How Flock Freight CEO Oren Zaslansky grew to $646.5M revenue and 2K customers in 2024.

hey folks my guest today is oren zazlansky he's the ceo and founder of flock freight and lead strategy fundraising and executive talent recruitment he also works closely with sales development product and fulfillment teams they are building an algorithmically carpool ltl freight sas tool it's a mouthful the growth is incredible aren't you ready to take it to the top i am thanks for having me today i don't want to bury a lead here so i had you back on i had you on the show back in december we did an interview record an interview we go deep you teach me about shipping from la to chicago trucks terminals i learned a bunch of stuff and you say we're doing about 75 million bucks in run rate i wanted to feature you in an upcoming issue of the magazine so i pinged you just to confirm the numbers and you said nathan we're at 300 run right now million what is going on how did you get this much growth so quickly uh well i think it's fair to say we've we've achieved product market fit um it took uh we're almost six years old the end of uh 2021 will be a six-year-old company and the first four years were excruciating i cringe sometimes when i meet people today and they they meet us today and they think oh this is easy you guys are killing it and the reality is like well you should have met us in 2018. so you know four years of building technology building a business working on use cases getting it wrong getting it right getting it wrong again listening to the customer iterating iterating not pivoting but iterating um you know a very agile environment until we really understood what they needed and we figured that out in early 2019 and that was a guarantee of a shared truckload at the point of purchase for the first three years we were waiting for dive deep into that dive deep what that means for people not familiar with trucking yeah so you know the common way of moving palletized goods first of all goods move on pallets uh in the united states so you're a manufacturer and you've made tables chairs computers food you know kind of everything and anything they're put on a pallet and they're sent across a very dense hub and spoke think eight drivers eight trucks eight terminals to go from that la to chicago example that we spoke about last time um and that is unfortunately a very low quality it doesn't pick up on time doesn't deliver it gets damaged things get lost and stolen it's expensive uh and it's slow you know these are not the key performance indicators you typically hope for what we do instead is we algorithmically create carpools or what we now call shared truckloads so a customer can come to flock and they could say hey i have four pallets i have 12 pallets i don't really want to see my goods take forever and get lost and get destroyed what is the alternative and we would say well we're going to use our technology to create a ride share a truck share program for you one truck one driver and we'll make sure that truck is full uh and so initially for the first three years of the firm you could imagine if you're building a carpooling model there's technology uh challenges but there's also just what we call liquidity you need marketplaces marketplace gotta line up time and space simultaneity so um you know it took us three years to get it to the point where it wasn't just aspirational we'll try to create a shared truckload the market our customers told us clearly if you can guarantee it then you've got something if you're just gonna try that's cool i mean we were building a great business we were you know raising capital and and and bringing on customers and retaining them but the customers told us if you could guarantee that at the point of purchase that i wouldn't have to gamble on this then you would just something just to be clear these truck drivers you're trying to sign up to add liquidity to your marketplace and they're saying aaron like i'm not going to go through the work of signing up if you can't guarantee my truck's going to be full this is why this is important to you is that right well there's two components to it that's the supply side of the marketplace yes on the demand side of the marketplace as a manufacturer as a shipper that says if you can guarantee my four pallets move hubless don't see eight trucks eight drivers eight terminals if you can guarantee me that if i do business with flock freight they'll move on one truck one driver and never move through a terminal that was the big that was the big activation moment the big aha moment so we built that and that meant uh additional optimization capability more algorithms but what it really meant was a pricing engine a pricing engine that could sell you a portion of the truck and predict whether or not we at flock would be able to sell other portions of the truck and ultimately get that truck full um that took us all of 2019 of getting it more wrong than right um and then 2020 it clicks we go from 25 million to 100 million by the end of the year we go from you know we're not we're not totally explicit about the revenue numbers but but more than 300 million at this point already um in october you know so we're many multiples of growth on a manualized basis how are you measuring that rn so when you say 300 in october what are you taking october revenue times 12 yeah so that would be you know if you said uh 25 million in the month of september times 12 will be 300 million run rate we will do more than 25 million uh in the month of october so our run rate will be you know 330 340 million um you know uh give or take a i mean that's what everyone listens to me looking for that 25 million in october revenue i mean that's sas margins right i mean you're not like having to pay truck driver that's like not like a gmv number is it uh it's not a gmb number it is uh a revenue number although i would not describe it as sas margins to be fair um we we have a fair bit of cogs uh still in this firm so we uh we've got an incredibly automated middle of our marketplace the optimization engine and the pricing engine is um is phenomenal right like unlike anything that's ever been built before the demand side of the marketplace the manufacturer who needs our services is largely very automated it's never finished but we are thrilled and it is easily stage appropriate the supply side of our marketplace we have a lot of cogs we are still feverishly building out automated integrations with trucking companies with carriers so right now we still have a fair number of humans that are involved in what we call the fulfillment hey mr trucker are you available you know what's the price can we get it negotiated um we are that's the primary focus of r d you know soaring our latest fundraising round you know announced about a week ago um the preponderance of christmas don't bury that real quick how much did you raise with evaluation uh we raised uh 215 million dollars led by uh softbank vision fund two they led our last round as well this was a was a real preemption you know with these numbers they they came to us mid-year six months into the last round uh and said you know giddy up uh we'd like to deploy some more capital can you go faster do you have a use of proceeds we said yes yes and yes um and so we raised into 215 at a 1.3 billion dollar 113 you raised back in december the series c what valuation was that at uh 460 470. well i mean incredible so softbank likes marking up his own portfolio is the lesson there and you're driving incredible growth that's what i should do well well to to be fair uh the latter yes the former no they they don't like marking themselves up i'm not gonna speak to it but you've got a smart audience that that can be problematic um we brought in um other pretty significant investors in the round i'd say most notably we brought in susquehanna uh sig is a major uh private equity growth equity fund at 15 20 billion dollars so they're participating in this round we brought in a firm from new york called eden capital coming into this round we also had pro rata in some cases i think super paratha from from insiders so um softbank was about half of the check in this round you know we had another 100 million dollars come in on top of what softbank wrote softbank wanted to write a much larger check initially up to 300 million um and from around construction standpoint we we you know manage that number down i guess it would say so that our other insiders could also continue to buy up and we could bring in new capital everybody loves to see some new faces around the table was 215 the actual size of the round or did you raise a bunch more that went into secondary um no it was uh 215 was the size of that was a point did all that go right to the balance sheet or did you provide liquidity to some early folks uh a little bit of liquidity to early folks but only only team members not not investors no investors want it out uh yeah i can certainly say that i can i believe that and when you say a little bit team members like under 50 million of the 215 yes okay very cool let me ask you a different question anyone doing the calculations in their heads they're thinking 300 million dollar run rate 1.3 billion valuation that's a very low multiple for others that are like at this revenue stage would you just say that's because your cost structure and the cost associated with the business model yeah it's largely a an issue of cogs and we have to balance that all the time where you know uh every founder does right as you think about we call the balance between fear and greed and the key word there is balance you know there are times where you don't want to raise because you're very greedy and there's times where you'll take every dollar thrown at you because you're you're fearful as a founder i've been in both of those situations and there's no shame you know you got to capitalize your business and make payroll i think the key lies in the balance flock um is going to be something gigantic you know we believe we can build a 50 billion 100 billion revenue firm um i think it's fair though to put us more in an amazon type uh quadrant you know than a google type quadrant from a cost structure we are always going to have some cogs in this firm and so from a multiple standpoint they are lower than they are in a true uh sas firm i think that's fair the flip side is we're in a u.s one trillion dollars space and we're going to build a multi many billions in revenue in the next three or four years so i think the the ultimately the exit value of this business will be in the many many many billions going into the public private or every public market q2 q3 next year no no uh we we want to stay private for at least a few more years i'd say let's say three years this is a bit of a educated guess yep interesting talk to me a little bit more about what metrics are important for you internally that might not be obvious to me right how do you measure marketplace liquidity for example uh well the the key i think metrics for us at this point are um we're constraining our growth we could go faster we need more automation on the supply side more integration on the supply side so we're measuring uh the total number of transactions that move through automation you know single digits going to double digits and scaling basically what percentage of this business in 22 and 23 can we fully automate what we call quote to cash so from a customer who's just beginning their journey with us all the way through to collecting capital is that that number sorry i'm going to cut you off but you told me last time in 2019 you had 10 000 freight bills go through the platform in 2020 you said it was between 10 000 and 100 000 for 400 growth is that what you mean when you say number of like quote quotes going no i mean we moved last month now already like 16 000 freight bills in the month so you know that's the growth um when i mean automation right now on the demand side of the marketplace it's automated customers order via integration or self-serve online now we have humans here to support that but but it's as automated as we kind of feel it should be within the middle of the firm the technology the hard hard tech of optimization the algorithms the pricing probability work that we do that is also automated um but when we get to the supply side you know hey uh truck driver will you move this freight and if so at what cost how much available space do you have on board it's only about 10 of the transactions on that end are are really totally automated at this point we want to take that number up it's not going to be 100 percent but to 80 or 90 percent and we want to do that in the next 12 to 18 months that's right startups have already figured that out that you'd go by um maybe we're we're we're taking a cold hard look at it there are there are there are a few that make that clean it's unclear it's real the us truckload industry is enormously fragmented which in the long run is great news through marketplaces thrive and fragmentation um you know little players have a chance to to participate day one the challenge though is there's no like clear aggregated point of volume where you can just go plug into a startup either as a partner or to acquire obviously we've got a pretty big balance sheet we also have enormous capital partners um you know who would love they we had a board meeting two days ago and they're asking me hey you know any acquisition targets we got our checkbook out you know we feel pretty great about you and the answer is you know we're looking at it we're looking at it you know um but it's unclear that that acquisitions are always the panacea that many believe i mean the the data on acquisitions is pretty pretty gruesome you know 75 to 80 of acquisitions destroy value um flock is not being built to say yay we're a billion dollar company do some secondaries and that's that you know flock is being built to be a hardened scalable platform that goes into the public markets and endures for decades and fundamentally changes the way freight moves in this country initially and then ultimately globally so it's not to say we're adverse to some some easier fast wins i mean those are nice to have but it's not what we're focused on we're focused on long-term value how do you have that long-term focus on i mean many startup founders when they hit a 1.3 billion valuation they take secondary off the table it's the first financial windfall for them that's important for them and then they go take a next big swing did you ever even exit before this so like this is your big swing um i haven't had exits but i have founded two previous uh traditional freight companies and i've made a very nice living uh for you know 10 15 years so you know i'm i'm okay i i you know i don't know that i want to disclose my salary here but i'll tell you i am far from being not the highest paid person at flock i've got a relatively modest salary and that's okay i'm playing for the equity um and i think and i'm playing for significance and i'm playing for purpose you know we're the only certified b corp in freight we have an opportunity to make a 40 reduction in greenhouse gas if we're successful at scale that's important to me i want to you know relentlessly remove waste and efficiency you know from the u.s transportation system so um you know i i figure everything worth doing is hard so let's take hard off the table it's not that interesting i want to do something that's purposeful and something significant and i i think i'll be financially rewarded along the way so you know the secondaries are great give a lot of comfort you know there were there were there was some wealth distributed last week and i couldn't be more proud uh to have been a part of that you know seeing people on my team and and the first you know the og's as we call ourselves the 2016 ogs you know the 2016 ogs having an opportunity to you know bring some comfort to their families um is is significant and purposeful and at the same time we are just getting started um you know we take this thing in the public markets and we keep going managing dilution as you scale is a tricky thing most founders think about that after the fact and wish they did a bunch of stuff differently you mentioned equity is really what you're playing for can i ask how much equity you've been able to hold on to up to this point you can ask i'm not going to answer that question correctly can you can you give me a range i mean i'm going to own a small piece of something very big that's a political answer it's a lot on paper but look let me say this that i think is helpful to your audience because understanding my wealth on paper i don't know if it's helpful what is helpful this was advice i was given by uh my lead investor from google adventures who led our series today gd guy named joe krauss joe krause is a super successful founder founded excite back in the 90s uh you know the original search oh seriously this was 18 million in 2017 right uh yeah yep and now that you were what that was probably like what 90 100 million dollar evaluation back then no half that that was 57 or eight it was actually about six uh no post the pre was like 41 42 you know something along those lines okay back to your google guy um and what he taught me was uh look you're going to be taking on a lot of dilution along the way and i get it as a former founder now turned investor it's going to make you crazy but but let me convince you otherwise um you have a certain number of shares and that number of shares doesn't change unless you sell them and if you sell them then you have sold them but until you sell them that that numerator so to speak does not change the denominator of the firm is changing right you're issuing new shares every time you raise money but you have a certain number of shares your job is to take it from a tenth of a penny you know when you found and you do your hopefully 83b founders out there do your 83p um qsbs is real um at least for now it may go away um but you know you want that you really want that um you know and your job is taking from a tenth of a penny to a penny to a dollar to ten dollars to fifty dollars to a hundred dollars to hundreds of dollars you know if you can so i've hung on to that you know my percentage of ownership has gone down but what is hopefully helpful to to some of your your viewers and your listeners is i don't think about it anymore i really don't because i need capital i need capital to build this business we are not a traditional high margin you know uh sas firm but we're building something absolutely massive my job complexity is that like we're a big business hundreds of millions in revenue hundreds and hundreds of employees you know need to double our head count how many now uh almost 350 340 employees okay you know we're gonna be seven eight hundred by this time next year that that's just complicated right from an organizational structure and leadership standpoint that's really where my you know my time um is going but my number of shares doesn't change but if i can take the share price to a hundred you know if i can take it to 150 you know going into an ipo you know that is a lot of money i mean it's already a lot of money now that is a lot of money so so for the founders out there you're going to make yourself crazy going from 100 of a pie or two co-founders 50 50 however you split it up yeah that number goes down for most founders it ends up in the single digits um i am not yet in the single digits i was just going to finish with the last question and say or and i promise i'm moving out for this but more less than 10 but you just answered it so more than 10 right now i'm a double-digit guy but to be fair i was uh mostly a sole founder i have i have some co-founders that are advisors they're not operators so they started with single digits pre-dilution and i had basically the whole cap table um but number of shares by the price per share and then get it liquid that's the job you guys go or in last question here because you're one of the few i can ask this you want to use investors almost like employees you want to bring on strategically give them work to do and make them hustle like hell to help build the business how do you give work to softbank how do you ask someone that big that powerful that you know impactful to do work for you um good investors want to be helpful and they know they're not us um so you know softbank is famous they're infamous i get it um you know working with masa is a tiny piece of what we do when you're a software portfolio company but really you live within your deal team so within my deal team um who you know of course is on my board again board meeting on wednesday i challenged my team and i had a couple things i said number one i know i understand how the private markets think we've raised nine rounds about half price kind of series c through series d and also some notes in between you know because getting started or bridges up bridges never downbridges but kind of the good bridges and the hard bridges along the way and i said look i know how the private markets think about us i understand what the story is i've done it nine times i understand what the key metrics are in order to create shareholder value i don't yet understand the public markets and yet this business is headed to the public markets we're not yet ready to hire a banker we're not yet ready to start talking to the exchanges so it's i wouldn't quite call this pre-ipo but we're pre pre-ipo meaning find me people that can educate me on the story and under the key metrics to understand how we need to shape this firm over the next two or three years to get it ready for the public markets you find those people i'm too busy go to work uh number one number two is talent talent talent you know we're looking for a vice president of engineering a vpe you know our vpe was promoted into cto he's phenomenal lose signs are the first person we hired uh absolutely transformative um and now you know now we need to recruit a bpe into a vpe to replace them on the day to day tough rule to fill as you can imagine you know tough labor markets um you know so i put my investors to work and i literally said this to them i would say founders also don't be shy of putting your board to work i know you love all your kids equally meaning your port coast but you love me a little more you know send me the top talent let me know if there's a company dying we could do an aqua you know you see a lot of things i don't see love me just a little more than your other children and help us bring out a world-class vp guys there you have it oran fluffy or if you want to learn more about you and the business where can they visit flockfreight.com you can drop me a note directly oren o-r-e-n at flockfreight.com i promise that's me that doesn't go to marketing or somebody else and uh i'd love to meet folks and the 1.3 evaluation pre or post post it was post guys there you have it incredible growth 75 million in terms of run rate just oh gosh 10 months ago now over 300 000 in terms of run rate 25 million a month and growing very quick they'll double their teams over the next year really focus on building a decades-long company eventually the public markets call it in two to three years we'll see what happens next warren thank you for taking us to the top thanks for having me on one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1pm central additionally remember these recorded founder interviews 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Introduction hello everyone my guest today is oren zizlansky he has logistics and innovation running through his veins he followed his parents footsteps who created their own freight forwarder after years with foreman's van line he founded his own 100 truck fleet at age 20 providing white glove freight service through the u.s and canada next came sole source oran's first brokerage which services major clients like whole foods and opened his eyes to the unnecessary complications and inefficiencies of lfl shipping aren't you ready to take us to the top i am thanks for having me so you through all this experience you've now built flock freight let's start with a tease there and then get more of your history what's flock freight doing today we do uh we create what we call share truck loads or algorithmic carpooling so it's a little complicated thing to think of but if you have four pallets of commercially manufactured goods and you're in la and you want to ship them out to chicago you would otherwise move them through the ltl industry less than truckload industry or hub and spoke model so just think terminal terminal terminal ups without the aircraft what we do is we come in and we use some really sophisticated algorithms to match your palletized freight with our other customers palletize freight and instead create a carpool or a shared truckload so we just book a big truck out of the full truckload industry have them make multiple pickups picking up our various customers loads and shipments and have them drive direct to destination the reason the customer cares is that by making a hubless offering no terminals no warehouses it picks up on time delivers on time it's faster there's zero damage no loss no theft it's just a much much higher quality offering um and it's a much greener offering about a 40 reduction in greenhouse gas as the only certified b corp in the freight industry uh because our model effectively um you know negates or disintermediates the use of terminals it's we like to say algorithms instead of warehouses it was 2002 or 2003 i forget which but i was rereading bezos annual letters and i remember one of the key metrics they tried to drive down and 0203 was number of contacts and it's exactly this thing that you're talking about so real quick before we get your back straight can you help me try to understand the economics this has sort of formed a lot of people if i want to ship two full trucks from la to chicago and let's say they're adidas shoes what am i likely going to pay for that so the way to think about it i'm going to give you some really simple kind of silly math but this is just i've used this in fundraising and again it's a reflection of very sophisticated audiences but taking a lot of industry experience and kind of putting it to layman's terms so imagine you could typically fit 26 pallets in a big truck a full truckload carrier truck the big ones you see on the freeways if you could fit 26 in there we'll just imagine that trucking company is going to charge you 26 to go from chicago to los angeles we can infer that that's a dollar per pallet right 26 dollars to fit 26 pallets now to be fair that trucking company is not charging you a dollar per pallet they're charging you 26 whether you put one pallet on board or 26 pallets on board you're going to pay 26 bucks you're a smart guy you want to get the truck full you want to get your lowest possible unit economics you put 26 pallets on board you have in your head a dollar a pallet conversely now you're a small shipper or you have a small order it could be a big shipper but you have a small order you just have one pallet to ship that's it it doesn't make sense to buy the whole truck for 26 dollars right so instead you go to the ltl industry these hub and spoke operators the ups fedex without the truck without the um aircraft they charge you two dollars to move that one pallet that's what we do that's what our financial model is is that instead of charging two dollars and paying almost two dollars we can charge two dollars and pay one dollar because we're buying it's like we're syndicating that entire truck we're taking all the risk and telling the customer don't worry about it i'll find the other 25 pallets to go with your your one pallet it'll never move through a terminal it'll never be unloaded uh bigger faster stronger you know on-time pickup delivery no loss no theft no damage faster transit times that's financially what we're doing interesting super interesting and and again before we go back to your the younger orrin um in 2020 with the pandemic happening like what's the big usage metric you track is it's not a number of pounds it's probably two minute is the number of truckloads or like what's the thing you track mainly yeah it's it's what we call a freight bill that would be like a standard unit of measurement in this industry a freight bill would be not a pallet but it would be a shipment so a shipment might be two pallets it might be 15 pallets but we would call that one freight bill and we've seen our so how many shipments we move um on an annual basis we had 400 percent growth um in the year of 2020. that's incredible are you sharing with the actual nominee it's gonna be in the millions right tens of millions um in terms of shipments or in terms of revenue that number you just gave me freight bills uh no it's not millions yet it is um that's a fair question it's tens and tens of thousands you know i don't know if we're at quite a hundred thousand yet but but we're getting very close that's got it so somewhere between 10k and 100k and that's just again number of freight bills as small as two pallets as large as 24. almost a full truck where we can still optimize and we can take that very big shipment and find a couple pallets a small shipment and put them together and ride share create a shared truck and can you put a face on this i mean is this the etsy ecommerce seller that needs to move like three like what is the face of the person that actually you know yeah we launched the business in the smb so small medium businesses that were small they had small quantities and they did not ship very often it's a great um playing ground to invent if not it's a little messy now we're playing much more in the middle market with enterprise customers so you know it could actually be a very big customer we'll use like um you know an almond manufacturer um is one of our biggest customers where you know a full truckload of almonds could be 40 000 pounds that's a lot of almonds to go into a box you know or to go into a 7-eleven so even though they're a 10 billion a year massive enterprise shipper they would have a need to only ship four pallets on you know out of their facility going to um a distribution distribution point now they may ship a full truckload of almonds into a costco or to an amazon fulfillment center but then they may turn around and ship a single pallet to 7-eleven so it's all b2b or what we call in the industry kind of dock to dock so what we don't yet do is residential we've done in the past but it's not who we are it's not who we believe we should be for quite some time instead we're going from a manufacturer that has made something or is a distributor of something and going to the receiver or their customer a very common pattern would be people who make stuff and it's going to an amazon fulfillment center or they make things that's going to a mall or some type of distribution center so i would not quite say etsy i would say more like a 25 million dollar minimum side manufacturer that's their revenue not their spend on freight but that's how big a firm they are up to you know several billion dollars a year again you know the abm beds of the world and in 2020 how many unique shippers shipped at Currently serving 2000 customers least one thing with you one freight bill like 2 000. oh wow okay and i just am really uneducated in the space i mean what percent is that of the total brands shipping something it's it's it's bips okay the beauty of this industry right so yeah we'll just say u.s freight is believed to be like a trillion dollars across all the varying ways that you might move things and look we're not a tiny company anymore we've had explosive growth we plan on growing a ton more but the reality is that you know it's it's basis points so yep um how do you guarantee that you have the truck inventory if i believe ltl's paying the same as you are but you're just doing it more efficiently like how do you make sure you have enough trucks if there's a christmas blip or something yeah that that's not just the billion dollar question that these days the 10 billion dollar question yeah trillion dollar question uh it is really hard so one of the hardest things but i would say the most fun and most interesting things that we do is we work in probabilities so we have a lot of applied data science and machine learning environments here where we are constantly ingesting as much data as we can uh from third-party data lakes so data sources where you can build a an integration with and you bring in the like what's the spot market doing what what's tender rejection meaning freight that's not getting picked up for you know if there's freight not getting picked up you can infer there's probably not a truck in that market to pick up that freight yep um furthermore we shape that with our own internal analytics our our own team of people talking to the world and then lastly working in probabilities what's your belief that that truck's going to be available and not only available in a binary non-binary way it's yes it's available no it's not but also if it's available what it's going to cost you know it's a spot market so it may be a low price today it may be a high price tomorrow and then to really blow this thing up wait sorry i don't understand that what what could what varies in price the dollar per 26 pallets could go up or down yeah the cost of contracting that entire truck he may charge you a thousand today at maybe 900 tomorrow could be 1200 the day after that especially around the holiday time so the context of your question given holiday you're right right demand is surging right now supply is kind of fixed right this is not a gig economy the way we see with like uber and lyft in rideshare or doordash or instacart those are good economies whereby uh in theory supply conflicts with demand um in our space you're a commercial truck driver driving a hundred thousand dollar tractor trailer full-time your drug and alcohol tested you know this is what you do it's not a side hustle like you were either a truck driver or you're not a truck driver so supply is changing don't get me wrong but it's relatively static demand is porpoising like crazy whether it's covet or holiday time so that's where the data and the analytics and and the data science and trying to predict what the future is going to look like all the way through to in our case not just can we get a truck or not and not just how much is that truck going to cost but what is the probability that we'll have many different customers freight bills or shipments that are going to tetris fit together into that truck at what variant costs i mean that's honestly i think the number one reason why uh softbank made the investment as they did is they looked at the hard science the hard uh the algorithms the mathematicians the data scientists that we employ to not just predict a future of is there a truck or not but to slice those trucks into little bits and pieces and then try to determine are you can you see the future and in our case with all the data that we're building and every shipment we move becomes a data point what's total team size orange today and how many of them are data scientists or engineers uh we're about 130 w-2s you know basically here in san diego we do have a few people scattered throughout the us particularly over covet you know we've been pretty agnostic to that we just want great talent and then engineering mathematicians which we'll call part of the optimization group data scientists analysts analytics uh that represents about half the payroll oh wow okay so call it 765 people there do you have any quota carrying sales reps oh yeah yeah yeah how many she's 30 35 and you know and they're selling to like the head of shipping in these massive billion dollar brands yes and uh they're selling to a manager of shipping at a 50 million dollar manufacturer that you know you and i may have never heard of and they make you know tables they make chairs and they you know have a need for our services as well and with all these operations sort of coming together i mean do you know i mean it's obviously i mean it's definitely maybe the millions tens of millions how many individual pallets you shipped in 2020 do you know that number um if i were to make a guess i'd say if we're getting close to 100 000 shipments per year you know you could say that times maybe five so maybe a half million pallets oh this is back of the napkin right yeah yeah no no i'm in the ballpark yeah no no i mean that's what i wanted i mean i would be shocked if you knew the exact number down to the actual palette and that's obviously changing by the day um Raised talk to me about softbank they just wrote a check what was the size of the check and how much have you raised a date total uh softbank's investments 100 million dollars we also brought volvo in which is a really exciting strategic for us both for a commercial partnership they spend a lot of money on moving freight and they do it some optimally and they want to partner with us but also to work with their innovation labs on really defining what the future of transportation will look like autonomous driving vehicles as an oem they make these trucks or they're working on that technology how a marketplace partnership like us could work with a volvo over the long term you know we think of volvo here in north america as these like lovely swedish cars and they are but but um not a lot of people know they're like the second or third largest truck manufacturer i say truck i mean like tractor trailer you know freight truck in the world i think them and daimler are you know the biggest in the world so in the us they own the brand mac truck which more people are probably familiar with um and then we have participation from all of our insiders google ventures signal fire and gop um at that point you know we set out to raise honestly 30 to 50 million bucks we ended up raising 115 so it was a bit of like no more capital can come in work with your insiders to you know prevent too much money from coming in um and that puts the total raise at a 180 185 million something like that and in that soft thing deal i mean were you able to stay you know let them put in more cash but still stay under and sell less than 10 of the business in other words i'm really really asking is north of a billion dollar evaluation south of a billion dollar evaluation got to be flirting with it oren uh it's south of a billion dollars yeah everyone's trying to get us on this one i know look um it's a couple ways of thinking about it one is you know it is freight we have a lot to prove it's a huge space um we're going after something much more complicated than has ever been pursued before and that's the true invention of a new mode of shipping freight there's the less than truckload mode pallets through terminals there's the full truckload mode fill the truck up at a single manufacturer send a truck down the road those are the incumbent modes we're this space in between and encompassing both which is shared truck load that's a mode that we've invented so it's obviously a lot riskier number one number two is you know you don't hear a lot of founders say this you got to be careful with valuations that becomes a market clearing price that you got to get over the next time and nobody wants to get over it by you know one or two percent right we want to be like doubling you know tripling quadrupling on these uh share prices round over round and as you start talking about billions which is certainly the ether you know that we're we're playing around in you also have to start thinking about what exits look like you know in my case i want to go into the public markets i mean i want to do an ipo and do the road show the whole thing um that's you know ring the bell in the nasdaq i mean it's just something really excited about doing um and so you want to make sure that you're going to create you know real long-term shareholder value as well that is a creative to your insiders as well as to that next set of investors is charging these 2000 customers two dollars per pallet and then you buying the pallet for a dollar region and optimizing your only revenue stream or there are other ways you make money no that's it that's what we do okay i'm doing i'm missing something like very Monthly recurring revenue obvious here so i'm just going to ask it directly if you're shipping 500 000 pallets per year charging two that puts you like a million in revenue per year there's no way you're doing a million in revenue per year we're doing many many yeah more than that so the two dollar versus one dollar is just meant to be a simple metaphor to whereby to understand this god we you know you can imagine though if i if i uh buy if i sell it two dollars and i buy it one dollar buy low sell high yeah like the real estate guys tell us then we have um for freight like 50 margin potential um in an industry that supports like 10 to 12. so we have many times a higher margin potential than anybody ever in freight before because of this financial arbitrage that's unlocked we we have not publicly disclosed as of yet revenue but i can tell you we are orders many orders of magnitude um higher than that yeah you had a couple million bucks i'm going i'm missing something very obvious here and it's the obvious thing you gave a metaphor you know renting out a whole shipment a truck it cost way more than 26 bucks for for the truck yeah i apologize in real dollars it'd be like three thousand dollars four thousand dollars to run that lane and if it's four grand i could charge eight grand you know it was the two to one that i was hoping to highlight yeah yeah okay got it but but generally like a truck like that la to chicago it's like four grand something like that in today's market yeah yeah yeah okay interesting um vault i wanna talk volvo real quick because this is gonna go back to your roots in terms of you maybe buying your first truck running those first routes back when you were younger at some point it makes sense for you to start if you're not already holding cars maybe autonomous trucks on your balance sheet uh maybe from volvo by the way you know what is the tipping point where that starts to make sense it's a good question look i've told people whether it's media or colleagues or people on the team i don't personally think we're going to see another parcel carrier parcel would be like fedex ups start ground up like ever i think what we'll see is is amazon come in and build the largest parcel carry in the world sort of from the side door or top down depending on how you want to think about the metaphor you know we're seeing amazon become the world's most vertically integrated firm which is not to say they don't use a tremendous amount of contract support top to bottom they do um but they're operating their own aircraft they're operating their own trucks their own warehouses i mean at some point it's interesting amazon tech company tech company they absolutely are a tech company the data insights they have i mean they know what you and i are gonna eat three days from now i mean they do uh it's the world's largest machine learning environment as best i could tell that being said um they're a logistics company and they're going to be one of the largest logistics companies if not the largest in the world no matter what how do i think about that i want to stay tech as long as we can um i i don't see a world in which we start operating warehouses and terminals that would be antithetical to our very model we are the contactless yeah we don't want to touch the stuff um i could imagine a future state um whether it's a partner like a volvo or in some other way shape or form where with autonomous driving vehicles we want to be pretty closely snugged in we love av autonomous vehicles like we oh my is this an enabler for us in a very big way that being said um with all due respect to our capital partner and all those fine folks out there working on it um it's not going to happen in this decade in a meaningful way we'll see the middle mile which is you know like running down the freeway um we'll see robots now that being said they'll be humans who are being paid to still be on board those trucks for many many years but to get to a future state where what we call the first mile and last mile that's backing out of a dock now picture your neighborhood or commercial district and ultimately getting onto the freeway and then the last mile is that process in reverse you know getting off a highway exit navigating through urban rural environments backing into i mean you can picture what this would look like um i think that is a long way out that being said when not if yeah looking at a regulatory problem as well interesting yeah interesting quickly uh before we wrap up here you launched company what year uh commercial launch kind of official first round hire first employees january of 2016. it was a year and a half project side hustle for me prior to that how much revenue did you in year one do you remember yeah well run rate revenue in year one i think we went out at about a two million run rate and uh two and a half million run rate of revenue and we were pretty darn proud of that that's pretty you should be really proud of that um and then last growth question you mentioned freight bill growth year over year 2019 and 2020 was 400 percent is that the same that revenue growth is the same about 400 percent or lower yeah no no it scales pretty well that's correlated that's i mean i imagine you have some serious scale growing at your scale at 400 years it doesn't surprise me softbank comes and says please oren please let us put in a hundred million it it it went well anything else i haven't asked about that you're like why hasn't he asked about this it's critical to our business um no you know i'd say you know we are really proud and passionate um about being the only certified b corp and freight so you know we have an opportunity here kind of from a social entrepreneurism angle to create significant market value you know real returns for our investors and ultimately in the public markets and have a real market cap we want to build both the largest freight company in the world and the most profitable freight company in the world we want to do both of those things the scale will come before the profit but we intend to do both while we simultaneously help do our part to save the world you know we believe passionately there can be a 40 reduction in greenhouse gas through our model so much so that we're on the precipice of being able to launch actual carbon credits to our customer for buying from us because the model is so much more efficient um you're actually kind of getting the the first word on that externally that we're in the process of bringing that to market right now the outside world doesn't know it yet but we've got a certifying entity of like actual carbon credits not some wow white labeled you know off-market product but like you know tesla carbon credits so to speak uh to toyota um of bringing that to market now because the the certification entities are looking at what we're doing and saying man that is no joke that is so much more efficient and of course we believe that it's an awesome opportunity to drive additional acquisition retention but to further drive our our purpose of saying you know we think we can build a very viable asset while at the same time helping to do our part to save the world or an incredible story let's wrap up with the famous five quick answers your number one favorite business book five dysfunctions of the team number two is it's a good one yeah number two is there a ceo you're following or studying bezos constantly remember are you an acquisition talks right now with amazon no okay number three that's good straight face you like how i sneaked that in like that was pretty good right i'm under so many non-disclosures right now [Laughter] all right good number three what's your favorite online tool for building the business oof um online tool for building the business god we live on slack it's just horrifying but we couldn't live without it number four how many hours of sleep every night six it's pretty good situation married single kiddos married two kids 18 14. wow and how old are you 46. take us home what do you wish you knew when you were 20. what did i want to do when i was 20. something you wish you knew when you were 20. i wish i knew um oh man i wish i knew that i was going to make all the mistakes i've made but to not be so hard on myself for making them and to realize that their each one is a little gift that's going to ultimately make me better guys flockfreight.com think of it like pooled trucking a lot of logistics over 65 data scientists engineers on the team of 130 when 50 of your folks are made up with that kind of background you know there's some serious tech there they raised 180 million bucks today serve over 2000 customers their freight bill growth year over year has been over 400 revenue growth is also in that same categories they look to continue to scale with things like eco credits do a great part and do their job in the world but also do it profitably over time as they reach additional scale oren thank you for taking us to the top thanks for having me one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sass we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or 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