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

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hey FreightPod listeners.
Before we get started today,let's do a quick shout out to
our sponsor, rapido SolutionsGroup.
Rapido connects logistics andsupply chain organizations in
North America with the best nearshore talent to scale
efficiently and deliver superiorcustomer service.
Rapido works with businessesfrom all sides of the logistics
industry.
This includes brokers, carriersand logistics software

(00:21):
companies.
This includes brokers, carriersand logistics software
companies.
Rapido builds out teams withroles across customer and
carrier sales and support, backoffice administration and
technology services.
The team at Rapido knowslogistics and people.
It's what sets them apart.
Rapido is driven by an insideknowledge of how to recruit,
hire and train within theindustry and a passion to build

(00:43):
better solutions for success.
The team is led by CEO DannyFrisco and COO Roberto Lacazza,
two guys I've worked with frommy earliest days in the industry
at Coyote.
I have a long history with themand I trust them.
I've even been a customer oftheirs at Molo and let me tell
you they made our businessbetter.
In the current market, whereeveryone's trying to do more

(01:03):
with less and save money,solutions like Rapido are a
great place to start To learnmore.
Check them out at gorapidocom.
That's gorapidocom.
Welcome back to another episodeof Freak Pod, I'm your host.

(01:32):
Andrew Silver joined today by,per usual, a special guest, mr
Charlie Dahoney.
Charlie, why is it Charlieversus Charles?

Speaker 2 (01:45):
I guess if you know me, you know'm more of a charlie
than anything.
I I've never really come acrossas a charles.
Um, my wife calls me that kindof jokingly sometimes and uh,
not so much when I was trouble,that was my mom when I was young
.
Now my wife just kind of like alittle jokingly, just be like
we pick that up for me, charles,and then the kids will follow

(02:07):
suit.
But other than getting teased alittle bit with the name, it's
never really stuck it's.
It is my, uh, my middle son,luke.
It is his middle name Also,luke, charles, luke.

Speaker 1 (02:17):
Charles, but your first name is Charlie or Charles
.

Speaker 2 (02:20):
Charles Nelson Dihoni and I go by Charlielie yeah,
charlie, yeah, I mean it fits.

Speaker 1 (02:26):
There's something about your I don't know if it's
your vibe or your aura you'vegot a very kind of friendly,
buddy buddy kind of vibe, like,of all you know, I've met a lot
of people at conferences in ourindustry, a lot of great people.
Um, I'm trying to figure outhow to say this in a way that's
not offensive or like weird, butyou've just got a very buddy
buddy kind of vibe to you and,uh, I way that's not offensive
or like weird, but you've justgot a very buddy buddy kind of
vibe to you.
And I think that's probablytrue of a lot of people who

(02:49):
you've engaged with where theyfeel that way about you.
And so it makes sense thatCharlie just fits, for it's a
more colloquial, friendly typeof versus the more kind of
Charles.

Speaker 2 (03:01):
I'm seeing you nailed it, man.
I think you said some reallynice things about me, so thank
you.

Speaker 1 (03:05):
it's very kind of you .
I'll certainly meant to be acompliment 100%.

Speaker 2 (03:09):
I wouldn't take it any other way.

Speaker 1 (03:10):
Assume positive intent thank you, I think that's
a, that's a.
Not a lot of people don't dothat enough.
I, and I am a culprit of of notdoing that enough.
Um, is that intentional?
Is that something that you'vehad to kind of build into your
kind of operandus mondi, or whatwas?
What does that stay sayingmodus?

Speaker 2 (03:29):
operandi, modus operandi yeah, sorry, I don't
know that I've been throwingthat up.
I think that I just I've alwaysbeen optimistic person and, um,
I think, as, as you grow inlife, particularly as I become a
parent, I've had to really dullmy edges, um, um, I think,
partially my, my, my likeupbringing partially my athletic

(03:49):
background, partially growingup in freight and companies like
worldwide express, you just getpretty rough around the edges,
you know, and I think as I'vegotten older and tried to do
more with more people, uh,assuming positive intent and
what people's behaviors are,just kind of helps you, you know
, reframe certain naturalinstincts that I have.
But I also got the, the acronymAPI, that is, I believe it's an

(04:14):
NFI value that was shared withme by David Broering, who is a
friend of both of us.

Speaker 1 (04:22):
It's just funny Cause if you think about our industry
, if people naturally assumedpositive intent, we would have a
very different industry wouldthat be better or worse for
fraud?
for fraud.
I mean, yeah, I mean you getbit in the ass more when you
assume like it's just the.
It's the same idea.

(04:43):
Something I think about withrespect to how we built molo was
like kind of trust first andlike give people the opportunity
, but you did get burned moreoften.
So if you're just looking atthe idea of fraud, um the, the
pain probably hurts a lot morein in a in a assume positive
intent environment because theyjust they're able to get their

(05:03):
grips around you faster andprobably harder.

Speaker 2 (05:05):
Yeah, but fraud isn't the only vector, right?
I mean, if, if, uh, if shippersand carriers or shippers and
brokers negotiated and in moregood faith and always assume
positive intent, I don't knowhow that would impact things.

Speaker 1 (05:17):
I don't know, I don't know yeah, I just think there's
a lot of people in the spacetoday who have such a poor
understanding of some of theplayers in the space, or like a
whole part of the space, becausethey assume negative intent.
And I'm specifically thinkingabout a shipper who I've talked
to recently quite a bit, whojust does not believe that

(05:40):
brokers have good intentionspretty much ever and they had a
philosophy on detention thatessentially was the brokers were
stealing all the detention fromtheir carriers and I just I
tried to argue that that was notthe case.
I think the point they werelooking at was that brokers had

(06:01):
a larger percent of theaccessorials in their network
than assets did, despite havinga smaller percent of the freight
.
And I said okay, but have youlooked at what percent of the
freight is being managed withdrop trailers and a pool versus
live load, live unload?
Because my guess is most ofyour accessorials are coming on

(06:23):
live loads and most of your liveloads are coming from brokers,
which in that case it makessense that that's how that's
going.
They didn't want to accept thatas a potential reality.
They just kind of were livingin the no.
Brokers are bad, they'restealing with the tension and I
just that's a shame, but you runinto that more often than you
probably should.
I mean, am I wrong?

Speaker 2 (06:44):
No, I think it's the nature of having an intermediary
right.
I mean, when I was starting inthe industry, we were a parcel
reseller when Worldwide Expresswas selling Airborne Express and
the DHL, and just having thatintermediary layer in between
the service provider and theclient oftentimes creates this
like artificial distrust.
And years ago, the role of thebroker, you know, when you're

(07:05):
when your father was really juststarting to kind of like scale
the industry and prove that itcould expand past somebody's
basement and a couple of cardtables um, the industry was
really based on informationasymmetry and it was.
You know, the broker industry,like the broker's role, evolved
because they had some dataaround capacity, location, price

(07:26):
, you know carrier andinformation that the shipper
didn't have, and so that was thevalue in bringing in the broker
.
I think the information hasbecome more readily available
and it's become much more of aof a relationship and a
strategic partnership.
And so when you hear thatthere's folks that are still
looking at it as if the brokerhas some cards that the shipper

(07:50):
doesn't have, I mean it's justnot the case anymore.
There's more data out therethan there's ever been and
strippers can largely do a lotof what the broker has performed
historically on their own, butthe brokerage industry continues
to grow, so clearly there'sfolks out there that believe in
the model and clearly theindustry continues to adopt it.

Speaker 1 (08:11):
Yeah, I think you made some really strong points
there and I think it's justinteresting that I don't think
the brokerage industry is goinganywhere.
As you said, it continues togrow.
It is interesting how 15 yearsago, brokers simply had access
to data and information that ashipper couldn't get without
them in a lot of cases, andwe've evolved to a place where

(08:35):
most information that a brokerhas a shipper can get if they
want it.
They might have to jump througha few hoops, but largely
there's not much hidden anymoreother than the profit on a load.
Like that's about it.
And you know, I've toyed withthe idea of like a fully
transparent brokerage and wedon't need to go down that path
altogether, but like we'regetting closer and closer to

(08:57):
that becoming a reality and Idon't even think it's the end of
the world.
You know.
I think the fear that a lot ofpeople have is people will make
decisions on how they feel aboutsomething without all of the
necessary information.
That's already happening, inthat people have these kind of
assumptions or perspectives onbrokers or carriers.

(09:17):
That's not necessarilyunfounded, but it's based on one
load or one bad experience orwhatever.
And so as soon as you open, thetransparency of rate store.
All of a sudden you know oneload that you know the broker
made 30% on, for whatever reasonis the linchpin for someone
deciding to never work withbrokers again because they think

(09:39):
that they're all making 30% onevery load.
No one wants to look at theload that bounced on Friday at 2
pm coming out of Idaho Fallspotato load that had to ship on
Friday and so you paid sevengrand and you quoted 4,500.
Nobody wants to look at thatload.
People just want to see theones where they're getting taken
advantage of.

Speaker 2 (10:00):
Yeah, and the reality is, you know, there's a small
percentage of brokers in NorthAmerica can locate a truck last
minute on Friday in Idaho Fallsthat's equipped and ready to go,
willing to get to where theyneed to be, and so you're
dealing with a very small poolof folks that have this tribal
knowledge and that specificniche focus and experience,

(10:26):
experience.
And so I guess I can imaginetoo, how, in certain chambers of
the industry or certain cornersof this space, there's gotta be
some spaces that are probablymore ripe with bad actors.
And I'm not saying that this isit, but I could imagine, maybe,
you know, in produce or in thatmaybe somebody who, who
specifically focuses on potatoesand has like a little bit of a
captive audience with somecarriers or a little bit of a
competitive advantage, couldcreate some leverage for
themselves.
But I think, going back to like, where is the industry really

(10:48):
going?
And part of the reason why Isold my last brokerage was
because I believe that most ofthese small brokers, over time,
over the course of our lifetime,are going to need to find, like
, safe Harbor with a larger, youknow, platform, and I think
that can.
Uh, I don't think that.
What I'm saying is that I don'tthink that they'll.
Uh, there's no place for the$10 million or the $20 million

(11:10):
shop out there.
But anybody who really studiesthe game knows that that's where
folks oftentimes get stuck andit's it's sort of a function of
uh, sophistication, workingcapital, um, you know, really
leveling themselves up, scalingthemselves as a leader, and so I
think, as you start to look atyou know there's more and more
of those folks are gettingrolled up and acquired or taken

(11:32):
over, and so as I start to thinkabout what is the industry
going to look like, you know,down the road, what you and I
are talking about is processingtransactions at scale.
You'd say it's like, you know,creating, like.
When you talk about creating atransparent brokerage, it's it's
like well, that's only enabledif, if, the cost to serve is
really rationalized and andfolks are sort of comfortable
with the operating, theoperating margins on either side

(11:54):
.
Because really, when you thinkabout it, what the brokerage
does, in addition to the pricediscovery, the coordination and
the visibility and these otherthings that the broker provides,
it's this like managerial layer, it's like one throat to choke
for a long tail of carriers, andthat is value.
And then you layer on top ofthat, the carrier compliance

(12:15):
piece and the risk mitigationand the sort of partnership
there.
I think, generally speaking andthis comes from my experience
of working with really largeglobal enterprises folks
understand it costs money to dobusiness and they understand
either, as my partner, you'reeither going to figure out how
to do it for less than I can andI'm going to pay you to do it,
or you're going to give it backto me and I'm going to have to
do it in-house.
And that is some of these otherfunctions, largely like

(12:36):
post-delivery functions andother things that brokers
perform, like the payment, thesettlement and all these other
things that I think those aregoing to continue to provide,
you know, value and the brokersthat can manage those things at
scale will command a fair margin.
And I think some of this, andrew, you know, I think the industry
has really gone towards, likethe, managed transportation is a

(12:59):
segment that continues to grow.
It's a segment that's really,really interesting to me in
terms of, you know, big, bigcompanies are coming in and
partnering in mass and saying,hey, you come in and you're
going to manage the long tailcarrier base and the large or
the large enterprise carriersbecause you've got a technology
layer that makes it easier forme and you've got all of the
relationships in place, thecompliance, the governance and
all of these other things.
So I guess I'm starting toramble, just.

(13:20):
But I think where we're talkingabout, you know, transparency
and brokerage, it's like it'sreally just like sort of
negotiating like, hey, who'sgoing to do the work and how
much is it going to cost, andyou know, is it on my books or
yours, you know?

Speaker 1 (13:34):
Yeah, I don't know where to go with all of that.
First of all, let me let mestart with that was a good
ramble there was.
There was a lot of meat inthere.
I couldn't help but wonder fora second.
So I don't usually do a ton ofresearch, like I do a little bit
, and sometimes I'll throwsomeone's previous podcast

(13:57):
episode on and listen for alittle bit, especially if I
don't know enough or I feel likethere's something I want to
learn more about.
And in your case, because yourbackground has so much in it,
you've worked with a number ofcompanies that you've started or
been a part of.
It's not like I'm interviewingsomeone who worked at one
company for most of their careerand then started another and
I'm interviewing them based ontwo companies.

(14:17):
So I thought to myself I'mgoing to listen to your
interview.
I just Spotify'd searched yourname and the first thing that
came up was your freight caviarinterview and you were talking
so fast during it that I thoughtI was at like 2.5 speed and I
made a note to myself to try tolisten to see how fast.

(14:39):
I thought you I was at 1.0speed, I was at normal speed.
You just were humming andgetting those words out, and so
I made a note to myself.
I was like I should check, Ishould check.
I don't feel like you'retalking that fast right now, but
I'm just calling it out assomething to be mindful of as
you're going.
So, anyways, my point among anumber of things that you said,
I have to pick one.
So let me start with this.
You made a comment that you feellike a lot of these small

(15:01):
brokers over time are going tohave to essentially find safe
harbor and find, you know, latchon to something bigger, whether
it's like an agency type dealor selling out altogether
whatever.
I'm curious about that because,especially with the business
you're building now, which wehaven't even talked about, we
will, we'll spend a lot of timeon Upwell, but there are a lot

(15:23):
of players, companies likeyourself, who are looking to get
really, really good atautomating some part of the
process for the broker and toalleviate as much of the kind of
human capital, the people, timeand energy, as well as the cost
to do something, becausethere's simply cheaper ways to

(15:45):
do it now.
And I'm curious if there are somany of these companies like
yours that are coming up and aregoing to be successful and have
found ways to make the lives ofa broker easier.
Wouldn't that theoreticallygive the small broker a longer
leash to live on their own, withkind of all the support that's

(16:08):
coming into the market, in thesense that almost it's like this
technology is going to becomeso cheap because it's going to
be so competitive that as abroker as a small broker I might
be able to compete with thebigger guys at least on some
elements of my operating costsbecause I can automate with
Upwell or other players ondifferent functions.

(16:28):
Does that make sense?
How do you think about that?

Speaker 2 (16:31):
No, it completely makes sense and I think you know
, as I look at, as I look at theevolution of the industry and
the small broker and thetimeline horizon of, call it, 30
years.
I've been, you know, watchingthe industry now for 20
something years and brokers havecome from like complete
dormancy, where every single onewas small, to now these major

(16:51):
players are, are coming in and Imean to some extent blacking
out the sun and so and I'mtalking about like a sales and a
growth perspective If you're a$10 million, $50 million
brokerage, um, you've got towork really hard to get those
RFPs and to get those newrelationships built.
And if they haven't heard yourname before, they're already
working with all of the majorplayers.
We don't have to go down theroster.

(17:11):
But those folks you know getthat.
They're at bat in the RFP andyou, you know the plight there.
It's like you're slinging out.
You know 50,000 lanes to try toget 20 that you can, you know,
get three that turn into routinelanes for you and you grow from
there.
So I just think that the uh, thecost of customer acquisition,
that the challenge of attractingnew freight from the enterprise

(17:32):
shippers, I think there's somedemocratization opportunities
there.
And I think up.
Well, you know, and otherplatforms you know, play, uh,
certainly, a vital role in inelongating the timeline and the
horizon of what the smallbrokers have access to them
today.
But there's a couple of othervectors that we really need to
pay attention to that I don'tthink any of us know what's
going to happen.
Number one um, our folks yourage and younger are going to

(17:53):
continue to start brokerages orare there going to be other
business opportunities?
And you know folks that justkind of slow down on that part
of it.
It's been rampant for the last15 years.
Let's see what the next like 10, 15 years turns into.
Because one of the things thatI do see in Upwell uh, I see it,
it clearly is just a the agegap in our industry is like the

(18:13):
disparity between, uh, the sortof old guard and the new guard.
There's a lot of young, youknow, fresh blood coming into
the business, but I think newstarts is going to be a really
interesting metric to watch.

Speaker 1 (18:24):
And then what happens with AI.
Go ahead, don't go off that yet.
I want to talk about that for asecond.
Don't lose your thought eitherabout AI.
But I'm curious talk to me alittle bit more about what you
are seeing with respect to theold guard versus new guard.
You're saying you're you knowyou have, I guess, a better view
of this than I do, because youspend all your time getting out
in front of brokers now, small,midsize, whatever.

(18:45):
What are you seeing in terms ofwhat the kind of leadership
landscape or ownership equitycap table landscape looks like
for brokerages out there,especially in the last six to 12
months?
Like what does it look?
I just I'm not in the gameright now.

Speaker 2 (19:00):
Yes, so I'm seeing a lot of.
That's a great questionactually.
And, um, as I'm sitting heretalking to you, I'm sitting here
going like well, actually, froma uh, a demographic perspective
, there's a lot of families likeyours.
Like the dad has been in theindustry, he's built something
that you know.
Maybe it's not massive ormonumental, but it's been
feeding the family for years andcertainly uh has an enterprise

(19:23):
value to it.
But one of the things I learnedas I was building my brokerage
and I went and acquired anotherbrokerage and then supported
multiple acquisitions of othersit's really hard to get a small
brokerage ready to sell.
Oftentimes the books are notclean and there's a lot of
expenses run through thebusiness and there's people on
the payroll that people arewondering you know what they do
and who they are.

(19:43):
So I guess I've seen a reallystrong trend of of uh familial
kind of transfers where thefather brings in the son, grooms
the son son takes over thebusiness, either in a like an
equity sale or a transfer orsome sort of like a partnership
or something like that.
But I think that's happeningquite a quite a bit, and so
that's one of the things that Ithink we have to watch is as

(20:04):
these folks age out of the likeownership age and they also, you
know, brokers in that categoryof like 10 to 50 million.
It's a nice lifestyle businessso the owner can have, could
have milked some good money andprofits out of the business over
time and really decreased theirfinancial risk and their need
for, you know, growth and um,and so I've seen people relieve

(20:26):
themselves with the dependencyon growing the business because
they already have the money thatthey need and then it's like,
well, why would I go clean thisthing up?
It's paying me for a long time,but then they don't know who
they're going to sell it to ortransfer it to.
So I think that's anothercomplexity that we really need
to kind of see is how does thisolder generation navigate this
landscape and do they have folksin their family or in the
business?
I mean, there's a lot ofexamples of operators buying the

(20:49):
brokerage from an older owner.
That's moving on.
So I think we have to kind ofwatch that trend.
But I think there's othercompanies out there that I mean
I get, I get approached all thetime by investment firms that
have DCs that want to come inand roll up brokerages, and you
must get talked to a lot aboutthose opportunities, because
people always bring up your nameand they say, wouldn't it be
great if we can go make this thebig thing and then someday

(21:11):
Andrew, the guy like AndrewSilver, can come run it and it's
like so I know there's a lot ofpeople that want to do, you
know, m and A and roll ups, andthere's a lot of companies that
are already out there executingthat strategy really really well
, and they've been at it foryears.
So I just think that the marketis going to, the appetite for
small brokers is going tocontinue to be there and if, if
people don't get creative aroundhow they're going to transfer

(21:32):
their business, there's going tobe really no other, no other
sort of like outcome in the next10 years as these people age
out of the operator's role andthen I think you know, the other
just really elephant in theroom.
Going back to the AI point is Ithink there's in fact I know I
get talked to entrepreneurs allthe time there's a lot of folks
out there that are reallyinterested in just, you know,

(21:55):
getting their own large languagemodels and building their own
AI agents in house and trying toautomate their own freight
brokerage and seeing what it cando for them in sales Within the
brokerage.

Speaker 1 (22:03):
you're saying yes.
I've been looking for that.
Are you looking to grow yourbrokerage?
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

(22:24):
freight as an opportunity, buttoday Cargado exists and that
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 Cargato to expandinto Mexico to grow their

(22:47):
business.
Cargato is the first platformthat connects logistics
companies and trucking companieswho are moving freight into and
out of Mexico.
If you move Mexico freight orare planning to reach out to
Cargato today at cargatocom,that's C-A-R-G-A-D-Ocom,
C-A-R-G-A-D-O dot com that'sC-A-R-G-A-D-O dot com.
This is what I've asked allthese AI companies is why
doesn't Robinson, Echo, RxO, allof these companies that are

(23:13):
founded with a hungry CEO who'stechnical or has some freight
experience, and then either theyhave a technical co-founder or
they have a freight experienceco-founder, and then they have
two or three engineers and thenthree months later they've got a

(23:34):
functional product that isbeing sold out into the market
as some kind of AI agent.
And I'm just thinking like, ifthe most valuable companies
today in the space started likethat, why don't Robinson and RXO
and Echo and those the likesjust do the same thing?
Why don't they just hire threeor four of their own engineers
to build this thing out and ownit themselves?

Speaker 2 (23:50):
I mean, I think they are.
I think, and part of this is,how much do you believe in the
technology capabilities of theselarge enterprises, which I
happen to believe in them prettydeeply, and I say this going
back to many years ago when webrought Cargomatic to market and
you know, we thought thatshippers were going to want to
sit around and track theirtrucks on their phone and that

(24:13):
that was anything.
It just dawned on me.
It was like you know, theselarge incumbents, they already
look at themselves as technologycompanies anyways, and CH is
not a client of mine at Upwell,but we do work with a number of
other you know large players inthat ilk and I would say that

(24:37):
there's a lot of adoption,there's a lot of use and there's
a lot of widespreadconversation around agentic AI
in the back office, in the frontof the house and companies like
I mean the list goes on and onright Fleetworks, Vuma, Happy
Robot Parade.
There's a lot of, like you know,really cool stuff going on in
the load building, Cued biggerpicture in the load building,

(25:00):
scheduling.
A lot of really cool agentic AIstuff is going on.
Scheduling a lot of really coolagentic ai stuff is going on.
But one of the things we see atupwell is we're bringing these
ai agents into the small tomid-sized brokerages and in many
cases you know large carriersand large brokers, but we still
see folks, andrew, that havealready gone out and attacked
that problem and they've alreadybuilt their own ai and they've
already deployed some largelanguage model to like solve a

(25:21):
problem behind the scenes.
So I think there's a lot ofinnovation going on and it's
happening.
In fact, I saw this when I wasworking with the steamship line
at CMA, CGM group and theirpartnership with BNSF, the
railroad and a number of otherplayers like that.
Um, there's a big appetite andthere's a lot of ongoing
projects going on behind thescenes inside these big
companies and I think that'swhat's opening the door for

(25:43):
companies like all of theagentic companies I just
mentioned and Upwell and others.

Speaker 1 (25:50):
Is it?
Is it?
Would that not scare you alittle bit, though you know, as
someone in the space to to thinkthat a lot of these companies
are just going to go do itthemselves?
I mean, is that not a risk thatyou have to worry about?

Speaker 2 (26:07):
a risk that you have to worry about.
Oh look, I think, um, I think ifwe stop at just automating you
know, the AR and AP using AI forbrokers if that's where we
stopped and we deserve to getdisrupted anyways but if we
continue on and we leverage theconnectivity that we're building
today to develop new productsand bring uh financial services
and financial products to themarket and allow uh shippers and
brokers to conduct theirtransactions in a more secured,

(26:27):
controlled and safe and reliableway, and if we can build more
connectivity in the world ofpayments and we can drive more
visibility into the forecastingside and help brokers make
better sense and carriers makebetter sense of what their cash
is going to look like in thecoming days, weeks, months, then
there's a whole lot of otherthings that we can do in the
universe of freight payments andfinance.

(26:51):
And so I look at you know, rightnow is the gold rush of our era
and this is an opportunity to.
I never thought, andrew, that Iwas the guy to go build the AI
that was going to change theindustry, but what I do believe
is I can leverage all of thelatest and newest and most

(27:11):
innovative AI through a platformlike Upwell, to bring the
results that people in ourindustry actually give a shit
about, because AI is talkedabout constantly, but not just
in our industry.
It's constantly across ourlives, right, it's reaching
every area of our lives, and soI just looked at it as an
opportunity to build that thetype of company that I wanted to

(27:33):
build and the scale of companythat I wanted to build, faster
than I could have before,enabled by AI, and so we use AI
in every single element of ourproduct and really in as many
areas of the business as we can.

Speaker 1 (27:47):
All right, this is the point where we have to get
into what you're building,because I like sometimes having
conversations where we juststart talking and who knows
where we're going, and 25minutes in we're here, but the
problem is you start talkingabout your company.
I haven't introduced it, nobodyknows what the hell it is, and
so that's shame on me as thehost for allowing us to get to

(28:08):
that point, and we didn't talkabout your background either.
So let's start with yourcompany now and we'll work our
way back, maybe.
So what are you?

Speaker 2 (28:17):
building.
So Upwell is an accountsreceivable automation platform,
and it's built specifically forthe logistics industry, and so
we work with brokers andcarriers to help them automate
the invoice process and helpthem collect their money from
their largest payers faster.
So technically I mean, I guess,more tactically what do we do?

(28:38):
We integrate the transportationmanagement software.
You know, whatever they'reusing off the shelf, or we have
an API for homegrown systems,and then we integrate with all
the accounting software, soeverything from NetSuite and
Sage all the way up to, you know, oracle and SAP, and then we
read the operational emails toabsorb the documents.

(28:58):
And so, with those like threesources, uplow sits in the
middle.
With those like three sources,uplow sits in the middle and we
have the largest catalog ofpayer standards in the industry.
So where we really started tobuild our business, andrew, is
we aligned with the large payersin the industry, companies like
Cass, us Bank, uber, freightTransportation Insight, the

(29:19):
companies that are managing thetransactions and paying the
majority of the freight bills,and we we study them deeply and
we understood how they audit theinvoices Once they receive the
invoices from the logisticsservice provider, the trucker or
the broker, and so we built arules engine that allows the
service provider, the broker, togenerate the invoice in the

(29:40):
perfect format with all of theperfect identifiers and the
right document packet, and wedeliver it where that payer
needs it to go and we send allof the right information from
the TMS and we validate all thatdata with AI.
So really, what that meanstactically of target is, you
know, the shipper, the payer fora large broker.

(30:02):
That broker might be managinghundreds of transactions a week
for target and target is goingto have four or five identifiers
that they're going to want tosee on the bill of lading and on
the invoice and that's going tobe maybe a PO number, a SKU
number, um, a bill of ladingnumber from their own internal
system, and then they're goingto have a document packet.
You know, certain supportingdocuments that need to be passed

(30:24):
along to their payment company,which maybe it's Cass.
So there needs to be an EDIinvoice generated, sent over to
Cass, and then a paper invoiceuploaded into Cass's portal and
then there's a match thathappens over on a couple of
those invoices when before theygot pushed out.

(30:47):
Well, those invoices are goingto sit there and they're not
going to get paid until thebroker goes in and does
something to it.
So what we do is we automatethe connection with the payment
portals and we take that perfectinvoice that we just generated
and we push it out to thepayment portal and then we sit
and listen to find out what'sgoing to happen next.
And so if we find out that thatpayment isn't going to get made

(31:08):
on time, we bring that back,that rejection code, into Upwell
, and that's where the billingteam is going to go in there and
make any changes, uploadwhatever document they need to
address, and they make all thosechanges behind the scenes in
Upwell.

Speaker 1 (31:21):
So this is the first time I've dabbled in on the show
in payments and receivables forbrokers, so why don't we take a
step back for a second andexplain the problem?
Explain kind of what that worldlooks like for brokers, like
what are the issues they runinto?

(31:41):
Why is it a problem, if youdon't mind, kind of the 30 000
foot view, and I'd love to hearwhatever this is.

Speaker 2 (31:49):
Um, this is so appropriate because I I look at
you as, and like you, somebody.
You're somebody that I woulddefine as a broker's broker,
like directionally, you couldgive me an accurate rate on most
lanes in the us, depending onwhat the commodity and time of
year is, and you know you mightnot be in the seat anymore, but
you still know what's going on.
It's that in you you're, you'relike really into it, but nobody

(32:10):
ever starts a brokerage becausethey're really into payments.

Speaker 1 (32:14):
You're going to.
You're going to expose me sobadly in the next five minutes
I'll share after but go ahead.

Speaker 2 (32:21):
So so basically, uh, every broker in the world gets
into it Cause they love solvingproblems, chasing freight,
getting customers, making money.
And what we all do is we all goout and the customer says give
you all these problems you solvefor them.
You get the first load andthey're like, hey, they have
these five or six things youneed to do on my invoice and I'm
going to send you an email withit and you're like yeah, I got

(32:41):
it.
Daryl's got my back.
We're good at all this stuff.
We do it all the time for othercustomers.
Well, inevitably, that datadoesn't get passed on to the
billing team so that customergets whatever vanilla invoice
that goes out and you, as theaccount rep, are going to get
drug into it and you're going tohave to have another call with
the back office team and you'regonna have to go through all
these invoicing standards.

(33:02):
And then, once you get you knowCheryl or you know Michelle or
whoever's in that back officeteam on your side, you get them
up to speed on making thoseinvoices right.
Well then, the customer's happytheir, their AP team is paying
on time, your AR team iscollecting on time and, as the
account rep or the owner.
You don't hear about thataccount until Cheryl goes on

(33:23):
vacation and then, like, patrickneeds to step in and make the
bills for that week and thenwhat happens is none of those
bills get approved.
Cheryl comes back in, she jumpsright back into the seat.
All the bills start going outcorrectly.
Next thing you know, the ownercomes out and goes like we're
$40,000 shy for payroll, what'sgoing on with collections?
And they pull this accountsreceivable report that takes

(33:45):
them kind of a day to pullbecause it's never up to date.
And you got to wait until thecash was posted at the end of
the day.
And you got to go pull all thepayment statuses out of and U S
bank and Uber freight andTransporium and Williams and
associates.
And once you get all the dataclean, it takes two days.
And the owner's like what, whydid that big shipper, why did
they not pay for a whole week?
Get them on the phone.
Hey, what's going on?

(34:12):
How come you guys are behind?
Uh well, these ones didn't haveour documents, it didn't have
our references.
I can't approve these.
Oh my goodness.
Oh my goodness, okay.
Well, that was like 45 days ago.
So let me, uh, let me get youthose updated real quickly and
then I'll send them right overand can you pay them today and
they should be like no, no, yeah, I'm going to net 30 with you,
right, like that's net 30.
Like it's going to be 30 daysfor us to process these from
today If you can get them overto me today.

(34:32):
And so I found myself personallyin that cycle over and over and
over again when I was buildingmy first bootstrap logistics
company, and so I was thatbroker that got stuck at 12
million bucks and really justdidn't have the sophistication
and the that.
This is 15 years ago, so thetechnology wasn't where it is
today.
I mean, there was no documentmanagement or like HubTran

(34:53):
available in those days oranything like that.
But you know, over time and I,over time, as I grew in my
career and I uh, got back intothe brokerage business, um,
about six, seven years ago, whenI moved my family to Omaha to
buy a brokerage, that's when Ireally had more of a better
understanding of the businessand I went into it with more of
a strong thesis around I wantedto take this 50-year-old truck

(35:15):
brokerage company and I wantedto automate the back office
pieces to the extent that Icould, and this was 2019.
And so I wanted to use whateverI could to automate humans out
of the process and repurposethose budget dollars back into
account managers and salespeople, Cause this company was 50
years old and hadn't had a salesrep since the owner the
original owner sold it.
So, anyways, uh, that was theplan, that was the thesis, but

(35:39):
you know, six years ago I had touse all this stuff off the
shelf and piecemeal it together.
I was trying to use billcom topay my carriers because triumph
was just coming out in thosedays, and and in those days,
like, a lot of people didn'ttrust triumph.
Yet I think they've done areally good job of building
their, their name and theirreputation in the industry and
becoming like the de factostandard.
And you know, I think they'veovercome a lot of the trust

(36:00):
initiatives, a trust initiatives.
A lot of big brokers you justmentioned use them for their
payments.
So they're clearly, uh, youknow, have have opened up that
space of like AP as a service,but on the air side, I didn't
have anywhere, andrew, to havethose rules live for the
shippers.
So the main problem that wesolve for is every one of the
shippers in your brokerage atMolo had their own rules for

(36:21):
their invoices, and those rulesare generally not conveyed from
the broker to the back office.
So those rules are really whatour secret sauce is at Upwell is
you can configure all of theunique requirements, down to the
format of the invoice, theidentifiers that need to be on
the bill, what payment portal itneeds to go into If it's an EDI
API email with a CSV email,with a PDF statement, invoicing,

(36:45):
whatever.
So that's what we do.

Speaker 1 (36:49):
And something you didn't necessarily speak to
directly but it's kind of eventhe further 30,000 foot view of
why it's important is justmanaging cash flow in a
brokerage and how hard that isand the idea that you know,
especially if you're playing inthe enterprise world with larger
shippers, your payment termsare definitely worse.

(37:10):
There are some as high as 120days, only a few.
There's more at 90, even moreat 60.
As a broker, you're not happywith anything above 30, 45.
You're like, okay, I'll take it60,.
You're probably taking it inthe right market, in a down

(37:30):
market, because you need theloads, you want the freight, but
there's a cost to doing that.
And so this just is reallyimportant because you got to pay
the carriers, or at least thefactoring companies for the
carriers, in 30 days and ifyou're getting paid on average
in 50 days among all yourcustomers, that's 20 days of

(37:52):
revenue that you're floating.
And let's say you're a $250million brokerage, that's a
million bucks a day you'removing.
That's $20 million of revenuecapital you have to have
available just to manage yourfloat.
And so the specific issueyou're talking about of invoices
that get sent out incorrectly.

(38:14):
You don't even find out, insome cases for 30, 40 days.
You don't find out, the shipperdoesn't tell you, they don't
receive an invoice from you onApril 9th and then call you on
April 10th and say hey, theinvoice is wrong on April 9th
and then call you on April 10thand say hey, the invoice is
wrong 30 days after April 9th,like they used to do.

Speaker 2 (38:32):
that you know.
Now it just goes into someportal.

Speaker 1 (38:38):
What I think happens is on April 9th you send the
invoice and they don't look atit until like the absolute last
minute necessary to hit thepayment on time.
But even so, if it's wrong, alot of times they just don't pay
it.
I had plenty of shippers thatnot only wouldn't pay it, they
didn't say anything to you.
So you have to track your ownreceivables and see okay, why
weren't these loads paid?
You reach out it's now been40-ish days before you even
notice it hasn't been paid.
You email them or call them andsay hey, what's the deal here,

(39:02):
can you help me?
And they say, oh, you invoicedincorrectly.
You didn't have this dash orthis Y or this X.

Speaker 2 (39:08):
But first they don't respond for two to three days.
Yeah exactly, you have to getback to them, so the whole cycle
is just painful.

Speaker 1 (39:14):
Yeah, so you know by the time you get it right, it's
been 45 days already.
Then you restart the clock onyour 30 or 45 days, so it's
really in some cases 70, 90 daysbefore you finally get paid if
you screw up the initial invoice.
So not to be a salesman on yourbehalf, but this is really
important stuff and you nailedit in terms of how, especially

(39:37):
us gunslinging, the younger type, as you kind of described two
sets, the old guard and the newguard, and I'll sit in the new
guard as kind of the youngrunning and gunning high flying
we want to grow at all costs.
We want to be the biggest andthe baddest.
That kind of competitive energyis great, but I spent so much of

(39:57):
my time just worried aboutgetting loads in the door, was
not very focused on making surethe cash was coming in the other
side, and I actually rememberthe first really big and
explosive fight that basically Ithink ruined the relationship
we had with our first investorwho we bought out was centered
on receivables and the fact thatwe were not focused on it and

(40:18):
they they kind of like took ahard.
They took a hard line of likeif you don't go get this money
tomorrow.
We're not paying your peopleand I'm like well that you're
gone see ya, but I do understandwhy they cared so much about it
.
Um, I just you know, when I was27 and starting the business, I
just was like they'll pay useventually.
What does it matter?
Just put more money in and uhthat the monetary yeah, exactly

(40:42):
these guys had committed.
Sorry, I was just saying theseguys had committed five million
bucks to us and they were onlyabout 800 grand in.
So I was like there's supposedto be a tree over here with cash
and send us the money.

Speaker 2 (40:52):
Fair, that's fair, um , but I think I had a couple of
like really painful um exposuresto this uh that that really
just like slapped me across theface.
One, uh, when I was building myfirst brokerage.
Uh, after about a year and ahalf we started doing well and
my wife was able to leave herjob and, you know, start hanging

(41:12):
out around the shop and atfirst she was just going to help
with QuickBooks one day a weekand next thing you know, she's
answering the phone and thennext thing you know, she's
running the entire back of thehouse and I'm doing the front of
the house and we're growinglike crazy, but we get to like
12 million.
Get to like 12 million and I'mjust like constantly in this
cycle that I was describingearlier of like running low on
money, uncovering the root causeof the invoicing issues,

(41:34):
getting the invoices fixed, andit was just completely like
distracting me from doing allthis stuff that I love to do.
This was also in you know,probably call it 2000 and I
don't know, maybe 10, 12 in thatera where, like I was in my
twenties, I grew up like reallypoor.
I didn't have like a greatnetwork of people to support me

(41:54):
in my growing brokerage.
So I bootstrapped the entirething with savings that I had
from worldwide express.
So I would.
I didn't have that float, youknow.
So at first I was collectinglike a maniac and everybody was
on auto, ach and credit card andthat was something they
instilled in us.
At worldwide is.
We spiff the reps on gettingtheir customers set up on auto
pay.
So I had that pretty likedialed in.
But as we grew, uh, you know,more and more customers were

(42:16):
coming on board.
I wasn't always able to convertthem all to auto pay.
And then really, my wife is theone that would come to me and
she'd be like look, we eitherhave to sell my ring or that
Mercedes.
But you know we don't haveenough for payroll.
And so I had to sell myMercedes in front of the
brokerage one time, and I thinkI I've told that story to other
people, but that was just onereally painful exposure to

(42:37):
working capital and in thosedays, like I didn't know how to
contact a bank and and get aasset baseline of credit, nor
would my business have qualifiedfor one at that size or my
quality of my information that Ihad.
So and then, as I kind of like,sold that business, you know,
by by the grace of God and wasable to kind of continue to move

(42:57):
on to my career and do someother things.
And then I turned around that,that brokerage company in Omaha
and that was really greatexposure into.
Hey, if you can really automatea lot of this stuff in the back
office, it's pretty accurateand you can get the people out
of the way and the people arethe ones that put latency in
these steps and make mistakes.
But the AI wasn't where itneeded to be.

(43:17):
You know, six, seven years agowhen I was doing that, and so I
would say most recently, after Isold the brokerage, I went to
work for a couple of very largeglobal logistics companies,
helping them with theirtechnology, their technology
strategy.
So the first was VanguardLogistics, which is a big ocean

(43:37):
freight company, a non-vesseloperating common carrier, so
they stuff containers onto otherpeople's ships, is that?

Speaker 1 (43:45):
a large company.

Speaker 2 (43:46):
Huge yeah, the biggest uh nvocc in the world.

Speaker 1 (43:50):
Shame on me, I should know the name I I was.
I was, I was looking for a nameof a new brokerage, as I was
just daydreaming the other dayand I was on chat gpt asking it
to help me with names, andvanguard came up and I was just
thinking about that.

Speaker 2 (44:03):
It's a great yeah, vanguard is a great one.
Maybe, um, yeah, maybe the ummansour family will sell it to
you for, like you know, aseveral billion.
I don't have that, uh.
So, anyways, I was.
I was helping them launch this,uh, this freight marketplace
called freight mango where wewere selling container shipping

(44:24):
online.
Like during the height of thecontainer crisis, and as we went
to market there, we really hadto build all of the invoice
generation functionality fromscratch, and that was terrible
like building a system to makean invoice and we solved it
largely with people in India andyou know, our order to cash was
completely unautomated at first, and then we built the stuff
over time.
But it was really when I wasworking for the steam ship line
CMAC Jam Group and I saw thatall of their large trade

(44:47):
partners had this exact sameissue.
It was the guy, a CEO in theindustry, a guy named Ken
Calloway from Road One, who is areally awesome guy.
I was trying to get him to cometo an event because he was one
of our partners at Zbox, theaccelerator.
I was running for CMAC JamGroup at the time and Ken

(45:08):
wouldn't take my call and hefinally picked up one day and he
said I'm not coming to yourevent, charlie, you guys owe me
a bunch of money.
There's a bunch of unpaidtrucking invoices.
I'm like, well, dude, I work forthe accelerator.
I don't, I don't know what todo.
He's like well, you got to gotalk to that team out there.
So I got to talk to all theseamazing people and they're

(45:29):
jumping into all these bills andthey're like man, this one
doesn't have bill lighting, thisone's missing our reference and
it's $15 million worth ofsitting out there.
And so once I saw that, thatwas like the big aha moment, and
I mean, within three months, Ihad the entire plan, the initial
investors and a co-founder kindof ready to go.
And, um, you know, that's whenwe got going.

Speaker 1 (45:50):
Attention freight brokers and three PLs.
Green screens Dot AI istransforming how free
professionals pricing quotefreight.
With AI powered pricing andreal-time market intelligence,
green screens delivers accurate,reliable predictions to help
stay competitive in a constantlyshifting market.
Whether managing spot rates orlong-term contracts, greenscreen
empowers brokers to quote withconfidence and boost

(46:12):
profitability, removing theguesswork from freight pricing
strategies.
Trusted by over 220 brokerages,greenscreen is leading the way
in the future of freight pricing.
And now there's Illuminate,greenscreen's latest product,
designed to shine a light ondeeper freight market insights.
Illuminate providesunparalleled visibility into
spot and contract freight trends, giving users a clearer view of

(46:34):
pricing fluctuations and marketconditions to inform smarter,
more profitable decisions.
Visit greenscreensai slashthefreightpod and discover how
Green Screens and Illuminate canhelp win more business more
profitably.
So it's interesting becauseyou're now like in the thick of
this business that you arerunning.

(46:55):
It's yours, it's your baby, butit feels like in your history
and we haven't done like a lotor a chronological, we haven't
talked about your background,but you've.
You've plugged little bits andpieces here and there and, yeah,
um, what I've noticed is you'veworked at a lot of places,
you've had a bunch of roles andyou know some of them have been

(47:17):
shorter stints and I'm curiousabout that.
Can you talk a little bit aboutyour path, um, and like how
this is different because you'renow, this is yours and you're,
you're in this, you're runningit, versus kind of like stopping
here, stopping there,consulting here or whatever.

Speaker 2 (47:33):
Yeah, I think that's fair and I think, just going all
the way back, I started withWorldwide Express and in those
days they were a franchise basedcompany.
So while I was there for fiveor six years I was working
within different franchisegroups and you know I was part
of a couple of differentacquisitions during that time in
different franchise groups andyou know I was part of a couple
of different acquisitions duringthat time.
And so I had a couple of smallexits in my twenties because I
got split equity at worldwidefriend running franchises for
absentee owners, like early,early in my twenties.

(47:55):
And you know, by the time I wasin my late twenties, private
equity came into that businessand I was able to kind of walk
away and I that's when I startedmy first brokerage company.
And after that I put about fiveyears into building, maybe four
years into building my firstbrokerage company and, um, I
really got stuck.
I was coming about like thatphase and I didn't really see a
path to taking that to a billiondollars and looking, knowing

(48:16):
what I know now, working capitalcould have solved it all.
Working capital and a littlebit of mentorship could have
solved it all.
I mean, uh, the guy that I soldmy last brokerage to, scott
Fitzgerald, is my exact age.
He started his brokerage theexact same year and that guy is
one of the wealthiest guys inthe industry right now.
And, um, and he did it justthrough grit and hustle and
sticking with it Right.
But you know, you mentioned,like I've done a lot of other

(48:37):
things.
I mean, I would say, after aboutfour years of running that
brokerage, I realized, like I'mnot the guy I'm not ready for,
probably need to learn someother things.
And, um, I was.
I would say I was also reallyinterested in startups at the
time.
I really wanted to figure outhow Uber was going to change
trucking and while I was likepulling at that string, trying
to figure out should I sell mycompany, I actually had two
companies at that time.

(48:57):
I had this brokerage businessand a small chain of pack and
ship stores that I was runningin San Diego, and so I ended up
selling both of those in 2014because I'd already gotten
involved with cargomatic andthose were the guys that
uberized trucking long beforeuber got into the space and um,
so I spent a couple of years.

Speaker 1 (49:11):
Whatever happened?
Whatever happened to that didthat thing flame out no, no,
it's doing extremely well.

Speaker 2 (49:17):
Yeah, they're, uh, really, I mean they're yes, yes,
uh, they're very profitable.
A guy, rich gerstein, cameafter.
Like all of the kind of techcrunch articles and stuff came
out about them, negativepublicity of maybe 2016 and 18
uh, this guy named rich gersteinstepped in.
I worked with the originalfounders, who are still both
dear friends of mine the goodguys, uh, but they weren't the

(49:38):
guys and gerstein has taken itturned into a really legitimate
business and they all freightfor a lot of folks.
They're backed by tiger softbank.
It's a freight brokerage yeah,it's uh, it's more of like a
managed trans company where theythey, but it's super, super
automated.
I mean they don't have a bigoperations team and they do a
lot of routine freight where youknow they put uh the same

(50:00):
carriers under the same loadsand they manage you know stuff
at scale for they haul forsteamship lines and big
retailers and you know all theusual suspects.

Speaker 1 (50:09):
Yeah, it makes sense Okay.

Speaker 2 (50:11):
Yeah, um.
So anyways, after I spent acouple of years there, I, um, I
I was still really curious aboutstartups and I wasn't ready to
kind of start my own.
I didn't have an idea goodenough, and so I I was the kind
of head of growth at at a couplemore startups.
Uh, after Cargomatic I didShipHawk and then Airspace, and
all three of those companieshave gone on to raise a
considerable amount of money andreached a certain scale where

(50:33):
they've become viable businesses.
And so that's when I kind ofrealized, andrew, that I'm good
at going zero to one.
My experience at WorldwideExpress and starting new offices
and hiring new reps made mevery entrepreneurial and very uh
adept at not only uh taking theidea but getting it out and
getting the first cohort ofcustomers to feel comfortable
with it and getting the firstloads on the trucks and getting

(50:55):
the first uh revenue across thedoor, getting the first VCs in
the in the business.
And so after I did a few ofthose, I thought to myself like
man, this is really cool, butlike you don't make shit working
at a startup, I never sold anyof my stock.
So I had a bunch of stock incargo, matic, airspace and ship
Hawk, and I never sold any of it.
I never had a chance to sellany of it, you know, in seven

(51:15):
years.
So I thought to myself like Icould do better.
Um, by this time I was, youknow, 37, 38.
And I thought I could do betterfor my family if I just went
and worked at a more establishedcompany and, and, um, you know,
got a better paycheck and hadsome more stability.
But I'm pretty unemployable.
So I wasn't really ready to gowork at it for somebody else.

(51:36):
But I thought if I could buy amore established company that
had more profit coming in, Icould afford to pay myself.
Call it 180 or $200,000 a year,because you know, at that time
I hadn't been paying myself thatmuch for a long, long time.
So, anyways, that was the wholedrive to move to Nebraska, and I
also subsequently wanted to getmy family Like.
I had three sons, very young atthe time.

(51:56):
I didn't really want to raisethem in Southern California
where we were at the time.
So, uh, we found this brokerageto buy in Nebraska and I
thought this opportunity to comein there and automate the back
office, clean up their AP andtheir AR, because their books
were a mess.
I thought if I could do thosetwo things and put any
technology spin on the business,that I could sell it to some
large strategic who was privateequity backed or venture backed,

(52:19):
because they could go raisemoney on my revenue at a higher
multiple than I could.
So there was just an arbitrageopportunity that I thought I
could create and it was kind offinancial engineering and that's
really what took me to Nebraskaand that's what happened at
Manning's.
We sold it 19 months later toScott Fitzgerald at Fitzmark and
that's when I started doingsome other things.

Speaker 1 (52:38):
What's it like to go into a business to buy one and
like go in and own it with thiskind of very core plan of
selling it in a short timeperiod?
Like I'm just curiousemotionally what it's like to be
in a business culturally whenyou've got this end game, that's

(53:00):
short term.
Like I just I'm coming from aplace of like building where I
like thought I'd be thereforever and so like you're
pouring yourself into people andwhat feels like a different way
than you maybe would if youknew you had a two to three year
timeline with a business.

Speaker 2 (53:14):
I think when I was younger, I probably had more of
an like a sentimental reasoningbehind why.
Why it's better to, you know,try to have this like long
marriage with the company thatyou're a part of, or the company
that you're running or thecompany that you own.
And then, over time, you juststart to realize that, man, my

(53:36):
life changes so much andeverybody else's world and life
changes around us, and more than, moreover, you never know what
opportunity is going to comeyour way tomorrow or the next
day.
So, um, I didn't go intoManning's thinking.
I was going to sell it on a 19month horizon, but when the
opportunity came up and theshareholders were all thrilled
with the outcome, it just made alot of sense.

(53:57):
And by that time we had turnedenough screws in the business
and I was like looking at thebusiness and I was like I felt
like they needed me, you know,but I actually wrote a kind of
an emotional blog post about itthe day that I decided to leave
because the second Fitz, uhFitzmark took over the business
and like their operator, dougStarnes, came out and their tech
guy, jacob Sherb, came out,like they had everybody trained

(54:19):
up on the new TMS and likelifted and shifted within like a
week and they just came in withlike this, like super, super,
like 18 style, like plan, andlike within a week I was like
these people don't need me.
And I hung out for like threemore weeks and I was like, no
thanks man, like I, I wasn'tdoing anything.
And so that's where, like Ijust saw, like Fitzmark is a

(54:42):
better manager of Manning's thanme and the best thing that I
did for this business and thesepeople cause Manning's is still
one of Fitzmark's like mostprofitable offices.
It's now Fitzmark Omaha andthis team is completely Fitzmark
, but the same people that werethere for 10 years before I
bought the business are stillthere and they're dedicated to
Fitzmark and and Scott and histeam just take great care of

(55:04):
people.
And so it's like you know thatwas a really healthy transition.
And it also came to time for mewhere, like all of a sudden, I
popped my head up and I was like, oh shit, other people are
calling.
There's other cool things thatI can do.
So I think I've I've neverreally, andrew, like run away
from something so much as I'vegotten the opportunity to run
towards something, so like, asan example, like I didn't sell

(55:25):
my freight brokerages because,like, they were dumpster fire,
like I mean, the first one waspretty rough but I was making
good money on it and like and Icould have gotten it better.
But I just started seeing, like, man, I want to learn more
about tech and I and I and I seethis opportunity opening up,
and that was like 2007,.
2008 is when I really startedto feel the pull to get into
tech, and so, by 2014, I wasable to sell that brokerage.

(55:47):
And then I kind of, you know,had these short stints and I
just really looked at it as likelearning opportunities.
I think when I've likeexhausted the maximum amount of
what I can learn out ofsomething, um, it's pretty easy
for me to just change my mindabout it.
And then the other part is likeselling that business, uh, at
Manning's, like that changed mylife.
You know, like I got theopportunity to go do something
else.
It relieved, you know, somesome sort of challenges in my

(56:10):
life that made it different.
So you have to take that intoconsideration, as you know.
I mean you got the opportunityto sell your business.
It was like everything'sdifferent from that down, even
if you don't walk away like therichest guy.
It's different.

Speaker 1 (56:25):
Yeah, I mean it's definitely different when you,
when you leave, um, there's twopoints of difference, difference
I don't know.
There's two points that likeare life-changing in that.
One is kind of can be, can befinancially.
I guess it depends how you sellyour business or how much you
sell it for.
But, um, just coming into alarger amount of cash for the

(56:45):
first time is is a meaningfulchange in life.
But two is more about how you.
That doesn't necessarily haveto change how you live, but when
you leave a business thatyou've been, that you built,
that's a meaningful change inyour life.
That I don't know that people,if I could give advice to
someone selling their companyand like leaving it because mine

(57:11):
wasn't about selling it as muchas leaving as a result of
selling, because I didn't leavefor a year and a half after I
sold, but mentally prepareyourself to leave.
And what I mean by that is likewhen you're going through the
long, arduous process of duediligence with an acquirer.
Aside from spending that timethinking about what's going to

(57:33):
happen to your business becausethat's how I spend all my time
is thinking what's going tohappen to my team, what's going
to happen to this team if theywant to take that over.
What's going to happen here?
What's going to happen here?
At no point did I ever think.
What happens to me when I'm nothere?
How do I navigate?
Not having this thing that, insome ways, has become a big part

(57:54):
of my identity?
Right or wrong?
Wrong, frankly, is what it is.
We shouldn't allow our businessto be a big part of our
identity.
We can have it be a big part ofour passion and our why, in
terms of why we show up everyday, but having it actually be
part of your identity is amassive flaw and it's a product
of other things missing in ourlife, and I only speak from my

(58:16):
own experience of not havingfilled my cup up enough with
things that really mattered andthen allowing a business to take
that place.
In any case, not being readyfor the aftermath of leaving is
a big mistake, I think, and Iwould recommend people spend
real time thinking about thatand contemplating what that can

(58:37):
look like.

Speaker 2 (58:39):
I agree I have a lot of friends that it keeps them in
the seat for a long timebecause they don't.
I mean, I have a really goodfriend in Omaha that's a super
successful CEO and he, he runs amarketplace business.
It's multiple billions ofdollars in GMB and and, uh, the
guy's one of the wealthiest guysI know.
And just he, I, he doesn't knowwhat he would do next, he

(58:59):
doesn't know what would happen.
He knows that, like I mean, youknow, you have some of those
friends where you're like, hey,dude, how are you doing?
I'm good, yeah, it's great.
And then, like, behind closeddoors, you're like, oh, dude,
I'm dead inside and they're likeme too, like it's like, I think
, in freight, you kind of youhave like those those friends
where you're like everything'spositive, it's up to the writer,
maybe it's your co-founder, andthen, like you get behind

(59:20):
closed doors and it's just likeyou're like, oh god, I think,
particularly with my, my friendsthat that are CEOs and dads
that are engaged with their kidsand stuff, like you can run
really, really hot at this age.
You know, and I think when Iwas younger, at first I was
going to challenge what you'resaying about like not letting
the business be who you are.
But then I kind of like Ilistened to a little bit more

(59:40):
and it resonated with me as Istarted thinking about my
professional identity when I wasyounger, before I had my
children, and how much I pouredinto relationships at worldwide.
Express that like maybe lookingback or like just very
superficial and maybe notlong-term relationships.
Maybe it wasn't a direct report, that I was like changing their
life or impacting them on adaily basis.

(01:00:01):
Maybe it's like somesuperficial relationship that
you know you just kind of dragon with or something.
And I think over time, as youlearn yourself better, you
become more defensive of your,your time and your friend group
because, like you want to fillthat time with, be it your
fiance or your, your family thatyou're going to build, or your,
you know your, your family,that your your your other family

(01:00:22):
that you want to just maintainhealthy relationships with as
you grow, or friends you want tostay in touch with.
You can't do it all Right and Ithink, uh, I didn't want to just
touch on one last part of yourquestion because I didn't answer
like, why is Upwell differentthan these other things that
I've done?
And and um, and there's noquestion that it is.
I mean, it's um.
I want to be very clear LikeI'm building this business to uh

(01:00:42):
, try to build a company that'sof a scale and um capabilities
that, like, exceed my ability tomanage it.
That would be something I'd bevery proud of is if we built
something that was so big andspecial that, um, you know they,
they asked me to become thechairman and not the CEO, um,
and I think we're, um, you know,light years away from that.

(01:01:02):
It's a long, long ways away,but that's the ambition that I
have.

Speaker 1 (01:01:05):
I respect and appreciate that, but I want to
dig in for one second on thatcomment and then you can keep
going.
But why that thought versuswanting the challenge of being
able to grow into the skill setof managing something larger
than you've ever managed?

Speaker 2 (01:01:26):
Well, I think very soon I'll be managing something
larger than I've ever managed.
Um, well, I think very soonI'll be large, I'll be managing
something, uh, larger than I'veever managed, and I'm not
intimidated by that at all.
In fact, I can see like veryclearly in my mind's eye how
we're going to get to what Ithought was the goal line of
this business when I firststarted off.
And we're getting there fasterthan I expected and we have the
support of folks that I didn'texpect the support from, and in

(01:01:47):
so many ways this has been likea dream come true for me, cause
it's just like just playing,like I'm playing a game that
like I know how to play, andit's like it's like I'm playing
Madden against everybody else'slike a little bit like on a
little bit lower skill level andI already know the plays are
going to run because I've beendoing it.
But then to also have the helpand the network then of folks

(01:02:13):
that like genuinely want to seeme be successful, from my
initial angel investors tointroductions to customers, to
just like goodwill dude, like itis so amazing to have the
network and the support.
But going back to your point, Ijust see the opportunity of
what Upwell can be, and I thinkthere's this massive, massive
potential for Upwell to becomethe clearinghouse for trillions
of dollars of payments forglobal trade, and we'll have the

(01:02:34):
intelligence to power thosetransactions and reduce the
waste and the fat that comesfrom the audit process.
And if we do our job, theauditors go away.
I mean, that's just the truthof the industry.
And so when I start thinkingabout building something like
that, it like motivates me to alevel like I can't even fucking
describe.
But it also makes me think,like dude, like Charlie, you're

(01:02:57):
not doing this to make a billiondollars.
You're doing this so that yourfriends in freight respect you
and that when your, your kids,get to uh meet, uh, andrew
silver someday, that AndrewSilver can say something really
great about your dad that, hey,I met him when he was running
around this brokerage and he'salways just like a friendly guy,
bit of a knucklehead, but wehad a good time together and you
know, everybody was justrooting for him and went up Well

(01:03:19):
, when went fantastic for him,we were all just so happy.
You know, that's why I'm doingthis.

Speaker 1 (01:03:28):
I like that.
At Molo we built a greatcompany and I'm proud of the
work we did.
We knew when to ask for helpand sometimes that meant going
outside of our own company.
I'm proud we built an ecosystemof trusted partners like
Metaphora.
When we needed differentiatedindustry expertise in business
consulting or technologyservices, we looked at Peter
Ryan and the team at Metaphora.
Business consulting ortechnology services, we look to

(01:03:48):
Peter Ryan and the team atMetafora.
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 tosolve problems 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,

(01:04:09):
optimizing spend or selectingand building software.
Go check them out atmetaforanet.
That's M-E-T-A-F-O-R-A dot net.
You know part of me, as you weretalking, just thinks like
you've had a lot of experiences.
You've worked at a number ofplaces or consulted for done you

(01:04:31):
know a little bit here andthere for a number of companies,
and I get why.
If you were to backtrack from apoint in time, you could see why
all the dots connected to leadto where you are.
But it is part of me likes tolook at it from the other end of
the spectrum and think, like itwas, maybe all of these things
were meant to happen so that youcould be in the position you're

(01:04:54):
in right now and that you wereeducated and met like and by
educated I mean like thrown intoa, a situation with um, I don't
know bnsf or you know thisocean liner, or with this broker
, and, like you know, oneexperience leads to the next,
leads to the next, leads to,like the point you mentioned

(01:05:16):
earlier, where you're sittingand looking at all these
invoices poorly managed, $15million owed out to uh, road one
, I think you said, and all of asudden, like a light bulb goes
off and it's like wait a second,I've got a.
I see a big problem and I thinkI can build the solution and I

(01:05:37):
think it's just cool.
So I, I I'm not surprised, um.
And then the second thing yousit around like friends
supporting you, and all thatsupport you've gotten, I think,
goes back to the first thing Isaid about your name.
And this is just a guy.
I'm just a guy who's I'veprobably shook your hand five
times in our life that's exactlywhat I was going to say,

(01:05:58):
probably, but consider you afriend and uh and again, the
five times are a product of justrunning.

Speaker 2 (01:06:03):
I think the first time we ran into each other at a
conference, like at the bar andand I and I think almost, I
think, probably every singletime we've ever seen each other
has been at a conference.

Speaker 1 (01:06:12):
Exactly, and but but I'm cheering for you and it's,
it's.
You know, it's not like therewas something that you did for
me that that made me want tocheer for you.
I think it's just kind of theway you carry yourself and maybe
the way you think aboutrelationships.
I don't know if you want totalk about that for a minute,
but like I think that certainpeople in our industry do very

(01:06:32):
well for a number of reasons,but like it's a superpower to
have people who want to pull foryou, and especially people who
you didn't really give them agreat reason to pull for you, or
maybe it's not, you didn't givethem a great reason.
Sometimes the great reason isyou're just a good someone's,
just a good person.
You know, like you meet themand you get a good vibe from

(01:06:53):
them and you're like this guyseems like he wants to help me.
I should want to help him, um,so I don't know, I think that's
a thing.

Speaker 2 (01:07:00):
Uh, I think that's a thing.
And I would also say, andrew,that, um, I wanted to start a
tech company when I leftWorldwide Express in 2007 or
2008,.
Whenever I left and I looked atthe landscape at that time and
like Mercury Gate was growingand other than that there was
like really no other than TMS.
There was no technology goingon and I knew I couldn't compete
with Mercury.
I didn't see Swan Leap andAscend TMS and all these other

(01:07:24):
ones that have popped up andlike since exited and done great
, and you know, I didn't havethe experience and the
perspective and the and Icouldn't execute it.
I didn't have the network.
So, going back to your point,like when I tell investors or
when I, when I introduced myselfto a prospective employee and
I'm giving them the whole story,like my background, can get so

(01:07:46):
long because it's hard for me totalk about any one part about.
It's hard for me to talk aboutUpwell without talking about
selling my car in front of mybrokerage and without talking
about stumbling upon this issue.
You know, uh, in in theselarger companies, but, um, it's.
I think that all the, some ofall of those experiences that
just position me uniquely, justto do what exactly?

(01:08:07):
What I'm doing it up well,which is what I think is making
it so much fun and, uh, drivingthe success that we're having.

Speaker 1 (01:08:13):
If I'm being honest, when did you start the company?

Speaker 2 (01:08:18):
uh 2000 or 2023, so just about two years ago that's
when I but I left my job june ofthat year and, uh, we had
already raised some money and,um, we started building the
product that June and July andthen we launched with our first
two customers last February.
So we've really been in themarket for about one year.

(01:08:42):
And you did a series a we did abefore I, before I started the
business, we raised a atmanifest in 2022.
I was able to raise 800k frommostly just my friends in the
industry, and that's uh just tobe well supported by a lot of
really legendary operators andinvestors.
Uh, in just one couple onetwo-day sprint was amazing, but

(01:09:03):
we parlayed that into a threemillion dollar venture round
about a month and a half later.
So I was sitting on about justunder $4 million before I gave
my two week notice at Z box andthen, uh, that lasted us uh
quite a while and then we wentback out.
We just did a $6.6 million seedround in January of this year.
Congrats.

Speaker 1 (01:09:25):
Thank you.
Um, although there's like newschools of thought that are like
stop congratulating people forraising money, that doesn't mean
anything, I disagree.
I think getting someone tobelieve in your business enough
to write you a check is a greatlike starting point.
It's not an end point by anymeans, but it is a noteworthy
starting point.

Speaker 2 (01:09:44):
I also challenge anybody who, like, naysays the
venture capital route or privateequity or any other you know
sort of asset class of investor.
I challenge them to get to knowmore, like, get to know more
VCs, get to know more privateequity investors, get to know
more family offices, becausethere's great investors out
there who it's.
Their number one job is to findentrepreneurs and founders that
are trying to build amazingthings.
And founders that are trying tobuild amazing things.

(01:10:05):
Not every business is venturebackable.
If you're looking to go start acar wash, I wouldn't suggest
you go to Sand Hill road in SanFrancisco.
But you know, if, if you've gotan idea that can scale and and
you know you think, you thinkyou're good enough, then go get
in front of some DCs, see if youcan raise the round.
Because, uh, I tell you what,I've been the supporting cast
member multiple times, um, as asa angel co-investor or

(01:10:29):
co-founder, but being in theseat as a founder CEO and your
brother Matt knows very well heand I are, like you're, very
similar.
Uh, I'm, I'm, I'm going to getkind of a few months behind him
in terms of, like, our corporatelife cycle with Cargato and us,
um, but it's.
It's not for the faint of heart.
It's not easy to just uh run acompany and go out and circle up

(01:10:51):
a bunch of investors and have aprocess come together in the
timeline that you want it to,without really like either.
Uh come dangerously close torunning out of money, burning
down your marriage, likeseparating with your co-founder,
you know all these other thingsthat can just become a
by-product of being stressed.

Speaker 1 (01:11:09):
Why do you think VCs have such a bad name in our
industry or some people givethem that bad name.

Speaker 2 (01:11:16):
Yeah, I think, look, I think there's a lot of folks
that that look at venturecapital as like an unfair
advantage, like you know, sortof like the the capital
equivalent of white privilege.
And I think when people look atit that way and you're a
struggling operator, like manybrokers are right now, I mean we

(01:11:37):
help midsize brokers that are,I mean we see their finance so
they're operating very, very youknow uh close quarters and um,
then they hear about somebodygoing out and getting you know
$10 million in a downstroke andturning it into some you know
front end of uh some bullshittechnology that they don't
believe in.
I understand why they getfrustrated, I do.
But I also uh think thatthere's no technology

(01:12:02):
development in our industry, andcertainly not at the scale and
the velocity that we've seen inthe last 10 years without,
without the vcs.
So you can say what you wantabout uh, flexport and convoy,
and I mean I put cargomatic inthe same class.
Um, I mean you think thatcargomatic is just completely
gone because you don't hearabout them anymore and everybody

(01:12:22):
else is gone.
So, um, I think that sort oflike long tech 1.0, when
everybody was a service providertrying to get valued as a
software company and the VCswere actually buying the
bullshit in 2016 and 17.
I think that really muddied thewaters for the next generation
of technology, which is likeProject 44 and Forkites, which

(01:12:45):
is pure SaaS.
And then you come in and youstart to see what folks like I
don't know ISO and Highway andyou know companies like us and
green screens pure SaaS comingout like pure software.
So I think those companies, yes, think about VC Absolutely.
If you have a large addressablemarket and you think that
there's a finite window of timethat you can build a big

(01:13:05):
business, do the math, see if itmakes sense.
If it does, the VCs will agreewith you.
If it doesn't make sense, it'snot going to pass muster.
And even though there's ashitload of VCs out, there.

Speaker 1 (01:13:19):
A bad idea is a bad idea.
A lot of great points in there,and I do think it's like it's
what has happened, as, like theVCs that wrote checks to
companies that didn't pan out,like that doesn't mean that VCs
are bad.
I mean, if you understand it,it's like they're making bets,
like they're there and theexpectation is not that a

(01:13:40):
hundred percent of the bets arehome runs.
It's just not the way the gameworks.
So I do think, I just think you, you have a very smart way of
thinking about it with, like,the just challenge yourself to
learn more, because it's oftenthe people with the pitchforks
who have done the least researchto understand why they have the
pitchforks.
They've they've latched onto apoint and they're running with

(01:14:03):
it with a pitch.

Speaker 2 (01:14:04):
Well, I see the people that, um, the people that
like lash out the worst aboutventure backed out.
I mean you are one of them.
I mean, like your peak, like uh, arrogance and Molo days, like
your, uh, your battle with uhDan Lewis it was all about, like
you know, haves and have nots.
I mean, no, cause you, you youtook investor money and you

(01:14:25):
admitted it from the get, butlike you used to be pretty vocal
, right.

Speaker 1 (01:14:30):
At your peak arrogance.
I appreciate you thinking youknow me well enough to know
where the peak was.
I'm just speaking from fromafar, from afar.
But, anyways.

Speaker 2 (01:14:40):
Well, I just think it's turning.
It's turning is what I wouldsay.

Speaker 1 (01:14:44):
Yeah, so I've.
I went pretty hard at Convoybecause I thought that they had
zero plan to make real money andzero understanding of how, and
I thought that they hadbamboozled investors.
I didn't think that theinvestors were the bad guys or
the VCs were the bad guys.
I thought that they were thebad guys for pretending a
business, like when I used tohear or see I saw the deck of

(01:15:06):
one of the digital brokers whowas talking about their multiple
.
They wanted SaaS multiples ontransactional brokerage revenue
and they were talking about howthe business was worth 20X
revenue on frickingtransactional brokerage revenue.
That isn't even necessarilyprofitable brokerage revenue.

(01:15:27):
It's like those were themoments.
I won't call out whichbrokerage was doing that, but
those are the ones where I'mjust like this is the BS and
this is where there are bad andthere are bad actors in every
industry.
Like that's just how the worldworks and I don't think that's a
VC.
I mean, I do think it's a VCproblem in the sense that it's a
problem for the VCs who fallfor it, but I don't think it's a

(01:15:48):
problem in the sense that theVCs are the problem.

Speaker 2 (01:15:54):
Look, all VCs aren't created equal, though I mean, I
would say that when the founderswere raising money for
Cargomatic in 2012, the deck waslike 50 pages and like 49 of
them was why FedEx and UPS willnever get into local trucking
and, like you, had to educatethe investors that many years
ago.
But now there's great people,there's great investors out

(01:16:15):
there that like work in theearly stage and they know what
we're doing.

Speaker 1 (01:16:20):
What I'm curious about is, if you look at your
experience with VC, I'd like tounderstand kind of lessons that
others in similar role, peoplewho are wanting to start
businesses like yours notnecessarily similar, but just,
you know, same kind of hungry,good freight experience but

(01:16:40):
haven't necessarily raised moneybefore and I'm just curious,
like what are some of the thingsthat people should look out for
?
How do you spot a good VC froma bad one?
What were the things that youwere paying attention to as you
were thinking about who to raisemoney with and who to partner
with?

Speaker 2 (01:16:59):
So I've just been through it like many times now,
first as a founder and then as aco-founder excuse me and then
as an angel and co-investor.
I've helped a lot of kids raisetheir first rounds of
institutional money and justrecently, I have a good friend
named Eric Malin who's been inthe space for many years, and I
was just actually on a ski tripwith a few other guys from the

(01:17:20):
space and over the weekend wewere able to help him raise what
looks to be, you know, hisfirst million dollars.
So, um, it can happen quicklyand it generally comes in the
form of uh getting in touch withan educated VC through a
trusted source.
So, um, if, if, somebody isinterested in you know, uh,

(01:17:40):
exploring building aventure-backed business for the
first time, there's the it's.
The best part about logisticsis is, um, people want to help
you, they want to talk abouttheir wins and, especially in
tech, people want to tell youabout all the things they did to
be successful.
So if you have some chops andsome credibility in the space,
then some cold messages like hitpeople up on LinkedIn and say,

(01:18:01):
hey, look, I'm uh, I'mconsidering, uh, building my
first business.
Here's the idea.
Don't be, don't be guarded withyour idea, like you're not
smarter than anybody else.
Your idea has already been had,you know.
So, uh, when on execution, like, but if, if you're going to ask
people for help, be transparentand open and say, hey, here's
what I'm thinking about building, here's why I'm thinking about
reaching out to you, and I'mjust curious, I've never done

(01:18:24):
this before.
Don't ask for fucking 30minutes, say two questions and
take the LinkedIn response andthen go do something with it.
But, honestly, the the bestentrepreneurs have action bias
and and I say this going back toum, I got reached out to by a
lot of entrepreneurs, like afterI left car dramatic, because
there was a lot of people thatwanted to Uber as trucking and
you know, car dramatic was thefirst one to try.

(01:18:45):
And Dan Lewis was one of thefirst people to reach out to me
and in 2014 or 13, we startedcommunicating and he was still
working at Amazon and he had twoideas that he was balancing
back and forth, but he wasasking specific questions about
over the road trucking and whyCargomatic stayed focused on
short haul, and why not LTL, whytruckload, and it was just like
really, really detailed anddefined questions.
But then when he would checkback in 90 days later, he would

(01:19:10):
like give me an update.
Hey, I just knocked out thesethree things and now I need this
question.
And so when, when a foundergets a question from a young
entrepreneur and then that turnsinto start to see some action,
which is ultimately what thebeginning of traction is, that's
when the entrepreneur will giveyou, the founder will give you
30 minutes on the phone and theymight write an angel check into
your business and they're goingto certainly make some intros

(01:19:31):
into some interesting VCs.
But I would say, if you're, ifyou're thinking about doing it,
talk to somebody who's done it,try to get into their network
and then study the space man.
Like I can't tell you how badof a problem it is that that

(01:19:54):
people come into our industryand they try to build tech and
they try to be disruptive andthey do it all on their own ego
and attitude and there's nocontext, there's no freight
person in the room andultimately that doesn't fly with
VCs.
Vcs are not trusting with thatbecause they they've all burned
money on, you know, stanfordpeople or people with great
degrees that come from zerofreight experience and they
never go out and get an Andrewsilver, or they never go out and
get a will Jenkins on theirteam, so there's nobody ever
that's like in the freight thatcan make the thing move.
So I think if you can, um, ifyou can arrange yourself with,

(01:20:17):
like, some good founders, getinto their network.
Figure out who are the guysthat are actually writing checks
in VC right now in this space,because it's a short list and
it's going to be like Julian atschematic, it's going to be like
Peter at grid.
It's going to be like, uh, like.
I have an investor in Newarkventure partners.
It does a lot, um.
You've got like Santos at uh atDynamo.

(01:20:39):
You've got Barack at auto tech.
I mean, there's really like adozen.
You know uh folks that are likesteeped in log tech, that uh
like tie at iron spring, that ifyou, if you get one of them on
on board, like your round isgoing to be filled up, because
they're the positive signal thatyou need.
So think about raising around aVC as uh building a pool party,

(01:21:04):
organizing a pool party thateverybody wants to go to, and
then, once you get everybodythere, like people are all kind
of standing around waiting tosee who takes their shirt off
and jumps in first, but like, ifyou get that one first guy to
jump in and there's a bunch ofother cool people in there, next
thing you know you got abanging banging round.

Speaker 1 (01:21:21):
I love that.
Great advice, Great feedback.
I want to pivot to the notionof building a business in an
ugly down market and I just amcurious what it's been like
starting in a freight recessionand knowing that people are

(01:21:41):
looking to cut costs and in somecases, I can see how you're
going to use that as a positivein your answer.
Some cases, I can see howyou're going to use that as a
positive in your answer, but inother cases I feel like people
are less likely to try newtechnology, sign new contracts,
when every day, every month, itseems like they're seeing their

(01:22:02):
margins erode and get worse andworse and they're just looking
to cut wherever they can.
So just curious, you knowyou've the entirety of your
business has been built in adown market.
What has that experience beenlike?

Speaker 2 (01:22:15):
The phrase that came to mind when I decided I have to
leave this cushy corporate jobthat I have for the very first
time in my life was you neverwant to waste a good crisis?
And I knew that this economicdownturn and this inflationary
environment was going to forcefolks to look at their operating
budgets and their workingcapital solutions.
And the cheapest money to usein your broker agenda is your

(01:22:38):
money.
But right now brokers money isspread out in their customers
accounts, you know, thousands ofbucks at a time.
So the idea was if we couldhelp them help brokers and
carriers keep their money intheir accounts, not spread out
in their customers and theircarriers accounts, then that's
the best reduction we can makein terms of their cost of
capital, their increase inworking capital and they're

(01:23:00):
decreasing their DSOs.
So, going back to when Idecided that I wanted to start
the business, I did a lot ofresearch because I was working
with 12 of these large corporatepartners 3D Accelerator I was
running with or working with, soI talked to a lot of their
heads of finance, cfos andthings like that.
But I also reached out to CFOsof brokerages, ceos of
brokerages, and what I alwaysthought was funny is, when I

(01:23:20):
talked to a CFO is they werelike like complimentary of
themselves and the improvementsthat they've made on their DSO
and their working capital sincethey've been there, but
generally dissatisfied with theresults that they're getting
currently and generally feellike they're paying too much.
So it's like if you think ifthere's a better buyer out there
than a CFO who's really nothappy ever and like the only

(01:23:42):
thing that does make them happyis reduction in head count and
improvement at working capital.
It's just a really simpleconversation to have because we
come in and we say look, I mean,based on your situation right
now, you've got 12 people in theback office.
We can help you do more withless, repurpose a lot of their
time back into more.
You know meaningful activitiesand, by the looks of it, if we

(01:24:03):
could fix your you know, improveyour DSO by two to four days,
like we do for all of our othercustomers, you know to your
point that's going to be anothermillion, $2 million of working
capital back in your account.
That that is going to allow youto say yes to that next
investment.
It's going to allow you to sayyes to the next hire.
It's going to allow you to sortof uh, make more educated
decisions about what next monthcould look like, uh, from a
growth perspective.
So there's never been a bettertime to sell this.

(01:24:25):
To be honest with you?
Yeah, they're looking at themoney more than ever before
Correct, and I would say thatwith AI, the way it is like
we've been able to build some nocode solutions to where I mean
we can go in and take over abroker's entire cast payer
portfolio in one meeting, withno engineering time, because we

(01:24:46):
can take all the invoices viaemail.
So it's just a really cool timeto be doing what we do.

Speaker 1 (01:24:52):
Yeah, I didn't mean to tee you up so easily with
that, but it makes sense.
The answer is it makes sense.
The next thing I'm thinkingabout is just freight tech
companies in general and I feellike zero to one is if there's
an idea that people think areinteresting.
Zero to one I don't want to sayisn't hard but is relatively

(01:25:15):
not as hard as getting one to ahundred or whatever.
And the terms are the numbersaren't necessarily numbers don't
matter, but it's more like youunderstand relatively what I'm
saying.
We see a lot of these companiescome into the space, get a lot
of hype, get early customers,early traction, but there are

(01:25:36):
only a handful or so freighttech companies that we've seen
actually scale to be like a realstalwart player in the business
.
I'm curious how you think aboutthat, if you think that's a
problem that's industry wide, orwhy you think that is, and how
you think about that within yourown business.

Speaker 2 (01:25:55):
I think it's a really astute observation.
I think it's something thatdrives me a lot and makes me
think.
Going back to, like, my why andmy motivation to building
something is shy of a couple ofcompanies in the arena today, um
, that have potential to IPO.
You know we've yet to see likea major IPO which is like the.
That's like the Holy grail foryou know, uh, uh,

(01:26:16):
entrepreneurial communities iswhen we all start IPO in our
businesses.
Then that's when you know weknow we've made it right.
But, um, you know you look atsomebody like jet and uh, at
project 44, I think what he'sbuilt is like I mean, he not
only did he um sort of build aspace, like he built a category,
but he's built a really niceglobal business that you know is

(01:26:38):
is uh going to be a conveyableand there'll be a nice exit
outcome for that.
But I think if you startlooking at that as like probably
the, the benchmark now in termsof what people should be aiming
for, um, I think there's acouple of things that that
impede people's ability to getto that.
That size and scale one is justthe tam, the total addressable
market, like I mean, if all youcould do is sell to freight

(01:27:01):
brokers, then your, youruniverse of customers is pretty
small, but jet figured out howto cross the chasm sell to sh
shippers, sell to serviceproviders, just to the asset
based people.
So you know, he's, he's uh,turned a lot of these
stakeholders into customers.
So I think when, when you havea path as a biz, as a business,

(01:27:22):
to take various multiplestakeholders and turn them into
customers, then that's a viablepath to scale and that's when it
really makes sense to take onthose like lettered rounds or
the growth equity money and Ithink a lot of what you're
talking about, the companiesthat come in and they get a

(01:27:42):
little bit of hype and they getsome customers and they don't
really scale.
Like, I think a lot of timesthey run into that problem where
, like, they get a little bit ofmaybe unsophisticated or
uneducated investor money Maybeit's from angels, friends and
family or just a dumb VC andthen they get that's enough to
go out and make a little bit ofnoise and get a product out
there.
And, truthfully, for years ifyou had software, people would

(01:28:05):
look at it in our industry Likethere was a very, very low
filter for, like, you know whatwas cool and what wasn't?
Because there was nothing.
So in a vacuum, everythinglooked good.
So I think people can come outand they can get some attention.
But then you know, if peopleimplement your software and they
don't get the desired resultsor the impacts that they're
looking for, then they don'trenew.

(01:28:25):
Then that's when the seed rounddoesn't come, or the series A
doesn't come, and then that'swhen the growth like really
flattens out.
So, um, in my mind I thinkreally a lot of these things are
intertwined.
It's like is your vision bigenough?
Is your space big enough?
If so, you could probably goget some money.
If you can execute with thatmoney and make customers happy,

(01:28:45):
then you can continue on that,that path.
But there's a lot of variablesand there's a lot of margin for
error in between, and so I thinkthat's why maybe it feels like
zero to one is easier, but like,truthfully, they never really
got to one, because like onemeans one fucking happy customer
and they never got there, youknow, yeah you.

Speaker 1 (01:29:06):
You brought up an interesting point.
I want to dig in a little bitjust back into the kind of vc
concept but also just the notionof capital verse, um
expectations and feels like whenyou make the decision to go
raise, like you did six I thinkyou said 6.6 million um, you're
starting a clock and it's aclock against expectations.

(01:29:29):
And I'm just curious how youthought about how did you come
to the number 6.6 or whatevernumber you came to and then
essentially agreed to take onwhatever extra from people who
wanted to give you some cash?
But like, how do you know howmuch to raise for how long?
And how do you think about theexpectations you're setting for
yourselves against what yourinvestors are looking for?

(01:29:51):
Just walk me through a littlebit of what it was like in your
head as you went through thatprocess and what might be
informational or educational toothers who are going to do
something similar.

Speaker 2 (01:30:01):
Yeah, I think this is a question people ask me all
the time.
It's like how much should Iraise, how much should I raise?
And there's really two lensesto look at that.
From One is well, how much do Iraise, how much should I raise?
And there there's really two uhlenses to look at that.
From, one is um, well, how muchdo you need?
And two is how much can youraise.
And so you know, you want tokind of pick a number somewhere
in between there.
And then I would say, thestaking man's approach is to

(01:30:24):
take whatever that number is andwhack it down by about 40% and
go out and target raising thatamount.
And and I say that because,like, let's just use quick math
let's just say, uh, you thinkyou need 1.5 million to uh build
the business and get it towhere you want it.
But you think, uh, you thinkyou might be able to go raise 2

(01:30:46):
million because there's beensome folks that are interested.
And you think, like, otherrounds with other similar
products, with similar TAMs havebeen raised, and so there's
some comparables out there andyou think you can go get a $2
million round, or you're farenough along to get a $2 million
round.
Well then what you do is you gookay, we think we need 1.5.
We're going to put aconservative budget together at

(01:31:06):
1.2.
And we're going to put aconservative budget together at
one point two and we're going togo out and raise that and we're
going to say we need one point,you know two to get to the next
milestone and you know we canprobably do a bridge in between
now and then.
And you start your raiseconversations just on the lower
end of the spectrum and you seewhere people are at and if you
start to get a ton of interest,then it's maybe it's a two2
million round and maybe pricingexpectations, you know, go up a

(01:31:28):
little bit.
But if it's not super wellreceived, that's really no harm,
no foul.
You're not trying to raise likea crazy amount of money, Like
you can go get your hands onthat kind of money if your
business is not a completelyidiotic idea and hopefully
you've pressure tested it abunch by then with smart people
that aren't just telling youwhat you want to hear but by
setting that price lower.
And I think this is somethingthat maybe I could have done a

(01:31:49):
little bit better on the the,the pre-seed raise that we did
have 3 million um led by Newarkventure partners.
Uh, that we did in 2023.
Um, I went out with a prettyhigh uh opinion of what I
thought we could get.
And also, to some extent, it'seasier to raise money before you
have a product or software,because there's less holes that
people can poke and there's lesshard questions that they can

(01:32:10):
ask.
So I kind of wanted to strikewhile the iron was hot, because
I just brought on all these likereally sexy angels.
So I wanted to kind of backstopthat with a nice venture round
and then that de-risked it tothe point where I could go like
leave my job you know, if I hada couple of years of salary for
my co-founder and I and you knowsome other friends or some
other teammates and then we'd befine, right?
So, um, anyways, uh, I think,had I maybe set that price a

(01:32:34):
little bit lower, uh coming out,I think I might've been able to
attract some other investorsthat would have come and then
like tagged along as the pricecrept up.
But, um, that's how you cankind of just like sort of cast a
wider net and not get a bunchof like soft passes early on in
the process because you may havean opinion of what you think
you could price the business at.
But you know, until you get inthe room with the VC like it's

(01:32:56):
best to really not even starttalking about those things and
kind of let the let the VCs, whoare expert in pricing
businesses, let them start totalk about pricing and then see
how you react to it as a founder, as opposed to as a founder
really trying to drive thatnarrative, especially if you're
a first time founder.
If you're a first time founder,shut the fuck up and just get
the money and build somethingyou know.
Be happy.
That's how I feel.

(01:33:16):
That feels a little crass.
I don't know, man, I think Ithink I help people try to
optimize all the time.
There's such a thing asprocrastination due to
perfection.
Yeah, the bottom line is dude,you're starting the business
because you want to build abusiness.

Speaker 1 (01:33:37):
That's the hardest part is getting it going.
I'm with you.
We're coming up on the end ofthe planned time.
I'm curious if there's anythingyou wanted to talk about or had
in mind that I didn't bring up.

Speaker 2 (01:33:54):
Um, you know, I think you, actually you made a
comment.
Yeah, there's one one thingthat I think I can wrap up with
quickly that I think is umappropriate for the conversation
.
I think something that'simportant to both of us is that,
uh, you know you, you asked thequestion about you know, um,
about Upwell being different andlike spending time in
businesses, or you asked thequestion what?
What was it like?
Uh, going into a business withlike kind of like a definitive

(01:34:17):
timeframe behind it, around,thinking you're going to like
convey the business jumping, andyeah, how did you think about
that?
And I think, um, what's evolvedfor me over time, andrew, is
like, instead of investing intorelationships for that person in
that role at that time, what Ifound is a lot of the folks that

(01:34:38):
I maybe hired into the businessat worldwide express and I
helped them achieve maybe theirfirst couple of promotions and,
you know, get to that phase oflife where they have a nice car
and they're getting married andyou know they kind of associate
some of my mentorship with someof that early professional
development that they have.
And what I found is, as theytransitioned out of worldwide
express, those are the samepeople that stayed in touch with
me and those are the samepeople that like my pictures on
Facebook and, you know, say nicethings about my kids.

(01:35:01):
And then when I run into thosepeople at conferences now some
of them have moved intoleadership positions and really
impressive companies and youknow.
So for me, like that coachingtree has really filled out over
the years and it's somethingthat like one of my proudest, I
think, assets I have is on myLinkedIn profile.
I've had a lot of people justgive me a recommendation like
unsolicited later on, like downthe road, or you know, maybe I'm

(01:35:23):
moving on and I'm asking himfor like a professional
recommendation and we'll just goin and do a LinkedIn
recommendation Some on and I'masking him for like a
professional recommendation andwe'll just go in and do a
LinkedIn recommendation.
Some of the things that peoplesay is just about like how I
helped them early in theircareers is super nice, and I
think as I continue to like growin my career, I've got these
like boomerang people that likework for me at one spot and then
I go somewhere else and thenthey're like in my inbox go do

(01:35:45):
this looks pretty cool, and solike my VP of solutions right
now Chris Gemery.
He worked for me at airspaceand he ran solutions for us
globally at airspace uh, where Iwas a co-founder, and then I
was an investor at a SASplatform called leverage, where
he came and he ran the exactsame thing solutions delivery.
And now, as soon as I startedup, well, like he wanted to come
run solutions.
So it's like you get that crewof people that, like you trust,

(01:36:07):
and then they start reaching outand they're like yo, I like
that.
Like that to me is like theultimate validation because,
like those are people that youknow you can win with you, know
you trust them, and like theywant to get back on the bus with
you.
Like that's, that's good stuffto me.
And I think, as as you kind oflike, uh, you know, continue,
you know moving down the road inin in your path, I just think

(01:36:30):
you're going to be overwhelmedby, because the amount of love
you poured into your team whileyou're building Molo, just
outwardly, it was just soobvious that the people and the
culture is what drove you andthat you weren't going to stand
for anything less thanexcellence when it came to like
quality people treating themright and, um, I think it's
gonna be cool for you to seethat in.
In whatever you know, the nextbig thing is for you.

(01:36:53):
I mean, I know you're thatyou're staying busy at master
and stuff right now, but, um, Ithink the world is waiting to
see, uh, when Andrew silvercalls its next shot.

Speaker 1 (01:37:03):
I appreciate that and everything you said I've I can.
I.
It's interesting because thereare, because I can't take that
and just accept it and it's onlymy own harsh criticism for how
I carried myself over the years.
There are some people inrelationships that I feel like I
have what you had and have andI feel really good about that.

(01:37:25):
No-transcript, just spending 90minutes with you here has you

(01:37:52):
know, I feel a certain type ofway in most of my conversations
with people because, like I'minterviewing smart, caring,
successful people who have madetheir path in the industry, so
like there's it's likely thatI'll end up getting some type of
feeling from just interviewingsmart people, but something
about today has really justinvigorated me with invigorate I

(01:38:15):
don't know if that's the rightword, but instilled this I
really want to build something.
Right now.
It's where I'm feeling like Imiss, like I want to just jump
into a startup from scratch andstart building, and that's just
kind of my takeaway from 90minutes with you.
So take that for what it is.

Speaker 2 (01:38:32):
I think that's a positive Well, I appreciate that
man, and I'll leave you withthis thought If I could have
found somebody doing what Upwellwas doing, I would have bought
the company and built it andgrown it.
But I looked and I couldn'tfind anybody doing this.
And so that's why I'm doing acold start at 45 years old,
because I couldn't find anybodydoing this.
And so that's why I'm doing acold start at 45 years old,
because I couldn't find it.
But I don't know.

(01:38:52):
I don't know whether you get inand you're building on top of a
foundation or you're justbuilding from scratch.
You were born to do it and it'sgoing to be fun to support you
and, like, hopefully, introduceyou to your first VC investors.
You know when the idea strikes.
Thanks, man, your first VCinvestors you know when the idea
strikes.

Speaker 1 (01:39:10):
Thanks, man, I appreciate that you got it and I
think our audience has heardenough of us going back and
forth complimenting each other,so I think we'll call it with
that and I hope everyone enjoyedlearning more about Charlie,
his business, upwell andeverything related to accounts
receivable and the businessthey're building.
So a lot of stuff in here, vc,and just freight stuff.

(01:39:31):
Good conversation.
We'll see you all next week.

Speaker 2 (01:39:35):
Have a good one Thanks for having me See you.

All Episodes

Episode Transcript

Popular Podcasts

Crime Junkie

24/7 News: The Latest

Stuff You Should Know

.css-15opob5{left:0;position:absolute;top:0.8rem;} All Episodes

.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Ep. #62: Charley Dehoney, CEO & Cofounder of Upwell

Episode Transcript

Popular Podcasts

.css-r6mb8g{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:1;overflow:hidden;}Crime Junkie

24/7 News: The Latest

Stuff You Should Know

All Episodes

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

Crime Junkie