Ep. #62: Charley Dehoney, CEO & Cofounder of Upwell

In this episode, Andrew welcomes Charley Dehoney, CEO and cofounder of Upwell. Charley has worked at brokerages like Worldwide Express. He bootstrapped his own brokerage, Dehoney Transportation Management. He bought and sold the 50-year-old Mannings Truck Brokerage. He’s worked for a digital freight startup, a supply chain accelerator, and a container shipping company. And that’s not even all of it. Across every chapter, one thread stands out: Charley’s intimate understanding of freight payments and the cash flow challenges that logistics companies face.

So when Charley reflects on his career, it’s clear why it’s led him to where he is today. As he puts it, “The sum of all of those experiences have positioned me uniquely to do exactly what I’m doing at Upwell.” 

In this conversation, Andrew and Charley also get into:

• The trust problem in freight and why we need more API: Assume Positive Intent
• Trends across the rise of managed transportation, broker consolidation, and the old guard versus the new guard of brokerage ownership. 
• How Upwell is tackling the freight payments problem — and the cash flow lessons Charley learned the hard way (including selling his Mercedes in front of his own brokerage).
• A candid take on VCs in freight: why they’ve earned a bad reputation, when they make sense, and how to spot the good ones.
• Tactical advice on fundraising — how much to raise, how long it should last, and what investors really expect in return. 
• Why starting a business in a down market might be the smartest move you can make. As Charley says, “You never want to waste a good crisis.”

Follow The Freight Pod and host Andrew Silver on LinkedIn.

*** This episode is brought to you by Rapido Solutions Group. I had the pleasure of working with Danny Frisco and Roberto Icaza at Coyote, as well as being a client of theirs more recently at MoLo. Their team does a great job supplying nearshore talent to brokers, carriers, and technology providers to handle any role necessary, be it customer or carrier support, back office, or tech services. Visit gorapido.com to learn more. ***

A special thanks to our additional sponsors:

• Cargado – Cargado is the first platform that connects logistics companies and trucking companies that move freight into and out of Mexico. Visit cargado.com to learn more.
• Greenscreens.ai – Greenscreens.ai is the AI-powered pricing and market intelligence tool transforming how freight brokers price freight. Visit greenscreens.ai/freightpod today!
• Metafora – Metafora is a technology consulting firm that has delivered value for over a decade to brokers, shippers, carriers, private equity firms, and freight tech companies. Check them out at metafora.net. ***

Chapters

• 0:00 Sponsor message and Andrew’s introduction
• 2:25 API: Assume Positive Intent
• 14:55 The turning point in a small broker’s business
• 18:33 The industry old guard vs. new guard
• 23:04 Why don’t the bigger brokers build their own AI?
• 27:46 An introduction to Upwell
• 31:20 The payments problem for brokers
• 40:54 Charley’s personal challenges with payments
• 44:43 The $15M moment that started it all
• 46:49 Charley’s background in freight
• 52:37 Buying a business with the plan of selling
• 56:00 Mentally preparing yourself to sell
• 1:00:29 How Upwell is different from what Charley’s done
• 1:09:45 Charley challenges the VC naysayers
• 1:11:08 Why VCs have a bad name in the industry
• 1:16:20 How to raise money and how to spot a good VC
• 1:21:24 Building a business in a down market isn't a bad thing
• 1:29:05 How do you know how much to raise?
• 1:33:53 Charley’s final thoughts on “the ultimate validation”

Transcript

Speaker 1: 0:00

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: 0:33

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. Welcome back to another episode of Freak Pod, I'm your host. Andrew Silver joined today by, per usual, a special guest, mr Charlie Dahoney. Charlie, why is it Charlie versus Charles?

Speaker 2: 1:45

I guess if you know me, you know'm more of a charlie than anything. I I've never really come across as a charles. Um, my wife calls me that kind of jokingly sometimes and uh, not so much when I was trouble, that was my mom when I was young. Now my wife just kind of like a little jokingly, just be like we pick that up for me, charles, and then the kids will follow suit. But other than getting teased a little bit with the name, it's never really stuck it's. It is my, uh, my middle son, luke. It is his middle name Also, luke, charles, luke.

Speaker 1: 2:17

Charles, but your first name is Charlie or Charles.

Speaker 2: 2:20

Charles Nelson Dihoni and I go by Charlielie yeah, charlie, yeah, I mean it fits.

Speaker 1: 2:26

There's something about your I don't know if it's your vibe or your aura you've got a very kind of friendly, buddy buddy kind of vibe, like, of all you know, I've met a lot of people at conferences in our industry, a lot of great people. Um, I'm trying to figure out how to say this in a way that's not offensive or like weird, but you've just got a very buddy buddy kind of vibe to you and, uh, I way that's not offensive or like weird, but you've just got a very buddy buddy kind of vibe to you. And I think that's probably true of a lot of people who you've engaged with where they feel that way about you. And so it makes sense that Charlie just fits, for it's a more colloquial, friendly type of versus the more kind of Charles.

Speaker 2: 3:01

I'm seeing you nailed it, man. I think you said some really nice things about me, so thank you.

Speaker 1: 3:05

it's very kind of you. I'll certainly meant to be a compliment 100%.

Speaker 2: 3:09

I wouldn't take it any other way.

Speaker 1: 3:10

Assume positive intent thank you, I think that's a, that's a. Not a lot of people don't do that enough. I, and I am a culprit of of not doing that enough. Um, is that intentional? Is that something that you've had to kind of build into your kind of operandus mondi, or what was? What does that stay saying modus?

Speaker 2: 3:29

operandi, modus operandi yeah, sorry, I don't know that I've been throwing that up. I think that I just I've always been optimistic person and, um, I think, as, as you grow in life, particularly as I become a parent, I've had to really dull my edges, um, um, I think, partially my, my, my like upbringing partially my athletic background, partially growing up in freight and companies like worldwide express, you just get pretty rough around the edges, you know, and I think as I've gotten older and tried to do more with more people, uh, assuming positive intent and what people's behaviors are, just kind of helps you, you know, reframe certain natural instincts that I have. But I also got the, the acronym API, that is, I believe it's an NFI value that was shared with me by David Broering, who is a friend of both of us.

Speaker 1: 4:22

It's just funny Cause if you think about our industry, if people naturally assumed positive intent, we would have a very different industry would that be better or worse for fraud?

Speaker 1: 4:35

for fraud. I mean, yeah, I mean you get bit in the ass more when you assume like it's just the. It's the same idea. Something I think about with respect to how we built molo was like kind of trust first and like give people the opportunity, but you did get burned more often. So if you're just looking at the idea of fraud, um the, the pain probably hurts a lot more in in a in a assume positive intent environment because they just they're able to get their grips around you faster and probably harder.

Speaker 2: 5:05

Yeah, but fraud isn't the only vector, right? I mean, if, if, uh, if shippers and carriers or shippers and brokers negotiated and in more good faith and always assume positive intent, I don't know how that would impact things.

Speaker 1: 5:17

I don't know, I don't know yeah, I just think there's a lot of people in the space today who have such a poor understanding of some of the players in the space, or like a whole part of the space, because they assume negative intent.

Speaker 1: 5:32

And I'm specifically thinking about a shipper who I've talked to recently quite a bit, who just does not believe that brokers have good intentions pretty much ever and they had a philosophy on detention that essentially was the brokers were stealing all the detention from their carriers and I just I tried to argue that that was not the case.

Speaker 1: 5:57

I think the point they were looking at was that brokers had a larger percent of the accessorials in their network than assets did, despite having a smaller percent of the freight. And I said okay, but have you looked at what percent of the freight is being managed with drop trailers and a pool versus live load, live unload? Because my guess is most of your accessorials are coming on live loads and most of your live loads are coming from brokers, which in that case it makes sense that that's how that's going. They didn't want to accept that as a potential reality. They just kind of were living in the no. Brokers are bad, they're stealing with the tension and I just that's a shame, but you run into that more often than you probably should. I mean, am I wrong?

Speaker 2: 6:44

No, I think it's the nature of having an intermediary right.

Speaker 2: 6:47

I mean, when I was starting in the industry, we were a parcel reseller when Worldwide Express was selling Airborne Express and the DHL, and just having that intermediary layer in between the service provider and the client oftentimes creates this like artificial distrust.

Speaker 2: 7:01

And years ago, the role of the broker, you know, when you're when your father was really just starting to kind of like scale the industry and prove that it could expand past somebody's basement and a couple of card tables um, the industry was really based on information asymmetry and it was.

Speaker 2: 7:18

You know, the broker industry, like the broker's role, evolved because they had some data around capacity, location, price, you know carrier and information that the shipper didn't have, and so that was the value in bringing in the broker. I think the information has become more readily available and it's become much more of a of a relationship and a strategic partnership. And so when you hear that there's folks that are still looking at it as if the broker has some cards that the shipper doesn't have, I mean it's just not the case anymore. There's more data out there than there's ever been and strippers can largely do a lot of what the broker has performed historically on their own, but the brokerage industry continues to grow, so clearly there's folks out there that believe in the model and clearly the industry continues to adopt it.

Speaker 1: 8:11

Yeah, I think you made some really strong points there and I think it's just interesting that I don't think the brokerage industry is going anywhere. As you said, it continues to grow. It is interesting how 15 years ago, brokers simply had access to data and information that a shipper couldn't get without them in a lot of cases, and we've evolved to a place where most information that a broker has a shipper can get if they want it. They might have to jump through a few hoops, but largely there's not much hidden anymore other than the profit on a load. Like that's about it. And you know, I've toyed with the idea of like a fully transparent brokerage and we don't need to go down that path altogether, but like we're getting closer and closer to that becoming a reality and I don't even think it's the end of the world. You know.

Speaker 1: 9:01

I think the fear that a lot of people have is people will make decisions on how they feel about something without all of the necessary information. That's already happening, in that people have these kind of assumptions or perspectives on brokers or carriers. That's not necessarily unfounded, but it's based on one load or one bad experience or whatever. And so as soon as you open, the transparency of rate store. All of a sudden you know one load that you know the broker made 30% on, for whatever reason is the linchpin for someone deciding to never work with brokers again because they think that they're all making 30% on every load. No one wants to look at the load that bounced on Friday at 2 pm coming out of Idaho Falls potato load that had to ship on Friday and so you paid seven grand and you quoted 4,500. Nobody wants to look at that load. People just want to see the ones where they're getting taken advantage of.

Speaker 2: 10:00

Yeah, and the reality is, you know, there's a small percentage of brokers in North America can locate a truck last minute on Friday in Idaho Falls that's equipped and ready to go, willing to get to where they need to be, and so you're dealing with a very small pool of folks that have this tribal knowledge and that specific niche focus and experience, experience. And so I guess I can imagine too, how, in certain chambers of the industry or certain corners of this space, there's gotta be some spaces that are probably more ripe with bad actors. And I'm not saying that this is it, but I could imagine, maybe, you know, in produce or in that maybe somebody who, who specifically focuses on potatoes and has like a little bit of a captive audience with some carriers or a little bit of a competitive advantage, could create some leverage for themselves. But I think, going back to like, where is the industry really going? And part of the reason why I sold my last brokerage was because I believe that most of these small brokers, over time, over the course of our lifetime, are going to need to find, like, safe Harbor with a larger, you know, platform, and I think that can. Uh, I don't think that. What I'm saying is that I don't think that they'll. Uh, there's no place for the $10 million or the $20 million shop out there. But anybody who really studies the game knows that that's where folks oftentimes get stuck and it's it's sort of a function of uh, sophistication, working capital, um, you know, really leveling themselves up, scaling themselves as a leader, and so I think, as you start to look at you know there's more and more of those folks are getting rolled up and acquired or taken over, and so as I start to think about what is the industry going to look like, you know, down the road, what you and I are talking about is processing transactions at scale.

Speaker 2: 11:39

You'd say it's like, you know, creating, like. When you talk about creating a transparent brokerage, it's it's like well, that's only enabled if, if, the cost to serve is really rationalized and and folks are sort of comfortable with the operating, the operating margins on either side. Because really, when you think about it, what the brokerage does, in addition to the price discovery, the coordination and the visibility and these other things that the broker provides, it's this like managerial layer, it's like one throat to choke for a long tail of carriers, and that is value. And then you layer on top of that, the carrier compliance piece and the risk mitigation and the sort of partnership there. I think, generally speaking and this comes from my experience of working with really large global enterprises folks understand it costs money to do business and they understand either, as my partner, you're either going to figure out how to do it for less than I can and I'm going to pay you to do it, or you're going to give it back to me and I'm going to have to do it in-house.

Speaker 2: 12:34

And that is some of these other functions, largely like post-delivery functions and other things that brokers perform, like the payment, the settlement and all these other things that I think those are going to continue to provide, you know, value and the brokers that can manage those things at scale will command a fair margin.

Speaker 2: 12:53

And I think some of this, andrew, you know, I think the industry has really gone towards, like the, managed transportation is a segment that continues to grow. It's a segment that's really, really interesting to me in terms of, you know, big, big companies are coming in and partnering in mass and saying, hey, you come in and you're going to manage the long tail carrier base and the large or the large enterprise carriers because you've got a technology layer that makes it easier for me and you've got all of the relationships in place, the compliance, the governance and all of these other things. So I guess I'm starting to ramble, just. But I think where we're talking about, you know, transparency and brokerage, it's like it's really just like sort of negotiating like, hey, who's going to do the work and how much is it going to cost, and you know, is it on my books or yours, you know?

Speaker 1: 13:34

Yeah, I don't know where to go with all of that. First of all, let me let me start with that was a good ramble there was. There was a lot of meat in there. I couldn't help but wonder for a second. So I don't usually do a ton of research, like I do a little bit, and sometimes I'll throw someone's previous podcast episode on and listen for a little bit, especially if I don't know enough or I feel like there's something I want to learn more about.

Speaker 1: 14:05

And in your case, because your background has so much in it, you've worked with a number of companies that you've started or been a part of. It's not like I'm interviewing someone who worked at one company for most of their career and then started another and I'm interviewing them based on two companies. So I thought to myself I'm going to listen to your interview. I just Spotify'd searched your name and the first thing that came up was your freight caviar interview and you were talking so fast during it that I thought I was at like 2.5 speed and I made a note to myself to try to listen to see how fast. I thought you I was at 1.0 speed, I was at normal speed. You just were humming and getting those words out, and so I made a note to myself. I was like I should check, I should check. I don't feel like you're talking that fast right now, but I'm just calling it out as something to be mindful of as you're going. So, anyways, my point among a number of things that you said, I have to pick one. So let me start with this.

Speaker 1: 14:57

You made a comment that you feel like a lot of these small brokers over time are going to have to essentially find safe harbor and find, you know, latch on to something bigger, whether it's like an agency type deal or selling out altogether whatever.

Speaker 1: 15:14

I'm curious about that because, especially with the business you're building now, which we haven't even talked about, we will, we'll spend a lot of time on Upwell, but there are a lot of players, companies like yourself, who are looking to get really, really good at automating some part of the process for the broker and to alleviate as much of the kind of human capital, the people, time and energy, as well as the cost to do something, because there's simply cheaper ways to do it now.

Speaker 1: 15:46

And I'm curious if there are so many of these companies like yours that are coming up and are going to be successful and have found ways to make the lives of a broker easier. Wouldn't that theoretically give the small broker a longer leash to live on their own, with kind of all the support that's coming into the market, in the sense that almost it's like this technology is going to become so cheap because it's going to be so competitive that as a broker as a small broker I might be able to compete with the bigger guys at least on some elements of my operating costs because I can automate with Upwell or other players on different functions. Does that make sense? How do you think about that?

Speaker 2: 16:31

No, it completely makes sense and I think you know, as I look at, as I look at the evolution of the industry and the small broker and the timeline horizon of, call it, 30 years. I've been, you know, watching the industry now for 20 something years and brokers have come from like complete dormancy, where every single one was small, to now these major players are, are coming in and I mean to some extent blacking out the sun and so and I'm talking about like a sales and a growth perspective If you're a $10 million, $50 million brokerage, um, you've got to work really hard to get those RFPs and to get those new relationships built. And if they haven't heard your name before, they're already working with all of the major players. We don't have to go down the roster. But those folks you know get that. They're at bat in the RFP and you, you know the plight there. It's like you're slinging out. You know 50,000 lanes to try to get 20 that you can, you know, get three that turn into routine lanes for you and you grow from there.

Speaker 2: 17:26

So I just think that the uh, the cost of customer acquisition, that the challenge of attracting new freight from the enterprise shippers, I think there's some democratization opportunities there. And I think up. Well, you know, and other platforms you know, play, uh, certainly, a vital role in in elongating the timeline and the horizon of what the small brokers have access to them today. But there's a couple of other vectors that we really need to pay attention to that I don't think any of us know what's going to happen.

Speaker 2: 17:50

Number one um, our folks your age and younger are going to continue to start brokerages or are there going to be other business opportunities? And you know folks that just kind of slow down on that part of it. It's been rampant for the last 15 years. Let's see what the next like 10, 15 years turns into. Because one of the things that I do see in Upwell uh, I see it, it clearly is just a the age gap in our industry is like the disparity between, uh, the sort of old guard and the new guard. There's a lot of young, you know, fresh blood coming into the business, but I think new starts is going to be a really interesting metric to watch.

Speaker 1: 18:24

And then what happens with AI. Go ahead, don't go off that yet. I want to talk about that for a second. Don't lose your thought either about AI. But I'm curious talk to me a little bit more about what you are seeing with respect to the old guard versus new guard. You're saying you're you know you have, I guess, a better view of this than I do, because you spend all your time getting out in front of brokers now, small, midsize, whatever. What are you seeing in terms of what the kind of leadership landscape or ownership equity cap table landscape looks like for brokerages out there, especially in the last six to 12 months? Like what does it look? I just I'm not in the game right now.

Speaker 2: 19:00

Yes, so I'm seeing a lot of. That's a great question actually. And, um, as I'm sitting here talking to you, I'm sitting here going like well, actually, from a uh, a demographic perspective, there's a lot of families like yours. Like the dad has been in the industry, he's built something that you know. Maybe it's not massive or monumental, but it's been feeding the family for years and certainly uh has an enterprise value to it.

Speaker 2: 19:24

But one of the things I learned as I was building my brokerage and I went and acquired another brokerage and then supported multiple acquisitions of others it's really hard to get a small brokerage ready to sell. Oftentimes the books are not clean and there's a lot of expenses run through the business and there's people on the payroll that people are wondering you know what they do and who they are. So I guess I've seen a really strong trend of of uh familial kind of transfers where the father brings in the son, grooms the son son takes over the business, either in a like an equity sale or a transfer or some sort of like a partnership or something like that. But I think that's happening quite a quite a bit, and so that's one of the things that I think we have to watch is as these folks age out of the like ownership age and they also, you know, brokers in that category of like 10 to 50 million. It's a nice lifestyle business so the owner can have, could have milked some good money and profits out of the business over time and really decreased their financial risk and their need for, you know, growth and um, and so I've seen people relieve themselves with the dependency on growing the business because they already have the money that they need and then it's like, well, why would I go clean this thing up? It's paying me for a long time, but then they don't know who they're going to sell it to or transfer it to. So I think that's another complexity that we really need to kind of see is how does this older generation navigate this landscape and do they have folks in their family or in the business? I mean, there's a lot of examples of operators buying the brokerage from an older owner. That's moving on. So I think we have to kind of watch that trend.

Speaker 2: 20:54

But I think there's other companies out there that I mean I get, I get approached all the time by investment firms that have DCs that want to come in and roll up brokerages, and you must get talked to a lot about those opportunities, because people always bring up your name and they say, wouldn't it be great if we can go make this the big thing and then someday Andrew, the guy like Andrew Silver, can come run it and it's like so I know there's a lot of people that want to do, you know, m and A and roll ups, and there's a lot of companies that are already out there executing that strategy really really well, and they've been at it for years.

Speaker 2: 21:23

So I just think that the market is going to, the appetite for small brokers is going to continue to be there and if, if people don't get creative around how they're going to transfer their business, there's going to be really no other, no other sort of like outcome in the next 10 years as these people age out of the operator's role and then I think you know, the other just really elephant in the room. Going back to the AI point is I think there's in fact I know I get talked to entrepreneurs all the time there's a lot of folks out there that are really interested in just, you know, getting their own large language models and building their own AI agents in house and trying to automate their own freight brokerage and seeing what it can do for them in sales Within the brokerage.

Speaker 1: 22:03

you're saying yes.

Speaker 1: 22:05

I've been looking for that. 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.

Speaker 1: 22:41

It's amazing to see how many logistics companies have been able to use Cargato to expand into Mexico to grow their business.

Speaker 1: 22:48

Cargato 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 Cargato today at cargatocom, that's C-A-R-G-A-D-Ocom, C-A-R-G-A-D-O dot com that's C-A-R-G-A-D-O dot com. This is what I've asked all these AI companies is why doesn't Robinson, Echo, RxO, all of these companies that are founded with a hungry CEO who's technical or has some freight experience, and then either they have a technical co-founder or they have a freight experience co-founder, and then they have two or three engineers and then three months later they've got a functional product that is being sold out into the market as some kind of AI agent. And I'm just thinking like, if the most valuable companies today in the space started like that, why don't Robinson and RXO and Echo and those the likes just do the same thing? Why don't they just hire three or four of their own engineers to build this thing out and own it themselves?

Speaker 2: 23:50

I mean, I think they are. I think, and part of this is, how much do you believe in the technology capabilities of these large enterprises, which I happen to believe in them pretty deeply, and I say this going back to many years ago when we brought Cargomatic to market and you know, we thought that shippers were going to want to sit around and track their trucks on their phone and that that was anything. It just dawned on me. It was like you know, these large incumbents, they already look at themselves as technology companies anyways, and CH is not a client of mine at Upwell, but we do work with a number of other you know large players in that ilk and I would say that there's a lot of adoption, there's a lot of use and there's a lot of widespread conversation around agentic AI in the back office, in the front of the house and companies like I mean the list goes on and on right Fleetworks, Vuma, Happy Robot Parade.

Speaker 2: 24:53

There's a lot of, like you know, really cool stuff going on in the load building, Cued bigger picture in the load building, scheduling.

Speaker 2: 25:01

A lot of really cool agentic AI stuff is going on. Scheduling a lot of really cool agentic ai stuff is going on. But one of the things we see at upwell is we're bringing these ai agents into the small to mid-sized brokerages and in many cases you know large carriers and large brokers, but we still see folks, andrew, that have already gone out and attacked that problem and they've already built their own ai and they've already deployed some large language model to like solve a problem behind the scenes. So I think there's a lot of innovation going on and it's happening. In fact, I saw this when I was working with the steamship line at CMA, CGM group and their partnership with BNSF, the railroad and a number of other players like that. Um, there's a big appetite and there's a lot of ongoing projects going on behind the scenes inside these big companies and I think that's what's opening the door for companies like all of the agentic companies I just mentioned and Upwell and others.

Speaker 1: 25:50

Is it? Is it? Would that not scare you a little bit, though you know, as someone in the space to to think that a lot of these companies are just going to go do it themselves? I mean, is that not a risk that you have to worry about?

Speaker 2: 26:07

a risk that you have to worry about.

Speaker 2: 26:07

Oh look, I think, um, I think if we stop at just automating you know, the AR and AP using AI for brokers if that's where we stopped and we deserve to get disrupted anyways but if we continue on and we leverage the connectivity that we're building today to develop new products and bring uh financial services and financial products to the market and allow uh shippers and brokers to conduct their transactions in a more secured, controlled and safe and reliable way, and if we can build more connectivity in the world of payments and we can drive more visibility into the forecasting side and help brokers make better sense and carriers make better sense of what their cash is going to look like in the coming days, weeks, months, then there's a whole lot of other things that we can do in the universe of freight payments and finance.

Speaker 2: 26:51

And so I look at you know, right now is the gold rush of our era and this is an opportunity to. I never thought, andrew, that I was the guy to go build the AI that was going to change the industry, but what I do believe is I can leverage all of the latest and newest and most innovative AI through a platform like Upwell, to bring the results that people in our industry actually give a shit about, because AI is talked about constantly, but not just in our industry. It's constantly across our lives, right, it's reaching every area of our lives, and so I just looked at it as an opportunity to build that the type of company that I wanted to build and the scale of company that I wanted to build, faster than I could have before, enabled by AI, and so we use AI in every single element of our product and really in as many areas of the business as we can.

Speaker 1: 27:47

All right, this is the point where we have to get into what you're building, because I like sometimes having conversations where we just start talking and who knows where we're going, and 25 minutes in we're here, but the problem is you start talking about your company. I haven't introduced it, nobody knows what the hell it is, and so that's shame on me as the host for allowing us to get to that point, and we didn't talk about your background either. So let's start with your company now and we'll work our way back, maybe. So what are you?

Speaker 2: 28:17

building. So Upwell is an accounts receivable automation platform, and it's built specifically for the logistics industry, and so we work with brokers and carriers to help them automate the invoice process and help them collect their money from their largest payers faster. So technically I mean, I guess, more tactically what do we do? We integrate the transportation management software. You know, whatever they're using off the shelf, or we have an API for homegrown systems, and then we integrate with all the accounting software, so everything from NetSuite and Sage all the way up to, you know, oracle and SAP, and then we read the operational emails to absorb the documents. And so, with those like three sources, uplow sits in the middle. With those like three sources, uplow sits in the middle and we have the largest catalog of payer standards in the industry.

Speaker 2: 29:09

So where we really started to build our business, andrew, is we aligned with the large payers in the industry, companies like Cass, us Bank, uber, freight Transportation Insight, the companies that are managing the transactions and paying the majority of the freight bills, and we we study them deeply and we understood how they audit the invoices Once they receive the invoices from the logistics service provider, the trucker or the broker, and so we built a rules engine that allows the service provider, the broker, to generate the invoice in the perfect format with all of the perfect identifiers and the right document packet, and we deliver it where that payer needs it to go and we send all of the right information from the TMS and we validate all that data with AI.

Speaker 2: 29:54

So really, what that means tactically of target is, you know, the shipper, the payer for a large broker. That broker might be managing hundreds of transactions a week for target and target is going to have four or five identifiers that they're going to want to see on the bill of lading and on the invoice and that's going to be maybe a PO number, a SKU number, um, a bill of lading number from their own internal system, and then they're going to have a document packet. You know, certain supporting documents that need to be passed along to their payment company, which maybe it's Cass. So there needs to be an EDI invoice generated, sent over to Cass, and then a paper invoice uploaded into Cass's portal and then there's a match that happens over on a couple of those invoices when before they got pushed out.

Speaker 2: 30:47

Well, those invoices are going to sit there and they're not going to get paid until the broker goes in and does something to it. So what we do is we automate the connection with the payment portals and we take that perfect invoice that we just generated and we push it out to the payment portal and then we sit and listen to find out what's going to happen next. And so if we find out that that payment isn't going to get made on time, we bring that back, that rejection code, into Upwell, and that's where the billing team is going to go in there and make any changes, upload whatever document they need to address, and they make all those changes behind the scenes in Upwell.

Speaker 1: 31:21

So this is the first time I've dabbled in on the show in payments and receivables for brokers, so why don't we take a step back for a second and explain the problem? Explain kind of what that world looks like for brokers, like what are the issues they run into? Why is it a problem, if you don't mind, kind of the 30 000 foot view, and I'd love to hear whatever this is.

Speaker 2: 31:49

Um, this is so appropriate because I I look at you as, and like you, somebody. You're somebody that I would define as a broker's broker, like directionally, you could give me an accurate rate on most lanes in the us, depending on what the commodity and time of year is, and you know you might not be in the seat anymore, but you still know what's going on. It's that in you you're, you're like really into it, but nobody ever starts a brokerage because they're really into payments.

Speaker 1: 32:14

You're going to. You're going to expose me so badly in the next five minutes I'll share after but go ahead.

Speaker 2: 32:21

So so basically, uh, every broker in the world gets into it Cause they love solving problems, chasing freight, getting customers, making money. And what we all do is we all go out and the customer says give you all these problems you solve for them. You get the first load and they're like, hey, they have these five or six things you need to do on my invoice and I'm going to send you an email with it and you're like yeah, I got it. Daryl's got my back. We're good at all this stuff. We do it all the time for other customers.

Speaker 2: 32:50

Well, inevitably, that data doesn't get passed on to the billing team so that customer gets whatever vanilla invoice that goes out and you, as the account rep, are going to get drug into it and you're going to have to have another call with the back office team and you're gonna have to go through all these invoicing standards. And then, once you get you know Cheryl or you know Michelle or whoever's in that back office team on your side, you get them up to speed on making those invoices right. Well then, the customer's happy their, their AP team is paying on time, your AR team is collecting on time and, as the account rep or the owner. You don't hear about that account until Cheryl goes on vacation and then, like, patrick needs to step in and make the bills for that week and then what happens is none of those bills get approved. Cheryl comes back in, she jumps right back into the seat. All the bills start going out correctly. Next thing you know, the owner comes out and goes like we're $40,000 shy for payroll, what's going on with collections? And they pull this accounts receivable report that takes them kind of a day to pull because it's never up to date. And you got to wait until the cash was posted at the end of the day. And you got to go pull all the payment statuses out of and U S bank and Uber freight and Transporium and Williams and associates. And once you get all the data clean, it takes two days. And the owner's like what, why did that big shipper, why did they not pay for a whole week? Get them on the phone. Hey, what's going on? How come you guys are behind? Uh well, these ones didn't have our documents, it didn't have our references. I can't approve these. Oh my goodness. Oh my goodness, okay. Well, that was like 45 days ago. So let me, uh, let me get you those updated real quickly and then I'll send them right over and can you pay them today and they should be like no, no, yeah, I'm going to net 30 with you, right, like that's net 30. Like it's going to be 30 days for us to process these from today If you can get them over to me today.

Speaker 2: 34:32

And so I found myself personally in that cycle over and over and over again when I was building my first bootstrap logistics company, and so I was that broker that got stuck at 12 million bucks and really just didn't have the sophistication and the that. This is 15 years ago, so the technology wasn't where it is today. I mean, there was no document management or like HubTran available in those days or anything like that. But you know, over time and I, over time, as I grew in my career and I uh, got back into the brokerage business, um, about six, seven years ago, when I moved my family to Omaha to buy a brokerage, that's when I really had more of a better understanding of the business and I went into it with more of a strong thesis around I wanted to take this 50-year-old truck brokerage company and I wanted to automate the back office pieces to the extent that I could, and this was 2019. And so I wanted to use whatever I could to automate humans out of the process and repurpose those budget dollars back into account managers and salespeople, Cause this company was 50 years old and hadn't had a sales rep since the owner the original owner sold it. So, anyways, uh, that was the plan, that was the thesis, but you know, six years ago I had to use all this stuff off the shelf and piecemeal it together. I was trying to use billcom to pay my carriers because triumph was just coming out in those days, and and in those days, like, a lot of people didn't trust triumph.

Speaker 2: 35:51

Yet I think they've done a really good job of building their, their name and their reputation in the industry and becoming like the de facto standard. And you know, I think they've overcome a lot of the trust initiatives, a trust initiatives. A lot of big brokers you just mentioned use them for their payments. So they're clearly, uh, you know, have have opened up that space of like AP as a service, but on the air side, I didn't have anywhere, andrew, to have those rules live for the shippers. So the main problem that we solve for is every one of the shippers in your brokerage at Molo had their own rules for their invoices, and those rules are generally not conveyed from the broker to the back office. So those rules are really what our secret sauce is at Upwell is you can configure all of the unique requirements, down to the format of the invoice, the identifiers that need to be on the bill, what payment portal it needs to go into If it's an EDI API email with a CSV email, with a PDF statement, invoicing, whatever. So that's what we do.

Speaker 1: 36:49

And something you didn't necessarily speak to directly but it's kind of even the further 30,000 foot view of why it's important is just managing cash flow in a brokerage and how hard that is and the idea that you know, especially if you're playing in the enterprise world with larger shippers, your payment terms are definitely worse. There are some as high as 120 days, only a few. There's more at 90, even more at 60. As a broker, you're not happy with anything above 30, 45. You're like, okay, I'll take it 60,. You're probably taking it in the right market, in a down market, because you need the loads, you want the freight, but there's a cost to doing that.

Speaker 1: 37:37

And so this just is really important because you got to pay the carriers, or at least the factoring companies for the carriers, in 30 days and if you're getting paid on average in 50 days among all your customers, that's 20 days of revenue that you're floating. And let's say you're a $250 million brokerage, that's a million bucks a day you're moving. That's $20 million of revenue capital you have to have available just to manage your float. And so the specific issue you're talking about of invoices that get sent out incorrectly. You don't even find out, in some cases for 30, 40 days. You don't find out, the shipper doesn't tell you, they don't receive an invoice from you on April 9th and then call you on April 10th and say hey, the invoice is wrong on April 9th and then call you on April 10th and say hey, the invoice is wrong 30 days after April 9th, like they used to do.

Speaker 2: 38:32

that you know. Now it just goes into some portal.

Speaker 1: 38:38

What I think happens is on April 9th you send the invoice and they don't look at it until like the absolute last minute necessary to hit the payment on time. But even so, if it's wrong, a lot of times they just don't pay it. I had plenty of shippers that not only wouldn't pay it, they didn't say anything to you. So you have to track your own receivables and see okay, why weren't these loads paid? You reach out it's now been 40-ish days before you even notice it hasn't been paid. You email them or call them and say hey, what's the deal here, can you help me? And they say, oh, you invoiced incorrectly. You didn't have this dash or this Y or this X.

Speaker 2: 39:08

But first they don't respond for two to three days. Yeah exactly, you have to get back to them, so the whole cycle is just painful.

Speaker 1: 39:14

Yeah, so you know by the time you get it right, it's been 45 days already. Then you restart the clock on your 30 or 45 days, so it's really in some cases 70, 90 days before you finally get paid if you screw up the initial invoice. So not to be a salesman on your behalf, but this is really important stuff and you nailed it in terms of how, especially us gunslinging, the younger type, as you kind of described two sets, the old guard and the new guard, and I'll sit in the new guard as kind of the young running and gunning high flying we want to grow at all costs. We want to be the biggest and the baddest.

Speaker 1: 39:55

That kind of competitive energy is great, but I spent so much of my time just worried about getting loads in the door, was not very focused on making sure the cash was coming in the other side, and I actually remember the first really big and explosive fight that basically I think ruined the relationship we had with our first investor who we bought out was centered on receivables and the fact that we were not focused on it and they they kind of like took a hard. They took a hard line of like if you don't go get this money tomorrow. We're not paying your people and I'm like well that you're gone see ya, but I do understand why they cared so much about it. Um, I just you know, when I was 27 and starting the business, I just was like they'll pay us eventually. What does it matter? Just put more money in and uh that the monetary yeah, exactly these guys had committed.

Speaker 1: 40:44

Sorry, I was just saying these guys had committed five million bucks to us and they were only about 800 grand in. So I was like there's supposed to be a tree over here with cash and send us the money.

Speaker 2: 40:52

Fair, that's fair, um, but I think I had a couple of like really painful um exposures to this uh that that really just like slapped me across the face. One, uh, when I was building my first brokerage. Uh, after about a year and a half we started doing well and my wife was able to leave her job and, you know, start hanging out around the shop and at first she was just going to help with QuickBooks one day a week and next thing you know, she's answering the phone and then next thing you know, she's running the entire back of the house and I'm doing the front of the house and we're growing like crazy, but we get to like 12 million. Get to like 12 million and I'm just like constantly in this cycle that I was describing earlier of like running low on money, uncovering the root cause of the invoicing issues, getting the invoices fixed, and it was just completely like distracting me from doing all this stuff that I love to do.

Speaker 2: 41:39

This was also in you know, probably call it 2000 and I don't know, maybe 10, 12 in that era where, like I was in my twenties, I grew up like really poor. I didn't have like a great network of people to support me in my growing brokerage. So I bootstrapped the entire thing with savings that I had from worldwide express. So I would. I didn't have that float, you know. So at first I was collecting like a maniac and everybody was on auto, ach and credit card and that was something they instilled in us. At worldwide is. We spiff the reps on getting their customers set up on auto pay. So I had that pretty like dialed in.

Speaker 2: 42:13

But as we grew, uh, you know, more and more customers were coming on board. I wasn't always able to convert them all to auto pay. And then really, my wife is the one that would come to me and she'd be like look, we either have to sell my ring or that Mercedes. But you know we don't have enough for payroll. And so I had to sell my Mercedes in front of the brokerage one time, and I think I I've told that story to other people, but that was just one really painful exposure to working capital and in those days, like I didn't know how to contact a bank and and get a asset baseline of credit, nor would my business have qualified for one at that size or my quality of my information that I had. So and then, as I kind of like, sold that business, you know, by by the grace of God and was able to kind of continue to move on to my career and do some other things.

Speaker 2: 42:58

And then I turned around that, that brokerage company in Omaha and that was really great exposure into. Hey, if you can really automate a lot of this stuff in the back office, it's pretty accurate and you can get the people out of the way and the people are the ones that put latency in these steps and make mistakes. But the AI wasn't where it needed to be. You know, six, seven years ago when I was doing that, and so I would say most recently, after I sold the brokerage, I went to work for a couple of very large global logistics companies, helping them with their technology, their technology strategy. So the first was Vanguard Logistics, which is a big ocean freight company, a non-vessel operating common carrier, so they stuff containers onto other people's ships, is that?

Speaker 1: 43:45

a large company.

Speaker 2: 43:46

Huge yeah, the biggest uh nvocc in the world.

Speaker 1: 43:50

Shame on me, I should know the name I I was. I was, I was looking for a name of a new brokerage, as I was just daydreaming the other day and I was on chat gpt asking it to help me with names, and vanguard came up and I was just thinking about that.

Speaker 2: 44:03

It's a great yeah, vanguard is a great one. Maybe, um, yeah, maybe the um mansour family will sell it to you for, like you know, a several billion.

Speaker 2: 44:15

I don't have that, uh. So, anyways, I was. I was helping them launch this, uh, this freight marketplace called freight mango where we were selling container shipping online. Like during the height of the container crisis, and as we went to market there, we really had to build all of the invoice generation functionality from scratch, and that was terrible like building a system to make an invoice and we solved it largely with people in India and you know, our order to cash was completely unautomated at first, and then we built the stuff over time.

Speaker 2: 44:42

But it was really when I was working for the steam ship line CMAC Jam Group and I saw that all of their large trade partners had this exact same issue. It was the guy, a CEO in the industry, a guy named Ken Calloway from Road One, who is a really awesome guy. I was trying to get him to come to an event because he was one of our partners at Zbox, the accelerator. I was running for CMAC Jam Group at the time and Ken wouldn't take my call and he finally picked up one day and he said I'm not coming to your event, charlie, you guys owe me a bunch of money. There's a bunch of unpaid trucking invoices.

Speaker 2: 45:14

I'm like, well, dude, I work for the accelerator. I don't, I don't know what to do. He's like well, you got to go talk to that team out there. So I got to talk to all these amazing people and they're jumping into all these bills and they're like man, this one doesn't have bill lighting, this one's missing our reference and it's $15 million worth of sitting out there. And so once I saw that, that was like the big aha moment, and I mean, within three months, I had the entire plan, the initial investors and a co-founder kind of ready to go. And, um, you know, that's when we got going.

Speaker 1: 45:50

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Speaker 1: 46:49

So it's interesting because you're now like in the thick of this business that you are running. It's yours, it's your baby, but it feels like in your history and we haven't done like a lot or a chronological, we haven't talked about your background, but you've. You've plugged little bits and pieces here and there and, yeah, um, what I've noticed is you've worked at a lot of places, you've had a bunch of roles and you know some of them have been shorter stints and I'm curious about that. Can you talk a little bit about your path, um, and like how this is different because you're now, this is yours and you're, you're in this, you're running it, versus kind of like stopping here, stopping there, consulting here or whatever.

Speaker 2: 47:33

Yeah, I think that's fair and I think, just going all the way back, I started with Worldwide Express and in those days they were a franchise based company. So while I was there for five or six years I was working within different franchise groups and you know I was part of a couple of different acquisitions during that time in different franchise groups and you know I was part of a couple of different acquisitions during that time. And so I had a couple of small exits in my twenties because I got split equity at worldwide friend running franchises for absentee owners, like early, early in my twenties. And you know, by the time I was in my late twenties, private equity came into that business and I was able to kind of walk away and I that's when I started my first brokerage company. And after that I put about five years into building, maybe four years into building my first brokerage company and, um, I really got stuck. I was coming about like that phase and I didn't really see a path to taking that to a billion dollars and looking, knowing what I know now, working capital could have solved it all. Working capital and a little bit of mentorship could have solved it all.

Speaker 2: 48:22

I mean, uh, the guy that I sold my last brokerage to, scott Fitzgerald, is my exact age. He started his brokerage the exact same year and that guy is one of the wealthiest guys in the industry right now. And, um, and he did it just through grit and hustle and sticking with it Right. But you know, you mentioned, like I've done a lot of other things.

Speaker 2: 48:37

I mean, I would say, after about four years of running that brokerage, I realized, like I'm not the guy I'm not ready for, probably need to learn some other things. And, um, I was. I would say I was also really interested in startups at the time. I really wanted to figure out how Uber was going to change trucking and while I was like pulling at that string, trying to figure out should I sell my company, I actually had two companies at that time. I had this brokerage business and a small chain of pack and ship stores that I was running in San Diego, and so I ended up selling both of those in 2014 because I'd already gotten involved with cargomatic and those were the guys that uberized trucking long before uber got into the space and um, so I spent a couple of years.

Speaker 1: 49:11

Whatever happened? Whatever happened to that did that thing flame out no, no, it's doing extremely well.

Speaker 2: 49:17

Yeah, they're, uh, really, I mean they're yes, yes, uh, they're very profitable. A guy, rich gerstein, came after. Like all of the kind of tech crunch articles and stuff came out about them, negative publicity of maybe 2016 and 18 uh, this guy named rich gerstein stepped in. I worked with the original founders, who are still both dear friends of mine the good guys, uh, but they weren't the guys and gerstein has taken it turned into a really legitimate business and they all freight for a lot of folks. They're backed by tiger soft bank.

Speaker 2: 49:46

It's a freight brokerage yeah, it's uh, it's more of like a managed trans company where they they, but it's super, super automated. I mean they don't have a big operations team and they do a lot of routine freight where you know they put uh the same carriers under the same loads and they manage you know stuff at scale for they haul for steamship lines and big retailers and you know all the usual suspects.

Speaker 1: 50:09

Yeah, it makes sense Okay.

Speaker 2: 50:11

Yeah, um. So anyways, after I spent a couple of years there, I, um, I I was still really curious about startups and I wasn't ready to kind of start my own. I didn't have an idea good enough, and so I I was the kind of head of growth at at a couple more startups. Uh, after Cargomatic I did ShipHawk and then Airspace, and all three of those companies have gone on to raise a considerable amount of money and reached a certain scale where they've become viable businesses. And so that's when I kind of realized, andrew, that I'm good at going zero to one.

Speaker 2: 50:39

My experience at Worldwide Express and starting new offices and hiring new reps made me very entrepreneurial and very uh adept at not only uh taking the idea but getting it out and getting the first cohort of customers to feel comfortable with it and getting the first loads on the trucks and getting the first uh revenue across the door, getting the first VCs in the in the business. And so after I did a few of those, I thought to myself like man, this is really cool, but like you don't make shit working at a startup, I never sold any of my stock. So I had a bunch of stock in cargo, matic, airspace and ship Hawk, and I never sold any of it. I never had a chance to sell any of it, you know, in seven years. So I thought to myself like I could do better. Um, by this time I was, you know, 37, 38. And I thought I could do better for my family if I just went and worked at a more established company and, and, um, you know, got a better paycheck and had some more stability. But I'm pretty unemployable. So I wasn't really ready to go work at it for somebody else. But I thought if I could buy a more established company that had more profit coming in, I could afford to pay myself. Call it 180 or $200,000 a year, because you know, at that time I hadn't been paying myself that much for a long, long time.

Speaker 2: 51:48

So, anyways, that was the whole drive to move to Nebraska, and I also subsequently wanted to get my family Like. I had three sons, very young at the time. I didn't really want to raise them in Southern California where we were at the time. So, uh, we found this brokerage to buy in Nebraska and I thought this opportunity to come in there and automate the back office, clean up their AP and their AR, because their books were a mess. I thought if I could do those two things and put any technology spin on the business, that I could sell it to some large strategic who was private equity backed or venture backed, because they could go raise money on my revenue at a higher multiple than I could. So there was just an arbitrage opportunity that I thought I could create and it was kind of financial engineering and that's really what took me to Nebraska and that's what happened at Manning's. We sold it 19 months later to Scott Fitzgerald at Fitzmark and that's when I started doing some other things.

Speaker 1: 52:38

What's it like to go into a business to buy one and like go in and own it with this kind of very core plan of selling it in a short time period? Like I'm just curious emotionally what it's like to be in a business culturally when you've got this end game, that's short term. Like I just I'm coming from a place of like building where I like thought I'd be there forever and so like you're pouring yourself into people and what feels like a different way than you maybe would if you knew you had a two to three year timeline with a business.

Speaker 2: 53:14

I think when I was younger, I probably had more of an like a sentimental reasoning behind why. Why it's better to, you know, try to have this like long marriage with the company that you're a part of, or the company that you're running or the company that you own. And then, over time, you just start to realize that, man, my life changes so much and everybody else's world and life changes around us, and more than, moreover, you never know what opportunity is going to come your way tomorrow or the next day. So, um, I didn't go into Manning's thinking. I was going to sell it on a 19 month horizon, but when the opportunity came up and the shareholders were all thrilled with the outcome, it just made a lot of sense. And by that time we had turned enough screws in the business and I was like looking at the business and I was like I felt like they needed me, you know, but I actually wrote a kind of an emotional blog post about it the day that I decided to leave because the second Fitz, uh Fitzmark took over the business and like their operator, doug Starnes, came out and their tech guy, jacob Sherb, came out, like they had everybody trained up on the new TMS and like lifted and shifted within like a week and they just came in with like this, like super, super, like 18 style, like plan, and like within a week I was like these people don't need me. And I hung out for like three more weeks and I was like, no thanks man, like I, I wasn't doing anything. And so that's where, like I just saw, like Fitzmark is a better manager of Manning's than me and the best thing that I did for this business and these people cause Manning's is still one of Fitzmark's like most profitable offices. It's now Fitzmark Omaha and this team is completely Fitzmark, but the same people that were there for 10 years before I bought the business are still there and they're dedicated to Fitzmark and and Scott and his team just take great care of people. And so it's like you know that was a really healthy transition.

Speaker 2: 55:08

And it also came to time for me where, like all of a sudden, I popped my head up and I was like, oh shit, other people are calling. There's other cool things that I can do. So I think I've I've never really, andrew, like run away from something so much as I've gotten the opportunity to run towards something, so like, as an example, like I didn't sell my freight brokerages because, like, they were dumpster fire, like I mean, the first one was pretty rough but I was making good money on it and like and I could have gotten it better. But I just started seeing, like, man, I want to learn more about tech and I and I and I see this opportunity opening up, and that was like 2007,. 2008 is when I really started to feel the pull to get into tech, and so, by 2014, I was able to sell that brokerage.

Speaker 2: 55:47

And then I kind of, you know, had these short stints and I just really looked at it as like learning opportunities. I think when I've like exhausted the maximum amount of what I can learn out of something, um, it's pretty easy for me to just change my mind about it. And then the other part is like selling that business, uh, at Manning's, like that changed my life. You know, like I got the opportunity to go do something else. It relieved, you know, some some sort of challenges in my life that made it different. So you have to take that into consideration, as you know. I mean you got the opportunity to sell your business. It was like everything's different from that down, even if you don't walk away like the richest guy. It's different.

Speaker 1: 56:25

Yeah, I mean it's definitely different when you, when you leave, um, there's two points of difference, difference I don't know. There's two points that like are life-changing in that. One is kind of can be, can be financially. I guess it depends how you sell your business or how much you sell it for. But, um, just coming into a larger amount of cash for the first time is is a meaningful change in life. But two is more about how you. That doesn't necessarily have to change how you live, but when you leave a business that you've been, that you built, that's a meaningful change in your life.

Speaker 1: 57:01

That I don't know that people, if I could give advice to someone selling their company and like leaving it because mine wasn't about selling it as much as leaving as a result of selling, because I didn't leave for a year and a half after I sold, but mentally prepare yourself to leave. And what I mean by that is like when you're going through the long, arduous process of due diligence with an acquirer. Aside from spending that time thinking about what's going to happen to your business because that's how I spend all my time is thinking what's going to happen to my team, what's going to happen to this team if they want to take that over. What's going to happen here? What's going to happen here? At no point did I ever think. What happens to me when I'm not here? How do I navigate?

Speaker 1: 57:52

Not having this thing that, in some ways, has become a big part of my identity? Right or wrong? Wrong, frankly, is what it is. We shouldn't allow our business to be a big part of our identity. We can have it be a big part of our passion and our why, in terms of why we show up every day, but having it actually be part of your identity is a massive flaw and it's a product of other things missing in our life, and I only speak from my own experience of not having filled my cup up enough with things that really mattered and then allowing a business to take that place. In any case, not being ready for the aftermath of leaving is a big mistake, I think, and I would recommend people spend real time thinking about that and contemplating what that can look like.

Speaker 2: 58:39

I agree I have a lot of friends that it keeps them in the seat for a long time because they don't. I mean, I have a really good friend in Omaha that's a super successful CEO and he, he runs a marketplace business. It's multiple billions of dollars in GMB and and, uh, the guy's one of the wealthiest guys I know. And just he, I, he doesn't know what he would do next, he doesn't know what would happen. He knows that, like I mean, you know, you have some of those friends where you're like, hey, dude, how are you doing? I'm good, yeah, it's great. And then, like, behind closed doors, you're like, oh, dude, I'm dead inside and they're like me too, like it's like, I think, in freight, you kind of you have like those those friends where you're like everything's positive, it's up to the writer, maybe it's your co-founder, and then, like you get behind closed doors and it's just like you're like, oh god, I think, particularly with my, my friends that that are CEOs and dads that are engaged with their kids and stuff, like you can run really, really hot at this age. You know, and I think when I was younger, at first I was going to challenge what you're saying about like not letting the business be who you are. But then I kind of like I listened to a little bit more and it resonated with me as I started thinking about my professional identity when I was younger, before I had my children, and how much I poured into relationships at worldwide. Express that like maybe looking back or like just very superficial and maybe not long-term relationships. Maybe it wasn't a direct report, that I was like changing their life or impacting them on a daily basis. Maybe it's like some superficial relationship that you know you just kind of drag on with or something. And I think over time, as you learn yourself better, you become more defensive of your, your time and your friend group because, like you want to fill that time with, be it your fiance or your, your family that you're going to build, or your, you know your, your family, that your your your other family that you want to just maintain healthy relationships with as you grow, or friends you want to stay in touch with.

Speaker 2: 1:00:26

You can't do it all Right and I think, uh, I didn't want to just touch on one last part of your question because I didn't answer like, why is Upwell different than these other things that I've done? And and um, and there's no question that it is. I mean, it's um. I want to be very clear Like I'm building this business to uh, try to build a company that's of a scale and um capabilities that, like, exceed my ability to manage it. That would be something I'd be very proud of is if we built something that was so big and special that, um, you know they, they asked me to become the chairman and not the CEO, um, and I think we're, um, you know, light years away from that. It's a long, long ways away, but that's the ambition that I have.

Speaker 1: 1:01:05

I respect and appreciate that, but I want to dig in for one second on that comment and then you can keep going. But why that thought versus wanting the challenge of being able to grow into the skill set of managing something larger than you've ever managed?

Speaker 2: 1:01:26

Well, I think very soon I'll be managing something larger than I've ever managed. Um, well, I think very soon I'll be large, I'll be managing something, uh, larger than I've ever managed, and I'm not intimidated by that at all. In fact, I can see like very clearly in my mind's eye how we're going to get to what I thought was the goal line of this business when I first started off. And we're getting there faster than I expected and we have the support of folks that I didn't expect the support from, and in so many ways this has been like a dream come true for me, cause it's just like just playing, like I'm playing a game that like I know how to play, and it's like it's like I'm playing Madden against everybody else's like a little bit like on a little bit lower skill level and I already know the plays are going to run because I've been doing it. But then to also have the help and the network then of folks that like genuinely want to see me be successful, from my initial angel investors to introductions to customers, to just like goodwill dude, like it is so amazing to have the network and the support. But going back to your point, I just see the opportunity of what Upwell can be, and I think there's this massive, massive potential for Upwell to become the clearinghouse for trillions of dollars of payments for global trade, and we'll have the intelligence to power those transactions and reduce the waste and the fat that comes from the audit process.

Speaker 2: 1:02:41

And if we do our job, the auditors go away. I mean, that's just the truth of the industry. And so when I start thinking about building something like that, it like motivates me to a level like I can't even fucking describe. But it also makes me think, like dude, like Charlie, you're not doing this to make a billion dollars. You're doing this so that your friends in freight respect you and that when your, your kids, get to uh meet, uh, andrew silver someday, that Andrew Silver can say something really great about your dad that, hey, I met him when he was running around this brokerage and he's always just like a friendly guy, bit of a knucklehead, but we had a good time together and you know, everybody was just rooting for him and went up Well, when went fantastic for him, we were all just so happy. You know, that's why I'm doing this.

Speaker 1: 1:03:28

I like that. At Molo we built a great company and I'm proud of the work we did. 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. Business consulting or technology services, we look to Peter Ryan and the team at Metafora. 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: 1:04:20

You know part of me, as you were talking, just thinks like you've had a lot of experiences.

Speaker 1: 1:04:28

You've worked at a number of places or consulted for done you know a little bit here and there for a number of companies, and I get why.

Speaker 1: 1:04:36

If you were to backtrack from a point in time, you could see why all the dots connected to lead to where you are.

Speaker 1: 1:04:44

But it is part of me likes to look at it from the other end of the spectrum and think, like it was, maybe all of these things were meant to happen so that you could be in the position you're in right now and that you were educated and met like and by educated I mean like thrown into a, a situation with um, I don't know bnsf or you know this ocean liner, or with this broker, and, like you know, one experience leads to the next, leads to the next, leads to, like the point you mentioned earlier, where you're sitting and looking at all these invoices poorly managed, $15 million owed out to uh, road one, I think you said, and all of a sudden, like a light bulb goes off and it's like wait a second, I've got a.

Speaker 1: 1:05:33

I see a big problem and I think I can build the solution and I think it's just cool. So I, I I'm not surprised, um. And then the second thing you sit around like friends supporting you, and all that support you've gotten, I think, goes back to the first thing I said about your name. And this is just a guy.

Speaker 1: 1:05:51

I'm just a guy who's I've probably shook your hand five times in our life that's exactly what I was going to say, probably, but consider you a friend and uh and again, the five times are a product of just running.

Speaker 2: 1:06:03

I think the first time we ran into each other at a conference, like at the bar and and I and I think almost, I think, probably every single time we've ever seen each other has been at a conference.

Speaker 1: 1:06:12

Exactly, and but but I'm cheering for you and it's, it's. You know, it's not like there was something that you did for me that that made me want to cheer for you. I think it's just kind of the way you carry yourself and maybe the way you think about relationships. I don't know if you want to talk about that for a minute, but like I think that certain people in our industry do very well for a number of reasons, but like it's a superpower to have people who want to pull for you, and especially people who you didn't really give them a great reason to pull for you, or maybe it's not, you didn't give them a great reason. Sometimes the great reason is you're just a good someone's, just a good person. You know, like you meet them and you get a good vibe from them and you're like this guy seems like he wants to help me. I should want to help him, um, so I don't know, I think that's a thing.

Speaker 2: 1:07:00

Uh, I think that's a thing. And I would also say, andrew, that, um, I wanted to start a tech company when I left Worldwide Express in 2007 or 2008,. Whenever I left and I looked at the landscape at that time and like Mercury Gate was growing and other than that there was like really no other than TMS. There was no technology going on and I knew I couldn't compete with Mercury. I didn't see Swan Leap and Ascend TMS and all these other ones that have popped up and like since exited and done great, and you know, I didn't have the experience and the perspective and the and I couldn't execute it. I didn't have the network.

Speaker 2: 1:07:38

So, going back to your point, like when I tell investors or when I, when I introduced myself to a prospective employee and I'm giving them the whole story, like my background, can get so long because it's hard for me to talk about any one part about. It's hard for me to talk about Upwell without talking about selling my car in front of my brokerage and without talking about stumbling upon this issue. You know, uh, in in these larger companies, but, um, it's. I think that all the, some of all of those experiences that just position me uniquely, just to do what exactly? What I'm doing it up well, which is what I think is making it so much fun and, uh, driving the success that we're having.

Speaker 1: 1:08:13

If I'm being honest, when did you start the company?

Speaker 2: 1:08:18

uh 2000 or 2023, so just about two years ago that's when I but I left my job june of that year and, uh, we had already raised some money and, um, we started building the product that June and July and then we launched with our first two customers last February. So we've really been in the market for about one year.

Speaker 2: 1:08:42

And you did a series a we did a before I, before I started the business, we raised a at manifest in 2022. I was able to raise 800k from mostly just my friends in the industry, and that's uh just to be well supported by a lot of really legendary operators and investors. Uh, in just one couple one two-day sprint was amazing, but we parlayed that into a three million dollar venture round about a month and a half later. So I was sitting on about just under $4 million before I gave my two week notice at Z box and then, uh, that lasted us uh quite a while and then we went back out. We just did a $6.6 million seed round in January of this year. Congrats.

Speaker 1: 1:09:25

Thank you. Um, although there's like new schools of thought that are like stop congratulating people for raising money, that doesn't mean anything, I disagree. I think getting someone to believe in your business enough to write you a check is a great like starting point. It's not an end point by any means, but it is a noteworthy starting point.

Speaker 2: 1:09:44

I also challenge anybody who, like, naysays the venture capital route or private equity or any other you know sort of asset class of investor. I challenge them to get to know more, like, get to know more VCs, get to know more private equity investors, get to know more family offices, because there's great investors out there who it's. Their number one job is to find entrepreneurs and founders that are trying to build amazing things. And founders that are trying to build amazing things. Not every business is venture backable. If you're looking to go start a car wash, I wouldn't suggest you go to Sand Hill road in San Francisco. But you know, if, if you've got an idea that can scale and and you know you think, you think you're good enough, then go get in front of some DCs, see if you can raise the round.

Speaker 2: 1:10:22

Because, uh, I tell you what, I've been the supporting cast member multiple times, um, as as a angel co-investor or co-founder, but being in the seat as a founder CEO and your brother Matt knows very well he and I are, like you're, very similar. Uh, I'm, I'm, I'm going to get kind of a few months behind him in terms of, like, our corporate life cycle with Cargato and us, um, but it's. It's not for the faint of heart. It's not easy to just uh run a company and go out and circle up a bunch of investors and have a process come together in the timeline that you want it to, without really like either. Uh come dangerously close to running out of money, burning down your marriage, like separating with your co-founder, you know all these other things that can just become a by-product of being stressed.

Speaker 1: 1:11:09

Why do you think VCs have such a bad name in our industry or some people give them that bad name.

Speaker 2: 1:11:16

Yeah, I think, look, I think there's a lot of folks that that look at venture capital as like an unfair advantage, like you know, sort of like the the capital equivalent of white privilege. And I think when people look at it that way and you're a struggling operator, like many brokers are right now, I mean we help midsize brokers that are, I mean we see their finance so they're operating very, very you know uh close quarters and um, then they hear about somebody going out and getting you know $10 million in a downstroke and turning it into some you know front end of uh some bullshit technology that they don't believe in. I understand why they get frustrated, I do. But I also uh think that there's no technology development in our industry, and certainly not at the scale and the velocity that we've seen in the last 10 years without, without the vcs. So you can say what you want about uh, flexport and convoy, and I mean I put cargomatic in the same class. Um, I mean you think that cargomatic is just completely gone because you don't hear about them anymore and everybody else is gone.

Speaker 2: 1:12:24

So, um, I think that sort of like long tech 1.0, when everybody was a service provider trying to get valued as a software company and the VCs were actually buying the bullshit in 2016 and 17. I think that really muddied the waters for the next generation of technology, which is like Project 44 and Forkites, which is pure SaaS. And then you come in and you start to see what folks like I don't know ISO and Highway and you know companies like us and green screens pure SaaS coming out like pure software. So I think those companies, yes, think about VC Absolutely. If you have a large addressable market and you think that there's a finite window of time that you can build a big business, do the math, see if it makes sense. If it does, the VCs will agree with you. If it doesn't make sense, it's not going to pass muster. And even though there's a shitload of VCs out, there.

Speaker 1: 1:13:19

A bad idea is a bad idea. A lot of great points in there, and I do think it's like it's what has happened, as, like the VCs that wrote checks to companies that didn't pan out, like that doesn't mean that VCs are bad. I mean, if you understand it, it's like they're making bets, like they're there and the expectation is not that a hundred percent of the bets are home runs. It's just not the way the game works. So I do think, I just think you, you have a very smart way of thinking about it with, like, the just challenge yourself to learn more, because it's often the people with the pitchforks who have done the least research to understand why they have the pitchforks. They've they've latched onto a point and they're running with it with a pitch.

Speaker 2: 1:14:04

Well, I see the people that, um, the people that like lash out the worst about venture backed out. I mean you are one of them. I mean, like your peak, like uh, arrogance and Molo days, like your, uh, your battle with uh Dan Lewis it was all about, like you know, haves and have nots. I mean, no, cause you, you you took investor money and you admitted it from the get, but like you used to be pretty vocal, right.

Speaker 1: 1:14:30

At your peak arrogance. I appreciate you thinking you know me well enough to know where the peak was. I'm just speaking from from afar, from afar. But, anyways.

Speaker 2: 1:14:40

Well, I just think it's turning. It's turning is what I would say.

Speaker 1: 1:14:44

Yeah, so I've. I went pretty hard at Convoy because I thought that they had zero plan to make real money and zero understanding of how, and I thought that they had bamboozled investors. I didn't think that the investors were the bad guys or the VCs were the bad guys. I thought that they were the bad guys for pretending a business, like when I used to hear or see I saw the deck of one of the digital brokers who was talking about their multiple. They wanted SaaS multiples on transactional brokerage revenue and they were talking about how the business was worth 20X revenue on fricking transactional brokerage revenue.

Speaker 1: 1:15:25

That isn't even necessarily profitable brokerage revenue. It's like those were the moments. I won't call out which brokerage was doing that, but those are the ones where I'm just like this is the BS and this is where there are bad and there are bad actors in every industry. Like that's just how the world works and I don't think that's a VC. I mean, I do think it's a VC problem in the sense that it's a problem for the VCs who fall for it, but I don't think it's a problem in the sense that the VCs are the problem.

Speaker 2: 1:15:54

Look, all VCs aren't created equal, though I mean, I would say that when the founders were raising money for Cargomatic in 2012, the deck was like 50 pages and like 49 of them was why FedEx and UPS will never get into local trucking and, like you, had to educate the investors that many years ago. But now there's great people, there's great investors out there that like work in the early stage and they know what we're doing.

Speaker 1: 1:16:20

What I'm curious about is, if you look at your experience with VC, I'd like to understand kind of lessons that others in similar role, people who are wanting to start businesses like yours not necessarily similar, but just, you know, same kind of hungry, good freight experience but haven't necessarily raised money before and I'm just curious, like what are some of the things that people should look out for? How do you spot a good VC from a bad one? What were the things that you were paying attention to as you were thinking about who to raise money with and who to partner with?

Speaker 2: 1:16:59

So I've just been through it like many times now, first as a founder and then as a co-founder excuse me and then as an angel and co-investor. I've helped a lot of kids raise their first rounds of institutional money and just recently, I have a good friend named Eric Malin who's been in the space for many years, and I was just actually on a ski trip with a few other guys from the space and over the weekend we were able to help him raise what looks to be, you know, his first million dollars. So, um, it can happen quickly and it generally comes in the form of uh getting in touch with an educated VC through a trusted source. So, um, if, if, somebody is interested in you know, uh, exploring building a venture-backed business for the first time, there's the it's. The best part about logistics is is, um, people want to help you, they want to talk about their wins and, especially in tech, people want to tell you about all the things they did to be successful. So if you have some chops and some credibility in the space, then some cold messages like hit people up on LinkedIn and say, hey, look, I'm uh, I'm considering, uh, building my first business. Here's the idea. Don't be, don't be guarded with your idea, like you're not smarter than anybody else. Your idea has already been had, you know. So, uh, when on execution, like, but if, if you're going to ask people for help, be transparent and open and say, hey, here's what I'm thinking about building, here's why I'm thinking about reaching out to you, and I'm just curious, I've never done this before. Don't ask for fucking 30 minutes, say two questions and take the LinkedIn response and then go do something with it.

Speaker 2: 1:18:31

But, honestly, the the best entrepreneurs have action bias and and I say this going back to um, I got reached out to by a lot of entrepreneurs, like after I left car dramatic, because there was a lot of people that wanted to Uber as trucking and you know, car dramatic was the first one to try. And Dan Lewis was one of the first people to reach out to me and in 2014 or 13, we started communicating and he was still working at Amazon and he had two ideas that he was balancing back and forth, but he was asking specific questions about over the road trucking and why Cargomatic stayed focused on short haul, and why not LTL, why truckload, and it was just like really, really detailed and defined questions. But then when he would check back in 90 days later, he would like give me an update. Hey, I just knocked out these three things and now I need this question. And so when, when a founder gets a question from a young entrepreneur and then that turns into start to see some action, which is ultimately what the beginning of traction is, that's when the entrepreneur will give you, the founder will give you 30 minutes on the phone and they might write an angel check into your business and they're going to certainly make some intros into some interesting VCs.

Speaker 2: 1:19:32

But I would say, if you're, if you're thinking about doing it, talk to somebody who's done it, try to get into their network and then study the space man. Like I can't tell you how bad of a problem it is that that people come into our industry and they try to build tech and they try to be disruptive and they do it all on their own ego and attitude and there's no context, there's no freight person in the room and ultimately that doesn't fly with VCs. Vcs are not trusting with that because they they've all burned money on, you know, stanford people or people with great degrees that come from zero freight experience and they never go out and get an Andrew silver, or they never go out and get a will Jenkins on their team, so there's nobody ever that's like in the freight that can make the thing move. So I think if you can, um, if you can arrange yourself with, like, some good founders, get into their network. Figure out who are the guys that are actually writing checks in VC right now in this space, because it's a short list and it's going to be like Julian at schematic, it's going to be like Peter at grid. It's going to be like, uh, like. I have an investor in Newark venture partners. It does a lot, um.

Speaker 2: 1:20:34

You've got like Santos at uh at Dynamo. You've got Barack at auto tech. I mean, there's really like a dozen. You know uh folks that are like steeped in log tech, that uh like tie at iron spring, that if you, if you get one of them on on board, like your round is going to be filled up, because they're the positive signal that you need. So think about raising around a VC as uh building a pool party, organizing a pool party that everybody wants to go to, and then, once you get everybody there, like people are all kind of standing around waiting to see who takes their shirt off and jumps in first, but like, if you get that one first guy to jump in and there's a bunch of other cool people in there, next thing you know you got a banging banging round.

Speaker 1: 1:21:21

I love that. Great advice, Great feedback. I want to pivot to the notion of building a business in an ugly down market and I just am curious what it's been like starting in a freight recession and knowing that people are looking to cut costs and in some cases, I can see how you're going to use that as a positive in your answer. Some cases, I can see how you're going to use that as a positive in your answer, but in other cases I feel like people are less likely to try new technology, sign new contracts, when every day, every month, it seems like they're seeing their margins erode and get worse and worse and they're just looking to cut wherever they can. So just curious, you know you've the entirety of your business has been built in a down market. What has that experience been like?

Speaker 2: 1:22:15

The phrase that came to mind when I decided I have to leave this cushy corporate job that I have for the very first time in my life was you never want to waste a good crisis? And I knew that this economic downturn and this inflationary environment was going to force folks to look at their operating budgets and their working capital solutions. And the cheapest money to use in your broker agenda is your money. But right now brokers money is spread out in their customers accounts, you know, thousands of bucks at a time. So the idea was if we could help them help brokers and carriers keep their money in their accounts, not spread out in their customers and their carriers accounts, then that's the best reduction we can make in terms of their cost of capital, their increase in working capital and they're decreasing their DSOs. So, going back to when I decided that I wanted to start the business, I did a lot of research because I was working with 12 of these large corporate partners 3D Accelerator I was running with or working with, so I talked to a lot of their heads of finance, cfos and things like that. But I also reached out to CFOs of brokerages, ceos of brokerages, and what I always thought was funny is, when I talked to a CFO is they were like like complimentary of themselves and the improvements that they've made on their DSO and their working capital since they've been there, but generally dissatisfied with the results that they're getting currently and generally feel like they're paying too much. So it's like if you think if there's a better buyer out there than a CFO who's really not happy ever and like the only thing that does make them happy is reduction in head count and improvement at working capital.

Speaker 2: 1:23:48

It's just a really simple conversation to have because we come in and we say look, I mean, based on your situation right now, you've got 12 people in the back office. We can help you do more with less, repurpose a lot of their time back into more. You know meaningful activities and, by the looks of it, if we could fix your you know, improve your DSO by two to four days, like we do for all of our other customers, you know to your point that's going to be another million, $2 million of working capital back in your account. That that is going to allow you to say yes to that next investment. It's going to allow you to say yes to the next hire. It's going to allow you to sort of uh, make more educated decisions about what next month could look like, uh, from a growth perspective. So there's never been a better time to sell this. To be honest with you?

Speaker 2: 1:24:26

Yeah, they're looking at the money more than ever before Correct, and I would say that with AI, the way it is like we've been able to build some no code solutions to where I mean we can go in and take over a broker's entire cast payer portfolio in one meeting, with no engineering time, because we can take all the invoices via email. So it's just a really cool time to be doing what we do.

Speaker 1: 1:24:52

Yeah, I didn't mean to tee you up so easily with that, but it makes sense. The answer is it makes sense. The next thing I'm thinking about is just freight tech companies in general and I feel like zero to one is if there's an idea that people think are interesting. Zero to one I don't want to say isn't hard but is relatively not as hard as getting one to a hundred or whatever. And the terms are the numbers aren't necessarily numbers don't matter, but it's more like you understand relatively what I'm saying. We see a lot of these companies come into the space, get a lot of hype, get early customers, early traction, but there are only a handful or so freight tech companies that we've seen actually scale to be like a real stalwart player in the business. I'm curious how you think about that, if you think that's a problem that's industry wide, or why you think that is, and how you think about that within your own business.

Speaker 2: 1:25:55

I think it's a really astute observation. I think it's something that drives me a lot and makes me think. Going back to, like, my why and my motivation to building something is shy of a couple of companies in the arena today, um, that have potential to IPO. You know we've yet to see like a major IPO which is like the. That's like the Holy grail for you know, uh, uh, entrepreneurial communities is when we all start IPO in our businesses. Then that's when you know we know we've made it right. But, um, you know you look at somebody like jet and uh, at project 44, I think what he's built is like I mean, he not only did he um sort of build a space, like he built a category, but he's built a really nice global business that you know is is uh going to be a conveyable and there'll be a nice exit outcome for that. But I think if you start looking at that as like probably the, the benchmark now in terms of what people should be aiming for, um, I think there's a couple of things that that impede people's ability to get to that. That size and scale one is just the tam, the total addressable market, like I mean, if all you could do is sell to freight brokers, then your, your universe of customers is pretty small, but jet figured out how to cross the chasm sell to sh shippers, sell to service providers, just to the asset based people. So you know, he's, he's uh, turned a lot of these stakeholders into customers. So I think when, when you have a path as a biz, as a business, to take various multiple stakeholders and turn them into customers, then that's a viable path to scale and that's when it really makes sense to take on those like lettered rounds or the growth equity money and I think a lot of what you're talking about, the companies that come in and they get a little bit of hype and they get some customers and they don't really scale. Like, I think a lot of times they run into that problem where, like, they get a little bit of maybe unsophisticated or uneducated investor money Maybe it's from angels, friends and family or just a dumb VC and then they get that's enough to go out and make a little bit of noise and get a product out there.

Speaker 2: 1:28:02

And, truthfully, for years if you had software, people would look at it in our industry Like there was a very, very low filter for, like, you know what was cool and what wasn't? Because there was nothing. So in a vacuum, everything looked good. So I think people can come out and they can get some attention. But then you know, if people implement your software and they don't get the desired results or the impacts that they're looking for, then they don't renew. Then that's when the seed round doesn't come, or the series A doesn't come, and then that's when the growth like really flattens out.

Speaker 2: 1:28:36

So, um, in my mind I think really a lot of these things are intertwined. It's like is your vision big enough? Is your space big enough? If so, you could probably go get some money. If you can execute with that money and make customers happy, then you can continue on that, that path. But there's a lot of variables and there's a lot of margin for error in between, and so I think that's why maybe it feels like zero to one is easier, but like, truthfully, they never really got to one, because like one means one fucking happy customer and they never got there, you know, yeah you.

Speaker 1: 1:29:06

You brought up an interesting point. I want to dig in a little bit just back into the kind of vc concept but also just the notion of capital verse, um expectations and feels like when you make the decision to go raise, like you did six I think you said 6.6 million um, you're starting a clock and it's a clock against expectations. And I'm just curious how you thought about how did you come to the number 6.6 or whatever number you came to and then essentially agreed to take on whatever extra from people who wanted to give you some cash? But like, how do you know how much to raise for how long? And how do you think about the expectations you're setting for yourselves against what your investors are looking for? Just walk me through a little bit of what it was like in your head as you went through that process and what might be informational or educational to others who are going to do something similar.

Speaker 2: 1:30:01

Yeah, I think this is a question people ask me all the time. It's like how much should I raise, how much should I raise? And there's really two lenses to look at that. From One is well, how much do I raise, how much should I raise? And there there's really two uh lenses to look at that. From, one is um, well, how much do you need? And two is how much can you raise. And so you know, you want to kind of pick a number somewhere in between there.

Speaker 2: 1:30:19

And then I would say, the staking man's approach is to take whatever that number is and whack it down by about 40% and go out and target raising that amount. And and I say that because, like, let's just use quick math let's just say, uh, you think you need 1.5 million to uh build the business and get it to where you want it. But you think, uh, you think you might be able to go raise 2 million because there's been some folks that are interested. And you think, like, other rounds with other similar products, with similar TAMs have been raised, and so there's some comparables out there and you think you can go get a $2 million round, or you're far enough along to get a $2 million round. Well then what you do is you go okay, we think we need 1.5. We're going to put a conservative budget together at 1.2. And we're going to put a conservative budget together at one point two and we're going to go out and raise that and we're going to say we need one point, you know two to get to the next milestone and you know we can probably do a bridge in between now and then. And you start your raise conversations just on the lower end of the spectrum and you see where people are at and if you start to get a ton of interest, then it's maybe it's a two2 million round and maybe pricing expectations, you know, go up a little bit. But if it's not super well received, that's really no harm, no foul. You're not trying to raise like a crazy amount of money, Like you can go get your hands on that kind of money if your business is not a completely idiotic idea and hopefully you've pressure tested it a bunch by then with smart people that aren't just telling you what you want to hear but by setting that price lower. And I think this is something that maybe I could have done a little bit better on the the, the pre-seed raise that we did have 3 million um led by Newark venture partners. Uh, that we did in 2023.

Speaker 2: 1:31:56

Um, I went out with a pretty high uh opinion of what I thought we could get. And also, to some extent, it's easier to raise money before you have a product or software, because there's less holes that people can poke and there's less hard questions that they can ask. So I kind of wanted to strike while the iron was hot, because I just brought on all these like really sexy angels. So I wanted to kind of backstop that with a nice venture round and then that de-risked it to the point where I could go like leave my job you know, if I had a couple of years of salary for my co-founder and I and you know some other friends or some other teammates and then we'd be fine, right? So, um, anyways, uh, I think, had I maybe set that price a little bit lower, uh coming out, I think I might've been able to attract some other investors that would have come and then like tagged along as the price crept up. But, um, that's how you can kind of just like sort of cast a wider net and not get a bunch of like soft passes early on in the process because you may have an opinion of what you think you could price the business at.

Speaker 2: 1:32:52

But you know, until you get in the room with the VC like it's best to really not even start talking about those things and kind of let the let the VCs, who are expert in pricing businesses, let them start to talk about pricing and then see how you react to it as a founder, as opposed to as a founder really trying to drive that narrative, especially if you're a first time founder. If you're a first time founder, shut the fuck up and just get the money and build something you know. Be happy. That's how I feel. That feels a little crass. I don't know, man, I think I think I help people try to optimize all the time. There's such a thing as procrastination due to perfection. Yeah, the bottom line is dude, you're starting the business because you want to build a business.

Speaker 1: 1:33:37

That's the hardest part is getting it going. I'm with you. We're coming up on the end of the planned time. I'm curious if there's anything you wanted to talk about or had in mind that I didn't bring up.

Speaker 2: 1:33:54

Um, you know, I think you, actually you made a comment. Yeah, there's one one thing that I think I can wrap up with quickly that I think is um appropriate for the conversation. I think something that's important to both of us is that, uh, you know you, you asked the question about you know, um, about Upwell being different and like spending time in businesses, or you asked the question what? What was it like? Uh, going into a business with like kind of like a definitive timeframe behind it, around, thinking you're going to like convey the business jumping, and yeah, how did you think about that? And I think, um, what's evolved for me over time, andrew, is like, instead of investing into relationships for that person in that role at that time, what I found is a lot of the folks that I maybe hired into the business at worldwide express and I helped them achieve maybe their first couple of promotions and, you know, get to that phase of life where they have a nice car and they're getting married and you know they kind of associate some of my mentorship with some of that early professional development that they have. And what I found is, as they transitioned out of worldwide express, those are the same people that stayed in touch with me and those are the same people that like my pictures on Facebook and, you know, say nice things about my kids. And then when I run into those people at conferences now some of them have moved into leadership positions and really impressive companies and you know. So for me, like that coaching tree has really filled out over the years and it's something that like one of my proudest, I think, assets I have is on my LinkedIn profile.

Speaker 2: 1:35:17

I've had a lot of people just give me a recommendation like unsolicited later on, like down the road, or you know, maybe I'm moving on and I'm asking him for like a professional recommendation and we'll just go in and do a LinkedIn recommendation Some on and I'm asking him for like a professional recommendation and we'll just go in and do a LinkedIn recommendation. Some of the things that people say is just about like how I helped them early in their careers is super nice, and I think as I continue to like grow in my career, I've got these like boomerang people that like work for me at one spot and then I go somewhere else and then they're like in my inbox go do this looks pretty cool, and so like my VP of solutions right now Chris Gemery. He worked for me at airspace and he ran solutions for us globally at airspace uh, where I was a co-founder, and then I was an investor at a SAS platform called leverage, where he came and he ran the exact same thing solutions delivery. And now, as soon as I started up, well, like he wanted to come run solutions. So it's like you get that crew of people that, like you trust, and then they start reaching out and they're like yo, I like that.

Speaker 2: 1:36:10

Like that to me is like the ultimate validation because, like those are people that you know you can win with you, know you trust them, and like they want to get back on the bus with you. Like that's, that's good stuff to me. And I think, as as you kind of like, uh, you know, continue, you know moving down the road in in in your path, I just think you're going to be overwhelmed by, because the amount of love you poured into your team while you're building Molo, just outwardly, it was just so obvious that the people and the culture is what drove you and that you weren't going to stand for anything less than excellence when it came to like quality people treating them right and, um, I think it's gonna be cool for you to see that in. In whatever you know, the next big thing is for you. I mean, I know you're that you're staying busy at master and stuff right now, but, um, I think the world is waiting to see, uh, when Andrew silver calls its next shot.

Speaker 1: 1:37:03

I appreciate that and everything you said I've I can. I. It's interesting because there are, because I can't take that and just accept it and it's only my own harsh criticism for how I carried myself over the years. There are some people in relationships that I feel like I have what you had and have and I feel really good about that. No-transcript, just spending 90 minutes with you here has you know, I feel a certain type of way in most of my conversations with people because, like I'm interviewing smart, caring, successful people who have made their path in the industry, so like there's it's likely that I'll end up getting some type of feeling from just interviewing smart people, but something about today has really just invigorated me with invigorate I don't know if that's the right word, but instilled this I really want to build something. Right now. It's where I'm feeling like I miss, like I want to just jump into a startup from scratch and start building, and that's just kind of my takeaway from 90 minutes with you. So take that for what it is.

Speaker 2: 1:38:32

I think that's a positive Well, I appreciate that man, and I'll leave you with this thought If I could have found somebody doing what Upwell was doing, I would have bought the company and built it and grown it. But I looked and I couldn't find anybody doing this. And so that's why I'm doing a cold start at 45 years old, because I couldn't find anybody doing this. And so that's why I'm doing a cold start at 45 years old, because I couldn't find it. But I don't know. I don't know whether you get in and you're building on top of a foundation or you're just building from scratch. You were born to do it and it's going to be fun to support you and, like, hopefully, introduce you to your first VC investors. You know when the idea strikes. Thanks, man, your first VC investors you know when the idea strikes.

Speaker 1: 1:39:10

Thanks, man, I appreciate that you got it and I think our audience has heard enough of us going back and forth complimenting each other, so I think we'll call it with that and I hope everyone enjoyed learning more about Charlie, his business, upwell and everything related to accounts receivable and the business they're building. So a lot of stuff in here, vc, and just freight stuff. Good conversation. We'll see you all next week.

Speaker 2: 1:39:35

Have a good one Thanks for having me See you.