See all Y Combinator transcripts on Youtube

Speaker 1

00:00

Thank you so much, Dan, for joining us on the podcast today. So Dan Lewis is the CEO and founder of Convoy. We're really excited to have him here. Dan, I wanted to start with your background, primarily because now you're building a trucking marketplace.

Speaker 1

00:17

And so I was curious, what did you do and how did you arrive at this idea?

Speaker 2

00:23

Yeah, so it really comes back to a combination of background in supply chain and technology. My family run a mom and pop off supply company, you know, distributing off supplies all around the Puget Sound in Washington. And every summer my job was to drive big sprinter vans delivering stuff.

Speaker 2

00:40

So I learned a lot about the idea of warehouse operations and delivering, but it wasn't really something that I thought, man, I'm gonna go build a company and do this. You know, I was pretty young. And then after school, I ended up doing a lot of work in transportation and technology. I worked for the Panama Canal for a while.

Speaker 2

00:56

I ended up living in Spain doing management consulting, thinking a lot about outsourcing of maintenance and parts distribution, did similar work with some airlines and companies in the United States, and then shifted over and started working in tech. Actually, my job in college was building websites for the Yale Athletics Department, which was a great job. It was super flexible. You know, I got 10 bucks an hour and I could work from my dorm room.

Speaker 2

01:20

But that kind of led to an interest in technology and then after college and after doing some consulting, I was at Microsoft for a while and a handful of other technology startups and bigger technology companies. And so then I ended up at Amazon. And 1 of the things that I saw at Amazon that kind of inspired me was, I realized that when I was growing up, we used to go to the store to buy stuff. And we would buy it the same day that we wanted it.

Speaker 2

01:48

And that was option value. People call it procrastinating. I call it option value. You can decide the day you want it, if you want to get it or not.

Speaker 2

01:55

And then online shopping came around and you had to choose, do I want to go to the store and get it today Or do I want to buy it 7 days in advance? And then it was 5 days and then 3 days and then 2 and then 1. And Amazon really took hold and started lowering or raising the bar for delivery and making it faster and faster. And all of a sudden with Prime, the decision between do I want it really soon and do I want to buy it online, wasn't a conflict anymore.

Speaker 2

02:25

And Amazon really started taking over in retail. And it was really that that caused me to think, okay, so the supply chain's winning. It's not the location of the store, it's not the ambiance, how nice the sales staff is, how easy the parking is, all that stuff. It's the fact that I can get it really fast.

Speaker 2

02:44

And that was driving massive shift in behavior. And we looked at a lot of different companies out there. I was looking to a startup in general and I decided to leave Amazon and go pursue this. When I was looking at transportation, a lot of the companies were last mile.

Speaker 2

02:58

So delivering Instacart or Postmates or DoorDash or Uber Rush or Google Shopping Express, all these different companies that were doing that, there were not a lot of companies focusing on the middle mile, getting everything in the right place so that you could do that same day delivery. And that was the initial, it was my background, but kind of the inspiration that led to thinking, let's go build a logistics company.

Speaker 1

03:21

Gita Gopinath And 1 of the things I know, having talked before, is you actually worked on even flushing the idea out a lot more before you started building it. Can you talk about that process and what work did you do to really understand, okay, this seems interesting, but is this real? And when did you actually get convinced that you are going to go build this?

Speaker 2

03:43

Brian Fitzpatrick I was liking what I was doing at my job, but I had this, you know, I really wanted to go start a company and I have 2 kids and, you know, my wife's at home with the kids and everything like that. So I was like, okay, if I'm gonna take this risk and walk away from my job, I better know what I'm doing. And so, And I think because I had done consulting, I didn't really know another way to do it.

Speaker 2

04:03

I was like, well, I have to go do a bunch of

Speaker 1

04:04

research.

Speaker 2

04:05

And so I quit Amazon. And before we decided what to build, we spent weeks full time kind of out in the field researching. So what I initially did was a bunch of online research to figure out kind of what the general space looks like.

Speaker 2

04:21

And then I did 3 things in parallel. I wrote to probably a hundred different people, maybe a third of them from my background, you know, people I knew from previous jobs related to supply chain that I could talk to about trucking. 2 thirds of them are people I just found on LinkedIn, and just wrote to them or just called them. Anjali Raza Kishan-Patel And

Speaker 1

04:38

all of them in trucking industry? Kyle

Speaker 2

04:40

Dacuyan All of them in transportation, trucking. Could be brokerages, warehouses, truck drivers. Actually, my mom's an ESL teacher.

Speaker 2

04:51

And growing up, we always hosted foreign students and foreign families in our house. And 1 of them was from the Ukraine. This guy's named Sasha. He ended up running a trucking business with his family and his brothers out of Eastern Washington.

Speaker 2

05:02

So he was actually the first call that I made. And he was talking to me about how he drove a truck delivering produce from Washington to Florida and some other runs as well. But I started to do a bunch of phone calls. And then I went out in the field and I was like, well, I have to go talk to people because that's the fastest way to learn and to make sure I don't make a big mistake.

Speaker 2

05:27

And I remember, it's kind of funny, I remember 2 things. I wanted to look professional, but I also wanted to fit in. So I bought a bunch of gift cards and I went to truck stops and I wasn't quite sure how to engage people at first. So I went inside and looked around and went back and sat in my car.

Speaker 2

05:43

I was like, okay, I gotta think about how I'm gonna do this. And the easiest person to go talk to was somebody who was like filling the tires with air, you know, so I went over and talked to that person and then started having more and more conversations at these truck stops and learning more and more. I didn't want to, you know, I was kind of like trying to gather as much information as I could. Did the same thing in warehouses, just walked into a bunch of warehouses, got kicked out of the Whole Foods warehouse.

Speaker 2

06:06

I think the door was not supposed to be open. I just walked in and started talking to people and they were like, what are you doing? But over 6 or 7 weeks, all that research and those phone calls and people just want to talk to you about what they're doing, you know? So we learned a lot of information.

Speaker 2

06:20

We wrote 3 or 4 business plans, right? I put them together and then had a lot of detail and tons of quotes and anecdotes and real examples to back up kind of the theory that you get from the data that's online. And when we took that to investors, that was different. And I hadn't realized how unique that was until after I did it.

Speaker 2

06:42

I thought that was normal, but then after I did it, I realized Not every potential founder goes and does that level of research before they start proposing their idea.

Speaker 1

06:51

And what were some of the 2 or 3 big learnings for you from that research in terms of how you decided to launch Conway and what pain points to solve?

Speaker 2

07:01

Kyle Liermann Yeah, I think the first thing I learned was 1, people in the industry were super open and interested in talking and interested in improving things. So it was very welcoming in that respect. A quick aside is that coming from a tech background and from a consulting background, I was always used to setting appointments or putting something on the calendar.

Speaker 2

07:22

And in trucking, you just pick up the phone and call. I remember so many times I'd try to set an appointment with someone, they're like, no, no, no, just call me. I'll pick up. So that was different.

Speaker 2

07:34

But probably the biggest insight we had early on was trust. There was a lack of trust between parties in the industry. And people generally get along, but there wasn't like a deep seated trust that shippers were confident brokers weren't taking advantage of them. In fact, shippers often felt like brokers and some of their transportation parties weren't reliable, or they had issues, or they didn't trust the pricing.

Speaker 2

07:56

Excuse me. And brokers also felt like, when they were working with trucking companies, that they didn't get the respect they deserve for all the work. The trucking companies felt like they were not necessary. And truck drivers would constantly tell me that they felt like brokers weren't looking out for them.

Speaker 2

08:13

And that larger trucking companies weren't looking out for these smaller, smaller guys and that they wanted someone they could count on. They wanted someone who would treat them fairly and more transparently. So there was kind of a lack of data, lack of transparency, and just that led to kind of some mistrust between the parties And honestly, everybody, you know, the shipper's trying to get the best rate possible, the trucking company's trying to get the best rate possible, and the broker or the 3PL in the middle is trying to do the same thing on both sides. And so everyone is trying to negotiate all the time.

Speaker 2

08:42

So it does breed a little bit of mistrust. So we realized, you know, the first thing was, let's build a lot, let's focus on building trust. Let's focus on bringing transparency, consistency and visibility into pricing, and visibility into where the trucks are, which answers a lot of questions. 1 of the areas that raised some lack of trust was that shippers often didn't know where the truck was.

Speaker 2

09:06

And trucking companies and truck drivers wouldn't always honestly report exactly where they were.

Speaker 1

09:09

So there was a trust issue on both sides, not just on the driver, but also the shipper side.

Speaker 2

09:13

That's right, well shippers, yeah, That's right. They didn't always feel like they were getting a full straight story. And I think that's pretty normal when you have a big industry and a lot of different parties involved and a lot of negotiating involved every day.

Speaker 2

09:27

And so all the parties were kind of a little bit, a love-hate relationship was how 1 of them described it to me. Gail DePriest.

Speaker 1

09:34

Got it. And how is Convoit today, you think, solving that trust issue on both sides?

Speaker 2

09:39

I'll give a couple of examples. So when we have a job that we're going to offer to the truck drivers in our community, our partners, We figure out which trucks or which carriers this job is best for and we offer it to them. And we show a price up front.

Speaker 2

09:55

And that's a guaranteed price. And it's guaranteed that there's a real job behind that. 1 of the things that was common in the industry is that sometimes brokers and 3PLs or even big trucking companies would post jobs online that weren't actually jobs they had yet. They'd post them to try to get a price, to figure out what the truck would do it for, and then they can take that price and go back and try to get the actual job.

Speaker 2

10:16

We don't put jobs up that aren't real jobs. And that was important and a guaranteed upfront price. We're not going to go back and ask you to pay you less later. And so there was pricing confidence and real job confidence.

Speaker 2

10:30

And we pay the drivers really quickly. They're also used to being stiff sometimes and worried about not getting paid. And so we paid them very quickly so they would have confidence the convoy was actually respecting them. On the other side with shippers, all the trucks that run loads for convoy use the convoy app.

Speaker 2

10:48

And so that provides real-time visibility for the shipper to understand where the load is. And when the truck's arriving, it provides, and actually another good example there is If a truck shows up at a facility and it's delayed, typically more than a couple hours in the industry, that truck is going to expect to get what's called detention payment for being delayed. Now there's often debates around that. When do you actually arrive?

Speaker 2

11:12

And the truck's going to say they arrived earlier and the shipper's going to say, well they arrived later because they don't want to pay. And so what we can do with that real-time visibility is solve problems like that. We actually built something that's pretty new in the industry, it's sort of automated detention. We just track it and we pay the driver, and they can just do it right from the app.

Speaker 2

11:30

So they don't have to go through an arduous process of trying to get that. Gita Gopinath

Speaker 1

11:32

That's great. Yeah, so on the trucker side, you do it with guaranteed pricing up front and a real job and quick pay, versus on the shipper side you're giving them tracking info and even helping solve for delayed shipments. Kyle Calica

Speaker 2

11:45

Yeah, that's right. And solving for just, if you know when it's actually there, you can see where it is, you can get time stamps that are real, it answers a lot of the debates. Gita Gopinath

Speaker 1

11:52

That's great. So let's go back to year 1 of Convoy, because a lot of our audience are actually early stage startups. And 1 of the big questions they often have about a marketplace, because yours is a marketplace.

Speaker 1

12:03

You have truck drivers and shippers on the other side. So the first question most of our viewers often have is, how do you bootstrap a marketplace? And so How did you guys go about doing it? What was year 1 in Convoy?

Speaker 1

12:18

How did you find your first few truck drivers and your shippers?

Speaker 2

12:22

We thought, we went out and did so much research that I had a pretty good list of truck drivers and a pretty good list of shippers right at the beginning. And so we thought, okay, we'll go talk to a bunch of truck drivers and get them signed up. And then we'll go to shippers, you know, start start bringing loads into this marketplace and start developing it as a broker.

Speaker 2

12:41

And truck drivers weren't interested. To be honest, we went out and talk to a bunch of them. And they're like, well, do you have any loads yet? We said, no, we don't have any loads.

Speaker 2

12:50

As much as they loved the idea, it's vaporware. For them it was like this new company, never heard of us before. And they also, as I mentioned, didn't have a lot of trust. So they were kind of skeptical of who's convoy.

Speaker 2

12:59

They're not going to download map and start using it. They're busy and they're looking for their next load right now. So we said, okay, got it. We're gonna come back with some loads.

Speaker 2

13:09

So then we switched over and went to shippers and we spent a lot of time again building trust and that's where we could sit down with the companies that ship freight. Some early customers were print shops, for example, and you go talk to them and figure out what is it you guys need, what are your pain points, and they'd tell us, and we'd say, okay, we can do this

Speaker 1

13:29

for you.

Speaker 2

13:29

And so we were able to get some shipments from them. And because those loads don't have to pick up for 24, 48 hours, from the time they're offered to us, we had time to take that job and turn around and go find a truck. So we actually used every single job as a marketing opportunity.

Speaker 2

13:48

And we used that job to go find a truck, offer them the job. They'd say, yep, wanna do this work for you? We'd say, great, download the app and it'll show up inside the app. And it was the right kind of way to get them to start engaging with us through a real job.

Speaker 2

14:02

And then to get the job and complete it, they would have to use the app. And that was fine for them as long as it was a real

Speaker 1

14:06

job.

Speaker 2

14:07

That then started building some buzz, especially in kind of the Western Washington community where we got started. And then truck drivers would tell their friends and we started getting more on And we built some referral programs early on, once we had a few truck drivers that trusted us. And it was pretty small initially, but honestly it really came down to getting the job and using that as a marketing opportunity to get a truck to sign up for the marketplace, versus trying to get supply before we actually had any action going.

Speaker 1

14:34

Yeah, and most marketplaces say that. Usually it's true for them, the supply always goes to where demand is, at least initially. And demand is kind of the anchor.

Speaker 1

14:43

Yes. So Did you start off in Pacific Northwest, is that right, because in Seattle?

Speaker 2

14:49

Kyle Lierman Yeah, we started off in the Pacific Northwest doing straight truck work, so box truck deliveries around like Western Washington, as well as some full truckload deliveries. And honestly, I think we did up to about 150 miles when we first started. So it was pretty tight.

Speaker 2

15:04

And the idea was in trucking, you have local truck drivers. They typically don't run more than 250 miles in 1 way because they want to get home that night. And they don't have maybe a bed to sleep in their cab. And you have regional and long haul.

Speaker 2

15:20

So we focused on the local folks initially. And the advantage there was that when you're trying to build a marketplace, you're trying to build density, right? You want to have a dense number of suppliers and buyers in that particular market. So because we focus just on jobs within a couple hundred miles of Seattle, every truck driver that we signed up was available the next day for another job because they lived in that region and they slept in that region every night.

Speaker 2

15:46

And so therefore we were able to get a higher density of truck drivers quickly in that region and start seeing the marketplace take shape and start learning how the business worked.

Speaker 1

15:54

Got it. So how many markets are you in today?

Speaker 2

15:57

We are just about nationwide now to be honest. Parts of the South and Southeast are where we're starting to expand into now. But we operate out of all the major metros right now.

Speaker 2

16:12

And we think of the world kind of metro to metro. We Think about it in terms of the shipping lanes that exist. Priya.

Speaker 1

16:18

Got it. So let me ask you this, because it's interesting, it's always interesting to see how marketplaces scale. It's very widely established that Uber and Lyft went city by city, right?

Speaker 1

16:28

Because there the riders are requesting for rides within the city. Airbnb was all about travel, so 1 of the things they did very early was, you know, they went after all the high tourist cities, right, New York, London, rather than just doing US, they just did global cities that had a lot of tourist traffic. How do you guys think about scaling? How did you decide market number 2 after Pacific Northwest, or even from local to regional?

Speaker 1

16:53

What lens do you use to expand? Ryan Seilhamer

Speaker 2

16:55

That's a great question. We always thought about what's the minimum viable footprint to serve our customers. And initially, we serve both trucking companies and shippers, but initially the folks that were giving us jobs and loads that we could take to go get truck drivers on the platform are shippers, and we had to really understand what they needed.

Speaker 2

17:15

So initially, as I mentioned, we focused just in the Northwest and we thought about 2 different ways to expand. 1 was to take kind of the initial services that we offer, so the types of trucking that we supported, which at that time was a drive-in, you know, full truckload drive-in as well as flatbed, and expand that into more geographies and more lanes, or instead stay in the same geography and add more types of trucks. And most of our customers that we had to date were much more interested in us to expand to new geographies with them than offering additional types of trucks, because most of them, we were already servicing the types of trucks that they needed. And so we decided, okay, if that's where our customers are looking for us to expand, that will help us expand, because it'll give us more freight and more volume in business as we expand.

Speaker 2

18:04

And so we essentially looked at, you know, where did our existing customers want to run freight next? And that's how we started thinking about expanding.

Speaker 1

18:13

Got it.

Speaker 2

18:13

So sort of, you know, what is the minimum viable footprint for a customer where I can feel like I'm really servicing them as a partner. And that's challenging in freight because I think you're right, in a lot of marketplaces it's a specific local geography and everybody stays in that geography. Whereas in trucking, 1 company based in Seattle or based in Portland might ship to 100 other cities.

Speaker 2

18:34

Another company might ship to 90 cities with 60 overlapping with that other 1. So you kind of have to look and see what are the most popular common freight lanes of your customers, and where do they want to start shipping with you next. And that's a really healthy way to start expanding into new geographies. So that's how we initially started going more broadly, was through our customers' desire for us to service them on additional lanes.

Speaker 2

18:56

Gautam Raghavanandrana.

Speaker 1

18:57

Got it. When did you first expand out of Pacific Northwest? How long were you in that 150 mile local zone before you said, hey, I think we have product market fit, let's expand?

Speaker 2

19:08

You know, I think we were probably operating in that zone for probably 4 to 5 months.

Speaker 1

19:15

Which is quite normal actually. Just really tight

Speaker 2

19:16

in the Northwest, yeah. And then we, so I mean the exact progression, which I'm happy to share, was Western Washington, Washington State. I remember drawing like the zones on the map, you know, like we're going to allow shipments to work in this zone, like using like a map and trying to draw it, because Washington has some really remote areas.

Speaker 2

19:33

Then we did Washington, Oregon, and Idaho. And then we kind of did the I-5 corridor going down to LA. Then we started doing the western 7 states. So we really started to expand in the same contiguous area.

Speaker 2

19:44

Then we went to Texas. And in each of these different regions that we went into, we thought a lot about different major highways and corridors, and the major lanes where freight runs, and that's really the key is to understand sort of where most of the volume's gonna be coming, and making sure you're building a lot of supply there. And it has been, honestly, probably 1 of the things, if you're people that are building marketplaces now, that was the most challenging part of this was our customers were constantly asking us to go to new areas. And for good reason, they were excited to work with us and they wanted what we were offering in all of their distribution centers around the country, for example.

Speaker 2

20:23

And we had to be really disciplined to push back and say no. And our sales team wanted to sell more broadly because they saw opportunities and their customers will be saying, look, I can give you 50 loads a week coming out of this city that you don't support yet, or this region. And we had to initially say no. And that was pretty unique for us.

Speaker 2

20:42

Most brokerages would take freight in the lower 40 States, wherever it's available, and try to market up and make a profit. Whereas in our case, we were focusing on building density in specific lanes and markets. And so we didn't actually go national. We went kind of lane by lane, metro by metro initially.

Speaker 2

21:01

And then since we've had a bunch of national customers, and so our goal then shifted to, okay, as I mentioned, minimum viable footprint for a marketplace to really service those customers, they really needed us to be in more geographies around the country, otherwise we couldn't really have that partnership with them. And then once we want to service them around the country, well now we need truck drivers around the country. So we start working with truck drivers that run nationally, and then those truck drivers are looking for their next load in whatever city in the country they're in. So all of a sudden the footprint to really serve that ecosystem expands pretty quickly.

Speaker 2

21:35

And I think that's been 1 of the growth areas and challenges for us is figuring out, okay, we have to expand it quickly, but still moderating in the sense that we're not going to do everything for everyone. Humans are infinitely flexible. So if it's all manual and it's all driven by people, that person can make a decision about which geography at what price and they can call somebody and figure it out. Whereas if you're trying to automate it and run it through a technology system, you're trying to automate the transactions and the matching in the marketplace, you have to know the scope.

Speaker 2

22:06

It's really hard to train for everything, right? So that's why when you're doing this digital freight matching and taking the approach we're using, you have to limit geography, whereas a lot of other folks, they just go everywhere, and that really is indicative that they're probably not using a lot of technology. Pooja Bhairaji-Halliday

Speaker 1

22:21

And that's probably not the most optimal because even though human beings are really flexible, there's only so many permutations and combinations they can do in their head. But a system can do it way better.

Speaker 2

22:31

Kyle Liermann Especially, so if you learn over time, ultimately you can do a lot more. That's right. Venka Uttama

Speaker 1

22:36

Now let's shift a little bit to company building. So how big was Convoy in year 1, like team size?

Speaker 2

22:43

Kyle Liermann Year 1, By the end of year 1, I think we were about 30 or 40 people. Edith Harris-Potter So we grew relatively quickly. I don't think I mentioned to our initial investors that we had our bank account open when we were trying to take our first seed checks.

Speaker 2

23:03

Because we had done so much research up front, we didn't worry initially about incorporating or getting the name set up. We didn't think about all those things. We simply just thought, what is the right business? How do we get customer data?

Speaker 2

23:15

How do we understand what to go build? And then we had a great story that we put together and we went to raise our seed round and it happened relatively quickly. Gita Gopinath

Speaker 1

23:23

How many people were you in? Was it just you and Grant, the co-founder, or did you have more when you were raising the seed round? Brian Fricke

Speaker 2

23:29

Yeah, it was me and Grant and then it was 5 engineers. Edith Harris-Potter

Speaker 1

23:33

Okay, so you already had 5 engineers.

Speaker 2

23:34

Brian Feroldi Yeah, and they weren't full-time yet, but they were all committed to the project and they were working on it kind of part-time. Some of them were employed elsewhere, some of them weren't, but they were working on getting it going. And 1 thing I learned through that process was that it felt like to me, like angel investors and seed investors look for 3 things.

Speaker 2

23:51

The first thing they wanna see is that they can, they believe in the founders, right? They have a conversation with you and they walk away thinking, I believe this person is gonna be capable of going and building something. Check box 1, right? Box 2 is the idea seems reasonable.

Speaker 2

24:06

For some investors, for some angel investors, that means they understand the space and they don't invest in things they don't understand. For others, it's they can think through it and they ask them around and they feel compelled that the idea could be reasonable. And most, you know, entrepreneurs that want to start a new business can check those 2 boxes. You're going to come across as a compelling individual because they're passionate about this and they put a lot of time to it.

Speaker 2

24:28

And you know, the idea is maybe reasonable. The space is reasonable. The hardest part is the when that angel investors ask themselves, can this person go deliver on that vision quickly? And that usually comes down to do they have the engineering talent available or the specific skills available to them to go build the company right away.

Speaker 2

24:50

And I had learned that over time. So 1 thing we thought was critical from moving on to angel investors was we wanted to have already working with us a group of engineers that were willing to go and that had already said they wanted to start. And I found when I talked to folks, that was 1 of the most compelling parts of it. Yeah, they were excited about the idea and us, but then they said, okay, but can you build it?

Speaker 2

25:14

I wasn't going to be able to build it all myself. My co-founder is a great engineer, but again, you need a team to do some of this stuff. That was really the question, was could we pull the people together? Already having a few people working on it made it much easier to raise the angel.

Speaker 2

25:28

Gita

Speaker 1

25:28

Ramasamyama And where did your first 5 hires come from? Was it from your network, or how did you recruit them?

Speaker 2

25:34

Ryan Seilhamer Yeah, I was part of another startup called Wavy that Google had purchased a few years back. And a couple of the folks had been part of that company, that startup in Seattle. I had been at Google for a little while.

Speaker 2

25:46

I think 1 of them had already moved back to Seattle, but they were interested in coming back to Seattle. And so those are 2 of the engineers. A couple of them were from Amazon, had left actually Amazon a little bit before, around the time that I had, were working on their own projects. Actually, we were sitting at a table, working at, my co-founder and I kind of had a table we were working at, and we invited other friends and engineers in Seattle that were working on their own projects to come join

Speaker 1

26:12

us.

Speaker 2

26:14

And then As they were sitting next to us, we were kind of like, hey, you want to help us with this little thing? We got them kind of excited about it. And we actually recruited 2 of the people to help us just by inviting them to come sit next to us, to work on their projects.

Speaker 2

26:25

So those were both folks who'd been in Amazon before, and then a fifth person I met through a friend who was also previously at Amazon. So it was pretty tight. And I knew 4 of the people, 4 of the engineers well before going into this.

Speaker 1

26:39

And so by the end of the first year you had 30 to 40 people. And How much was engineering versus the rest?

Speaker 2

26:49

At that point, product and engineering was probably 40%. 40%,

Speaker 1

26:55

got it.

Speaker 2

26:55

About 40%. And the company quickly shifted as we started getting into more of an operational mode, we started shifting more towards sales and operations and customer success and customer support. And those roles ended up growing faster than product engineering, just proportionally.

Speaker 2

27:17

All is growing, we have a great product engineering team, we brought a lot of great data science talent in recently. But proportionally it's more sales and marketing operations. Preeti Rasgopala

Speaker 1

27:26

That's actually common. I mean most people find it counterintuitive, but it's actually common for most marketplaces in the early days, where their ops team and maybe the sales team start scaling much faster than the engineering team, but there's obviously a point at which you start turning that dial. But for growth, it was true for Airbnb too, it was true for Uber and Lyft as well.

Speaker 1

27:49

So it's actually quite common. So how big is the company now? How many people?

Speaker 2

27:54

We are just over 200 people now.

Speaker 1

27:56

Just over 200, and in less than 3 years?

Speaker 2

27:58

Less than 3 years.

Speaker 1

27:59

Okay, so 1 of the faster scaling companies. How has your job shifted as a CEO from year 1 when you were managing 20 to 30 versus today? What has been the big changes you've had to do?

Speaker 2

28:12

I think that my role is constantly changing, and I'm always thinking about that too. Because I do worry that I won't see a change that needs to happen and do it well. So I think when I first started, I was a visionary recruiter.

Speaker 2

28:33

I was out trying to convince customers, convince other employees to join us. I had a diagram I drew, and I think I said, okay, I need people with marketplace experience and with transportation experience, and had a few different dimensions to this. It's like, I'm going to go find those people. So I was pretty aggressive about going out and trying to recruit and find the right people for the company.

Speaker 2

29:00

And then we kind of got in, then I switched my hat. We had maybe 10, 15 people, and I really switched to product and business development. So then I was thinking, okay, what is Z1? And Convoy was founded April 1st, 2015, and we launched to customers at the end of August.

Speaker 2

29:17

So it was very fast in terms of that run up. And so all summer, it was a core group of folks cranking when building the first version of the product. So I really shifted into designer, product manager, and thinking about our go-to-market for that initial launch. Edithera We usually call that the doer-in-chief.

Speaker 2

29:35

Kyle Yeah, it was the doer-in-chief for sure. And then we announced and we launched and then I shifted into fundraiser. And we were like, okay, now we have something that we feel like is working well, it's out in the market, we've built a great V1, we've built a good, solid, initial team, let's go raise our Series A. And so we went and raised a round from Greylock that fall, so the fall of 2015, and closed it right at the end of that year.

Speaker 2

29:58

And that was my first time having gone and done a round like that. And so that, again, it's a different type of job and I had to learn how to do that and how to think about it from that perspective and really think about what do we do next and adding a little bit more structure around the business and around the plans. And then I shifted back into like salesman in chief, or chief salesman. And I remember going and spending a lot of time with customers throughout 2016, building relationships.

Speaker 2

30:32

Unilever had called us actually, really forward thinking shipper. And they had asked us if we were interested in participating in a pilot that they were running with different sort of digital freight companies. And we ended up becoming their partner out of that. And so I spent a lot of time learning about their business, spent time with them, and then spent time thinking about who are other kind of similar types of companies we can go and build relationships with.

Speaker 2

30:56

And that was really where we started to expand more down the West Coast. We started working with them in Southern California and Texas, And we were looking for more businesses there as well. So that, that year was really, again, focusing on, on initial sales. And it kind of kept evolving from there.

Speaker 2

31:12

Yeah. A couple other, other hats. You know, we, we did a lot of like really strategic business development in early 2017, thinking about, okay, now we have some real customers. How do we get deep partnerships, right?

Speaker 2

31:23

Because if you wanna go accelerate and disrupt an industry, it's great to have other companies in that industry, in that business that wanna support you doing that and are gonna make an investment in you doing that. So we've kind of shifted our, and so I became more of a strategy focused, strategy and business development focused in 2017. And I think my role will continue to evolve as I step back and help the leaders at Convoy and become stronger, bring in people, develop people at the company and really start building the culture, think about culture vision and sort of executive leadership development at the company is really where I think it goes next. Priyanka Chopra

Speaker 1

31:59

Yeah, we actually say that role changes from doer in chief to company builder in chief. So That means you wear multiple hats at different points in time. 1 of the things I know you spend a lot of time on is mission statement and building core company values and really reinforcing that within the company for culture.

Speaker 1

32:18

So talk a little bit about when did you sort of define a mission statement? Did you have it even before you started the company or at what point? And also at what stage of the company did you actually list out the core values?

Speaker 2

32:30

Brian Fitzpatrick yeah. So our mission statement, I'll just say it up front, is to transport the world with endless capacity and 0 waste. And we actually didn't codify that.

Speaker 2

32:42

That was sort of how we thought about it. We knew that 40% of the time trucks are running empty. There was an incredible amount of waste. By reducing waste we can improve the economics, improve service, you know, everything gets better.

Speaker 2

32:52

It's a win-win-win. So that was kind of the vision and we codified that just a month ago. So almost a little bit over 2 years in we said let's write this down, let's really formalize around this.

Speaker 1

33:02

What prompted you to think about, to codify this 1 month ago? Like.

Speaker 2

33:07

Yeah, it's interesting. They're kind of, as we were thinking about, how is our company growing? There are different sort of sizes of company where the culture starts to change.

Speaker 2

33:16

And you need new mechanisms and you need new ways for people to kind of stay connected and in touch and kind of share information, right? So when we passed 150 people, which I think is referred to as the Dunbar number because it kind of refers to the number of people that this researcher believed you could have direct social interactions with and relationships with or direct relationships with. We felt like we needed, we wanted to take some of the things that we all talked about and believed and make them more like constructs of the business that everybody knew coming in would learn about and think about, and it would kind of represent who we were as we started to get bigger. And then to the values, so we have a set of company values.

Speaker 2

34:00

We use them all the time. We use them for every recruiting, you know, every time we interview somebody.

Speaker 1

34:05

Let me, how did you guys come up with the values? Yeah.

Speaker 2

34:09

So I came from Amazon, and I've gone back to that a couple of times, but Amazon has a set of leadership principles. And that construct we liked. So we said, okay, that's an interesting concept, let's look at that.