Ep. #57, Part 2: Jeff Silver, CEO & Founder of Mastery Logistics Systems

Episode Transcript
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Speaker 1 (00:00):
Hey FreightPod listeners.
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(01:31):
So Paul reaches out, gets youconnected to Fordo Mark Fordo
absolutely pivotal.
This is going to be hard ingeneral, and I'm sure it was
with Back Claws.
It's like how do you givecredit to all the people you
want to give credit to that hadsuch a big impact and I'm
speaking for you as someone whohas done this on such a smaller
scale, with even just like 500employees that worked for me.

(01:53):
It's really hard when you'retrying to tell a story about
your business and give credit toall the people that were
impactful, and especially forsomeone like you where it's 10x
um, it's even harder.
But, um, I'm sure you'll findways to credit as many people as
you can, because it's.

Speaker 2 (02:10):
It's impossible.
I'm not going to try because Iwould definitely end up leaving
somebody out, not not on purpose, and you know, but but ford was
critical, as you know.
I wouldn't have done it withouthim, actually, or somebody like
him, but that was a verycritical thing.

Speaker 1 (02:31):
And so the idea there was a quick pivot from, you
know, being a TMS provider tobeing a broker.

Speaker 2 (02:42):
Yeah, I wasn't convinced one way for sure in
the first place.
So it wasn't a hard pivot.
We just weren't really sure andin fact we were trying to name
the business.
We were looking for somethingthat could work as either.

Speaker 1 (02:53):
While we weren't sure , how did you settle on the name
?

Speaker 2 (03:00):
so the, the.
I'd always sort of thought thatthe back hauler's name was a
bit of a burden.
It just wasn't a great name.
People would make fun of it.
You know, American chicken backhaulers or whatever, Just
whatever it you know.
So we were looking for I alsodidn't want to be a three-letter

(03:21):
acronym Right, there are toomany of those in the trucking
business and brokerage and Ididn't want to name it after the
family either, because I knewat some point we would sell it
and I just think that's a littlestrange.
So we were looking for a namethat would work in multiple

(03:45):
languages because I wanted to beable to be in Europe and
something that was identifiable,that would work on swag as you
know, Marianne is the swag queenand loves to make that a big
part of the businesses.
So it had to be something thatwould be identifiable and we had
some different ideas.
Allie Cat was one.

(04:09):
Alexandra Catherine, our onlydaughter that was one idea.
Number five on paper number onein our hearts, belly Fire, which
the idea of that was.
We always looked for peoplethat had fire in the belly when

(04:31):
we were trying to hire them.
But there was also thisconnotation of of a?
Uh, an ulcer right, that wedidn't want to be giving people
an ulcer uh as a broker or as atech company.
And uh, our good friends, the,the Wiles we used to call them
the Wiley Coyotes and so we werein Cabo, at their place,

(04:53):
talking about the names, and theidea of Coyote came up.
So we were, as we were justgetting going and talking about
what to name the business, um,in our, at our house in Lake
bluff, illinois, with our threedevelopers that work for us, and

(05:15):
Marianne and I were sittingthere and all of a sudden, with
coyote on the list, coyote comesright across the backyard,
looks in at us and we're likethere is absolutely no freaking
way.
That just happened.
But it did, uh, and that's howwe ended up with coyote and when

(05:35):
did you?

Speaker 1 (05:37):
when did you know what you wanted like who you
wanted coyote to be like, atwhat point?
And and help me understand whoCoyote was Like this is.
I want you to take me throughthose first couple years of
building the business, how itwas different.

Speaker 2 (05:56):
The critical thing that we did, our invention, if
you want to call it that was notthe technology, it was an idea.
It was the idea that we wouldmove every single load that we
possibly could that we committedto, regardless of whether we
made money on it or not.
To clarify, unlike some of theentrants that came later, we

(06:22):
never priced to lose money.
That came later.
We never priced to lose money.
We never had this idea ofburning shareholder money to
lose money to gain market share.
That's an idiotic idea andthere are companies that are
gone today because they thoughtit was a good idea.
That was not what we did.

(06:43):
The experiment, the idea here,was to see if we were willing to
really take the responsibilityof moving every load that we
committed to.
What would happen?
How fast could we grow?

(07:04):
What would that feel like andcould we make money at it, right
?
So we always priced to try tobe in the middle of the market
and over time we did haveshippers that would tell us we
tend to be about right on themoney with Robinson a third of
the time, a little more money ora little less money a third of

(07:25):
the time.
So we knew we were always atmarket.
But we were willing, where wehad to, to lose money.
And in fact early on, right aswe were still building Bazooka,
we didn't really have much of anaccounting system yet or
anything like that.
But I kept a spreadsheet, anExcel document, that showed,

(07:46):
from beginning of the first daywe moved freight until that day,
whether we were net positivefrom all the loads that we lost
money on versus what we mademoney on, at least for the first
few months.
And there were times at whichit was negative, not because we
wanted it to be, but becausewe've refused to ever not step

(08:09):
up and pay a truck, pay acarrier to move a load if we had
to, and we tried to not do it.
Obviously we wanted to makemoney, but that was a hugely
altering thing.
Nobody had ever done it before.
I'd suggested to Paul in thedays of backhaulers once or

(08:32):
twice, if you know, the idea oflike putting a, an insurance
thing in where everybody wouldkick in $10 a load or something.
So we would have this pool andwe would use that to move
freight.
But we had never done that.
So I wanted to try that thistime and it worked and people

(08:54):
saw that we were doing that.
It was the first time anybodydid that.
Right Up until then, brokersused to say whatever and just
fail on freight or lie to thecustomer or you know, just fail.
And we were a no fail, noexcuses thing.
It was different and it worked.

(09:14):
So we were off and running thatway.
And then uh ran into.
First uh Sissler and hisbusiness and Greg Seabolt at GFS
, general Freight Services inAtlanta Started talking to them
a little bit.
Well, they were one that wewere going to sell the

(09:36):
technology to, but got to knowthose guys.
And then I was introduced toWarburg.
So in 2007, I think we did atotal of $25 million in revenue.
And then I was introduced toWarburg, so in 2007, I think we
did a total of $25 million inrevenue.
But Warburg came in andinvested towards the end of that

(09:56):
year and our experience withthem really from the very start,
almost 100% of the time waspositive.
They were great.
So they provided the workingcapital from that time on.
But also they helped us buy twocompanies in 2008.
The first was a company calledIntegra out of Memphis and

(10:24):
Atlanta.
The two guys who were runningthat now have a business called
AddedX, and it was 2008 andthese guys had an all intermodal
company.
So they had one guy that workedfor them that was based in Lake

(10:45):
Forest, illinois, and one day awoman who worked for us drags
this guy into the office.
She had met him at Starbucksand I think she had a coyote
shirt on and he recognized it orsomething and they started
talking and we talked to themabout this idea of combining

(11:07):
their business with ours.
They were all intermodal, wewere all truck.
We were a small company.
They had a whole executive team.
They had a CFO we didn't haveone yet they had a president and
a VP of sales.
They had a.
A logistics business too, Idon't know, wasn't really doing

(11:28):
much.
So we ended up doing a deal andbuying them and when we bought
them, just for the detail, whenwe bought them, they were doing
about a half a million dollars amonth in margin.
They were doing about a half amillion dollars a month in
margin.

(11:48):
And fast forward about fourmonths and the economy implodes
and all of a sudden truck pricesare cheaper than intermodal
prices and it was a disaster.
They were down to like under$200,000 a month from $500,000 a
month in margin and Warburg's,like what the hell is going on?

(12:09):
And I get a phone call, I thinkin June of that year, from
Chuck Herzog, who's one of theguys whose business it was, and
he said Jeff, I'm down here inmemphis where he lives, uh, with
our sales force.

(12:30):
All of our sales folks are hereand they're not happy and like,
well, okay, chuck.
Well, first, why didn't youinvite me?
I had to come down there.
He said I didn't think you'd beinterested in that.
And I said, well, it would havebeen.
I said, well, I'm not veryhappy either, but why don't you
tell me why they're not veryhappy?
And he said well, because theythought when you, you know you
guys said when they, when youguys bought us, that they'd be

(12:53):
able to sell truck, and not justintermodal.
And I said, yeah, I thought sotoo.
Why aren't they selling truck?
And he said because they don'tknow how.
You haven't taught them.
I was like okay.
So I stood back and I said youknow what?
I will not leave my desk forsix months.
I'll take some people with meto help me and I will take every

(13:18):
call.
Have them start talking totheir customers, find out what
opportunities they have and callme with those opportunities,
and I think the first one camefrom maybe John Morrell or
somebody it was at Menards orsome business where it was an
absolute wrong one to start with, because they only allowed like

(13:39):
21 carriers on their property.
So we took two loads and had togive the loads to one of those
carriers, right, and we lostmoney, obviously a ton of money
on those because they knew whatwas going on.
But a few days, a few dayslater, leslie Johnson one of the
women that was selling for themcalls me and she's at Coca-Cola

(14:01):
and she had a friend thatworked at Coke and she was over
there and she had never beenable to sell them intermodal
because the way Coca-Cola wasset up in those days they were
very regional with seven regionsand they didn't ship beyond the
region, which meant that noneof their loads were ever long
enough to work on intermodal.

(14:22):
She said'm down here, um atcoke and and ch is failing on
five loads.
Can we take any of them?
I said, take all of them.
And and she said, well, how doyou know you can move them.
I said, well, because that'swhat we do, just take the loads.
She said, what do I charge them?
I don't care, take whateverthey were going to pay or

(14:42):
whatever, we'll just take them.
And so we took them and we movedthem and that was our start
with coca-cola.
And then after that, rightafter that, the fourth of july
happened and I was at at stacygold's house it was our
controller at the time at thelake bluff parade and my phone

(15:03):
rings and it is the guy fromCoca-Cola Enterprises in Texas,
corporate marketing, and decidedto run a special on two liter
cokes or diet coke or somethingin Texas.
And there's all these extraloads.
And ch wasn't answering thephone and I said we'll take the

(15:30):
loads, we'll move them and wemoved a bunch of loads for them.
I think you were involved inthat, if I'm not mistaken, but
maybe that's not right I have, Ihave a fourth of july memory
that, uh, that that sounds verysimilar.
So pivotal, pivotal.
So we ended up doing that andthen, unfortunately, I mean it

(15:50):
helped our business buthurricanes pointed themselves at
at Texas, uh, I think inSeptember of that year, and we
really started getting goingwith them and we were off and
running with Coca-Cola and andthere were a lot of things that
went wrong with that acquisition.
In fact, I think two yearslater the entire executive team

(16:13):
that we bought was gone.
Most of the operations folkswere gone, but I think we had
kept eight of the 11 salespeoplethat we had and then a few
other operators had kept eightof the 11 salespeople that we
had and then a few otheroperators and it was incredibly
successful because thosesalespeople are the ones that

(16:34):
you know at Backhaulers.
We had never had outsidesalespeople but intermodal sales
is outside sales right, and sowe were now out in front of the
customers with these greatrelationships that these folks
like James Jacobs and Pat andthese guys had Jenkins and
Leslie and John Morell and wewere off and running with these

(16:54):
large customers At Backhaulers.
We had never gone to a grocerywarehouse, we didn't do any
refrigerated freight, none ofthat kind of stuff, so this was
a whole new world, and we grewlike crazy because of them.
Later, that same year, though,we also bought another business.
That was General Freight, theone that Sissler was in.

(17:15):
That was also, you know, moreclassically, a great acquisition
, in that it really did exactlywhat we thought it would do, as
opposed to the disaster-turnedgreat that we had with the first
one.
We kept most of those people fora long time, and some of them,
obviously Jonathan was there inPilbury recently at Coyote,

(17:36):
where he was eventually the CEO,and left, but then we didn't
buy anything else at all until2014.
So after that, all of ourgrowth was organic, but a lot of
it came from, you know, justpeople busting their butts to do

(17:58):
it.
But some of those relationshipsthat were parlayed into other
relationships, you know, weChris Pickett was eventually
able to win a full outsource forHeineken against a competitor,
specifically because a guy fromCoca-Cola came to the meeting we
were having with Coca-Cola WithHeineken, with Heineken, tossed

(18:20):
us out of the room and told theHeineken guys that either they
would use us now or waste a yearand be back to use us the next
year because the other guywasn't going to do it right.
And that relationship lasted avery long time and I think
Coyote still does a bunch ofthat because well, not, I don't

(18:49):
know, funny is the word just.

Speaker 1 (18:50):
It's powerful to me to think about just a quick
statement around leslie andcoca-cola and I am part of this,
which is maybe why it feels soreal and the idea that ch fails
on five loads, however manyloads, and that gets put in
front of Leslie and she sayswhat do we do here?
And you say, just take theloads and we'll move them and
figure it out.

(19:10):
The number of times that weplayed hero at Coyote.
It was so representative of whowe were and who we were trying
to be for our customers.
Because I do remember thatfourth of july it was, it's one
of the most pivotal moments ofmy career and it's, I think, in

(19:31):
a lot of ways it shaped the wayI ran my business.
And I remember I think the way Iremember is I was, I was pulled
out of the pool and, uh, youand myself and ford, and there
were all these shuttle runs like, and we had just like hundreds
of these.
I remember we, we spent like aday, the day at the office just

(19:52):
managing hundreds of theseorders.
A lot of them were shuttle runsbetween Memphis and West
Memphis and then a bunch of themwere long hauls from Dallas to
Memphis or Memphis to Dallas orwhatever it was.
And then the aftermath of ustrying to figure out how to bill
.
We had to have these carrierssend us these PODs and I just
remember sitting on the floorwith Pat Campbell and we were

(20:13):
just trying to match them all up.
There were like literally likea hundred of them, and it was at
the time when a shipper neededhelp the most.
Our phone was always going tobe answered and we were going to
figure out how to solve thatproblem there are one of the
things I would say, though, justto make sure that nobody is

(20:35):
misinterpreting this.

Speaker 2 (20:37):
I think that there really have been two times at
which I really have helped chrobinson.
The first was in selling backhaulers to them.
The second was in thecompetitor that we created for
them, because at some point theywoke up and saw that was
happening and they changed theway they did business.

(20:58):
They stopped failing on freightbecause we were not failing on
freight.
I think we made them a muchbetter company, or helped make
them a much better company, bythat.
I think that was a verytransformative thing for them to
have happen, which is verynatural.
Are you looking?

Speaker 1 (21:16):
to grow your brokerage?
Are you struggling to land newcustomers in these challenging
market conditions?
Look within so many companiesthat tender you freight
throughout the domestic UnitedStates also have business coming
out of Mexico.
A year ago I understand why youmight not have seen that
freight as an opportunity, buttoday Cargado exists and that

(21:37):
means any load coming into orout of Mexico is now an
opportunity for you to support.
In just over a year I've beenable to see Cargado go from
ideation to launch to rapidgrowth.
It's amazing to see how manylogistics companies have been
able to use Cargado to expandinto Mexico to grow their
business.
Cargado is the first platformthat connects logistics

(21:59):
companies and trucking companieswho are moving freight into and
out of Mexico.
If you move Mexico freight orare planning to reach out to
cargado today at cargadocom,that's c-a-r-g-a-d-ocom.
Yeah, I mean, what's the saying?
Something about tides raisingall boats, something like that.
I mean that's you kind ofraised?

(22:20):
the bar, for my perspective isthat coyote raised the bar for
not only what was possible butwhat could be expected of a
freight broker by a shipper, andwe got to a place where
technology was available tocreate even playing fields and

(22:40):
to measure how one performer didagainst another.
And in doing so, it now becamelike you're either going to live
up to the competitors who areat a certain level or you're not
going to have my business.

Speaker 2 (22:55):
Yeah, we were, I mean , regularly in the high 90s for
on-time delivery on people'sscorecards and in a lot of cases
I had out some of the assetplayers, which never made sense
to me, but we were able to do it.
So it was that focus, it wasthe no excuses get the job done.
And, and absolutely core tothat was the people that you

(23:19):
know, marianne figured out howto go higher, right.
All these athletes, all thesefolks that had worked two jobs
in college, that we just didn'tcare of what their GPA was.
We cared about what they woulddo to take care of everything
that they needed to.

Speaker 1 (23:35):
Yeah, talk to me a little bit more about that.
What did a great Coyoteemployee?
What were they like?

Speaker 2 (23:47):
How did they operate?
I think it's exactly what Ijust said.
Right, it's, it's.
It was very self-selective andso many of them came from
recommendations.
I forget who the guy was, butsomehow they found somebody that
was on the purdue lacrosse teamor something like that, and
then they would find five moreof those folks, because the

(24:08):
people that were already therewould bring in folks like them,
even if somebody was theirfriend and they didn't think
they were going to fit and beable to deliver in the same way,
they would never recommend them.
And so that culture of onlybringing the best, you know.
And we had a ton of athletes.

(24:29):
I think, as you know, we had atleast 100 kids that played
either D1 or juniors hockey.
We had, you know, people inthese team sports.
Where these kids would be, youknow.
You knew if they were a D1athlete, they were able to
manage a whole bunch of stuff atthe same time, because they
didn't get through collegewithout doing that.
You knew they were used tobeing measured by numbers every

(24:52):
day.
That's just the way, you know.
That's how sports works, andwhether you win or lose today,
you got to get back up and goand compete again tomorrow,
right.
So you know very early shefocused on that and that was a
huge part of what we did.
Obviously, not everybody was anathlete, but we found that same

(25:13):
sort of type of mojo in othertypes of areas, right.
So I think that was a huge partof it.
It and if you hire the rightpeople, give them the right
tools, they're going to takecare of the customers the right
way and the customers are goingto take care of you.
That was pretty simple.
You know.

(25:34):
I think this is so much of whathas happened in this industry
wrong in the last few years hasbeen because some folks that
came into the industry recentlyand a lot of the money that
supported them, did notunderstand what brokerage is and

(25:58):
why brokers make money.
What is brokerage?
So?
The reason brokers exist is totake care of risk, to absorb
risk and to spread that riskacross a broader group of
customers and carriers.
That's what it is.

(26:19):
That's why brokers get paid.
Get paid.
So all of the idiocy that cameout with a couple of these
so-called digital brokerages,where they were convinced that
if they automated everything,they could take much smaller

(26:50):
margin, or basically the ideathat they could guarantee some
margin, service and rate at thesame time showed a complete lack
of understanding of thisbusiness and, unfortunately, one
of the folks that propagatedthat was somebody whose name I
mentioned before in a digitalbrokerage, where that's one of
the smartest guys I've ever met.
But the idea that you could goin and automate everything, even

(27:14):
though there were many loadsthat we did that CH Robinson did
that, coyote did that werecompletely hands-free.
Their idea was, if they writean app that can move freight
with no hands, you don't have topay the people, so you don't
need a margin, basically, or youneed a very small margin.
But that's not what brokerageis.

(27:36):
Brokerage is about absorbingrisk.
The other piece that they didn'tunderstand is that, for the
most part, the way that thefolks that work at large
companies, at large shippers,are compensated, they're
compensated on a salary plus abonus plan, so that does not

(28:01):
mean that they're paid to findthe cheapest rate on every
single load, the cheapest cost.
They're paid to hit theirbudget.
So if they hit their budget fortheir transportation, meaning
that for the entirety of theyear, if you add up what they
paid to all the carriers, thatit matches what they budgeted to

(28:23):
move that freight, then theyget their bonus If they go above
their budget.
They don't get a bonus If theygo way below their budget.
What happens?
They get a bonus, right, andthen their budget gets cut the
next year because obviously itwas too high, very often by

(28:46):
folks that don't understandfreight and don't understand
freight cycles and don'tunderstand that freight can get
more expensive from one year tothe next without the person
doing anything right or wrong.
And so sometimes, where some ofthese newer companies would come
out and say we will move thefreight for cheaper than
everybody else, that's notnecessarily what that manager is

(29:09):
looking for at a shipper.
They want to make sure that thefreight is delivered on time
and in budget at what theyexpect, right.
And so all of that that lack ofunderstanding of that, you know
, led to a lot of investorslosing a lot of money and buying
into this idea not reallyhaving any clue what they were

(29:32):
doing, which fortunately is nowgone.
So one of the companies that isdoing it is gone, and the other
one, uber Freight, who wasdoing it for a while, has now
fortunately pivoted and is nowbrokering freight the right way,
where their intent is to makemoney right, because the reason

(29:54):
they're being paid margin is toabsorb the risk on any
individual load by spreading itacross many loads for many
customers and many carriers andcapacity.
And that is why size and scaleand density matter, because if
not, you don't have the abilityto spread that margin over

(30:15):
multiple companies.

Speaker 1 (30:18):
Yeah, I mean Uber went so far as to hire a former
Coyote, Todd Sauter, greatformer coyote to kind of help
transform their business into amore well, into an eventually
profitable kind of brokerage.
So I'm curious now will youdive a little bit more into the
risk concept, because I thinkthat's interesting and few

(30:39):
people maybe have talked aboutor understand that really.
Like, what does that mean forthe broker to job, to absorb
risk on behalf of the shipper?

Speaker 2 (30:55):
So let's say that that same widget maker from
North Carolina has five carriersand a hundred loads that they
need to move.
Today there's not enoughcapacity out there.
I mean there has been morecapacity recently, but generally
there's some loads that arereally good for asset-based

(31:17):
carriers and some that are notright.
So really good asset-basedcarriers today run their
businesses in a very intelligentway.
The way to do that is to makesure that you are not wasting
your resources, you're notdeadheading too much, you are

(31:38):
not using too many trailers andtrailer pools that you shouldn't
, but mostly that you run a fullnetwork, right?
So let's say that that that guyin North Carolina is shipping
out loads all across the country.
He's probably going to give hisloads to to the Asset based

(32:04):
carriers that are going to wherethey need to get to, but then
he's going to have loads to gointo, like Idaho, that somebody
doesn't want to go to, or let'ssay they're going.
You know he's got eight loadsto Florida and he's got two
carriers that each like twoloads a day to Florida, but he's
got four more that he can't usehis normal asset-based carriers

(32:26):
on.
So he contracts with a brokerto do that.
So what that broker has to do.
He has got to work with 400 or800 or 10, you know a thousand
different carriers that will goto Florida some of the time.
Some of them might be basedthere, others occasionally have
loads they need to pick up downthere and if you talk to enough

(32:47):
of those carriers or interactwith enough of those carriers,
you'll find, as a broker,eventually, somebody that will
move that load.
You get paid a margin becausesome days you just can't find
anybody that's going to go toFlorida or that wants to go to
Florida, so you might have topay them to go to Florida,

(33:09):
deliver down there and thendeadhead all the way back up to
South Georgia, to Macon orSavannah or somewhere, to get a
load.
And that's what you're doing.
You're spreading that acrossall the different customers and
carriers.
You have Right, spreading thatacross all the different
customers and carriers.
You have right in some case.
In some cases you can justround trip a guy because one of
your other customers has a load,reload back up out of flora.

Speaker 1 (33:33):
That's the whole idea and that in in a way that
before that was, before coyotecame around the risk didn't
necessarily feel like you had totake it because you could just
choose not to move the order.
And now you had kind of createda new environment where you

(33:56):
know it was a requirement totake on the risk if you were
going to get business.
And so where I think there havebeen a lot of companies,
there's a reason.
There's a couple of reasons whyhundreds, maybe even a thousand
people have been hired out ofCoyote to lead new brokerages in

(34:20):
the last 10 years.
Like people saw the successthat Coyote had.
People saw the end result withthe acquisition by UPS and saw,
like holy cow, these guys had itfigured out, how do we grow?
Like they did and they wouldhire whoever they could get from
Coyote and then throw them intothe leadership position and be

(34:42):
like do it, like make it likethey did.
And when you really simplify itto just like, ah, no excuses.
Like we just took all the loads, we made commitments and we
always moved them.
If you think that it's just thatsimple, you likely end up where

(35:04):
a lot of these companies did,which is floundering over time
and not really reaching Fewcompanies have grown the way
that Coyote had.
If you understand theimportance of a guy like Ford
and the team that he created andthe structure created for how
you develop carrier capacity,how you go about pricing

(35:26):
business in a way that canreduce risk by knowing your
lanes, that you have strongerprivate fleet capacity on that
you know can be consistent orstrong enough relationships and
the technology to support it,you realize it's a way more
challenging thing to effectivelymanage that risk in a way that

(35:47):
allows you to be a profitableand growing business.
What I'd like you to do is talka little bit about the nuance
of how to make that type ofbusiness profitable.
What are the elements, outsideof no excuses and great people,

(36:08):
that allowed for Coyote to growat the rate it did and be as
valuable as it was of a business?

Speaker 2 (36:22):
Clearly, the technology was an enabler only.
It was only an enabler becausewe had the right people, the
right people with the righttools, taking care of the
customers the right way right.
And by customers I mean thecustomers and the carriers,
because those things are arecompletely codependent, and I

(36:46):
don't think there's a differentway to put it right.
I mean it's critical to get tosize and scale, uh, because
you've got to have the densityand that density probably comes
at that at least a thousandloads a day kind of thing, um,
anything sort of short of that.
It's really hard to be good atthat Right Now.

(37:10):
The industry as I see it nowhas changed a lot, right, but
the whole post and pray thing Ithink people just are way too
dependent on posting freight onthis or that load board and
having somebody hopefully callin.
I was listening to one of yourpodcasts about having to answer

(37:33):
all the calls that come in andnot being able to answer them.
For me that's mostly becauseyou posted all the loads and you
have 1,000 carriers all callingfor the good load and nobody's
calling for the loads that aremore difficult to move, except
occasionally somebody does andthat's why you do it.
I get it.
But developing more specific,better carrier relationships

(37:55):
where you need them in a customway that's based on the freight
that you get, that to me justmakes still makes all, all the
all the sense in the world.
That, to me, just makes stillmakes all the sense in the world
.
So you know it's interesting,not all of those people that

(38:23):
worked at Coyote were a greathire for the folks that hired
them.
Because you know there arefolks that just weren't as good
but a lot of them were right andthe reason they were hired is
because they were great peoplein in the first place.
But in other cases somebody youknow some folks have gotten a
free ride just by having that ontheir on the resume.

Speaker 1 (38:37):
Well, let's talk about the technology then for a
minute.
Just given the development likelooking at where express was
versus what Bazooka became howdid you think about knowing you
weren't going to sell thetechnology externally?
How did you think about howmuch to invest in building
technology, given that you hadtaken private equity money?

(38:58):
How do you come to the rightnumber of what's worth investing
in building so that we can getto XYZ?
Talk me through that thoughtprocess as you're growing the
business.

Speaker 2 (39:14):
Honestly, we didn't really think about it.
We just knew we had to invest.
There was nothing to buy.
You can go buy something andmake it work.
At that point I mean you could,but they weren't good.
You know, I remember going to aTIA convention, right as that
thing, as we were startingCoyote, and it was like you got
to be kidding me.
These are what you can buy.

(39:35):
Like one of them still requiredall caps entry because they
didn't know how to sort withmixed case.
I mean it was bad.
So there was no question aboutwriting it ourselves.
The you know, once we hiredDarren Cockrell, he did

(40:00):
professionalize that a lot moreand put something in place that
really managed the whole processto make sure that the work we
were going to do made sense todo as a company.
But I don't think we did thatbefore he got there.

Speaker 1 (40:18):
And as you take me through the years of Coyote,
when did you know this thing wasworking?
This was going to be a reallybig, successful business.

Speaker 2 (40:36):
From the start we knew it was going to work.
I was never worried and wecertainly knew it when we got
our first loads from customersthat we had had before in the
olden days.
Certainly knew it when Warburginvested in us.
Certainly knew it whenCoca-Cola was starting to use us

(40:57):
and Pepsi and all of thoselarge customers, and when we won
that full outsource from fromEineck and frankly, that was the
one of the coolest things ever.
Right, and so it just, it wasmagic.
I mean, it was magical coyote,from the very start till our

(41:17):
relationship started with withUPS as a you know where they
were a customer, uh, all the wayuntil we sold it.
Magical the whole time.

Speaker 1 (41:30):
So you mentioned before joining a Japanese speech
contest and the aftermath beingnever being afraid to speak
publicly again.
When I've talked to peopleabout your impact to them in the

(41:51):
past, there are two things thatget brought up a lot.
One are your speeches and theother are your howlers and the
quote-unquote coyote hushHowlers and the quote unquote

(42:14):
coyote hush, which was in theminutes.
In the aftermath of you sendingout a howler, which was like a
newsletter, you could hear a pindrop on the floor because
everybody went from talking onthe phones to just staring at
their computer screen.

(42:36):
Dialed in to whatever it is,you had to say Talk to me about
what that experience was like.
How did you use that skill ofcaptivation to charge these
people into being so bought intowhat we were doing?

Speaker 2 (42:51):
I mean, I think it was all about just open, brutal
honesty.
That's the reason people like meto come and speak at
conferences and to investors,because I just have never been
afraid to speak my mind forbetter or worse.
I mean, I am a big supporter ofthe right kind of people and

(43:13):
not of others and businesses andpeople and things like that.
I mean, what you see is whatyou get from me, as you know,
right and sometimes to a fault,but it is what it is At this
point.
It's not changing.
The and the same goes for whatI would tell our folks in the

(43:33):
howler or in the truck stopshere before that, and that is
that that you know.
I would tell them exactly whatwe were going to do and then we
would go do it, if at allhumanly possible, and those
people knew that I was neverasking them to do anything that
I hadn't done myself or wouldn'tdo myself.

(43:54):
And, um, you know, I think thatI think I discovered early at
Backhaulers that where, in someways, we didn't have all that

(44:18):
much structure, and so what Ifirst started doing and what
became the truck stops here is Iwould send out these little
letters, these little memos outthese little letters, these
little memos or these notessaying okay, this is what you
would call today an SOP, this ishow we are going to do this.
Everybody needs to understandthat from now on we are going to

(44:38):
do this.
It was a way of gettingeverybody to do something the
same way, and the more I didthat, the more people expected
me to be the guy that did thatand and that brought me the
ability to tell people what todo.
Right, I mean that just at thatpoint.
You know, I was about to saybefore there were a couple of

(45:00):
other books that I read early on.
One of them was by Deming.
Deming was was the guy, uh, who, basically American guy that
taught the Japanese quality fortheir, for their automotive
industry.
Uh, and still worth reading, Imean, it's, it's.

(45:22):
He was fascinating in what hewas able to figure out well
before he should have, and thatwas to build, basically take the
human element out of any kindof a technology, right?
So he was the one that figuredout for the worker take away the
ability for them to even make amistake, or take away the

(45:44):
ability for them to even make amistake, because people will
make mistakes if they can, notbecause they're not trying, but
eventually you just makemistakes.
So if you have the capabilityof building a system that
prevents that in any way, shapeor form takes it out, then you
should figure out how to do that.
And so I started leveragingthat into the way we did stuff

(46:08):
at Bad Callers and startedsending out things where I would
figure out okay, if we did itthis way, that removes almost
every possibility of making amistake on this.
So let's all do it this way andlet's train that, and everybody
does it that way and you're notgoing to make a mistake,
whether it was a technologything or just a systematic way
of doing so.

Speaker 1 (46:35):
And it's fascinating to me, I guess, that you started
by giving people essentiallySOPs and that turned into a kind
of masterful form ofcommunication between you and
your employees.
That what I feel like.
I mean, I just remember thesespeeches and I remember just

(46:55):
sitting there looking at you andthen looking at the crowd and
looking back at you and it'sjust this connection that was
like unbreakable and, um, it wasa really cool thing to be a
part of and I just, I mean it'spassion it's passion.

Speaker 2 (47:14):
That's why people follow passionate leaders.
They don't follow passionpeople that are not passionate.
Right, I mean it's.
It's why it's hard.
And this is not a knock onjonathan at all, but you know,
jonathan didn't have the samepassion for I mean, he was.
I thought he did a great jobwhen he came, you know, when he
took over coyote, and he did aphenomenal job for us and

(47:37):
everything that we did inbuilding the business and
selling it to ups.
But you know he's never soldfor his supper, right, it's it's
.
You know, it's different fromany time.
Taking over from a founder isalways different and difficult.
It's hard and there are peoplethat are good at it.

(47:57):
I don't think I couldnecessarily do it Right and so,
but it's about that passion.

Speaker 1 (48:11):
And being able to articulate it in a way that
helps the team identify.
What are the things we need todo to make this dream a reality,
and how do we do them together?

Speaker 2 (48:17):
Yeah, yeah, you got to have the dream in the first
place and then you got to beable to explain the dream in a
way that people can understandand buy in on.
Yeah, you have to have enoughother people that also believe
in the dream.
And you know it's no differentfrom what we're doing now, right
, where we have taken this thingthat was impossible to do,

(48:49):
create what was on thatmainframe and build a new TMS
that would work for assetcompanies and brokers.
Nobody's ever built a TMS atall that works for shippers as
ours does now shippers withprivate fleets, dedicated fleets
, one-way truckload fleets,intermodal brokerage, power-only
brokerage, which I think isreally the only new thing
practically in the entireindustry in decades since Al

(49:13):
Gore invented the internet orwhatever.
In a lot of ways, it's.
It's that the task is difficult, that the dream is difficult.
That makes it worthwhile.
It's, but you got to be able toback it up, right.

(49:35):
You got to be able to throwyourself into it, to convince
people that you're going to beable to do it and take off
running, because not every dreamcomes to life, right.

Speaker 1 (49:45):
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Talk to me about the value ofthe relationship between the CEO

(50:50):
and in a training class and theway that you thought about.
That's funny because, again,you haven't heard this, but I
interviewed cole stevens, whoyou know, and he talked to me
about how his dad, kenny, who'slike you know, just like you
kind of walks around and,wherever comfortable clothes
he's wearing and you know,orients the training class, his

(51:15):
new of drivers.
He's the first person they talkto and make sure they fully
understand the business.
And you see that a lot withsuccessful leaders is they
connect with their newestemployees as early as possible
and that was something that youdid and I'm curious if you could
take me into your brain forwhat you thought the value of

(51:37):
that was and how you thoughtabout those interactions with
new hires definitely.

Speaker 2 (51:48):
I see that a lot from our customers.
I mean you know, robert lowfrom prime inc is, I mean until
until the basketball courts intheir building in Springfield
have been taken over by Pickle,by Pickle courts, that they have
now been transformed, robertfor years and years into his 70s

(52:08):
would go and play basketballwith those drivers all the time.
I mean hugely important DerekLeather's, the same way I mean
from from Warner.
I mean these guys, they knowthat that they don't, they're
nothing If those drivers are notperforming.
It's the same thing even in abrokerage, right?
If, if the if they don't havethe right employees, they don't

(52:29):
get the right employees in thefirst place and they don't
connect with them, all's lost,it's lost.
And so for me there were acouple things.
Number one I got to meet thepeople right away and very often
I would go back and say toMarianne, you know, that person

(52:50):
would be a great trainer someday.
I think what do you think?
Or that person could recruit,or this is somebody that speaks
French or Spanish.
So if we ever are doingbusiness in Quebec or in Mexico,
we could do this.
Or this guy's you know fatherworks at at this company.
That could be a customersomeday, or?
Or?

(53:11):
I mean there's a millionreasons to want to get to know
those new people that are comingin the door, that that that's
the first thing.
Right, it helps you, just likeit.
You know any CEO that's not outin front of customers all the
time is missing everything.
Right, because they're not.
How do they run their businesswithout knowing what the

(53:31):
customers want directly from thecustomer's mouth?
It's the same thing with thosenew employees, right, where
you're hearing why they took thejob.
You're hearing what theirexperience was, what kind of
family.
I used to ask them what theirparents did.
You know, you get to know themright from the start and I would
try to.

(53:51):
You know, first of all, I wouldtake every at Coyote.
I would take any visitors thatcame in to visit us, would go to
that training class, everybody.
If you ever meet a Coyoteperson, a former Coyote person,
you'll know when you meet themby how they introduce themselves
.
We drilled it so many differenttimes.
They stand up, they look theperson in the eye, their hands

(54:13):
are quiet.
They're not flailing all overthe place.
The person in the eye, theirhands are quiet, they're not
flailing all over the place.
Even today at Mastery we haveprobably 15% of our workforce
was at Coyote at some point.
When folks are introducingthemselves in their former
Coyotes, it's just reallydifferent from if they were from
somewhere else, even if theywere at CH or something before.

Speaker 1 (54:33):
So it's an interesting transition because
you mentioned bringing customersinto the training classes and
there was something very uniqueabout how you would tour or the
value of a tour for a customerwhen they would come to Coyote,
and it's funny to think aboutnow in today's largely remote

(54:55):
world how this is very different, but this was a pivotal part of
the sales process, potentiallyfor a customer to walk the floor
of Coyote with you, and I'dlove for you to just explain how
you thought about a tour andwhy you carried them the way you

(55:18):
did, and you can include thepart about bringing them into
the trainees, because I thinkthat's valuable so we would
always end in the training room,uh, but look, if it was a
shipper that was coming in, thefirst thing to do was to show
them the massive group we hadfocused on carrier capacity
that's how their freight movedand explain how it worked and

(55:40):
what everybody did and let them,if they wanted to hear how
those conversations were goingwith those carriers and realize
the uniqueness of what we weredoing in that way Right, that
was.

Speaker 2 (55:53):
I mean, you would see a sea of those people that was
sitting there guaranteeing thattheir freight was going to move.

Speaker 1 (56:04):
And some people.
Everybody had the same no, notthe same thought.
Everybody had a thought.
When they saw that bald head ofyours coming around the corner
with a customer, everyone wasthinking is he coming to my desk
?

Speaker 2 (56:19):
Because I would do that.

Speaker 1 (56:21):
I'd plop the customer down and say, listen to this
guy or that girl or whatever,watch what they would do With no
forewarning, so you didn't knowif he was coming to you and
some people got really excitedabout it because it was a chance
to show off.
It was a chance to show whatthey knew and that they were
great at what they did and thatthey wanted to be the one, when

(56:42):
Coca-Cola or Pepsi or whoeverwalked through the door, that
they were going to be the one toshow them how we talk to
carriers.
There was something veryprideful for a lot of us about
potentially having you show upbehind our desk, and I'm sure
others were terrified of it.
Like, I don't want to be put onthe spot, but talk a little bit
more.

Speaker 2 (57:02):
I'm not even sure why .
Always I would pick somebody,but it may be that you know this
person graduated from this gameschool, that they did, or
they're from the same town orwhatever right there was.
Whatever reason, I like to moveit around because it was one of
the things that you know helpedpeople stay on their toes.
So I would take them throughthe carrier floor and then I

(57:22):
would take them and show themour operations floor.
You know they would see wherethe people were selling.
But I wouldn't spend much timeon that, right, because they
don't care that we're going andfinding other customers, except
to the extent it helped their,you know, helped the finding
other customers, except theextended help there, you know,
help the whole system work well.
But explain the way those opsfolks worked and and how they

(57:43):
were being compensated to takegreat care of the customers.
I would take them through HR andexplain how we hired people,
that whole process, and theywould see that I would take them
up to our it group and, youknow, show them what we're doing
with the systems and that wholething.
Right, because there weren'tthat many of us at the time that

(58:05):
that had these type of of itshops, clearly, um, and then end
in the training room, right,and have the customer introduce
themselves and their company andin a lot of cases that would
also help that customer sort offeel, the buy-in.

(58:25):
They're part of the wholeprocess, they're part of
training folks right.
Now we would also send thosetraining classes out to
customers, right, would alsosend those training classes out
to customers, right.
John Bendick from Norco had tohave received I don't know a
thousand at least coyotes overthe course of time as and he's a

(58:47):
friend of mine as a, as a favorto to help these kids learn,
and they would go eventually,once UPS bought us to the UPS
hub and they go to a railheadjust to see what intermodal was
and all sorts of stuff.

Speaker 1 (59:02):
Yeah, the tour concept was something I stole
from you, borrowed from you,used from you, learned from you
is probably the best way to putit.
And bringing the shipper intothe training class and then
letting them talk, asking themto teach them something was so
fun to see.
And you could tell these guyswere like wait, I get to have a

(59:23):
little impact on these 15 kidswho started a week ago and then
they just, you know, at firstthey maybe seemed timid and next
thing, you know, they've beentalking for 10 minutes, giving
them every piece of gold theyhave.
I'm like don't do this, don'tact like this.
If you come to me like this,I'm way more likely to be.
It's like it brings them intothe process in a way that I

(59:45):
definitely understand how itgenerates buy-in.
So, all right, let's talk aboutthe next phase.
So you know, company hasmassive success.
It's time to sell.

(01:00:05):
I mean, when did you know itwas time?
How did you know UPS was theone versus?
You know anyone else who wasinterested?

Speaker 2 (01:00:22):
one versus you know anyone else who was interested.
So the um, you know 2014 wasreally a pivotal year.
We grew from a billion to twobillion dollars in that year.
Uh, half of that was organic,the other half was was buying
access america.
Uh, and just a shout out to Ted, who you interviewed, I think,
in your second podcast.
That guy is unbelievable.

(01:00:45):
What he's done with the schoolthat he and his wife created in
Chattanooga is unbelievable, andhe had built a great business.
And that's the funny thingabout it is that when he
originally reached out toSissler, I told Sissler don't
waste your time talking to him,we'll never buy him.
Sissler ignored me, fortunately, and eventually we did a deal

(01:01:10):
with them and acquired them, butthat was 14.
Warburg had invested in, in, in,oh, seven.
So you know there are very longhold great private equity group
, but seven years is seven yearsand at some point you got to
start making plans to dosomething with it.

(01:01:32):
So we were doing the two trackthing, where we would either
have gone public we had got allof our stuff together, filed to
go public and everything elseand at the same time we were
having conversations withpotential acquirers.
So we had known UPS forprobably six or seven years by

(01:01:54):
that point, and I thought UPSstill think UPS is an incredible
place, probably six or sevenyears by that point.
And you know, I I thought UPSstill think UPS is an incredible
place and incredible business.
Um, and they were my by far mymy um preferred answer, although
we got to meet a group anothergroup, that is, is from Mexico

(01:02:17):
actually that I don't know ifI'm allowed to name them, but
they were also a phenomenalfamily-run business that was
interested in acquiring us atthe same time and that would
have been very different butalso very cool.
Also very cool.
Oh, and things heated up when,I think Alan Gershon Horn saw a

(01:02:42):
news article that had leakedabout us getting ready to go
public.
And I don't still don't knowwhether Warburg leaked that on
purpose to try to have thathappen or somebody.
Actually, I don't know how theywould have figured it out,
cause it was not a big group offolks that knew that we were
doing that.
But Alan reached out at thatpoint.

(01:03:05):
I'd known him already fromtaking care of UPS as a customer
and the idea for UPS at thetime was, I think they were
about a $50 billion package anddid about $10 billion of other
stuff with their supply chainbusinesses and the idea at the

(01:03:25):
time was to turn it into a $100billion package company and a
$100 billion logistics companyover time that we would be part
of.

Speaker 1 (01:03:36):
The logistics part yeah, and so the deal goes
through and I mean, is iteverything you imagined?
What, what, what, what kind ofwas your plan?
I mean, did you know you weregoing to be be leaving to do ups

(01:03:56):
stuff right away, or yeah?

Speaker 2 (01:03:58):
that was the idea.
I really was interested indoing that.
So immediately we took sissler,put him in charge, um and I
switched over to the ups sideand I started doing a, a
worldwide tour of UPS and I meanit's really an unbelievable

(01:04:19):
place.
You know, I got to see peopleputting on those dress browns
first thing in the morningeverywhere from Singapore to
Shanghai to California, toWashington, to all over Europe.
I mean it's pretty amazing howcommitted folks are.

(01:04:39):
I've always said that peoplework for people.
They don't work for companies.
I think UPS is the exception.
I think people work for UPS asa company and I think it's
really really interesting andcool ups as a company and I
think it's really reallyinteresting and cool.

Speaker 1 (01:04:59):
Why do you think, how do you like if you could just
put a guess to why how theirculture is is such that people
are so loyal to the company?
What do you think makes it thatspecial in that way?

Speaker 2 (01:05:14):
I think part of it is a lot of those folks started
off part-time, throwing packages, as they would say, and
eventually ended up there andit's you know, they do a
phenomenal job at taking care oftheir people Phenomenal job.
It's interesting with the unioninvolvement and the contentious

(01:05:37):
negotiations that happen ascontracts go by.
But it's amazing I always sortof try to characterize it as a
cross between the discipline ofthe US Army and the mystery of
the Catholic Church Somewhere inthere, the US Army and the
mystery of the Catholic Churchsomewhere in there.

(01:05:57):
Because when UPS would say tosomebody, here's an opportunity
to go open a new source centerin Bangladesh or wherever people
would go Didn't matter.
People would have been at UPSfor 35 years and have had seven
completely different careersthere and they, they love that

(01:06:20):
super committed.

Speaker 1 (01:06:25):
So we're going to wrap on coyote and I just want
to wrap on a positive not thatthe sale wasn't a positive, it
was but I want to like get tothe heart strings of coyote.
For you, what was your favoritemoment?
When you think back on, likethe entirety of what you and
mary and the team built atcoyote, what was the favorite

(01:06:45):
moment or most proud moment?

Speaker 2 (01:06:47):
you can give me two, or just one, if they're the same
, because definitely that whenheineken awarded us that
business, that was definitelyone of them.
That was such a transformativething, you know, definitely

(01:07:11):
being Coca-Cola's carrier of theyear, winning their thing all
the time.
I mean we were doing 450 loadsa day for those guys, that was
huge.
I think that.

Speaker 1 (01:07:33):
Okay, at Molo we built a great company and I'm
proud of the work we did.
We knew when to ask for help,and sometimes that meant going
outside of our own company.
I'm proud we built an ecosystemof trusted partners like
metaphor.
When we need a differentiatedindustry expertise in business
consulting or technologyservices, we look to peter ryan

(01:07:53):
and the team at metaphor.
They've consistently deliveredvalue in the transportation and
logistics space for over adecade for mid-market and
enterprise brokers, for shippers, carriers, private equity and
freight tech companies.
At Molo we use Metafora to solveproblems we simply couldn't on
our own.
Metafora is the only partneryou should trust to help you win
, whether that's doing ops andtech diligence, growing revenue,

(01:08:16):
optimizing spend or selectingand building software.
Go check them out atmetaforanet.
That's M-E-T-A-F-O-R-A dot net.
So you sell the company.
Warburg is ecstatic, they makea billion dollars on the deal

(01:08:39):
and you certainly did well.
And after a while ups, youdecide not for you and you
retire.
Right, that's the word you wereusing for a minute.
Okay, so you've now built twovery successful businesses.

(01:09:00):
You have enough money that youdon't need to work again for the
rest of your life.
You're in your 50s, you'veretired.
Why would you start.
Why did you start?
Why go back?
What, what one of my kidscalled?

Speaker 2 (01:09:14):
me, and so they had this logistics company and
trying to use this off-the-shelfsoftware in it and it wasn't
really working for them.
What was I supposed to do?
Say no, I'm not gonna helpthat's fair.
So okay, first of all, I have nodesire to ever be retired.
Hey, I I was retired for fiveyears at the right time of my

(01:09:36):
life, when you were playingfootball and Johnny and Brian
were just born, and I wasexhausted.
That was the right time to beretired.
Now is not the right time.
I don't ever want to be retired.

Speaker 1 (01:09:54):
Why.

Speaker 2 (01:09:58):
Of building stuff as you know, I don't like golf, as
you know.
I do like to cook, but youcan't just do that.

Speaker 1 (01:10:15):
I mean, you like to solve problems, you like Sudoku,
you like crosswords, and it'sone of the things that's always
been fascinating is how you justattack a problem in a way that
anyone who hasn't seen it beforeit's like what the hell, how
does he do that?
So I guess it's just such a bigproblem to tackle.
So talk to me.
I mean, yes, yes, I called youand we had.

(01:10:40):
Molo was a few years old, andwhat year was this?
20, 2019.
Yes, so molo was about twoyears old.
Um, how big were we?
Five.
So we had done 40 million inrevenue in 18 and 100.
We were doing 130 in 19.

(01:11:00):
So we were getting to a pointwhere the software we were using
was it was just becoming a moreof a nuisance than than
anything else.
And um, yeah, I remember, Iremember Vogrich and I talking
about it like man, it would justbe great if you would just
build a TMS and you hadn't.

(01:11:23):
It felt like.
I remember there was a.
We were flying to one ofBrian's games in, I think, omaha
.
Actually, this game was in Iowaand I remember showing you some
of how we were doing, like Iwas showing you some of the
customers that we landed.
You were kind of surprised, Ithink, like at where we had
gotten to and the idea had justkind of come to mind of you

(01:11:48):
maybe getting involved to helpwith the technology.
And then I remember the nextmorning we had stayed in a hotel
room and the next morning I getup and I meet you for breakfast
and you're like all right,here's the plan.
It was as if overnight you hadformulated the entirety of a
business, for what mastery wouldbecome.

Speaker 2 (01:12:10):
Yeah.
I don't think you'reremembering that right, because
I had no idea what I was gettingmyself into.

Speaker 1 (01:12:14):
That's pretty funny right because I had no idea what
I was getting myself into.
That's pretty funny.
There's.
There certainly was a lot ofconfidence on and and and you
know you had, you had written alot of shit down.
Uh, you're like, and then youknow this could be what this
looks like and this could bewhat this looks like that
probably is true, but that wasbefore a very, very pivotal

(01:12:36):
moment.

Speaker 2 (01:12:36):
That happened in maybe April of that year.
So that says I mean theoriginal idea was to build a
brokerage TMS, first for you andthen to be able to sell it to
other people.
We knew we could do that right.
We'd done it before, itwouldn't be all that hard, I

(01:12:57):
thought.
And then I had heard from AlanGershenhorn, who was the guy at
UPS that we did the deal with inthe first place, and Alan had
retired and he was working witha group called 8VC out of
California at the time, now outof Austin, texas, and he asked

(01:13:22):
me to come and speak at one oftheir events and I said no, I'm
not interested.
And he said, well, it's atMeadowwood in Napa.
So I said, okay, I'll go.
And I agreed to go and speakthere and I did.
But the key thing is that whileI was there I met Mark Rourke,

(01:13:44):
the CEO of Schneider, andShaleen Devgan, his CTO, and
Shaleen is as much responsiblefor what Mastery is today as I
am.
I mean, his vision was that theworld needed a TMS that could

(01:14:05):
work for everybody, that theworld needed a new, modern TMS
that could be the only TMS thatthey needed for all their
businesses.
Tms that could be the only TMSthat they needed for all their
businesses.
At the time, their brokerageand their asset businesses were
on two separate pieces oftechnology and took an hour just

(01:14:26):
to take a load from their assetbusinesses and get it ready for
the brokerage.
It was just very, very, verydifficult.
And so, within I would say avery few weeks of having met him
, we had a deal with them tobecome a longtime customer for

(01:14:49):
them, to invest in Mastery andto make this a TMS that would
work for especially the largestshippers, carriers, brokers and
all the combinations of those inNorth America.
Needs needed, needs stillsomething that allows for

(01:15:19):
collaboration between thoseplayers, because it's built on a
very modern tech stack that'sAPI, connectable to absolutely
everything.
So that really first agreeingto do this for Molo and then
Schneider's input was criticalin what we created Now at Coyote

(01:15:49):
.
Our tech stack was very easy.
It was all Microsoft, it wasall NET.
Today's tech stack is athousand times more complicated
and more difficult.
To write a cloud-first app likethis, like what we've done, is

(01:16:12):
ten times as much work as doingthe same thing for an on-prem
system, because what we'reserving up is just a whole bunch
of web pages and a whole bunchof HTML that's being held
together with all sorts of magicby all the technologies that
people have built around ittoday to make all of that
possible and work.

(01:16:34):
But each individual web page isstill a web page.
It's not all that differentfrom when you look at something
on Wikipedia or something right.
It's all of the structures, allof the work, all of the way
that data works and is heldtogether.
And you know, in this business,anybody that's operating in our

(01:16:57):
industry is probably going tohave to have three loads open at
the same time in any givenpoint in time, plus 15 other
things they're working on.
Web pages aren't built tounderstand that right.
So if you leave one and go dosomething else for a minute and
come back to the first one,remembering the state you were
in and what was going on andwhat was there and what you had

(01:17:18):
saved and what you hadn't, andall this kind of stuff is a huge
amount of effort and work to do, and I had no idea at the time
that it was that much moredifficult.

Speaker 1 (01:17:31):
Yeah.
So I mean five years intobuilding the technology versus
what you had thought going in.
What's the difference Six yearsinto building the technology
versus what you thought going in?
What's the difference in whatyou thought the process would be

(01:17:53):
versus what it actually was?

Speaker 2 (01:17:56):
Everything is completely different.
The technology is way harder,as I've heard you say on this
podcast, other podcasts, thatyou've done everything takes way
more money and way more time todo than you think it's going to
, and then that it did in theprevious tech stacks.
Because of all the complexityof it, I also did not realize at

(01:18:18):
the very start what anincredible opportunity this was,
the fact that this does notexist at all.
There is not another scaled TMSthat you can go and buy in
North America, at least rightnow.
That is cloud native, uh, thatcan do what the system can do,

(01:18:40):
that, what it can do for abroker, for an asset-based
carrier, one-way carrier ordedicated fleet or a private
fleet.
Private and dedicated fleetshave been just completely
ignored by anybody that's everwritten any of these things,
except as a sort of afterthought.
We'll try to make this or thatwork Right, there's nothing out

(01:19:02):
there.

Speaker 1 (01:19:03):
What's different about running a private
dedicated fleet versus just aone-way truckload carrier?
That makes this a better systemthan what could have been out
there for them as an assetcarrier alone.

Speaker 2 (01:19:21):
It's too long of a conversation to have right here
right now, but most of it isthat generally, dedicated fleets
are running around trips allthe time.
That's easy because they'retrying to get back, but there's
the complexity of what they'redoing for their backhauls and
sharing the revenue.

(01:19:41):
The biggest part is that thewhole invoicing thing
practically across the industryis all done by spreadsheet.
Most shippers not everyone.
Most shippers requirespreadsheets for billing and
most carriers bill viaspreadsheet not everyone.
Most shippers requirespreadsheets for billing and
most carriers bill viaspreadsheet.

(01:20:02):
Not EDI, because there areelements to it that are
lane-based, that are load-based.
There are elements that areoverhead-based, meaning you have
on-site management that costs acertain amount of money.
There are technology charges,so it's a very different
scenario in terms of creatingthe billing and all that.

(01:20:25):
There are promised number ofdays in service for drivers and
how many they actually did.
That all impact each other andin some cases that's sort of
bundled across multiple sites.
It's just very different.

Speaker 1 (01:20:43):
And in your experience again, I've only
worked in brokerage, so this isall new to me.
On the asset side, in yourexperience, the companies that
at this point we've seen theindustry move to a blurred
execution strategy for manycompanies, most asset-based

(01:21:05):
carriers with, say, at least 100trucks, likely have a brokerage
of some sort, whether smalloverflow or meant to be its own
entity altogether, whether smalloverflow or meant to be its own
entity altogether and manybrokerages are now getting into
trying to own or lease trailers.
So the lines are blurring alittle bit and I guess from your

(01:21:26):
understanding has there beenother systems available in the
market for a company to use thathas multiple modes or multiple
business units, like brokerageand asset, that can all function
under the same system oh, to acertain extent, yes, but they're

(01:21:46):
older technology, right?
they're not cloud native and howimpactful is the cloud-native
architecture to improving whatyou had before?

Speaker 2 (01:22:01):
Well, there's two things.
Number one those systems havenot been improved.
The fact that they'recloud-native is one thing in and
of itself, but it's alsoindicative of the fact that when
this technology which is theright technology came out, they
didn't restart and rebuild theirtechnology.
They're trying to port it tothe cloud, these legacy

(01:22:23):
providers.
That's different from startingover, where there's API
connectivity to everything,where everything's built on the
modern infrastructure and youcan work from anywhere, as long
as you can see the internet.
I mean it's just.
It's in and of itself, it'sit's.
It's one thing, but it's alsoindicative of of just how the

(01:22:46):
software has been dealt with ornot, right, I mean it has.
It's been a, a space that'slargely been left alone by tech
companies.
You know, partially, becausesome of them don't think that
it's big enough to go attack andothers that just realize it's
really hard.
I mean this is really hard.

(01:23:06):
These systems are super complex.
Just the driver paid modulesthat have to exist.
Are, you know, a very a bigcarrier will have 250 different
driver pay modules that have toexist.
Are, you know, a very a bigcarrier will have 250 different
driver pay programs.

Speaker 1 (01:23:23):
We.
I talked to Cole about thisagain.
You won't have heard this, butby the time this airs you will
have heard.
Cole and I spent five minutesfrom Steven's trucking talking
about driver pay and I mentionedthat that was one of the first
things that I learned as like anuance in an asset-based carrier
that I was just dumbfounded byas a former broker or as a

(01:23:47):
broker in general, that I justhad never thought of that as
part of the nuance to what achallenge it is to effectively
operate a trucking company.

Speaker 2 (01:23:57):
It's managing trailer pools.
I mean there's just, you know,and as you said, I mean I think
honestly that, as I said before,I think power only brokerage is
the really the biggest newdifference, new thing that has
happened in technology in thisindustry forever.

(01:24:19):
I think that over my career,there are three things that have
changed, regardless of what allthese little startups have
tried to pitch as beingreinventing know, reinventing
blah, blah, blah and all thatnonsense.
One of them was the ubiquity ofthe internet and the

(01:24:42):
commercialization of theinternet and the World Wide Web.
So, obviously, when I started,the internet was only military.
It didn't exist in a commercialway, right.
So we were proud inventors ofthe rate confirmation on the fax
machine kind of thing, right,that was the first thing when

(01:25:03):
that became prevalent.
The second was in 2007, uh.
So in 2007, uh, apple came outwith the, with the iphone and,
and that changed a bunch ofstuff.
Obviously, Not much is verydifferent up until we've gotten

(01:25:24):
to power-only brokerage and theimpact it's having.
So if you're one of ourcustomers like Schneider and
Warner, any of those kind ofguys Schneider and Warner both
do a tremendous kind of guys.
Schneider and Warner both do atremendous amount of power-only
brokerage, a tremendous amount,thousands of loads a day that

(01:25:45):
allows them, without having tohire more drivers although hire
as many drivers as makes sensefor them to do, and they're
obviously very good at that butthis allows them to have that
that sort of flexible capacity,uh, that allows them to provide
solutions to their customerRight.

(01:26:06):
So the customer doesn't reallycare.
You know, they've got a, anorange trailer or a blue trailer
from Warner on their dock.
They don't know if it's aSchneider driver pulling the
orange trailer or anowner-operator, so an employee,
an owner-operator or an externaldriver, when that trailer is

(01:26:27):
being pulled they may know.
When they look at the truckthat pulls in, they often don't
care because those guys aretaking the responsibility for
moving the freight.
It's that ability to sell asolution that makes a giant
difference.
They're selling capacitysolutions, just like good
brokers.

(01:26:48):
Do you know and I thinkRobinson is up to a couple
thousand trailers now they do alot of this, A lot of this
power-only brokerage.
It's a big part of it and Ithink that's going to become a
bigger and bigger part of theway the world continues to

(01:27:08):
transform in this industry.

Speaker 1 (01:27:14):
What are some of the other things that, as you've
spent a lot of time in the lastfew years curiously entrenched
in these large asset-basedbusinesses, as a former broker,
I'm curious what are some of themore interesting things you've

(01:27:34):
learned about asset-basedcarriers that make it really
challenging to build a systemfor them to operate efficiently
with?

Speaker 2 (01:27:46):
you mentioned driver pay as a big one oh my, I mean
there are so many differentpieces to this, but you know all
of the onboard device, all thepings, the hours of service that
we didn't deal with as brokers,the way you communicate with

(01:28:12):
the driver by sending theseforms.
Platform Science has been agreat partner for Mastery as
we've gotten all of ourintegrations with them up and
running, which we have now beenworking with other of those
providers as well, but thoseguys have been a great partner
as we've learned to do that andnow have really cool things that

(01:28:36):
nobody else does.
Basically, right from the PMS,the folks that are interacting
with those drivers via platformscience are able to message the
drivers right from inside of theapp and they can see exactly
the same thing the driver seeson their platform science device
.
The dispatcher or the loadplanner or whatever can see

(01:28:58):
right from their desk.
Right, that's something I don'tthink anybody's ever done
before.
But the way all those thingswork, the balancing that the
tractors, the drivers, thetrailers and the freight that's
a huge difference.
Things like pre-orders thatallow you to create these orders

(01:29:21):
in advance of when you're goingto get them from the customer.
A lot of these carriers willplan a lot of their work for the
next week on a Thursday and say, okay, we know where what next
week is going to look like, atleast for the first three days.
Let's get these loads in thesystem and plan.

(01:29:43):
But they don't have the EDI204s from the customer yet, so
they need to be able to createthese.
But then when those 204s comein, they don't create new loads
for them.
They have to be able to betranslated to understand that
these are loads we already have.
So let's treat these as, um, asupdates, rather than new loads

(01:30:04):
is something we're coming outwith shortly.
That's going to be very, veryhelpful.
Um, I mean, managing trailerpools is is a huge thing, right,
it can be a key to beingprofitable or not, and how much
freight you're able to commit toyou know just when we started.

(01:30:29):
I mean, I cannot give enoughthanks to Warner.
So Dara Mahone came in intoWarner right about the same time
.
Uh, that that, uh, we signed acontract with Warner.
Uh, dara grew up in Ireland.

(01:30:49):
He's an incredible guy.
He came to the U?
S on a on a visa that Schneiderwas was being able to issue at
the time for Irish truck driversto come over.
So he came over to the US on acontract to drive a truck for
Schneider.
I don't think that lasted asuper long time and eventually
he worked himself up and becamethe guy that took Vonage to the

(01:31:11):
cloud.
So Warner brought him in to betheir CTOTO and he has built a
great team over there and youknow he has been really pivotal
and his group has been pivotalwith their operations, people
and with the full support ofDerek Leathers the whole time

(01:31:31):
and helping us get this right interms of what we're doing for
asset.
And so it was interesting,whereas we knew exactly what we
wanted to build for brokerage,when we sat down and said, okay,
what does a driver look like inmastermind, that was a whole

(01:31:52):
new thing we got to do.
What does a trailer look like?
What are all the differentpieces, what does it track, what
are all the different pieces ofinformation that we need?
And started with, you know,these Visio sketches that I
would do and went and met withthe Warner folks especially,
also, obviously, schneider andeverybody else, but those guys
fell in really quickly inhelping us, helping us and and

(01:32:15):
helping shape what the thingbecame, uh, early on.
And it's funny as I look atsome of the some of the drawings
now, because it's turned intoso much more than that, um.
But you know it didn't occur tous that other systems don't do
some of these things Like.
One great example is we havethis thing for driver

(01:32:38):
preferences that are things likeyou know, this driver prefers
not to haul pork, or won't haulpork, or doesn't want to drive
at night, or things like thatthat historically are just stuff
that people write down andthey're not part of a system.
Well, when you go to run theoptimization, you need to take
those things into account.

(01:32:59):
You can't just have the personsit there and say, oh no, no, I
know that doesn't work because,right, it makes sense to just
have that.
Where it makes sense to block,that matches as what the
optimization would say is aviable result.
So we didn't really realize atthe time, because I've never
seen an asset-based system otherthan their AS400, which is just

(01:33:23):
a bunch of blinky letters on ablack screen and seeing one.
So I didn't know what to expector what to do.
And so we created somethingfrom scratch with that
completely.
I mean, everything was fromscratch, obviously, but all the
rest of the stuff, as you said,I could just dream out of my
head right off the bat.
We had to learn everythingabout this, about hours of

(01:33:43):
service and how that works forsingle drivers versus teams,
because not every team is a team, not every team is a full team
where you basically can ignorehours of service.
There's training teams, there'shusband and wife teams.
There's all sorts of differentthings.
They all work differently.
There's Canadian hours ofservice.
We had lots of different stufflike that.

Speaker 1 (01:34:06):
How do you think about prioritization?
When building a product likethat, where there's so much to
build, you recognize thateverything just generally takes
longer than you think it will.
So how do you navigate customerexpectations or prospect
expectations against atime-consuming effort and

(01:34:30):
knowing what is best?
I think the idea of leadingfrom the front and a CEO who's
sales-minded in front ofcustomers is clearly proving
valuable in this exact scenario,because you're out in front of
Dara, you're out in front ofChalene, you're out in front of
your customers, consistentlyhaving these conversations but

(01:34:50):
balancing and making decisions.
I'm curious how you thinkthrough that and making
decisions.
I'm curious how you thinkthrough that.

Speaker 2 (01:34:56):
I mean, it's not necessarily an easy thing to do.
You know you've met LaurenKugler, who is our chief product
officer, who is absolutelyphenomenal at this and balancing
all of these needs.
You know we have had a very,very well thought out and now

(01:35:18):
very well delivered product mapfor a long time.
That is generally very fixedfor the next two quarters and
somewhat fixed for after that,and she always manages to leave
room in there for certain thingsthat got to get done that come
up as we're doingimplementations, or a new
customer that we can sign up.
We can just do this.

(01:35:38):
So one thing is that we don'tdo any custom work at all.
The only the closest thing tocustom work that we do is for
integration only where oursystem needs to talk to another
system and they didn't have theAPI capabilities yet or
something we had to figure outsomething.
Nothing goes into the systemthat doesn't get blessed and

(01:36:02):
that is not going to bebeneficial to all or most of the
folks.
Now things are going to be verydifferent for what our the
folks with private fleets thatare on here.
Now we have a very largeprivate fleet, whose name I
can't say, but a very largeprivate fleet for a very large

(01:36:25):
retailer that's operating thesystem, for other companies as
well that are shippers and abunch of other dedicated fleet
folks that are in here.
You know you have to beresponsive the first time you do

(01:36:47):
that.
You know.
A great example is for thatvery large private fleet.
They use a different kind of areference number that they
really everything is based onthat reference number.
That's a stock order number, anSTO that we needed to get onto

(01:37:08):
that main screen where we'redoing the matching of the
capacity with the freight andand we didn't think they were
going to use it in that way.
So we had to make that pivotvery quickly and Lauren was able
to figure out how to do that.
You have to be able to beresponsive in that, on the
brokerage side, just becauseI've been doing this so long,

(01:37:28):
it's hard for somebody to comeup with some new idea for a
brokerage.
We're not getting a whole bunchof new ideas.
A brokerage we're not getting awhole bunch of new ideas.
Um, you know, when we firststarted working with with
schneider on their power only,which is in the system live and
has been for years now um, thatwas all new.

(01:37:48):
So orchestrating the way thatwhole trailer thing works for
the carriers that they find toto find out also, so they'll.
They'll cover the load with thecarrier, then the care.
Then they have to tell thecarrier where to go get the
trailer If there's not alreadyone dropped at the shipper.
We built that in for them, butnow it's useful for for other

(01:38:09):
folks as well.
So it's it's not easy to do.
You have to manage it, but youhave to be very protective of
your roadmap or you end upplaying whack-a-mole and nothing
gets done.
And the good news is ourcustomers are just phenomenal.
Many of them are also investors.
In fact, all of our capital hascome either from our own

(01:38:31):
resources or from our clients,and they're super supportive of
that.
They understand that if we messup the roadmap because of
something that they want, ithurts the business.
And sometimes they got to tryto get us to do it and we got to
do it and we got to figure itout.
But they do it very carefully.

Speaker 1 (01:38:54):
So it's an interesting element of the
business is that there arecustomers that are also
investors, and I see a positivein that, being that you are that
much more likely to get themost honest and best feedback
for what needs to go into thesystem because you just have
such aligned incentives and itallows you to create a system

(01:39:18):
that really can cater to all ofthe needs of your customers.
I guess would a drawback be, ora concern be, for a potential
customer who's not going toinvest, that they're less
important or that they're?
How do you think about thatkind of thought process?

Speaker 2 (01:39:39):
it was early.
But some of these big national,you know, manufacturers or
retailers or distributors, justdon't have a vehicle to invest.
And you know, today if somebodyasks about that, we give them
somebody to call one of thosecompanies and they say it hasn't
made one bit of difference tous, right, it does not impact

(01:40:02):
that at all?

Speaker 1 (01:40:02):
And do you ever run into like customers who are like
well, I'm an investor, youbetter put this in for me.

Speaker 2 (01:40:09):
Our customers are incredible.
I mean they're incredible.
You know the folks that haveinvested, which you know the
warners and schneiders and prime, who has been absolutely
incredible and wonderful inevery way, and, and ruan and
avrit, the ones that haveinvested over and over in us are

(01:40:29):
incredible partners.
I call them all the time andtalk to them all the time,
because these are smart people.
They are, they get the business, they're behind it, they own
part of it.
They are.
They're just incredible.

Speaker 1 (01:40:42):
It just doesn't happen as you think about the
last six years, the business hasevolved quite a bit right.
Initially, the first piece wasthe brokerage built, and then
the asset, and now the shipperstuff is being done.
Will there ever be a finishedproduct like done, no more

(01:41:05):
building.
I don't see it.

Speaker 2 (01:41:07):
But what I will tell you is that, from where we are
today, by July this product willbe ready for use by 90% of the
shippers, carriers, brokers andall the combinations of those in
North America.
Not 100%, because we'll stillhave this or that other type of

(01:41:30):
refrigerated onboard device orrefrigerated tracker that we
need to add or something thatsomebody needs specifically uh,
that we don't do yet.
We have a great new uh tankercustomer uh, and some of that
work still needs to be done interms of the managing the

(01:41:50):
commodities that are in thereand the trailer washes and
things like that.
But, um, we have work we'redoing specifically for avrit uh
on on making this system readyfor work for them, for for their
asset, large asset, ltlbusiness, which then we'll be

(01:42:13):
able to take to others as well.
The sort of part we're on forthat now, which also helps us
with shippers, is the ability tohave multiple orders, as many
as you need on a given load.
We already have multi-route,meaning you can manage three
different routes forcross-border or intermodal or
something like that,independently but in concert,

(01:42:36):
but multi-order.
We need to be able to have aload full of you know, a pickup
delivery load full of, you know,12 on and offs of different
shipments.
For an LTL driver or a lineallall move, that's got eight
customers different orders on it, so we're in a great spot.

(01:43:01):
It is so cool to see this beingused by thousands of drivers a
day, actually real asset-basedcarriers and already starting to
move a good chunk of America,with a lot more coming.

Speaker 1 (01:43:20):
A few months ago, I saw you cry as you addressed the
mastery team.

Speaker 2 (01:43:28):
It can't be possible.
What would?

Speaker 1 (01:43:31):
bring you to tears with respect to this business.

Speaker 2 (01:43:35):
It's just unbelievable what this group has
been able to do.
It is such a hard thing to do.
There is a reason why nobody'sbeen able to do this and these
people are just unbelievable.
I mean, they are sounbelievably smart and focused.
It's incredible and again, it'snot like I sat down and said oh

(01:43:58):
, this is a really hard problem,I want to go solve this.
That doesn't happen.
I didn't realize until it wastoo late how hard this was or
just in time.

Speaker 1 (01:44:11):
I mean, was there ever a party that was like screw
this, maybe this is not worthdoing, or was it full steam?

Speaker 2 (01:44:20):
ahead all along.
Then you know, once you make acommitment to Mark or to Derek
Leathers or Robert Lowe, you gofigure out how to deliver that
commitment Period.
End of story, Not to mentionall the employees and everybody
else.
There's no fail.

Speaker 1 (01:44:39):
So that's something about you that I think I've
always admired, that many peoplewho've worked for you have
always admired, and I thinkcertainly all of your children
have admired and maybe evenstruggled with, is you've always
set this bar so high for whatyou accomplish, and the basis of

(01:45:00):
a lot of it is kind offollowing through on your
commitments, whether it's toother people or to things you've
set out to do.
Whatever it is and I thinkwhat's once once as a child, we
dissect it, we realize, likeyou've never pushed us to meet
you at that level, rather justto whatever we commit to that we

(01:45:21):
follow through on it, that wegive it all we have and we do it
in an honest and right waywhere we're not taking advantage
of people or taking or cheatingthe system or anything like
that.
And so I think it's somethingthat we've all kind of always
admired but also struggled withis trying to keep up with you.
Not that you've asked us to,but I guess, when I think about

(01:45:45):
where you've taken this businessnow and it still feels like
it's in its earliest stages in alot of ways when will it feel
like the mission is accomplished?
Like what?
What is?

Speaker 2 (01:45:57):
what is the mastery ecosystem look like when mission
is accomplished I think we willhave hundreds or thousands of
shippers, carriers, brokers onthis system and they will run

(01:46:22):
this system for decades anddecades.
One of my goals in thisbusiness is to create a company
that can live on, as I have inthe past ones, past my time here
.
I think that's that's criticaland also continue to learn right
.
I don't want this to be thekind of thing that somebody is

(01:46:45):
looking at, like they do nowwith the old mainframe system,
and say, oh, nobody's maintainedthis or this technology is out
of date.
My this or this technology isout of date.
My, my hope is that thisbusiness will be one that
continues to learn, that thatsomebody well, after I'm either

(01:47:05):
not here or not anywhere willwill be taking that next
technology stack and rewritingthe system to to meet that and
to benefit from it forever.
I don't know if that happens,but you know, I'm continue to be

(01:47:27):
super proud of the back haulersfolks that are still at at CH
and that are all over the place,the coyote folks that have gone
on to do other things and theones that are loving their new
life with rxo, which is what Ihear from most of them.
Um, you know, I got a lot.

(01:47:48):
I had a lot of people that askedme after that was announced how
I thought about it, and Iwasn't sure until I actually got
to spend time with Drew, andnow I am very stoked about it.
I'm really happy that they havehim as their leader today and
that they're at a company andthis is not a knock on UPS at

(01:48:09):
all.
They're a great packagebusiness.
That's what they've decided tobe.
And then Carol is a very smartperson.
But I'm excited for them, butI'm proud of them in that way.
And you know, look, I thinkthat a lot of those folks have
done what they've been able todo, partially because I was

(01:48:29):
there and we did start thebusiness in Marianne, and then
partially because we were alsoat some point able to let it go
and people have gone on andlearned from other folks and
Marianne, and then partiallybecause we were also at some
point able to let it go andpeople have caught on and
learned from other folks, and Ithink that's the way it's meant
to work.

Speaker 1 (01:48:46):
You mentioned hundreds, if not thousands, of
customers, and today mastery hasbeen focused at the top of the
market.
How do you think about thatevolving over time?
Who is the right customer todayfrom a size standpoint, and
does that shift in the future?

Speaker 2 (01:49:08):
Yeah, I mean, we have been focused on the largest,
most complex guys just becausethat's sort of where we started
and there was just this gapingneed there, you know.
So Pepsi is one of ourcustomers.
I'm not going to get intoexactly what we're doing with
them, but they should hopefullybe a poster child customer for

(01:49:30):
us because they have their ownlogistics business.
They're a shipper givingthousands of loads out to other
folks.
They've got two giant fleetstheir Freo fleet and their New
Bern transportation fleet.
Guys that move a lot of thesparkling and water and stuff
around Gator.
But that's today.

(01:49:54):
We will go to smaller next.
I would say by this time nextyear.
We've already started to focusthere a little bit, but we will
really move towards the fleetsthat have, let's say, between
250 and up trucks, as opposed tothe at least 600, 700 that we

(01:50:20):
like to see today, and thebrokers and the shippers that
are roughly in that same size.
There's thousands of those folksthat need new, modern tech as
well.
It's just a matter of you know,and very often you might think

(01:50:41):
it's easier to start with thesmall guys.
One of the things that's beenoutstanding about these larger
types of folks that we've dealtwith is that for most of them,
their IT shops are way beyondwhat I would have ever expected
and their capabilities thatthey've got.
I mean, it's been incredible toget to know the IT folks, the

(01:51:02):
shops at Schneider, at Warner,at Ruan and Averitt and all
these companies you know.
They you know, and Bison andCat, all these guys I mean it is
, they're really really good,which I was not necessarily
expecting.

(01:51:23):
A lot of the smaller folks don'thave that same capability,
right, and so for that and forsome other reasons, it can be
just as hard to get a newcarrier, a new small carrier,
set up as a new large carrierright.
In some ways it can be easier,but it can be harder.
Right, it takes as much work ormore to do that, and we weren't

(01:51:45):
situated to do that yet.
But we are now and gettingourselves situated to be ready
to take on an influx of thosepeople as we move forward here.
Uh, but you know I don't seedoing this particularly for
owner operators and very smallcompanies, um, but you know we

(01:52:06):
should have plenty of of others.
You know, we're in a situationwhere, you know, one of the
things that we've done that isjust absolutely super cool is I
was able to be at one of theseretailers that runs a private,
very large private fleet thatWerner also does dedicated for,
and in the same facility at oneof their DCs, I was able to see

(01:52:30):
the folks from Werner and thefolks from the retailer both
working at the same time on thesame system and being able to
communicate in a whole differentway.
It's really cool, that'sawesome.

Speaker 1 (01:52:51):
You've littered some AI throughout the Mastermind
technology and, as a listener ofthe show, you've noted that
I've had a lot of conversationsrecently with many young folks
who are bringing or trying tobring AI into our space, and you

(01:53:11):
know even some more experiencedpeople getting involved with it
too, and even some moreexperienced people getting
involved with it too.
I'm curious what your thoughtsare on this movement, if this is
more of a hype cycle with AIinto our space, or if this is
really going to transform how wemove freight, or if there's

(01:53:34):
somewhere in the middle whereit's going to make things a
little bit more efficient.
Like, how do you think aboutthat?

Speaker 2 (01:53:43):
So it will definitely drive efficiency, for sure.
I don't think there's anyquestion that there is help
coming for that.
Well, for one thing, we doleverage it, for when we're
writing code right, we use aMicrosoft product that helps our
folks do more faster andespecially good with testing and

(01:54:07):
stuff like that.
That's already had an impact, abig impact.
One thing that is, I think,missed and hard to explain,
necessarily, is that and Imentioned before that you know
everybody uses this technologydifferently.
One thing that's reallyimportant for folks to

(01:54:30):
understand about what we've doneis what we have created is
really for a lot of these largercompanies, especially, I think,
for some of the smaller guys wewere just talking about, this
will be the only system theyhave, right, and they'll connect
with the other things that theyneed you know, the P44s and
four kites and those for thebrokers and et cetera.
But this can do everything.

(01:54:53):
Right, that's the point.
But for others, it's reallyabout the infrastructure that it
brings right.
So both Schneider and Warner,for example, talk about how this
is just part of their suite oftechnologies, and we've written
this.
So, if I heard right, I thinkdave boring mentioned in in uh

(01:55:17):
in your podcast with him that hethinks that.
I assume you know that I thinkthat this is a system that has
to be the only tms somebody has,or it.
It needs to do everything foryou, and that's not at all the
case.
We're switzerland.
Right, you can take what youwant, use what you want and plug
in everything else right, youcan connect anything with this

(01:55:40):
and while we have built in someAI, for example, to allow you to
take a carrier's list of 80trucks and automatically just
have it show up in a minute inMastermind, so you don't have to
type all those trucks inSomebody else wants to use

(01:56:01):
another tool to do that.
They can be linked via API toART.
We don't care, right?
Some of these guys that youhave interviewed that are
interacting using AI interactingwith their customers and stuff
will be super easy and theeasiest DMS for them to
integrate their stuff into, sothey will do some of it.

(01:56:27):
A lot of it is going to befolks bringing it in and either
they'll integrate it to us orthe customers will just
integrate it.

Speaker 1 (01:56:38):
And talk to me about what you think, the impact.
How do you think brokeragechanges in the next five to 10
years?
Like more consolidation?
Are there new ways of brokeringcoming about?
Is there an end of brokeragecoming?

Speaker 2 (01:56:55):
We don't think that is the case, and again because
of the reason that brokers exist, right to absorb risk.
So I thought, as Coyote wasgrowing gangbusters, that at
some point it would be CH, us,echo, tql and maybe one other

(01:57:17):
guy.
I thought that the industrywould consolidate like crazy.
I didn't understand why anybodywould deal with a small company
.
You know, one of our customersis Evans Group of Companies,
that is, they've got 9,500drayage drivers and they do
brokerage etc as part of theirstructure.

(01:57:41):
A lot of it is agent-based.
Those guys have phenomenalrelationships with their
customers.
I mean, it's unbelievable.
I don't understand it, butthey're really good at it and I
think those are very valuableand not going away anytime in
the near future.
So it shows what I know nothing.
When you came to me and saidyou're starting another
brokerage, I said that's stupid.

(01:58:02):
Why would you do that?
We don't need another brokerage.
It's the last thing we need.
How are you going to go compete?
Obviously, I was completelywrong.
Right, you were able to build agreat business very quickly.
So I don't necessarily see thatit's going to consolidate
anymore.
I think people will continue tobuy each other, but it's so

(01:58:26):
easy to start a new one.
I do see certain things changing, certain things changing.
I I you know for one.
I have seen now the blending ofeverything.
As you mentioned before,brokers are now starting to have
more of their own trailers sothey can do power only brokerage

(01:58:48):
and hit that drop trailerfreight that that becomes a big
thing.
It's a great sales thing for usbecause nobody else has a
system that allows you to dothat.
You're seeing more and moreshippers now starting brokerages
.
That has existed for a while.
It's becoming more prevalent.

(01:59:10):
I know of one or two carriersthat do not broker and don't
want to, even at scale, but onlya few, right, pretty much
everybody's doing both.
So it's you know.
I think what does have theability to change everything is

(01:59:32):
when we do finally get to somelevel of actual autonomy where
you don't need a driver in atruck.
At some point, that couldchange everything, right, that's
where you know, and I thinkthat's going to be a progressive
thing.
That starts with portions ofhighway driving in some places

(01:59:53):
and eventually and I'm talking,talking, you know, not in the
next five years at all, andprobably longer than that,
probably in the 2040s that thatwe actually have that at scale,
even though there are some folksdoing it live today, but to do
it at scale, that's on normalhighways.
They're interacting with otherdrivers in bad weather and

(02:00:18):
pulling loads up big hills.
That's a ways away, but whenthat happens, everything changes
.
And so who wins then?
If you don't have to hiredrivers, which is the specialty
of these big asset-basedtrucking companies, it's who has
the densest network.

(02:00:38):
Is that going to be very largeretailers, the Walmarts and
Amazons, and those folks?
Is it going to be the folksthat have the cheapest cost of
capital?
Who, the folks with the mosttrailers?
Is it the large truckingcompanies?
I think the large truckingcompanies are the best situated
to do it, but I think that'll beinteresting to see and then

(02:01:01):
understanding the role of thebroker there.
Somebody like CH Robinson, with30,000, 35,000 loads a day,
should be incredibly wellsituated to be able to play that
game right, especially as theyget better and better with with
power only trailers.
Right, what are the?
What do they care if it's arobot driving the truck?

Speaker 1 (02:01:26):
It's fascinating to think about.
So what piece of advice wouldyou give to the young generation
?
You know, you?
You made a joke to me the otherday.
Like I'm after dave bell, I hadhim on, and you're like, oh,
you finally had an adult onbecause I had some.

Speaker 2 (02:01:44):
I had some young folks.
Yeah, well, that was a whileago.

Speaker 1 (02:01:49):
I just I had a series of younger entrepreneurs and
those are the ones I want tokind of give a message to.
So these, these young folks whoare coming in trying to make an
impact in the industry, starttheir own businesses.
As someone who's on his thirdbusiness, who started as a
21-year-old kid, who didn't knowhis head from his arse in the

(02:02:09):
space, what advice do you havefor these?

Speaker 2 (02:02:13):
folks Just enjoy it.
I mean they've picked the bestpossible industry that they
could ever find.
There are always problems tosolve and opportunities here.
I mean you just got to enjoythe ride right and, like you
said before, just treat peoplethe right way.

(02:02:34):
Don't make up shit formarketing purposes.
We had a fill of that in theindustry with a couple of those
actors.
Don't do that right.
Be real, Be honest, Berespectful.
You know our entire time atCoyote we never had a problem

(02:02:54):
with CH Robinson, right, wenever said a bad word about him.
I would never do it.
Only when we had some badactors come in uh, have I ever
said anything negative aboutthose type of folks?
And they really hurt theindustry and unfortunately we're
past that.
So I think that's that's great.
Um, but just do things theright way, even when nobody's

(02:03:18):
looking.
I think that's the big thing.

Speaker 1 (02:03:24):
And what would you say you're most proud of in your
40-year career?

Speaker 2 (02:03:31):
Do I have to say my kids Because you're one of them?
No, you don't have to say yourkids.

Speaker 1 (02:03:37):
Oh, career-wise we talked about being honest.

Speaker 2 (02:03:42):
I didn't ask you who's giving you the closest
thing to a heart attack.

(02:04:04):
I guess I guess the familiesthat we've been able to create
out of these businesses I mean,first of all, so many of them
married each other and had kidsI mean real families, but but
also the families that wecreated that weren't weren't
natural families, uh, that youknow, people that know each
other and whose whole socialstructures and and lives that

(02:04:24):
are based on these things.
You know that and and and whatwe're tackling now it is a real,
real hole that people reallyneed filled.
You, I, I am also proud of whatwe did with coyote, for sure um
in, in that it did elevate thelevel of service that people

(02:04:45):
expect and and you know howpeople hire.
And the level of talent in thewhole industry, I think would be
different had mirror not comein and and done that.
I think it, it, it.
I'm not saying somebody elsecouldn't have done it at some
point, but that's not where theindustry was at the time, right?
So, generally, the level oftalent that's in the industry, I

(02:05:07):
think that the way that folkstake care of each other, that
learned partially by how shetaught people to do that, the
commitment to St Jude's that shealways pursued, that everybody
learned from us how to act.
You know, not everybody got it.

(02:05:28):
That worked for us, for sure,but enough did that.
It's had an impact.
But just all the folks that arestill friends today because
they met in these businessesthat we created it's pretty cool
, all right.

Speaker 1 (02:05:46):
Well, I think we're between what will likely be two
parts four hours in, so, um, Ithink we can call it with, I
feel, a debt of gratitude.
Um, not just I'm on behalf ofmyself, but I think I can speak
for hundreds I mean reallythousands of people who whose

(02:06:10):
careers have been shaped by youand uh, who, whether it was you
just opening a door for them andgiving them a job, or showing
them truly how to be, how tocarry themselves in business,
how to engage with customers ina way that created value, which
allowed them to make money, thatallowed them to get married and

(02:06:33):
buy a house and have kids andcreate a lifestyle that they
wanted for themselves, or totake all of it, put it together
and go start a business, like somany of us have.
Just thank you.
You've shown the way in so manyways, and I personally would
not be where I am today if itweren't for you.

(02:06:54):
So I'm really grateful andappreciative and I love you,
thank you.

Speaker 2 (02:06:59):
Well, I feel the same way about other folks that have
done that for me Paul for sure.
You know Robert Lowe and thefolks at Prime that have helped
us through everything here andour other customers and stuff
that have helped us througheverything here and our other
customers and stuff and you knowit's best industry around.

(02:07:27):
So if you're listening to this,you're probably in it, and so
congratulations on being in thebest industry you could ever be
in and with that we'll see younext week.

Speaker 1 (02:07:36):
So congratulations on being in the best industry you
could ever be in, and with that,we'll see you next week.
You

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