Ep. #88: Tom Madine, CEO, ShipStation Global

From a live, in-person Chicago studio, we sit down with Tom Madine to unpack what real scale looks like in transportation, and why SMB shipping is still one of the most misunderstood corners of logistics. Tom shares his path from early sales roles into building Worldwide Express, then zooms out to the hard truth: small and midsize shippers don’t just buy rates. They buy accountability, fast fixes, and a partner who can “make it right” when the inevitable problems hit.

We go deep on business models that divide founders and operators: direct sales vs franchise networks vs agent programs. Tom breaks down the trade-offs of control, the power of entrepreneurial motivation, and why culture and management matter more than the org chart. Then we shift into mergers and acquisitions strategy, including the mistakes that kill deals (like rushing rebrands) and the playbook that helps integrations stick: align on a common vision, align economically, communicate relentlessly, and move fast on the painful synergy work so it doesn’t drag on.

Finally, Tom explains the big bet behind ShipStation Global and the Auctane combination: pairing logistics software and e-commerce shipping tools with deep carrier relationships and a massive commercial engine, aiming for a true single pane of glass across parcel, LTL, and beyond. If you care about freight brokerage, logistics technology, private equity partnerships, and building a durable platform in a fragmented market, this one is for you. Subscribe, share with a builder in your network, and leave a review: what’s the hardest part of scaling a logistics business without losing what made it great?

Thanks to our sponsors:

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Transcript

Sponsor Open And Scale Hook

SPEAKER_01 0:00

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Chicago Studio Welcome And Guest

SPEAKER_01 1:02

Welcome to the Freight Block. Thanks, man. Glad to be here. I'm your host, Andrew Silver, joined today by Mr. Tom Madine. Special guest and special shout out to 16 Shotham at the studio where we are hosting the first ever lot, I guess, in-person recorded show on the south side of Chicago, right by Guaranteed Rape Field. Pretty cool space we're in. Welcome to the show, though. Thank you. It's been a long time. Yeah, I'm excited to do this. So an industry titan, I would say.

SPEAKER_00 1:34

That's kind. How do you feel about that label? Sounds old. I don't know. You can't be a Titan when you're young. So yeah, you're not young anymore, right? Oh thanks, Andrew. This is off to a great start.

SPEAKER_01 1:45

So you uh came into the space. I'll age you here, what, 35-ish years ago?

SPEAKER_00 1:51

Uh a little less than that. So I I got into the space uh in 97. So what is that now? 29 years. 29. So yeah, I got uh I was in uh I guess I'll give my uh my backstory. So I got out of college in the early 90s. I got into sales for a big telecom company and knew I wanted to have my own business. Um, loved sales, um, but had had my own business in college. And uh came across a company that at the time was called CGI. Um and it's what later became Worldwide Express. Okay. Uh, but that was my uh that was my entry into the industry, and I've just never, never left the company and watched it grow from almost almost nothing in size to you know what we become today.

SPEAKER_01 2:30

In your background though, you you went to UVA as a civil engineer. I was, yeah. And how does that turn into selling or reselling transportation?

SPEAKER_00 2:40

Well, if you as one of I actually had a professor tell me at one point in time that unequivocally I should not be an engineer. Okay. Like I was good at math, but I was just bored out of my mind. Um, I had probably not the best grades at UVA, you know. Thankfully, um I I think back then they padded grades, so I was able to get out. Okay. But um, but but I just got out of here. I'd had my own, yeah, exactly. But I like I said, I what I I'd had my own business. I knew that I was like, I

From Telecom Sales To Freight

SPEAKER_00 3:10

liked, I, you know, I enjoyed selling. And so when I got out of school, literally it was like, I can go, I can go try to get an engineering job that I'm absolutely gonna suck at. Or I can, you know, get into sales and learn what I need to learn, and then maybe one day I'll, you know, I'll go out and become an entrepreneur. And uh so got into sales selling long distance. Most people who listen to this probably don't remember what that was, but long distance phone services door to door. Long distance phone service. It used to be like guys my age, when you were calling like California from New York, it cost a lot of money. So businesses spent a ton of money on long distance calling, and that's that's what we did for one of the one of the big uh competitors to ATT back in the day. So now you've aged yourself. I definitely have. As you I know you don't like editing these things, we might need to edit that last three minutes out.

SPEAKER_01 3:57

So so you're you you joined CG, it was CGI at the time. CGI, yep. And what exactly was the business then?

SPEAKER_00 4:04

So it was a we we were a franchise-based company, the two founders, uh David Kaiger, Roger McDonald, they um they were old Tramel Crow guys, and they had a business that um we had a contract to resell Airborne Express. If you remember those guys, they were the predecessor company to DHL here in the US. Okay. And what uh Airborne was a they they had a really good footprint with the Fortune 1000, but they had very limited um coverage in the SMB. So the whole model was they worked with resellers like CGI, which later became Worldwide Express, uh, to go out there and bring on SMB customers. And it was a sort of a typical reseller relationship. We bought for wholesale prices, went out and sold to small business customers. We, you know, we we made a margin, but even with that margin in there, they were able to save money over where they were and you know, get other services and you know, other reasons to work with us. But it was really just selling parcel services. And the business did, it was a good concept, it did well, and we were able to take there were a handful of us that came over from the telecom industry, and we sort of took that, you know, it's thought of as like the copier sales model or that, you know, the real door-to-door sort of in-person, face-to-face selling model. And we sort of brought that to the the the transportation industry, and it just it took off.

Selling Parcel To Underserved SMBs

SPEAKER_01 5:20

So selling parcel 20 plus years ago, what what was that even like? This is for for our show. This is the first time we've dabbled with parcel. So so you know, talk to us like we're 12.

SPEAKER_00 5:32

Uh, how old were you in 1997, by the way? Seven. Seven. Okay. That's that's definitely making me feel old. Um, so you don't look it. I thank you. Thank you. We're calling you old three times in 10 minutes. You don't look old. No, it's it's an aggr it's an aggressive start to the to the interview, though. Um, so we really you'd walk into a business, and if you think about it, and and look, for clarity, we've evolved quite a bit over the years, but it's really going into a business that um, you know, they had never seen someone from a parcel carrier before. Um, our whole model, and this would be a sort of just zoom out, our whole model, and even today, well, we have a, you know, we've got a nice enterprise business and we've got some customers that everyone's heard of. Most of our work is done with small and medium-sized businesses. They're, they're, they're underserved, most people don't understand them. Um, it's really hard for carriers in, you know, in any mode to work directly with SMBs, whether it's parcel, LTL, like it's very difficult. Um, and I think most businesses just aren't, they're they're they're not really set up to distribute to the SMB. They're not set up to work with the SMB. They just think small business customers are just like their enterprise customers, only they don't spend as much. And that's that's not really true. Like the need set is different. So what we would do is we'd walk into these small businesses who were at the time using, you know, either FedEx or UPS, right? Like obviously, you know, those are the two options at the time. And we would get them to move their, you know, their shipping services over to us. Um, and the reasons they would do it, look, there there were some logical reasons, but but but fundamentally, the main reason they would do it is there was someone there in person that could take care of them, that would that when something went wrong, they had one throat to choke, they knew who it was. And SMBs, for the most part, I mean, they get treated pretty institutionally um by all their vendors. And we understood that the thing we had is we were all because it was a franchise model. So one of the, it was sort of like who better to understand the needs of an SMB other than another small business owner, right? So the model just really got legs through the late 90s and early 2000s. Um, and uh, you know, we we we dotted the landscape with franchisees, um, which I was one of them. And then um, you know, I I went down to join the founder in end of 05, um, right when he was looking to bring private equity into the business for the first time and um, you know, sort of begin building the business that that that that we have today.

Franchise Consolidation And Roll-Up

SPEAKER_01 7:39

So you were one of the first franchisees in in 2005 at that point, like how many, how many franchises were there?

SPEAKER_00 7:46

We had, we were, we we were in every primary and secondary market, we had about 130 franchisees. And that that consolidated though pretty rapidly. Where so 05, the model was, hey, you get all these franchises out there, and some were good, right? And some weren't. But to really, and part of the thesis when I went down in 05, part of the thesis was look, we have certain certain cities where you have a good franchisee and the business is doing very well. But you have other cities where you have a maybe not as talented of a franchisee or someone who's not as well capitalized, and that market's struggling and they were protected geographic territories. Okay. So the first part of the thesis was, hey, how do we do an internal roll-up? You know, we didn't we didn't have institutional capital in at the time, but how do how do we encourage some sort of an institutional roll-up where we can get our better franchise owners in Chicago to buy another city, like buy Detroit or buy the red? Like there was there was a a real push to sort of shrink the footprint and and get better coverage. And we ended up with um by 2010, and the business has gone through some iterations by then, we'd we'd sort of moved our business over to UPS. Um, when DHL pulled out of the U, we moved over to UPS, which was which was a fantastic move. Um, and we'd rolled out our LTL business. But as the business became a little bit more complicated and the industry was starting to mature, we went from 130 franchisees down to about 50, and they were all bigger and more scaled out. But even within that 50, there were five of us that were really big. So the top five guys controlled about 60% of the network. Um, and that sort of brought us full circle to, you know, now we bring private equity in, we've got institutional capital behind us, we're we're we're we're we're expanding the business from just a sort of a single mode parcel business to now we're getting into LTL, which was very new at the time. LTL brokerage was just a brand new concept. And um we sort of had the idea of like, all right, well, these top five guys, and I was one of them, these top five guys had this massive advantage over all the other franchisees. We had scale, we we were able to hire, you know, we had managers running the business, you know, we we didn't have to be involved in the day-to-day as much. You you you had enough capital to hire as many heads as you needed. So we sort of had the idea like, look, if these five guys individually have this advantage, what if we could just stitch the whole thing together and do an internal roll-up and buy all the franchisees? We're gonna need to do something, right? Technology, if you if you go back in time, this is like 2012, 2013 timeframe. You know, Brad Jacobs has just gotten in the industry, you know, Coyote's doing what they're doing, like people are spending on technology. It's you need scale. And as a franchisor, we were only taking a royalty. So as a franchisor, while at the time we had like $500 million of revenue that was running through the system, we were only seeing a small fraction of that in a royalty. So we didn't have enough money to really dump into operation, all the all the earnings resided at the franchise level. Yep. So we kind of had a, for lack of a better way of putting it, we we had a come to Jesus with our franchisees. And it was, and it was all very positive thing. But it was like, look, if we look ahead, these are great businesses, but if we look ahead 10 years, the industry's changing. What gave us success over the last 15 years isn't going to work over the next 15. So we want to do a roll-up and we we do want to buy you guys. Now, they didn't just automatically say, yeah, let's, you know, but but we we established what I thought was a really fair value, and we gave all of our franchise owners the opportunity to sell to us, and we'd give them, in most cases, 60 to 70 percent of the consideration in cash. And the rest, they let us roll, we let them roll into our equity right, you know, next to us and our private equity partners. And we timed it perfectly because we we bought about 40 or 50 percent of the network in one hold cycle. And then in the second, and then when we brought in, this was we had Quad C as our partner at the time, this back in 2013, brought in Ridgemont in 20 end of 2016. The guys who'd sold their businesses, they they got like a double lick, right? So they made the money when they sold the business, but then they got the second bite of the Apple. So then all of a sudden the rest of the franchise deals kind of, for lack of a better way, putting it, closed themselves. Cause now guys were like, hey, sign me up. They're like, I screwed up the first, I should have done this. If I'd have sold, yeah, and we literally, like, I remember having a conversation with one of the bigger guys who'd held out. I was like, you actually worked for free for the last three years. And it and you did the math. He's like, I know. So we, you know, we ended up, we bought all the franchises in by 2018, I guess, 2019. Um, and that was when we did our first big uh acquisition of unishippers as

Agents Franchises And Direct Channels

SPEAKER_00 12:14

well.

SPEAKER_01 12:14

A philosophical thought around this, because I had this conversation with a uh a brokerage owner the other day about a truckload brokerage owner, about agents and building on an agent program. And this was someone who's like super focused on operational execution and kind of controlling and owning the brand and and kind of the product that you deliver in terms of for your customers. And the challenge we discussed was, you know, with an agent model, you have to give up some of that control. Yep. And you alluded to it in talking about uh the early days of or as the franchise model was growing and how, like, you know, one region might have been really well managed by someone like yourself, but then another one not so much. So I'm just curious like your thoughts on kind of how you can manage a business like that and have expectations where everyone meets them and and and is delivering at the level that you want, or is it just not possible? And you know, you you have to just accept that giving up the control and allowing people to be franchise owners means you can't really control the outcome of how they how they service your customers.

SPEAKER_00 13:21

So it's tricky. Um I I so we I look at our model today. So we've got worldwide as our, you know, obviously ShipStation Global. We'll talk about that in a second. But if you but if you think about the selling organization, we've got our direct model, they're all company employees. We also have a franchise model today. So Unishippers continues to go to market under as franchisees. And then we have global trends that we acquired back in 2021 and they're and largely agents. So I guess here's how I'd give the short answer. There's there's value in each of those channels. Each of them have their own, their their own pros, their own cons, but but they're all very powerful channels. So our perspective was if you'd have asked me in 2016 when we were buying up franchises and and and look that this the relationships in a in a 20-year relationship, you're gonna have a lot of friction with the so there was it was like some of them we were happy to end, right? I would have said, hey, we're done, we're a direct company, we're not gonna have franchises, we're not gonna have a let's just be a direct company. Well, we started losing people from the franchises we bought, their employees would sort of say, I don't want to work for a big company. There's some people that are like, we call them like outdoor cats or indoor cats. There's some people that just don't want to work at a big company. Like literally, guys who worked in my franchises, the day we the day I sold my franchises back to corporate, right? Which was an issue negotiation because I was the CEO. That's what it's like, but but I was one of the first ones to sell. And my company literally the Friday before we sold, felt like he worked for this cool dude who owned a business and it was like felt great. That Monday, he felt like he worked for the evil empire. Even though you were the same guy. And it's like, dude, what and he's like, I don't know. I just it mentally, it was like this mental block, like no longer this. And by the way, that's the beauty of entrepreneurialism, right? So we went through this period where we we lost, I don't know, dozen, 15 people who went and they became an agent of global trans or they went over to some, and it's like, what, guys, what are we doing? We like we need to harness the power of these people that don't want to be W-2 employees that can go out and be really successful entrepreneurs. So that's when we when we bought Unishippers. Part of the model was yes, we want to continue to buy those franchisees because it's it's if you do it right, it is a creative. You you're you're buying a business, you're folding gross margin onto your existing operating plot. Like it's a really, really it's a great transaction for everyone. Franchise your agent sells for more than they could on the open market. We buy it for less than it's it's they're they're great transactions. But there is a there's a huge benefit to having someone passionate. Like you can't replicate the passion of an entrepreneur. It's impossible to do. I don't care how you set up your comp plan, I don't care how great the people are you got you're hiring. When someone's daughter needs braces at the age of 13, they're gonna figure out how to do it, right? And there's no, there's no power greater than harnessing the power of an entrepreneur. So we we said, look, let's let's actually have this direct model, but let's also have a franchise model where we bring people in from the outside, but we also have this glide path for folks that we have, because we're, you know, we're big selling organization. We probably 15, 20 people a year leave our selling organization from either senior sales or management and go get a franchise because they say, hey, I'm done with big company. I want to go do my own deal. And it's become this massive, massive channel. And now with global trends in there, we've had people go over and become agents, right? Which is a little bit of a different model, but still a very good one. Um, but to to long-winded way of answering your question about how you manage it, I think I wouldn't want to have just an agent business. I wouldn't want to have just a franchise business. And I frankly, I wouldn't want to have just a direct business because I think there's value to having all three channels, how you cover the market. It's it's a at minimum a talent strategy because I can attract people to both global trends and unishippers who wouldn't work for me in a million years. You know, they just they don't want that. They don't want a job. But can I get that talent if I have the model structured a different way? Yes. Right. So that's that's sort of how we think about it. Um, as it relates to like standards and everything, that's just culture, man. Yeah, we look, I have I have W-2 employees that do stupid things, right? For sure. I I have agents who do stupid things. I like that just happens. That's just it's culture, it's management. It I mean, some of it is contractual, right? Like you have to do the following thing, but but it it it's all manageable, but it's just why I think why most people don't like agent programs and most people don't like franchise programs is they don't have control or they they don't feel like they have control. Um, we've probably had just as many issues with customers and litig, like with our W-2 employees as we have from our entrepreneurial channels. So it's like you're gonna have the noise either way. So then it's just a matter of zooming out and saying, okay, well, it's just a coverage model question. And then can we make the channels co like there's a there's a lot to manage, but I think if you can get it right, it's pretty powerful.

SPEAKER_01 18:04

It's funny you say that because it is so true that it that's the first thing that someone brings up in talking about agents and and the challenges, like, you know, having control and you know, how do you manage and that whole process? And it's like, but you look at your own W-2 business and realize you got all these issues that you have control of and you still haven't done crap to fix them.

SPEAKER_00 18:24

Yeah, and you're gonna continue to have HR issues and you're gonna have, you know, the employee agreed to what like just the stupid stuff that happens when I mean we've got 4,500 employees, right? So, like, I love any of them who are listening, I love all of them, but not there's not a 4,500-way tie for best employee. You know what I mean? Like, someone is doing something stupid right now, I'm sure, right? And I'm sure someone in our agent program, and I feel like, and you it like anytime you're in a big company, you got to deal with that stuff, but you you you do have less control for sure, and you just have to accept that. And by the way, a franchisee or an agent, like you can't fire them. So they can tell me, yeah, yeah, I don't know if there's swearing on your program, but they can give me the middle finger, and there's really not a whole lot I can do about it. Yeah. Um, but the the but but but at the end of the day, you're trade, there's trade-offs, right? Because I also have this incredibly powerful, motivated entrepreneur who, when they're fired up and motivated, they're gonna outperform everyone, everyone. Yep.

SPEAKER_01 19:19

If you're listening to this podcast, you know the drill. Rates are spiking, margins are tight, the contracts are dangerous, the Supreme Court ruling is in, the sky is falling, and so on. Really, though, in an ever-changing market, your pricing and sourcing have to adapt fast and stay dynamic. That's where Triumph Intelligence comes in. Built on green screen's AI technology, it delivers real-time predictive rates based on your data so you can quote accurately in seconds. But here's the kicker now that it's part of Triumph, you can tap into their leading network of nearly 70% of brokered freight transactions and more than 170,000 real carriers. You simply cannot get better data anywhere else. Head to Triumph.io slash more capacity to get a demo today. Yes, it's interesting because the other comparison I think of is I was having this conversation with my father the other day, maybe a few weeks ago. You know, I've got four months now left on my non-compete. And big question is like, do I go start something from scratch or do I buy something that's already operating? Yeah, and and I think the answer is the latter. And he's kind of against that. And he's like, you know, I don't know why you would want to buy someone else's trash, like your someone else's problems. And and I'm like, I get that. But then I realized like at Molo, we had plenty of our own trash and our own problems. And like, that's just the reality. You're gonna have it whether you build it yourself or not. And there's certainly more control in building it yourself from scratch. But uh, I think the advantages at least of entering the market in today's age uh with the Supreme Court stuff and just trying to you know onboard shippers that you have relationships with, it's way easier to do if you come in with an established business for sure than it is starting from scratch.

SPEAKER_00 21:00

And we've done enough MA, and there you usually because you didn't grow the business yourself, you you you go in and you're gonna scratch your head and look, but but there's this bias that you have of looking at like you know, we just did this deal with you know the ship station now where we and Octane come together. So it's probably natural on both sides, you know. You I look at you you find something at the business that you weren't a part of, and you're like, God, why are those guys doing it that way? That makes no sense. But then I look at my own business and we got 30, you know, if they've got a hundred things that are messed up, I got 101. You know what I mean? So it's just you're always gonna have the issues. So it's it it really is and look, for some people, they don't like MA is not right for every company. Some companies like they don't have the right MA muscle, like everything has to look a certain way and fit us. And you see this with big companies. There's some big companies that are huge and they just suck at MA. Um I think the same is true of like franchise and agent, right? So like it's just it's a it's a different thing that you don't have the same level of direct control. Control over. But if, but, but like if you have a successful strategy, it's you're better. If you have a successful MA strategy, that's better than going it alone, right? It's just a question of what are you as a business capable of doing? And does it fit in with what you're actually, what, what leadership is actually good at?

SPEAKER_01 22:18

Yeah. So I,

M&A Integration: Culture Brand Incentives

SPEAKER_01 22:19

you know, I was I wasn't going to go here right away, but I do now that we're on the MA subject, I think we got to sit here for a minute. So um I think there are countless examples of MA in transportation that just have not gone very well. Where uh big company buys fast growing company, uh fast growing company employees say F the man kind of deal or see things change. And you know, whether it's even perceived change versus like actual change, there's that expectation that eventually all the top performers leave and the business stops growing or goes the other direction and and actually you know uh gets smaller. And so I'm just you you are you've probably been through more MA with with with worldwide than than than anyone or as as much as anyone. And I'm curious, like for one, like how have you made sure that your transactions have been successful? Let's start there and then uh we'll we'll see where it goes.

SPEAKER_00 23:21

So we've done a so I'd break the transactions into three categories. So one is sort of the internal MA we do of buying franchises and agents, and we've done literally several hundred of those. And and those are they're very they were very tricky to do out of the gates before we had a playbook, an operating sit like it was really, really, really hard to do. And there are plenty of people who have tried buying uh Unishippers as an example. They had begun a program. When we acquired them, they'd begun acquiring some of their franchises, and it was a it was a just a design, it was like a dumpster fire the way they were doing it. Any idea why? Yeah, they they were they were they went out and bought at the time, they were buying their most underperforming franchisees and folding them on top of an operating footprint where we took the different the a different approach, and by the way, I'm not saying that we were right and they were wrong, but the the outcomes were different. So I guess I am saying we were right and they were wrong. Um, but the um we bought the biggest ones where they had most successful. Yeah, and they were more, they were better people. Now we had to pay a lot more, but then we had a uh really uh like a foundation that you can now fold things onto, right? Because as a as a franchise or as someone who runs just an agent business, you don't have that operating foundational footprint. Like you it, they're two totally different like managing agents and being an agent are two totally different things, right? Managing franchisees and running a franchise are two totally different things, right? So you have to have that capability in-house. So we bought the bigger ones, and then it then it became very easy for us to fold things on. And and and where we've had success with it, and and this is by the way, how you have success anytime I think you do an acquisition, right? And this will carry over into the next two buckets of like Tuck and MA and then the big transformative stuff we've done, is you have to get everyone aligned to a common vision. You have to get everyone aligned economically. And where these things fall apart is hey, I ran old co, right? I'm I'm I'm at this fast flying company and I'm working with this, you know, really great entrepreneur, and everything's awesome. And I believe and what what did they believe like people at Molo as an example? They believed in your vision. They felt like they were part of something special. You know, Molo and their identity really is around Molo. Like I got, I look at like worldwide. I go to these sales meetings all the time. I do, you know, dudes who have tattoos of our logo on it. I'm like, one of those. We just you got a Molo tattoo? On my ass. I would have asked to see it had you had it been in a different spot, I would have asked you to show it to me. Yeah, but I'll take I'll take your word on it. Post Cubs game with yeah, that sounds like a late night. There was some alcohol involved. Yeah, a little bit. Um, I just love that we've had so many different iterations of our logo. So these that we literally have guys who have multiple, multiple tattoos.

SPEAKER_01 25:51

Yeah, we paid $200,000 to change the logo six months after I got the logo on my ass. That's so awesome. And I knew it was coming. And still that's that that that's awesome.

SPEAKER_00 26:00

So you have an old Molo, it's like a logo that wasn't even Molo's logo, and like it was an old Molo Molo.

SPEAKER_01 26:06

We it was no the the logo on my ass is is one we paid, I think, $50 to a guy on Fiverr to create. And then we hired moving brands who shout out to moving brands, they were great. I don't know why we spent 200 grand to do this rebranding. Uh Coyote had done it and we like the people and the process, but yeah, we got a new one. And then the new one's better, but uh the old one is bigger and it's on my ass. Yeah, well. No, that's gonna look like Wolo by the time. Exactly. My dad, my dad when I was a kid said you can never get a tattoo. And the the joke was he's like, you're gonna get the Michigan tattooed logo on your ass, and when you're 70, you're gonna be so wrinkled that the M is gonna look like a W. Yeah.

SPEAKER_00 26:45

So it's it's in a it's in a safe spot. Um anyways, back to back to I've got to get back in my head right. Um, but but it really is you sort of have to align like so. Anyway, these the these people that work for Amolo or whatever, whatever the company is. Like, I'll give you a perfect example. We we we bought a company, um, one of the tuck ins we did. It was it was actually an agent, uh group called BLX. Awesome. They're expedited, they're among the best. It's one of the more popular acquisitions we've done. And, you know, we we we do the deal, and then right away, and I didn't I didn't put my foot down on this one, but but everyone at the companies I always use the example from of mice of men, like Lenny loved that bunny rabbit, and he just had to love it so much that he killed it, right? That's what companies do with these acquisitions, right? So we we buy BLX and all of a sudden they got to become Worldwide Express, and they've got to, and well, lo and behold, that was great, except two of our top customers happened to be competitors of Worldwide Expresses. And the two, like literally within 36 hours of buying BLX, we'd lost our two largest customers. And I was like, I'm sorry, could someone smart be in charge again? And let's rename the company BLX and let's let's so it's it but and that that went into some of our branding strategy, but um but it but it also went to like these the you know, they're in in Iowa, these like being a BLX employee means something, right? So now can you figure out how it can still mean something to work at Molo, be wherever it is? Can it still mean something to work there, but you're part of this larger organization? So you've got to have the story within the story, and that all comes to like, hey, can we align on what the vision is here? And more importantly, can we align on an outcome that we both make money if we achieve this good outcome? Yeah. And if you can do that, you're you look, you anytime you buy something, you're gonna have some percentage of the people that are just like, I don't, I don't want to be a part. I and you gotta just accept that that's that's the case. But then as quickly as you can, you got to rally around the you know the remaining 97% of the people, right? And say, look, this is this is where we're going. This is the vision. This is this is this is why we feel like the the industrial logic of why this acquisition made sense. Oh, by the way, here's what it means for you, right? Which is largely should be not a lot changes, maybe it becomes additive in some way, shape, or form. And then, oh, by the way, here's this, here's this for the leadership. If this works, here's what it means for all of us, right? And you just align everyone's economic incentives. It's not perfect. I mean, we've done acquisitions that have gone poorly, we've done some acquisitions that have gone incredibly well. Um, but but but I think that's the key.

SPEAKER_01 29:13

Yeah, it's interesting because the example you use with BLX and changing the name right away and the immediate loss of two customers, it makes me think of some examples that I've seen in the past. And and the theme, it feels like, is especially with bigger companies, is you get these kind of siloed responsibilities where like the the chief marketing officer or VP of marketing like is only focused on their function. Yeah. And they're like, well, BLX doesn't, you know, the the everyone should know worldwide, not BLX. And they're not thinking about the best interests of, they're not thinking about every customer with BLX and the potential competitors, and they're not necessarily even listening to the people on the front lines, they're just in that little silo and they make that decision in their silo. And and I feel like that's kind of a strategic miss that that I've seen.

SPEAKER_00 30:03

I and I think it's the CEO's job, um, and really senior leadership just generals job, right? Like there is we and is one of the hardest things about I think leading leading bigger companies is you do have to keep everyone across the organization aligned on what the outcome is, right? Like branding, that's part of it, right? Having a like one of the reasons we changed the ShipStation Global, right? That was that's a it's a great brand. We you know, we we needed a new branding strategy anyway, at both companies, right? And that that made a lot of sense. But that's not the whole story, right? Like it's like branding is part of it, but the branding's part of it, and it matters if and only if all the other parts of the business are performing the way that they should. So a lot of it is like, and we talk about this all the time. I'll use HR as an example. You know, I I I I have, I think I made this comment. I I I love RHR. I might see HRO is the best because her she keeps everyone focused on what really matters, right? It's like talent acquisition, it's it's all people stuff, but but I've seen other companies where HR really tries to like make themselves more valuable. And I want to insert more value into the organization and push these initiatives to the forefront that may not do anything to help us with revenue, but I'm gonna, and it's like, no, because people are always trying to like, I want to prove that I'm adding value. Marketing's the same way, every area of the organization is the same way. And at the at the at the end of the day, what matters is, and and and by the way, you you you you without strong HR, without strong market, like without strength across the organization, you can't do anything. But at the end of the day, the business is all about and and how we're gonna be evaluated and judged. If we're doing our job the right way, more customers will want to use us than don't want to use us, we'll grow, we'll grow, we'll get more customers, we'll make more revenue. Like you will grow. And growth is a byproduct of you doing everything the right way, right? And sales is the tip of the spear that goes, and that's you know, but it's keeping everyone aligned to what the right outcome is. And that I think is that that's the to the extent we've had success with acquisitions, that I think is why it's worked. Um, we've moved fast when we need to move fast. Sometimes we've moved slow when we should have moved fast. Um, if we've learned anything about them, though, is like, you know, the the one we just did, you know, we we we sort of message us like there are anytime you do an acquisition, you got to get the cultures to align. You gotta, but but there's also it at some times there is a dirty side to every acquisition that you do that you've got to go out and realize synergies and you don't need two of everything. On that stuff, you need to move very quickly, right? Because it's it's like, you know, what we would tell people is like, look, putting two big companies together sucks. It just does. But if we do it slowly, it's not gonna suck less, it's just gonna suck for longer. So let's just figure out what we need to do and get it done quickly. So it's like it's weird. It's a it's a muscle, it's a skill. And that's why I said some big companies kind of suck at MA and some some don't. It's a skill, man. It's like you got to learn how to do it. And there are parts of it that you have to do quickly and and you know, like like it's battlefield medicine quick, like you are quick. And there are other things that require a lot of bedside manner and thoughtfulness and rehit, like is so it's like it's it's just a weird, and a lot of it's feel, but some of it you've got to move quickly on, and some of you got to move slowly on, right? Like and it's just having the experience and knowledge and know-how, and probably by the way, having screwed it up a number of times, of knowing how to do it in a way that you won't in your in your you won't kill the bunny rabbit in your in your efforts to really love on it.

SPEAKER_01 33:28

Yeah, that's a great

Vision Execution And Winning Belief

SPEAKER_01 33:30

point. And you know, back to your like I think alignment in the vision is paramount to it from the C it's the CEO's job to create alignment of the vision, to to articulate the vision, to craft the vision and articulate it in a way that everyone can get aligned to it. And then next to me is belief in the vision. I mean, you need people to actually believe in it, and um, that's what will make them show up and do the work. And then the most kind of the last piece of this is execution of the vision, and that's where the management and the day-to-day frontline people like that's how you make it all work. Yeah. Um I guess what I'm curious about is like I I think about at Molo, I think there were there was that was something we did very well. Like our executive team was very good at articulating and and aligning people to the vision, and our people bought into it. And and so, like, our execution was fantastic. Our customers by and large loved us. We at the peak, at least in my reign, was 600 or so employees, and you're talking about 4,500 man. That's a crazy number to try to align around a vision and across a number of companies. Like, how do you make the impact that you have to make in your role with such a large organization?

SPEAKER_00 34:48

I think you need a really strong team to help reach, right? It really, it's, you know, and a lot of it is you constant communication. Like we do all hands all the time. And we've we've got a really it was funny when we put these deals together. We've got a, you know, we, you know, we know probably up through, you know, January of next year, like, hey, this person's doing a meet the leaders, and it like what what is that calendar? And by the way, it's not instant, we can pivot it as needed. Of course. Um, but we're we're highly focused on communication, and a lot of it is just like uh in terms of the getting people to believe, like a proper vision is long-term very aspirational. Yep. But at the same time, in the near term, you've got you've got to have near-term milestones that you're achieving. Yeah, but it has to be unbelievable, but not unbelievable, like, yeah, we could do that if only we knew how to sell, right?

SPEAKER_01 35:39

Like you can't, you know what I mean? Like just like the the aspiration has to be like, it's far reaching. It's gotta be it's gotta be a little bit more than someone to be like, this guy's a little crazy for sure.

SPEAKER_00 35:49

But by the way, it's funny, we were reviewing this, like as we look at our vision over time. Like, I remember the first time I said, Man, we're gonna do a billion dollars, right? And they were like, Fuck you. Like you're not um it's not happening, you moron, you know, but then you do a billion, then it's two, and then it's so like history has a tendency to obscure the details, right? So it's it's like you say something today that seems aspirational, but where we are today was aspirational 10 years ago. You know what I mean? So it's just like, and and so I think some of it is you have to also, it is helpful that I've been here for 30 years because I can I can give people the right context around like, no, I actually kind of remember. So it's back to that old man thing again, right? But it but but you can give people the property. Uh yeah, I still think it I saw it in your eyes. But it's one of those things where you can give people proper context. And then it's so so, yes, our our our our five year, our 10-year vision of what we want to be should be somewhat aspirational and really should also be something that's not, I don't think it's something that can be clearly defined. Like our you know, our goal of ShipStation Global is look, we want to we want to be the global leader for for businesses who who are looking to purchase intelligent logistics solutions, right? It's like this we want to be global, we want to be the ubiquitous player, and there's other things around that that we're getting people galvanized towards in what we look like. But then you put the, it's like, here's the vision, but oh, by the way, here's the roadmap on how we're gonna get there. Here's what we need to achieve over that time period. And by the way, as we get even more narrow in 2026 and 2027, these are the five things we need to do. And we're gonna be myopically focused on these five things. But remember, it's sort of like someone described to me once of like the the vision is kind of what you're building. And then, you know, these things, these near-term goals are like the the bricks that you're laying to build it. Yep. Nobody wants to be a bricklayer, but everyone wants to build a castle. So you want to sort of show them like this is what we're building towards. By the way, over the next five, 10 years, like here's all the things we're gonna have to do. And some of the the further out you go, like some of these they require a little bit of imagination. But then if you look at what we got to do right now, like we got to do these five things. And it's gonna be hard work, but it doesn't require a lot of imagination. It requires execution. Yep. And then, and then those whether you call them big rocks or big, they evolve over time. And every year you have a new, and but but but the key is is leadership is you know, if that vision out, it's it's like, I don't know, I always use the analogy in my head of like you're the you're you're out there, you're you're you're you're you're in a scrum and you're playing football and you're doing whatever, and like every once in a while the CEOs to pop their head up and be like, oh shit, we're moving the wrong direction. Like, and you got to move them back towards the vision. But that's leadership's job is to make sure the ship's gonna get off course and there's gonna, but it's like, let's get people back. This is what we're focused on. Remember, this is what it means to us. And by the way, if these five things matter, that means number six through infinity doesn't matter. So if you're spending time on number six, redirect your focus over here. But and it's just getting people focused on the right things and not pet projects. And it's I know it's it's basic execution stuff that I just think most people just overlook. They really struggle with because it's not cool and sexy, yeah. But it's like you set this aspirational vision, I think where visions fall short is you set a vision and then no one believes it because they're like, well, that's too much of a moonshot, and we're not good at any of those things that you mentioned that we need to do. Yeah. That's why I need to bring it down closer to like now to get there, if we do these things and show them how you would build it, that that's when people start to believe it. Like you actually actually not just have the vision, but the plan to achieve the vision and communicate that plan. And really, if you think about the building blocks of the plan, it though those should not seem like they should be hard work, but they shouldn't be these moonshots that people are like, well, we can't do that. We're we're not good at any of those things. You know, like you know what I mean?

SPEAKER_01 39:25

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SPEAKER_00 42:11

And like, I think that's right. How is how is what this person just did, how does that actually tie to the company's goals and objectives and and what it really means, if we can repeat that behavior over and over, here's what that means, and here's what yeah, totally. And and by the way, a lot of that is so within a vision, you've also got things that are like core to your values, right? So it's it's everything ties together. Like one of ours is make it right. So you know the industry, it's like you ship enough, bad stuff's gonna happen. So we've empowered our people, like this whole thing, you go into any of our offices, you see the words make it right written there. And we've carried this over to ShipStation. And I'll give you a perfect example, but but I've been technically the the CEO of ShipStation Global now for three and a half weeks, and I've gotten a couple of, and we've got between the two brands, we've got over a million customers globally. So it's a lot of customers that we've got out there. I've gotten two of the I hate you right now on like LinkedIn, right? Like, I can't believe you guys are just something that'd fallen through the cracks, right? But in both cases, you know, we got them out to the right people within hours, the big technical problems, like these big e-commerce merchants who just couldn't ship, all of a sudden we're back in bed and they're highly appreciative. And then you push that story out there. And on something like make it right, it's really easy to get people at the organization to want to embrace that because you think of the people in support. Everyone in support they want to help customers, but what constrains them, what constrains them from helping customers are stupid policies that big companies put in place to like, oh, we can't give a credit unless a and it's like you you lose like by far, you uh like our view, again, not saying we're right. Um, but our view is like just make it easy to solve in the moment for the customer, and then you'll have a better support team. If you have a better support team, your salespeople will trust it more. And if the salespeople trust it more, they'll focus more of their energy on selling versus maintenance. And then all it's like the cascading effect of this, it just ripples through. Entire organization. And then the support organization all of a sudden they understand, like, oh, this aspirational goal we have to be a billion-dollar EBITDA business. I see how that works because I just helped lock in a couple, you know what I mean? It just it all cascades from there. Yeah. So and and and it's it's like you can't do it through the spreadsheets and through the finance, like like the finance guys are never very good at like telling the story. They're good at like, hey, the plan goes from X to Y, like that. And you need that for sure. But but people also need to feel like they're part of something special. And that's where communication, communicating the vision, and not just the good, like sunny side of the egg part of the vision, but the things that we need to do to get there. And by the way, the things that we need to not focus on and the sacrifices we need to make. But that's that that's the that's the art of. And by the way, that that that is something that whether people come in through an acquisition or you hired them right out of college, that I mean, everyone wants to be part of a winning team. Everyone wants to be part of a good story. So if you have a solid vision and you have a clear plan and you can go execute, you celebrate the little wins along the way, you report out on the performance of what's working, what's not. And people all of a sudden it catches fire where they're like, oh man. I'm with it's like playing on a sports team. If you play on a sports team that loses every game, you kind of just go into every, you go into every game defeated, but you start winning and having success. And even if you're not winning, but you're building off successes, that's what coaches do in the NBA, right? Like they build off the little successes, then all of a sudden, what a winning culture takes over. And and that's just that's the that's what businesses are, right? Businesses are just, it's we're just playing a sport. We just keep score differently, but it's just a sport.

SPEAKER_01 45:36

It's so interesting because, like, you know, I've interviewed, I don't know, 85 maybe people on the show before, most of whom are CEOs. Um, I would say like yourself, but not many are running a business of your size. But like, there's just one commonality in our industry of those that are successful, and it's that they like obsess over how they execute for the customer. Yeah. And, you know, just the other day I was interviewing Liz Wayne, who's the CEO and founder of Able Transport Solutions. They're a small uh overhaul, oversized um broker out of uh Omaha. And she said something that I thought was really interesting because I almost took this from her. She's like, you know, there's two, she's like, I feel like there's two types of people that succeed in this industry, founder CEOs. Um, one are like the kind that are just like insanely intelligent. Like you can you can feel the intelligence as soon as they start talking. And the other are the grittier type who just obsess over the customer and make that work. So, which one are you saying I am? You could maybe be in the middle, but I'm I'm neither.

SPEAKER_00 46:40

Thank you.

SPEAKER_01 46:40

I'm the latter. You you don't consider yourself the latter?

SPEAKER_00 46:43

No, I'm kidding. I'm definitely the latter.

SPEAKER_01 46:45

Yeah, definitely the latter. I mean, I I I can just in in the make it right concept and the way you talk about um how you think about the vi articulating the vision, like it all it's all so focused and and focused on the right things. Like it's just it's it feels like you know, as someone who's seen some some acquisitions that didn't go so well from even my earliest days, it's like it feels like it's so easy to get lost in the wrong stuff. And if you focus on the simple stuff and just like if everything is centered on how do we execute for the customer better, and people actually believe that and and put their focus to that, it's hard to go wrong.

SPEAKER_00 47:24

You know, things take care of themselves.

Leading Through COVID And A Downcycle

SPEAKER_00 47:26

Like we through COVID, you know, we we is when we thought we were gonna go out of business, right? And because every no one knew, but like in March of 2020, I certainly didn't see I certainly didn't see a freight boom coming, right? Like I was like No scary days. Those were those were rough days. But we we put something out there because we we thought, I mean time we got all these SMBs, we're like, no one's gonna pay us and we're gonna go out of business, and this is how it all ends. I can't believe this is happening. But we we we just galvanized everyone around this concept of the holy trinity, right? Which was like, look, we need to wrap our arms around our customers, make sure that they know that we are there for them and we're and we just don't want to lose customers. But also, PS part of that is we need to make sure that our customers are paying us, right? Because we need to wrap our arms around our existing customers. We need to remain very focused on continuing to add new customers, right? And let's add good, solid new customers. Let's not use this as a and here's all the reasons that we can continue to add business in this in this trying time. And then lastly, we need to make sure that we keep our expenses as as managed and as you know, only the necessity as possible. And let's just galvanize around those three things over the next, you know, until we either go out of business or this thing blows over. Um and what's crazy is getting people galvanized around three really simple things. And by the way, in a company where everyone was aligned economically to the outcome, because we have a lot of shareholders, even before the freight boom came, like our our DSO improved. Like we we had great months even before the great freight, like we definitely took a dip because it was, it was, it was much, much, much slower. But it was like, oh my God, this is like working because it's like getting everyone galvanized around simple, simple, simple things. And I think that's part of the message too, where I think a lot of people lose it is yeah, you have this grand vision. This is where really smart people, I think, struggle. You have this grand vision and you can see it in, but but can you bring it down to like tangibly, what do I need to do to get there? Right? It's sort of like getting in shape, right? Like you what what do I need to do today? Like, well, don't eat like a pig and woo a little bit more and you'll be fine. And if you do that every day and you're Peter, you'll be fine, right? Like it's like it's like it's it, it's just you have to give people a pretty I don't want to make it sound like a simple blueprint, but it's like people need to understand, like, okay, well, what is defined success for them? What do I need to focus on today in order for us to achieve this great vision 10 years out? Because if I focus on what's 10 years out, I'm never gonna like execute today. So it's like it that's the missing piece. It's like you gotta have this great vision, but also like, what do you got to focus on? And then and then you manage aggressively those things that you're focused on. And then as the CEO or any or leadership, if you focus if you're focusing on those things, and then all of a sudden, lo and behold, you're not getting the results you want. Well, maybe you got to pivot, right? And but but that's where I think that's where it all falls short. It's like it all has to tie together. Everything you're doing has to tie into you achieving this great, like Molo wanted to become this great thing. It did, right? It was a great outcome and a great story in the industry. But as much as you talked about that, I'm sure you had to to galvanize your people around the basic execution on a daily, weekly, and monthly basis that they needed that that needed to happen. Otherwise, the vision was just some wishy-washy thing that it's a fantasy. Yeah, right. A vision can be a vision can be a plan to build a castle or it could be a fantasy. And in a lot of cases, it becomes a fantasy. And it becomes a fantasy because there's not the execution. And it also becomes a fantasy because there was never a reality check along the way of like, well, yeah, that's supposed to be aspirational, but can we, can we do like our will people believe that we're capable enough to do that? Yeah. And that's that's just where I think a lot of businesses get it wrong.

SPEAKER_01 50:53

Yeah, a hundred percent. And I think the interesting thing to me is is you talked about kind of that rallying cry or rallying moment during COVID. Like adversity will make or break a business, and especially external adversity, because it reminds me of the Serenity Prayer. Like, God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference, right? Like there was nothing you could have done about COVID in March of 2020. You could not change the environment outside of your walls. But what you could do, and I think the difference between making and breaking a business in adversity is good leadership. Yeah. Good leadership battens down the hatches and said, Hey, let's get this real simple. These are the three things that we got to do today, tomorrow, and the next day to get through this and grow through this.

SPEAKER_00 51:38

Not just not just to survive, but to thrive through this environment. You know what's interesting though, because I've had this conversation, especially now having gone through a four-year, thankfully, hopefully over freight recession, leading through COVID was super easy. Like you, because you had a mandate to do anything. You know what I mean? It's sort of like we use the example like battlefield medicine. You know, if I if if I go into an emergency room and like I'm bleeding out, like, I don't care if the doctor treats me roughly, like, save my life. Like COVID is sort of like very, very, very easy to lead in those moments. And we've had a couple of them as a business where it was like we can fight all we want. If we don't get through the next X days or X weeks, we're out of business. So, like everyone, like people give you a lot of license to lead and do hard things in those moments. Fair. Over the last four years, I think that's where a lot of people were really tested. It'd be interesting to see how people come out of this because over the last four years, it's been like a slow moving storm of like, is it getting any better? No, it's getting worse. It's just raining. Yeah, it's like this sucks. And you don't have the same mandate as a leader because it's not, you know, it it the the barbarians are not at the gate that day, right? It's just another day of, you know, and that's that I it's gonna be interesting to see as you look at companies that went through the last four years, is how that has shaped people's styles and approaches. But it that that was to me, that was much more difficult to lead through than to lead through just an absolute chaotic situation.

SPEAKER_01 53:04

Were there moments or or pivotal points? Like I really appreciate you pointing that out because as someone who unfortunately didn't get the opportunity to lead through those last three to four years, um, the only thing I was leading was my charge to improve my handicap uh in golf. But um, as someone who's who kind of went through that, uh this kind of unpredictable future of we don't know when the market's gonna shift in our favor every day seems to just be slightly worse than the one before. Like, were there points where you thought like we need to make a drastic move or or like how how did you kind of approach that kind of never-ending dullness of the slow market where there's very little demand and uh people aren't really happy to show up to work every day?

SPEAKER_00 53:53

So for us, we had it, I think, a lot easier than most because 70% of my revenue is nothing at all to do with truckload, right? It's either parcel or LTL. Now, LTL got hit pretty hard in this cycle as well, but our parcel business held up in incredibly well and grew, and there are a lot of reasons for that. Um, but but I had other levers to pull. I had franchise acquisitions I could continue to do. So, so I mean, working our way through it, like we had to, we really manage the cost side of the business. We got very efficient, we made a lot of investments across the board in technology. Like we've we were one of the first, we don't, you know, we don't run around and pilot, but you know, as much as anyone, we've been on the automation train of like, hey, oh, we can actually use AI to do that, right? So there's getting your cost model like hopefully over the last four years, people have done what they need to do to get the cost model right. Um, we eliminated a ton of wasteful stuff. Like my dumbass, I sponsored a NASCAR team at the height of COVID, right? And I can't think of dumb.

SPEAKER_01 54:51

I cannot think no, there's not much dumber than I signed a $60 million 12-year lease at the nicest office building in Chicago right at the peak.

SPEAKER_00 54:59

Yeah, that's that's that at least you got office space though. Like I have like I have like bumpers of of crash NASCARs in in office. It's like it's like, oh my god, I'm so dumb.

SPEAKER_01 55:10

The other downside though is I had you know, I I I bought a nice condo right by that office. And you gotta watch people going in and out. And so every day I walk out, I look into my actual old office. So that's not the best, but yeah.

SPEAKER_00 55:22

Yeah, but that that's that's that's not as dumb as your tattoo, but that's a that's a good one. More expensive. Um, definitely more expensive. I don't know, financially. May not end up being. Um, but then uh but but like you you you you have to look at the business more. You you look at the business, you say, okay, what can we live without, right? And obviously, like things like the the big obviously that was an obvious one, right? 20 million or whatever you spent on NASCAR. But then all of a sudden it's sort of like, okay, you get the business the cost right and you get the organization right. And you have to you have to critically look at the organization like you would any team and say, hey, I'm investing X in this group. What am I getting out of it? And it forces you, I think it's a good, it's a healthy period for while it sucks, it's a healthy period for you for you to look at your business and say, well, well, why do I spend all this money on insert whatever group is? And you say, Well, I'm getting nothing out of it, right? Well, the textbook says you should have that. It's like, well, fuck, the textbook's wrong. And you can rip costs out that you don't need. Um, because I think that happens anytime there's a good period, is inevitably businesses are like people, they get, they get, you know, they put weight on and when times are good, and you just got to sometimes take it off. It's like that this gave us an opportunity to do that through the last four years. So I think we've got a we we have we're fortunate. We had a model that was far more resilient because we're modally way more diverse. SMB was actually there's a lot less volatility, believe it or not, in SMB than in enterprise, particularly with the with the brokerage business. Um, and then, you know, for us, because we've got such a nimble model, we were, we, we, we, we had, we had a lot of growth levers we could pull that we didn't. So we actually came through it. Like we, you know, Q2 of 20, just as our legacy business, we did better in Q2 of 26 than we did in Q2 of 22, right? So it's like we we dipped, like any, but we dipped a lot less than everyone else. Um but it but but back to your question, like were there were there times where we we definitely changed approaches on things. Um, we've definitely tried to engineer the business in such a way that we don't we have a more durable um and predictable stream of revenue. Like we really leaned in more to mid-market and SMB customers versus chasing enterprise logos. Like we've got some great enterprise customers and we have a great team. But but I I don't want to go like we want to, we our goal is to do business where we're not gonna be completely commoditized. Yep. And there are segments, you go, you know, this, you go into some some of the largest shippers in the world, they have portions of their freight that are not very commoditized that you could do something unique with. And that's that's where we focus our efforts. Um, but we also focus a lot of our energies on on the businesses that are not the top 5,000 shippers in the in the world, because that's where our value proposition resonates the most loudly. And that's also where you have more predictability and stability in the revenue from year to year. And it just, it's not as it's not as jumpy as you see in the in the pure enterprise space.

SPEAKER_01 58:06

Yeah. You know, one of the things I've always thought a way to kind of insulate or protect yourself was and get stickier was to be able to service across multiple modes. Yeah. And I think your business is is a perfect example of that.

Multi-Mode Growth And Carrier Strategy

SPEAKER_01 58:19

And I'd like you to actually kind of briefly walk, because this I think will help us get to the acquisition that I think is most pressing to talk about, um, or the merger. Um, but but like you started as a parcel company. We did. And you have just over time, through acquisition and and some organic, I'm sure, been able to expand into every other mode, it seems like. So can you just kind of walk through the timeline of that and all the modes and eventually now to where we are today? Yeah.

SPEAKER_00 58:45

So parcel was the initial one, and we were in that really is we were a standalone parcel until really 2008. Um 08, we're, you know, going through the GFC, we're moving away from DHL over to UPS. DHL pulled out of the US market, and uh it was 98, 99% of our revenue was tied up in that single line. So we were like, all right, we gotta we gotta evolve here. So 08, we rolled out our LTL brokerage business and we we timed it perfectly. Um because the same, by by the way, the same thing that was killing us in the parcel side was was LTL carriers were hungry for business. So it was a great time to be launching that, launching that model. Um, so we got into LTL in 08. Truckload we fiddled with, you know, a little bit. I'd say we tinkered with it in the mid-teens. And we there was always like a little that we did, but we didn't really, I wouldn't say that we kind of quote really leaned in to it until probably like 2016, 2017. Um, but we didn't become big at it or scaled out until we did the global trans deal. Because Global Trans is, you know, they'd bought AFN, Circle A, they'd be like they had some real. They had a bunch of the, you know, the legacy backhauler businesses up here that they they'd acquired. So, you know, we went from not really relevant in truckload in 20, you know, 2020 to by 2021 when we did the global trends deal, suddenly we had a relevant footprint in truckload. Um, and then since then we've rounded it out more. Like we brought Gier is another great, you know, uh deal that we did, refrigerated truckload. You know, we've done some other little tuck-in MA as well. But um, I would say truck brokerage is really, I would say became a real core part of our operating model in the late teens.

SPEAKER_01 1:00:27

So the last few years, what does the kind of breakdown look like in terms of the revenue split or whatever you're comfortable sharing?

SPEAKER_00 1:00:33

Yeah, no, so we're we're pr predominantly parcel and LTL. Um LTL is our largest mode. Um it is, I guess with this, technically, if you look at like a pro format for the now the combined business, the revenue profile is a little bit different, but it's still very heavily um parcel and LTL. Truck brokerage is very meaningful. It's um, you know, just 30-ish percent of our revenue. Um, but but I'd say half of that is enterprise, half of that is um what we should consider SMB.

SPEAKER_01 1:01:04

Yeah.

Octane And ShipStation Global Thesis

SPEAKER_01 1:01:05

And the most recent merger, what is that walk us through like what that is and what?

SPEAKER_00 1:01:10

Yeah, so Octane is a software company. They make uh awesome company, they make shipping software. Um, most well known is a product called ShipStation, but they've got a we've got an array of offerings that you know, we power some of the largest e-commerce merchants in in Europe with one of our enterprise um softwares. And basically what it does, it's a they they they make software that makes it incredibly easy for businesses that are selling through multiple channels with multiple carriers and just to to through a single pane of glass able to manage, you know, all their orders, their inventory. It's it's just it's a it's a really, really powerful software that primarily e-commerce merchants kind of have to use, right? Um, so the business is great. And and um, you know, they they had a great growth trajectory. They, you know, Toma Bravo um invested in them back in 21, um, right around the same time that we did our deal with CBC. And it it was just one of those things over the years where there's a lot of overlap between the two companies. Like a lot of our customers use an Octane product, right? So, you know, they I mean, it's and product, engineering, marketing, I mean, they are an amazing company. And then you look at like what we're good at, we're good at we've got a huge commercial engine with the franchises, the agents, the direct sale, like we've got over 2,000 people in front of customers every day. So it's commercial engine and then carrier relationships. We've got just very across every mode, very deep carrier relationships. So you put those two things together and and and you got a pretty pretty pretty neat company where now all of a sudden, you know, we can go to and we've got, you know, you look at the size of the organization, you know. I think last year the number is we are through our octane platforms um moved over three, it was like something like three billion orders uh that were processed. So it's it's massive scale business, right? Um moved well over 200 million dollars to, I'm sorry, 200 billion dollars of GMV that that came through those those shipments moving. So the the the reach of the business is huge, but now you add to that, you know, we're gonna add some add different modes in. So now all of a sudden we're gonna take it from just e-commerce, where we're by the way, we we e-commerce merchants, this is this is like must-have workflow of software. But now as you expand it out, is there an opportunity as we add in LTL and other modes to not only continue to service the needs of these e-commerchants, which a lot of them have LTL needs, and like it's it's it's just and and what we saw was you because we run into this all the time, I'll pivot back to where we're going with it, but you're you're a small business. Today, you you're cobbling together a patchwork of solutions that you may use ShipStation to manage your e-commerce orders, but you're using another system to manage any of your freight supply chain. And then I still do some truckload and I go over, and it's just it's not all tied together. It's like you've got this neat setup over here for all your parcel, but you're still using, you know, post-it notes and you know, strings tied around your finger to manage everything. Putting all that into a single pane of glass is, I think, where there's going to be real value for the customer. Because they then not only get better workflow where everything, like you need to integrate your net suite, no problem. You need like it, it every every everything becomes super easy for the customer in terms of like how the workflow actually is generated, but then also add in the you know, all the shipping relationships we have. They now have the opportunity across the board to buy shipping in a much more intelligent way. So you add in the capacity, you add in all these other options. All of a sudden, if you're a customer, not only do you have this workflow software that it's on it on its own is worth something, but you have this array of carrier options that you can buy shipping far more easily, probably far more economically than you can on your own. Because again, we're mainly we're not focused on the 5,000 largest shippers on the planet. This is to go after SMB shippers who they're focused on running their own business, not running, you know, they're not great at running a supply chain on their own. That now all of a sudden you you put the two together, you it it really is a case of one and one is equal to something a lot more than two.

SPEAKER_01 1:04:59

Yeah. I mean, it's it's fascinating. I'm curious, like it almost sounds like there's a path to like 4PL manage trans with all of this.

SPEAKER_00 1:05:08

There is, and I wouldn't say that that's sort of like the the the main play, but there is absolutely where you'll have customers now have the ability to bring your own carrier if you want. Use one of ours or bring your that's sort of the model. Use one of ours or bring your own, right? We've got the connections with the carriers. So if you want to bring your own and just use our work work software, we're fine with that. And there's probably like the way I think about it, if you're if you're a small customer, and we can you know debate over what what what the definition of small is, but if you're of a if you're a smaller customer, you're gonna use a software, and chances are you're gonna want to use one of our carriers because we're gonna we're gonna be able to give you a much better experience, probably much better pricing than you'd be able to go out and negotiate on your own. It's easier. Like every you something goes wrong, you're dealing with the same person for you know, my software, like it's a better experience. You get into the mid size, mid size customers will still. Love us for the software. They'll still love us for a lot of the carrier options we bring to the table, but they're going to probably augment that with some other carrier relationships that they have or they've developed specialty, whatever it may be. That's fine, right? And then you get to the high-end. They're really using us for the software. They're using us for the APIs and to the carriers. Like I think about some of the merchants that use us, they've got API connections to 400 parcel carriers globally. Nobody wants to manage that on their own. Right. So it's just the the the ability to have this connectivity. That's that's where the enterprise customers will utilize us for the most part. But then you get into the mid-market and and more traditional small customers. They've got more of an array of things that they're going to benefit from, right? Better insurance. But all the all the things that we're providing customers with right now, they they can they automatically get that by using Chipstation.

SPEAKER_01 1:06:48

It's interesting to me because you've you've kind of been capped, been selected, or you know, you've CEO'd your way through multiple very large transactions where two companies come together, both a meaningful size, and everyone point they say, Hey, it's you, you're the guy. There's a coin toss, and I've lost four times. That's funny. Uh, but this one I think is is maybe the most unique because you're buying a pure tech business.

SPEAKER_00 1:07:17

And what's interesting is they bought they bought they actually bought us. Yeah, which is which is the neat part. Um the um, yeah, it's a it's totally like I was joking with someone the other day. I was like, man, I'm a I'm a software CEO now. I gotta get, I gotta, I gotta get I get my by the way, my wife's I my wife will let me tell her friends what I do now, right? It's you're not just a freight guy, you're a freight guy, like your husband drives a truck.

SPEAKER_01 1:07:40

Now you're a real Austin software software guy. Yeah. I mean, but like, is are there concerns there? I don't know if concerns is the right word, but like, what do you think are the challenges of you know, given the hit your your experience in leading, of now kind of coming into this role of a large, like successful software business? It's it's gotta be, feel like it's a little different, right?

SPEAKER_00 1:08:05

So I had a this, it was a long time. This deal took a while to put together. So I got to know the guys at Toma pretty well over the last few years. And you know, I had I had a gut check moment as we were getting serious, where um yeah, had dinner with them and the guy who's the chairman, and and and it was sort of one of those, like, hey, are you really ready to do this moment? So, like you've never run a software company. Like, how and I remember thinking myself, I was because I was at dinner. This was and I remember what I was because I was my daughter's at birthday dinner. Poor I was focused on everything in my head other than her birthday. But uh tell her that. I I don't think she's listened to the freight pod. Yeah, it's a great I great audience, great audience. Um, but you know, I in my head I was like, you know, if I'm gonna do this, I need to actually be comfortable stepping out of my comfort zone. Because I I I have to, I, I have to, at my advanced age, I have to choose to evolve and I have to choose to grow and I have to choose to probably do some things that I haven't had to do in years. So I've been a worldwide for so long, I can kind of run into my sleep, right? I understand what every button on the machine does. Now, this is this is the ship station is a whole new company. So it's really forced me. And I, and by the way, it's been great. I feel more energetic, you know, taking more peptides now to help me, but it's like, but it's one of those things, man, where it's like it's it's been energizing because it is a totally different company. Like we I've got now Silicon Valley Great Engineering, right? I've got this product team that is like best in breed, like real market, like the ship station brand is very well respected in the marketplace. So there's there's there's parts of this business that are requiring me to really embrace things that I've never really had to embrace. Um, and it's pretty cool, you know, it's it because it is it is something new. It's a new, and that's been the beauty of our whole model, though. If you if you look at a chart of it, like every every four years, we kind of reinvent the company. It's been the beauty of private equity. Private equity comes in, and if they get in, they're getting out, right? That's just how the model works. And this is our sixth private, like this Toma's my eighth private equity sponsor. I've had six private equity cycles, and each one, the company reinvents itself in some way. It was like, well, we're a franchise or now we're buying franchises and we're a direct operating company. And then you do so it every time it's sort of evolved and there's been a new, and it keeps it fresh. It keeps so that's why I think I've been able to be here for as long as I have is you know, every four or five years, you're constantly reinventing the company. So this is its next iteration. Now, this is the biggest one, and this is the one that's probably, I would argue, the most the the the the biggest sea change, right? Because it is now a truly a world-class software organization. Um, but that's kind of what makes it fun. And they, and listen, they have a great team over there as well. So it's not like I didn't inherit, like in this case, I would say the the the the team that we inherited is the best team that we've ever inherited in any MA. And that's the not to say anything negative against the other MA work we've done, but the the the this team's really solid.

SPEAKER_01 1:11:03

So as a side, and this is maybe for my own benefit more than, but it will help others

Private Equity Fit And CEO Truth

SPEAKER_01 1:11:07

too. As someone who's thinking about getting in bed with private equity to go buy one or multiple brokerages to get started, how do I know the right guys to get in bed with?

SPEAKER_00 1:11:20

So I will say this. I have now had eight sponsors. That's why I asked. All different, but all in many ways the same. Here's what I'd say. If they're what I found with private equity, and I've I've had nothing but good, I've nothing but success, and we've gone through some tough times and had some tough deals, and we've had deals where people made a gazillion dollars, and we've had deals where we we struggled to get to the right return. But I would say that as a as a class, right? I I've always been able to do business, and and some that have reputations for being hard to work with versus others. At the end of the day, they just they they all of them have the same desires to make money, right? Like they're investing money on behalf of you know, widows and orphans, right? The from pension funds. And it's like that's who they're investing on behalf of. And, you know, I I always say, look, generally I have found them as a as a class to be very they in every situation, my I my private equity partners have had a chance to do the wrong thing and not. They've done the like I've I've been, and I don't know if it's a good fortune or if just I assume it's how it is. Like they're they're because bad reputations spread very quickly. And I think what I found most of the guys and girls I've worked with in private equity, they're as focused on raising the next fund and doing the next deal as they are maximizing the outcome on on the deal they're working on with you. So the the ones that have been around a while that are on, you know, they're not on their first fund, they've clearly have a track record of success over time and they've had opportunities to screw people over along the way. And if they continue to raise funds and get people to sell to them, they probably haven't, right? Yep. So and that's so so I've I've found them to be incredible to work with. A lot of guys don't like working with them. Um I do, uh, you know, because I've got a board of guys who are just as motivated on the same outcome as me, right? Yes, let's make the dollar we invested today worth something more than a dollar tomorrow, right? And that's that's what business is. Like we talked about it being a sport. That's how you keep score, right? So I would say the the other things, though, I don't think it matters if they have a lot of domain experience. That could actually be a negative. Um, they're the smartest human beings on the planet. Um, if you forget that, most of them will remind you of that. But they are the smartest human beings on the planet. Um, and they can pick up a business very quickly. Like they got super nimble minds. Um, you know, try to look for someone who's got good like that you enjoy hanging out with because you're gonna spend a lot of time with them. Um, but I've I've had nothing but success with private equity. We've been able to do things with the business that we could never could have done if we didn't have private equity sponsorship. Having institutional capital in your deal, where you have, and and by the way, it's got to be the right fund for where you are in your in your like if I had the private, if if today, like today I I've got Toma is the is a is a prime sponsor. They're one of the largest funds on the planet, right? And we're a large company and you need that. If I had a fund that I worked with 17 years ago, they couldn't, it wouldn't work. And nor would it work if Toma it's just you got to have the right fund and the right group with the right strategy at the right time. Um, but man, we've been able to do great things because of private equity. Like our business would be nowhere near where it is today if we hadn't brought private equity in 19 years ago. So it's it's it's been um I I've enjoyed it. Uh, you know, I have I think that the the the guys I've worked with have definitely helped us make the business better. Like I always joke around, I'm like, oh yeah, keep expenses lower and get sales higher. Thanks for the advice, guys. It's great. Like, I didn't let me write that one down. Um, but they generally have like it when you have real problems, they're pretty good at helping you think through them.

SPEAKER_01 1:14:44

So let me let me think of this from a different angle. Because if you've had success across eight sponsors, the common denominator, frankly, is you. So what are you doing in your role as a partner to private equity to make it as fruitful as it can be, aside from making the business as profitable as it can be?

SPEAKER_00 1:15:09

You gotta always be truthful. Like one of my first the guy, one of the first guys I worked with, you know, he he kind of explained private ectomy in a nutshell. He was just sort of like, dude, we can handle, we're big boys, we can handle bad news. We can just if it's raining out, just tell us it's raining out. You know, don't you know, don't tell us it's sunny if it's if it's the middle of a thunderstorm, right? But a lot of CEOs, they it's like there's an element. I I really had to work when we were smaller, I had to really work to change this culture at our business where people would people would want to be like, no, it's all great, everything's great. It's like, dude, we get paid to fix problems. There are problems everywhere, not acknowledging the problem. And that's where I think like with private equity, I'm pretty straight shooter. Um, I've never been worried about getting fired, right? I I I technically could be, but but but I've never worried about that. Um but I think it's it's communication, your style, be very honest and truthful. Um I really do think economic economic alignment is important. Um, I've never cared about my current income. I've always been focused more on creating equity value. Um and and I think in I've had the luxury of being able to focus on that because of the history. But you know, I think where it gets funky is, you know, you you see these P firms that bring in an outside CEO who's more focused on their current income and their annual bone. And it's like that's the alignment's not there. And that's why you have the friction and the tension. And it's just you, you, you need people like we should both make money the same way. Yeah. Right? Like we should both make money together so that we either do really well together or we don't do really well together. Well, same too. And I know by the way, I have a material personal investment in the coming, you know, very large shareholder in the business. I I think I think those things matter more than they get credit for. You know, it's hard to replicate that, right? Like some some guy's not gonna come into a company and put the size check in that I like I've got, you know, 29 years of acting, like uh no one's gonna come in and replicate that. Yeah, but you can still replicate the economic alignment. Um, communication is is is of critical importance. And look, there's an element of I'm gonna call it managing up, but there is an element that is the CEO. Look, your job is to help manage investors, right? And and they are your investors. So you want to be very truthful to them, but you also have to establish clear lines where it's like they don't want to run the business. So it's it's just over the years, you learn how to manage it. And I manage it very differently today than I did 19 years ago. But you learn how to manage it in such a way that um it it is a skill, right? But but I think it really boils down to alignment and communication. And if those two things are there, they just want to make money.

SPEAKER_01 1:17:46

So funny how like you could just apply this to any relationship, right? I mean, it's like it was the same thing in growing, you know, getting your people to to to row the boat in the right direction. But it's it's interesting because I'm I wouldn't call myself an investor, but I've I've put a little bit of cash into a number of businesses, and one of the CEOs would send monthly investor updates. And I always I didn't ask for them, but I always read them because I thought they were interesting. And then this year I didn't get I I forgot they existed because I didn't get one for four months. Uh, and then in May I got one, and in May it was like, things are great. And I was like, hey, what I forgot about these, like what happened? And I connected to the dots and I was like, wait a second, the business wasn't doing so well for four months. Uh and therefore I stopped getting the communication. I gave them some shit. And I'm like, dude, I like I I'm not upset if the business. I mean, I again I'm a small shareholder, but like I don't think you're thinking about this the right way. Yeah, like if you're gonna do it, do it. Don't don't only do it when it when it when it's when it is sunny out.

SPEAKER_00 1:18:42

Yeah, and I well, and it's because you're gonna go through if you're if you listen, I've been at worldwide now for 30 years again to re refocus on my advancing age. Your vintage. That's not my vintage. That's a better way to do that.

SPEAKER_01 1:18:55

I have a mentor who's who's vintage, and he said, Stop calling me old, I'm vintage.

SPEAKER_00 1:18:59

I like that. I'll I'll work on that. Um, but I've been through a lot of different seasons, right? I've seen the business almost go under a couple of times. We've had periods where no matter what we did, we couldn't grow. Like it's just that you you go through all seasons and you need to be able to lead through all of them. And you need, and by the way, savvy investors and PE guys are very savvy investors. Now, look, they they they're they're short-time horizon investors, so hopefully they don't catch like take my experience with CVC. They're amazing, right? But but they own the business, they bought it in 21 and had to ride it through a whole freight cycle. So we had to work with, we had to grind it out to get to any sort of like acceptable return. Yeah. But you know, the reality of it is that they were really good partners along the way. And they're they're they're they're big boys and girls. They've seen it all. Now, as long as I'm being truthful with them about what we're dealing with, we can make the right decisions. We can, we can figure out how to make the right decisions that will impact our near-term profitability versus our long-term ability. Like we can make all the right decisions, but you can't make it in an absence of people not staring at the same date and the same information. Everybody needs to have the same information. And my job as the CEO and my CFO's job as a CFO is to give them like we are the aperture through which these the PECs the business. And as long as we're giving them the view of the business that we actually have, not some sanitized view that we want them to have, then we can sit down and make decisions on what's working, what's not working. And that's just, you know, and I think it's hard to do that. I think it's hard to do that first time through with private equity.

SPEAKER_01 1:20:30

But again, after you've done it enough, you sort of like you kind of get the game and you get how to feels like you're also saving yourself time and energy and stress by doing it that way versus like, all right, we'll sanitize the information and then we'll manage the sanitized communication and and remember that we're only saying this to these guys and inside we're saying something else. It's funny. It just is exhausting to think about.

SPEAKER_00 1:20:53

And again, luxury, I'm a large enough investor in the company that literally, with almost every sponsor I've had over the last few cycles, been like, look, if there's ever a moment where you feel like I'm not the right guy to be the CEO of this company, just tap me on the shoulder. Like, I I care more about my investment performing than my job as the CEO. So if you ever feel like there's someone, like literally someone better than me, not like you're pissed in the ear, you wish that things were different, but but you really think like this guy is the wrong guy, dude, just let me know. I'm out. Like, because I I don't want my investment to go to zero. Like we're aligned. We want the same outcome on these dollars we have invested. Yes, I like all the other, then it'll be emotionally hard. But the reality of it is, if you ever think I'm the wrong guy, just get me out of here. Now, if you then, but but that's also liberating in a way because it's like, I'm just gonna tell you how it is. And and I'm gonna do like here are the things I'm working on, and we'll see the progress we make on them or we don't make on it. And if along the way, and you've looked at a lot of businesses, you really feel like the business would be better served with a different CEO. Not just you're pissed at me because we had an argument, but you really in your heart of hearts believe that, dude, that that's the right thing for the business. Let's make the change. Yeah. Um, that thankfully, one of these days it's gonna bite me in the ass and be like, funny you bring that up, Tom. I mean and talk to you.

SPEAKER_01 1:22:06

I mean, I I think your career speaks for itself that you've lasted as long as you have. So, but this is a new test to get you know off of the private equity train, back onto the ship station train. Yeah. Um, this is a new test and one that is I would say the most unf unfamiliar or uncomfortable, as you've said. So I'm curious how you think about like how you're spending your time the next, say, call it six months, um to, I guess, partially win over all your new teammates, employees, um, and set this up to actually be a success in an environment that's slightly uncomfortable.

SPEAKER_00 1:22:43

Uh, a lot of it, I'm on the road a lot. You know, we're global business, so I'm I'm committed to get to every one of our global offices. You know, we've got offices in London, we've got offices in Madrid and Poland, Monterey, the Philippines, Sydney, Australia. So I'm gonna see all the offices. Um, constant communication, right? From me and the rest of the senior team, constant communication. And again, I have a I but the the the team is amazing, right? Like I'm in many ways kind of like a figurehead, as it were. Um someone referred to me as a mascot the other day. I didn't like that one, but that's not I was like, I think I don't think you meant it that way, but that uh don't don't don't say that out loud again. Um, but um it's it's a lot of communication, is you put it to win people over, but get people believing in the vision, right? And and and fortunately, we're gonna have some really good news to report in terms of our results and some of the like we talked about having these five big rocks we got to crush, like making real tangible progress on integrating the businesses and positioning ourselves to really achieve this longer term vision. Um, and and that's a lot of the goal. And then it's just getting, again, uh Peter the repeater on what the what what's important, right? Like, and that's the other thing I think a lot of guys miss. It's like, you don't need to change your message. It's like best salespeople on the planet are children because they stay on message, right? And it's like just repeat the same message over and over and over and over again. And eventually people will like, oh, that's what we're supposed to do, right? And it's just so that's all we're doing for the next six months is just executing. Um, everyone knows what they need to do. There's no one at the like, if I do my job the right way, there should be no one at the company that's like, I don't know what I should do. And by the way, if there are people that don't know what they should do, then it's sort of like do we need your that do we need that in the organ? You know what I mean? Like getting it, we're getting a notion from you now?

unknown 1:24:25

Total.

SPEAKER_00 1:24:26

Total, okay. Um but uh yeah, that's that's the whole thing, man. It's just that make sure everyone knows what they're supposed to do, make sure everyone believes in vision, knows where we're going, and then just continue to build around our rally cries so that at the end of the year, what what winning takes all skepticism away. It just takes all skeptics. The most cynical person now, now by the way, hopefully we got hopefully most cynical people are no longer with us, right? But big company, you're always gonna have some people who the most cynical people can't argue with success. So we've defined what success looks like. We have we have goals we're trying to achieve in terms of revenue earnings and the like in the near term. And as we achieve those, the most cynical people at the company will be like, oh no, this this is actually working. Okay, I'll feel better about what I'm and and and that's how you that's how you build, you know this. That's how you then build on the winning culture. People want to win, nobody wants to show up at their job and be like, oh man, I would just want to be mediocre. Like they're like, I hate this company. Like there are people like that, but that's not the bulk of your workforce. The bulk of your workforce wants to, they want to feel like they're contributing, they want to feel like they're winning, they want to have a bit of a swagger, they want to be, they want to feel like they work at a company where it means something to work there. I've meet guys at Molo, and you could tell like they were in a cult. You know, they felt it meant something. I mean that is a compliment, right? Like that it meant something to work there, right? Coyote, it meant something to work there. Like worldwide, it meant something to be like my goal, if we do our job the right way, it means something to be at ShipStation. If you're at Ship Station Global, man, it means something. And people and people, by the way, people around the industry know what it means. They're gonna assume you're a certain kind of person. Yeah, like you've probably heard enough about worldwide over the year that if you met someone from worldwide, you could probably in your head imagine what their personality was like. And it's just the same with coyote, same with Molo, same with like that's just how it is. And and that's part of that's the CEO's job. The CEO's job is to get get that, get that to mean something, right? You can't just say, well, HR will do that, right? Yes, I need HR to to help me achieve that, but that's that's that's what I gotta do. Yeah, like I don't gotta execute on the minutia, but I've got to create that environment. I've got to set the tone. Yeah, you set the tone. And and and that's that that I think too is what people, like CEOs, founders, whatever, they have to embrace. It's like, man, it if it is to be, it's up to me. And I can't do it without the entire team. And by the way, there are a lot of people in the company that are better. Hopefully, they're better at their area than I am. But my job is to work with them to make sure to to cascade this down to the 4,500 people, to cascade this through the couple of thousand other partners we have in the franchise and agent channel. Get our, and it should be the same message we're parroting to our million plus customers that it's like, this is what we're building, this is what we are about, this is what we're trying to achieve. And by the way, in the near term, this is what we need to accomplish for it to become a reality. And if you do those things, man, uh yeah, it's a software business. And I'm not, you know, year from now, I'm gonna have a man bun and just look exactly like a software CEO. T-shirt and a jacket. Uh, I'm gonna have next time I come in, I'm gonna have like an old like Pink Floyd concert t-shirt on. Um, I'll be just just legit. But it'll be um, you know, I I I I I regardless of what the business is, those those fundamentals are what makes businesses perform and do well.

SPEAKER_01 1:27:42

Yeah. It's it's it's it's interesting because like I think some of the things you've said are like most CEOs would say them, but like I can you can feel like it radiates that this is like truly what you believe and how you operate. And so speaking. Cynicism or cynical people, I uh I I went on Glassdoor and looked up your like CEO approval rating. Yeah. And it's one of the higher ones that I've seen for a CEO of a large company. And it's lower than it used to, it used to be much higher. Oh, see, I wasn't gonna give you the number because like I don't know if you're one of those people, if I gave it to you, it'd get in your head and why is it an idea?

SPEAKER_00 1:28:22

I look, I used to be uh I uh it we yeah, the freight recession and the reality that kind of you know took a little bit of my edge off there.

SPEAKER_01 1:28:31

Yeah, but I it's I but I'm I mean it to say that it's impressive because especially it's it's for one, Glassdoor is weighted negatively to begin with, because like your your superstars don't go to Glassdoor to write a rave review, they just like show up to their job and enjoy it.

SPEAKER_00 1:28:45

The companies that have high reviews, that's what they do, is like at the end of a training class, they're like, all of you need to go on Glassdoor and say good things, we're gonna fire you.

SPEAKER_01 1:28:52

You know, it's like uh so like I take a lot of it with a grain of salt, but I think when I see a number of a large number of reviews and still a very positive like review or approval rating of the CEO, I think it says a lot. So um clearly, I think your message is is heard and respected by by your people. I hope so. Yeah.

Risks That Matter: Carriers And Cyber

SPEAKER_01 1:29:13

Um I'm curious, like what at this point keeps you up at night? Like if in and if not literally, but more like metaphorically, as you think about um where you're going with this business, like what is it that worries you uh about the coming months and years?

SPEAKER_00 1:29:30

You know, in terms of actual ability to execute, which is like it you talked about like what you can control, what you can't control. Look, no one knows what the economy is gonna do. No one knows how long the freight market's gonna be good for, if demand will pay what's gonna happen. But for me, you know, I wouldn't say there's a lot that keeps me up at night. I mean, the things I always focus on, you think about our business, we keep very strong carrier relationships, right? That's that's paramount to our business. Without strong carrier relationships, we're we're toast. Cyber, you know, make sure that we've got you know our our systems because we are a software business, right? And even pre-octane, like worldwide, all of our customers come in through they they interface with us through, you know, digital means. Keep your technology up and running, right? It's gotta be available, it's gotta be secure. Cybersecurity scares the hell out of me, but we spend an awful lot of money on it. We got great amazing team managing it. Um, but those are the things that I always in the back of my mind are like the boogeyman. As long as the boogeyman doesn't jump out, and the boogeyman is gonna always be found in those two areas, right? Like, because you're the underpinning of your model are good carrier relationships, and the underpinning of your model is available, uh, you know, available tools, right? So that the the systems are up and running. As long as you manage those things, everything else is about just basic execution. And there'll be times when we're executing really well, there'll be times when we're not, but if you manage it the right way, you know, you can it it it's kind of like managing, you know, over time, where it's like you start getting a little sloppy, you put weight on, you do whatever, you you just cut back, right? And then then you prevent yourself from having a bigger issue. Same thing with the business, right? Like you see tones where it's like, hey, sales performance is slipping, what's going on, right? Or like, hey, our NP, our NPS scores are kind of dropping. What's going on, right? Is it a motivation issue? Is it what what's going on? So, so as long as you've like got the thermometer in the business uh, you know, enough and the metrics are you know are the right ones, you're managing the right KPIs, along the way you can spot problems with execution before they become like, oh shit, I gotta make a big change. Um and that's to me, I don't, I, I, I don't worry about that. Um like I I think about the business constantly. Like I'm I like I I have some balance, right? Like above my fit, my like all that's great, but the I'm always thinking about the business. And I think a lot of the you know, men and women at at Ship Station are in the same boat as me, you know, because we are, I hope, as cult-like as we've ever been. Um but I don't know what the outcome will be. I I like I have a when I close my eyes and I see what the outcome will be, I know I I have a pretty strong uh opinion on what it will be. But I think we're gonna have a good outcome and build an awesome business. We've got to manage the big boogeyman so that nothing goes wrong there. Um, but outside of that, man, it's just we've got to go continue to execute. We've got to keep people believing. We've got to can and you got to continue to to to fuel the foundation of the business. Like the reason I was up here in Chicago to do this live, you know, we had a sales training that because of the World Cup, we did at our Chicago office instead of Dallas. But, you know, it was like 50 kids who've been with the company for a year or two that are coming in for a second level training. And it's just like, you know, we still have to make sure that we're we're bringing new people into the business and we're still keeping the culture alive and breathing fresh energy into the business at all times. And they understand that they are really the lifeblood of the business and the future of the organization. Like those are, but those are the things that you've got to just continue to do. Yep. And like it is, man, as long as we do those things, like we'll we're we'll we'll, you know, we've got and obviously we've got to keep the products very relevant and you know, it's it is easier for people to theoretically, it's easier for people now in the world of AI to create a competitive platform, but can they create a competitive platform that also has these you know 30 plus year deep carrier relationships and also has a 2,000 plus person distribution? Like they they can't, right? So as long as we stay really focused on keep the product relevant, keep it very innovative, um, make it make it work so that makes customers' lives a lot easier. Yep, you know, keep this focus on, you know, making it right for customers, keep the focus, you know, follow the Holy Trinity. But but you keep doing those things, man. I I think the outcome's certain. I really do. I I truly think the outcome is certain. It's just, it's a lot of work, though, to get people to continually believe. And it's a lot of work to keep people focused, and it's a lot of work to keep everything moving in the right direction. And that's just, but that's the making the donuts part of the business. Yep. You know, and that's that's that's that's uh that that's the that's the drill.

SPEAKER_01 1:34:00

It's cool to me that you're still at this point with such a large organization, still finding time to get in front of the people who are only a year in with like the personal touch. Because I I always thought that was one of the things I I got from my people that they said was like one of their favorite parts of the business was uh you know our initial training class. How within the first two weeks, myself, my partner Matt Bogrich, we both would carve out an hour of our own time to sit and just have as honest and open of a conversation, any questions, anything's on the table. Um, it just it gets a level of buy-in that I think a lot often people think I've never seen something like this where the CEO would come and sit and just talk to us like this.

SPEAKER_00 1:34:37

But it goes back to the environment you were building, right? Again, because you wanted an environment where people would come in and they would eat, sleep, and breathe your vision. And if you're not willing to engage, how like you can't do that all from the ivory tower. No, you know, if the ivory tower is comfortable, don't get me wrong, I love the ivory tower, right? I'm very comfortable in it. But you gotta, man, you gotta get out there and and the the because the business, the underpinnings of the like that, that the grassroots part of the business, man, like that's still the business, right? And if you're it the further away you get from that, it's like finding the right balance. You can't like live in the weeds, but man, you still gotta understand the grassroots of the business because that's how you grow, right? Is that the ship's going well at the grassroots? Yeah.

SPEAKER_01 1:35:22

I mean, that point was so good. You have our our uh audio or our video engineer nodding his head up and down, like he's bought in. I don't think he's ever heard anything about freight before this conversation. Uh, but he's bought in. But you're right. I mean, you're spot on. I I think like I hated, I regret ever going into the ivory tower. Like, I, you know, we were we were on the floor guys forever. We were on the floor, our desks were on the floor for the first five years until we got the fancy new office, and then we put ourselves in the offices. And and I look back and I regret that so much. My ego was so inflated, underdeveloped. And like, I just I think that was a character defect that that even to this day I have to work on. But um, I think that was detrimental to how I showed up in the business.

SPEAKER_00 1:36:06

Dude, is there a it has there been a truer story told and retold over time of hubris, right? It's sort of like Rocky III, right? Eye of the tiger, right? Again, I'm aging myself with that reference, but you know, it's it's sort of like you gotta like all too often, like you get too big for your britches, you fly too close to the sun, and bad shit starts. And we've all done it. I've done it a number of times. Like I joke around, I was like, man, 29 years, I probably at least four times should have been fired, right? For for being guilty of like, you know, I'm the man, you know, and you never are. Um, but it but it I think you work so hard because you want it, you want the nice office. You want it like part of why you did it was you wanted those trappings, you know, and that's part of why we all do these things. But then enjoying those trappings actually costs you what it took to get it. So it's just finding the right, it's it, it, it's a, it's a, it's a, it's a hellish balance, but but but if you can, if you can get it right, you know, you you can have both, you know, where you know, because it look, the ivory tower is nice, it's air conditioned, it's you know, the food's good, but you've got, man, you've got to be out there at the grassroots level or you or you just don't deserve to be in the ivory tower.

SPEAKER_01 1:37:11

Yep. And and we've spent the bulk of this conversation focused on kind of the growth through the business. And I'm curious from the personal side, like what is something, you know, I mentioned for me, ego is a big thing, and you kind of alluded to a little bit, but like what is something that over your uh vintage career that you've had to deal with and navigate on the personal side that maybe was a struggle and and you had to battle through and and try to experience some growth in so it's interesting.

SPEAKER_00 1:37:44

I so I am as I as I think about like evolution, a lot of it was evolving as the company grew, like because there was a different leadership style required each time. Like early on, it was sort of like, well, just get on my back and let's go. You know what I mean? Like that's the early stages of building something. Um I I think if you ask my people like what I struggle with, like I'm believe it or not, for for someone who's pretty, like a pretty direct person, I like I I don't I I've really had to work to be able to give like people that need clear direction and guidance and like prescriptive, like do it this, like I've always struggled, like from a leadership style. Like I'm I'm better at being like, hey, here's what we need to accomplish, and we spend enough time together. But it's like over the years, it's like really learning how to manage people more effectively that don't align with the exact style of normal, like the natural style that I have, right? And and I think a lot of a lot of CEOs or a lot of leaders are sort of like, well, they're they're just gonna have to adjust to my style. And it's like that's not like they're that's not realistic. So a lot of it is You can try to force that, but it does Yeah. Learning to adjust my style to others, I think is has been a part of it. Umflict avoidance by nature, I don't know that I'm conflict avoidance by nature, but if I were running back in the NFL, once I had the first down, I'd definitely go out of bounds. You know what I mean? Like I'm I'm not getting hit. It's just too much friction. Yeah. So it depends on the nature of the relationship, though, right? Like in a transactional relationship, it doesn't matter because it's got a beginning, a middle, and an end, right? In a in a more long-term relationship, though, yeah, I I a lot of times like I and it probably is a weakness, but I but I have people, it's great. I have people on my team, like I have several people on my team that are really, really, really, really, they they keep me honest with it. Um, but yeah, I I'm I I I think anytime you've been around a company for this long, you pick and choose your battles wisely. And you pick and choose like what's worth the friction. And you know what? It has led to, I would say it has been, what do they say, your greatest strength and your greatest weakness are often, you know, two sides of the same coin. I think it's allowed us to do some great things that I haven't mired on every single issue along the way that would have burned a million people out. But there are times where I've probably let something go on for too long and it's like, oh, okay, fuck, we gotta deal with this, right? Like, so it's a little bit of a, you know, both both both sides of the same coin.

SPEAKER_01 1:40:18

Yeah, that just got me really thinking. And it's gonna make me think more about my own weaknesses and strengths and how they're connected. Um cool. So I we're probably trying to start wrapping up

What Success Looks Like Next

SPEAKER_01 1:40:30

here. Um I'm curious, like, what is what is like I know you kind of described what you want the company to be. Um, but like, what does success look like over the next three to five years to get to the next, I guess, to your ninth sponsor? Uh yeah, that is.

SPEAKER_00 1:40:49

And who knows what the outcome will be, um, whether it's that, an IPO, whatever, whatever it may be. Um, look, I think we've got uh on our hands right now, we've got we've got to get through the integration work, but then we need to get, you know, as as I think about what we're gonna become today. You I I think it would be safe to say that that at least in North America, ShipStation is by by by far the leading provider of of of e-commerce logistics and intelligent, this sort of intelligent logistics for for e-commerce businesses. I want to expand the TAM that we're going after. So we do want to bring it into the industrial space. We do want to add other modes in. But I think if we do our job the right way, we really become the go-to platform for SMBs and mid-market shippers to buy transportation. Now, they may be buying it from our carriers, they may be buying it from their own carriers, but we sort of become that go-to solution for them. Um, if we if we do this the right way, I mean, both markets are incredibly fragmented. The platform space is very fragmented, the brokerage space, as you know, is very fragmented. You know, we continue to bring in um more and more businesses that round out our capabilities, you know, allow us to offer more to our customers. Um and I think there's a global angle to that as well. You know, we've we've got a pretty meaningful presence in Canada through ShipStation. We've got, as I mentioned, a very meaningful European presence through a few brands that to to to dial that in, there's not a clear global leader in the platform space. Um and and and it and by the way, it may be a there may be a void there for a reason that you know the the complexity of being all things in all countries, given how the you know the transportation networks are different globally. But I think there's a real play there for us to become the the the sort of the de facto global platform that businesses rely on to make logistics easier. Um a lot of work to do, but that's sort of uh an aspiration. And can we have a toehold, enough of a toehold in other countries that then doesn't require so much imagination to see that become reality over the term? Um you know, obviously we're we're gonna measure that through our revenue and and earnings targets. Like that's certainly if anyone from Toma Bravo is listening, they're like, all that mealy mouse shit sounds great, but what's revenue? What's it like? What is all about it? Yeah. Words, words, words, words, words, what's important. Um But uh, you know, I that to me, I think we'll we'll we'll have some real clear proof points here over the next the next couple of quarters. Um and look, I do think this is a business that at some point in time is very, it's it's right for the public markets. It's a it's a big business, it's a business of scale, but we're also in a space that is that is really, I think everyone would agree that it's a space that's very underserved. It's a space that is very fragmented. There isn't a clear leader, but it, but, but it's a space that's ripe for someone to go in and and and kind of be the leader. You know, it's it's like it's there. And I think investors can believe that. And if you think about what we're at the intersection of of all these different marketplaces and care, it's like tying it all together. There's a, there's a, there's a story there that's that that's not some pie in the sky thing. It you really do have the ability to build a brand that can that can serve millions upon millions of customers globally, make their lives easier, make their the the the art of running their businesses a lot easier, purchase transportation more effectively, and we can provide value not only to the customer, but the carriers that we're partnered with, you know, our employees, our franchise partners, our agent. Like there's a the the whole ecosystem, you know, if you if you're doing those things, the only people that that don't benefit are our compet are our competitors. Um, and that's that's just fine with me, right? Like I I don't want our competitors to love, like I want them to be like, oh, but I don't I don't want them to love us. Did you want your competitors to love you at Molo?

SPEAKER_01 1:44:31

You wanted an experience. It was pretty clear I wanted them.

SPEAKER_00 1:44:33

They probably hated me, but uh but but by the way, do you do you do you in your heart of hearts think that you know Oklahoma baseball wanted any, like, did they care if North Carolina no, like you want to win. It's a sport, business is a sport, man.

SPEAKER_01 1:44:46

There's then it's fun to compete with other really strong players. Like I love competing with Arrive because Pi, like you could just tell he's great, but like most companies, I'm like, I think they're full of shit. I don't think they follow through on their word, and I want to beat the crap out of them.

unknown 1:45:00

Yep.

SPEAKER_00 1:45:01

And and look, I I will say I have a lot of respect, and I'm not just saying this, I I do have a lot of respect for a lot of the lot of the people that I would consider to be our competitors. But but I think now we're a different animal, right? There's no one out there that looks just like us. Um, and and it's a very different value proposition, right? Because it's like you use whoever you want, but you like my my my software will make your life easier, right? Like the this, whether you use any of my carriers or not, like this, like our goal is like this is something that makes your life a lot easier. But then you add in the ability to sort of consume the transportation that that that we can offer through all these great carrier relationships. It's just a totally, totally different way for people to buy transportation. And oh, by the way, it's easier, it like it simplifies their lives. It it that they don't, you know, they don't, they everything's integrated now, right? It's just it's an easier way to do business. And and but for combining, and again, it took a lot of balls for Toma to put this together, but for to to take a software business and combine it with a brokerage business, it is that's not it hasn't been done a lot. Big bet. It hasn't been done a lot, but uh, but I think if you look at what are you building, you're building a company that look, we're in in, you know, in the in this post-AI world, you know, look, we're we have a chance to prove to be among the most durable software models out there because we've got all these different motes around our business that are not just the technology, right? But like I said, it's also this commercial engine, these carrier relationships that can't be replicated, right? So it it and if we can make our numbers validate that thesis, which we will, then then I think you get something pretty special on your hands.

SPEAKER_01 1:46:33

Yeah, it's certainly you certainly cannot find a one-to-one direct comparison in in the competitive landscape of someone doing this. And it's really fascinating because like it's so daunting and scary to think about the number of acquisitions it took to get here, but it really does speak to the leadership of yourself and your team and the teams that you've brought in through these acquisitions that like it's still going. Yeah. On iteration number eight, it's still chugging along, and you're taking this is like the biggest bet. So it's fascinating. I'm I'm really excited to kind of watch it play out because I I just this is this is big stuff, and and you're doing it in a way that no one's done before. Um, and I'm excited

Final Thoughts And Sign-Off

SPEAKER_01 1:47:13

to see what happens. Cool, man. I enjoyed our time together. Yeah, thank you. This was this was great. And uh I, you know, hopefully it turns out well, this is the first time doing it live. I don't know if I've done the first live one. That's surprising. Well, I guess live's in-person one first in-person one. Um in-person is such a better format. Oh my god. And I can't tell if it's just you're an easy conversationalist, which you clearly are, or that just sitting in front of someone makes it a lot easier to go. Because I think we went an hour and 40 minutes or something like that. I pulled up my phone eventually to try to track the time. Um, and the space is is relatively great. We're actually in a warehouse. Um, you know, there's a there's a what looks like a dock door right in front of us that doesn't lead to the outside, but there are dock doors outside. And if there were noise uh interruptions that maybe we can edit out, authentic. It yeah, those were a product of like we're in a warehouse, we're in a warehouse of things moving and yeah, shit going on. So um, to our listeners, uh, you know, thanks so much for tuning in and uh I hope you enjoyed the episode. See you next time.