, because we also apply that kind of vetting. On the carrier side Right now, a simple thing we do is we make all of them download our app, and if you're a dispatch farm and like overseas somewhere, you're not going to download an iPhone app. So that's one thing. We do the classic stuff you know, like FMCSA, monitoring, make sure they're legit and all that stuff, but we're slowly building, I think, a good carrier monitoring system.
Speaker 1:Yeah. And when you think big picture five years from now, what do you want True North to be? If this goes all the plan, what does the business look?
Speaker 2:like for all things like small carrier freight. So anytime you need a small carrier for anything, you go to this marketplace. A small carrier can find a factoring company through this marketplace. We've built partnerships and that sort of thing fuel cards, all that stuff but the core thing that all carriers need is business. So that'll be the core of it.
Speaker 1:And how do you navigate the negative connotation around the word marketplace? Because it's it feels like it's a term that there's been so much investment in this space and poorly managed investment in this space, totally, and companies that show up and are gone a year, two years, five years later, and marketplace marketplace is usually. If you had to give me the top three words that someone's going to use for a business that will be dead in three years, marketplace is one of them. So how do you navigate that using a term that is most commonly used among corpses of venture past?
Speaker 2:So I was scared of that term for a really long time and like I was scared of saying we're a load board and really like tiptoed around it. But like that's what we want to be is, we want to connect one party to another party and we want to connect them over and over and over again and have them build a relationship, and so maybe it's a marketplace relationship product, but like that doesn't really roll off the tongue and so like I don't know why be scared of a term when it's actually the thing we're trying to embrace it here. Yeah, what do you think when you hear marketplace? Just do you hear convoy and corpses and like- yeah, BS is one of the first things.
Speaker 2:I think of.
Speaker 1:For being perfectly honest if someone comes to me and says I'm building a marketplace for freight, I'm like, okay, here we go Totally. And it doesn't give me a good feeling is half of the cold emails that you send out to brokers and carriers that say like, hey, we're True North, the future marketplace of freight, that's getting deleted at least half the time.
Speaker 2:I would think I have learned not to say that in cold emails. For what it's worth. Yeah, Maybe I'll turn it back to you Hearing what we are building and want to build. What if you're in the broker seat and, let's say, you're bought into this vision, you see where it could go. What are the words you use?
Speaker 1:I want to be the one-stop shop for owner ops. Okay, like I want to be known as if I'm you, I want to be known as. If I'm you, I want to build a product that owner-operators love. There's so much opportunity for an owner-operator here to make their business better that they come in droves. It's interesting to think about. If you can somehow get a bunch of factoring companies participating, you become any tool that I need as an owner op. I know to come to true north to get the best deal yeah if you can suck them in that way and give them something.
Speaker 1:I don't mean suck them in in like a negative way, just being like if you can draw them into your environment that way. Now you have. Something that's interesting to brokers is you've got access to capacity that they would like to have, but they know it takes a lot of lift to actually get it on their own. Most companies don't go after owner-operators. Most brokers don't go after owner-operators. It's a lot of work.
Speaker 1:It's a lot of time for one truck at a time. I personally found success doing that. I moved a bunch of loads on a regular basis. I made commission, I was successful as a carrier rep and most of my freight was booked on owner-operators. Ironically, coyote tried to build a team out of that model and it lasted two or three years where people I had two interns. When I went back to college I gave each of them half of my carriers and they started booking and that was kind of how they started this owner operator group. But after a few years it died down. And I think it died down because it's a really hard thing to maintain and and and be successful at. It takes a lot of time and energy and it doesn't make a ton of money because each carrier is only worth one load a day.
Speaker 2:Yeah.
Speaker 1:So if you could find a way to offload a lot of that lift for the broker as True North, but still give them the benefit of the quality that owner-operators can be, because let me tell you my owner-operators, they were better service providers than 99% of the market. My owner operators, they were better service providers than 99% of the market. They knew that that was all they had to stand on.
Speaker 2:Yeah.
Speaker 1:Their service and their name. That was it. Yeah, they weren't going to give me better rates than the big carriers. They weren't going to give me a more efficient way of working with them. They didn't have tools that made it easier to do EDI or anything like that. They had their name and they had the service. They provided their word, and so I think there's a lot you can do with that. It just takes a lot of effort to manage it, and if you can find a way to be the effort in all of that, I think you've got a solution that can make sense for brokers to want to use. It's just a matter of how do you do that. How do you actually get the carriers, the owner-operators, into your network on a consistent basis?
Speaker 2:Yeah, there's a ton of pride in the best owner-operators for providing great service. You're right. It's funny that you say one-stop shop for owner-ops, because that was on our YC application and the term one-stop shop to me actually has weird connotations and so I dropped that. But if I hear you know, maybe the trucking industry doesn't have those weird connotations.
Speaker 1:I'll come back to it. One-stop shop for every owner out.
Speaker 2:It rhymes. Yeah, that's great. When I heard you say talk about the team at C coyote, it made me remember um, when we were a carrier, we were trying to get coyote to to, you know, give us more freight, and like, when they get the ups right and all this stuff. And I visited and I remember this so clearly and I've thought about it a lot in terms of how I build culture at true north is I met with, like it was like the lowliest of carrier reps and he brings me into a room and he sits me down and he gives me this 10 minute spiel on the origins of Coyote and the founders and how much they cared about carriers and their whole culture. And like he let me like see what, like his tech and how they, how they, how they do everything. And I was like man if, if you know, in this hundreds of people come, I don't know if you had even thousands of employees at that point, if at that point, yeah, for sure thousands yeah, because this must have been 2020.
Speaker 2:If, like, one carrier rep can give me that kind of you know vision, um then, like, whoever, whoever set the culture of that company, that was doing a really good job. And so I think about that now is how do I make sure everyone at True North knows where we're headed? And yeah, I don't know, did you, having you know, seen your I think it was your dad and your stepmom do that at Coyote? Do you think about that much at Molo and instilling that kind of culture?
Speaker 1:100% Culture is very intentional and the way it all starts day one, it all starts with the initial onboarding and training. It actually starts before day one if you're doing it really well. The HR teams, the talent teams at Coyote and Molo we had Megan Savelle doing this for us and her team and Kara Kinney, but who had come from Coyote, but it started before in your onboarding process. I mean, you get fed all this information about who the company is and it's how people treat you, how they engage with you, how they respond to you, and then when you started the company and we had this at both companies like you got exposure to the executive team very early.
Speaker 1:I saw my dad do this and how he would go and meet with the training class in their first couple of days and spend an hour, hour and a half with them. I did the same thing. I went and I was just an open book with my team and I would sit there for as long as needed, introduce everybody in the room that I'd introduced myself. I'd let them ask any questions they want and I would tell the story of who we are, why we are who we are and how we win and when. You ingrain those things in your team in the very earliest of days and then you repeat that in the stories you tell, whether it's in a weekly reflection, like you did or I would do company meetings, town hall type settings where I would just go for 15, 20 minutes talking about why we're winning, like what examples I had where customers were telling me how happy they were with our service and who are the individuals involved that got us there.
Speaker 1:Giving that recognition to people is something they so greatly appreciate.
Speaker 1:But you always have to remind people why and it might feel redundant at times to say the same concepts over and over again at times to say the same concepts over and over again, which is why you weave different stories into these conversations but the why is always the same.
Speaker 1:And so, years down the road, when the founders are long gone that low-level carrier rep they know the story in and out because they know it's who they are, how they, how they behave on a consistent basis and it's it's what makes the company who they are. So I do think it's something you have to be very intentional about and any opportunity you have to like weave in the essence of who the business is in a teaching moment. You've got to figure out a way to do it. It's just it's there's so many wasted opportunities, whether they're failures or learning lessons or the biggest wins. If you always kind of bring those things back to the vision and kind of the core values of the business, then there's no second guessing why we got to where we did or why we behave the way we do. People just know it becomes kind of ingrained into who they are. Well, we're coming up on our 90-minute mark here.
Speaker 2:Wow, yeah time flies.
Speaker 1:Time did fly. I don't have anything burning off the top of my head that I didn't get the chance to ask you. Actually, let me go here for just a minute. You told me that you are, I think, eight days away from having a child.
Speaker 1:Yes, I am or close to your due date. I should say Congratulations, thanks, thank you for making time, which is probably a very stressful uh time in in your pregnancy, um, but talk to me a little bit about like building a business while kind of, I guess, walking into motherhood and kind of what challenges come with that. And you know this is an industry that has always been you know, at the executive level fairly male dominated. Thankfully that is changing.
Speaker 2:But kind of the challenges of what you're going through right now, yeah, well, okay, so I'm, yeah, I'm, I'm doing a week, which is crazy, I can't believe it. But walking into at Manifest, for example, like I was like heavily pregnant and already one of the only women there it felt like, and so it was really hard to miss me once you saw me, and it's like that at most conferences, even without being pregnant, is I always stick out like a sore thumb and I've learned to embrace it, even like I'll, you know, I'll send emails to people I want to meet with beforehand and I'll say I'll be wearing a blue dress and everyone always knows exactly who I am. I don't even need to wear something flamboyant because there are so many people in dresses, and so I've learned to make it work for me, I think.
Speaker 2:I think I mentioned earlier like I've always felt like an outsider in most places. You know, aerospace is a very male-heavy industry, so is consulting and finance and tech and so everything I've ever done. I've been one of the few women and as a very like feminine woman who hates golf, you know, and the stereotypical men things, you just learn to embrace it and actually, since I've gotten pregnant, I have found a lot more to relate to with men, because most people in freight are family people, I find, and so people talk about their kids and I've never been able to relate to that before because I didn't have kids and I don't care, and now that I'm thinking about it, it's like I find a new way to connect. Um, so being pregnant, I think, has actually brought me closer to you, know people who traditionally I don't have a ton in common with.
Speaker 1:Besides we're in freight and we like football or like the two things yeah, and how do you think about navigating, running a business, a young, a startup? I would call it, while having a child going through maternity leave. I mean that's gotta be pretty like stressful to navigate and I just how are you thinking about that and how?
Speaker 2:are you kind of?
Speaker 1:positioning yourself to navigate and just how are you thinking about that and how are you kind of positioning yourself to navigate it successfully?
Speaker 2:yeah. So when I started true north, I was 27 and I said you know, we're gonna ipo in five years and then I can have a family and all of that. And here I am five years later, um, and I I just said like I, I have to prove to myself that I can have both. And yes, it's hard, but like, running a company is fucking hard, having a kid is fucking hard. Is it like going to be twice as hard? We'll figure it out.
Speaker 2:And I have an amazing husband. We have a lot of support systems and I've set up a lot of support systems. And you know I'm taking four weeks, which isn't a lot, but it's. You know, I've never taken a break ever from work. Most often I've overlapped jobs in between, and so this will be the first time I don't do work for a few weeks, and so that will be different and I think that'll be rejuvenating too, even though I'm not thinking parenthood is easy at all. I'm sure I won't sleep very much, but I won't be, you know, talking to customers every day and that kind of stuff. So I'm excited for the chapter and I think I can do it, and the team is, I'm sure you can.
Speaker 2:Yeah, and the team is set. I mean, like, the stuff they come up with in these innovation weeks is so fun, and now they get a whole month of innovation week because we have tons of feedback from our early customers right now. And so, yeah, I'm excited to see what they come up with.
Speaker 1:Very cool. Well, I'm happy for you and I'm sure you'll do great at all things with it, so you'll be fine.
Speaker 2:Thanks, yeah, it'll be a big life change.
Speaker 1:Anything else you want to add, or before we sign off here.
Speaker 2:That's all I've got no, I'm glad we got to talk through um, like your, your thoughts on ai and relationships and all that. Those are the questions my team um wanted to ask of you. They're fans of the pod, so, um, we're we're stoked that I got to come on I appreciate them listening if there's anything I missed or things.
Speaker 1:they have further questions Wanted to ask of you. They're fans of the pod, so we're stoked that I got to come on.
Speaker 2:I appreciate them listening, if there's anything.
Speaker 1:I missed or things they have further questions about. You know how to find me. I'm happy to help. Sweet Thanks, fun to be on and with that, that's all we got. Have a great week, listeners, thank you.
