SaaS Interviews with CEOs, Startups, Founders
Look Back: FlockFreight Grows 400% YoY, 500k Pallets Shipped, Still Shy of $1b Valuation
06 Sep 2022
Chapter 1: What is the main topic discussed in this episode?
If you're shipping 500,000 pallets per year, charging two, that puts you like at a million in revenue per year. There's no way you're doing a million in revenue per year.
We're doing many, many times for the vet.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hello, everyone. My guest today is Oren Zislansky.
He has logistics and innovation running through his veins. He followed his parents' footsteps who created their own freight forwarder after years with Foreman's Van Line. He founded his own 100-truck fleet at age 20, providing white-glove freight service through the U.S. and Canada.
Next came sole source Oren's First Brokerage, which services major clients like Whole Foods and opened his eyes to the unnecessary complications and inefficiencies of L2L shipping. Oren, you ready to take us to the top? I am. Thanks for having me. So through all this experience, you've now built Flock Freight. Let's start with a tease there and then get more of your history.
What's Flock Freight doing today?
We create what we call shared truckloads or algorithmic carpooling. So it's a little complicated thing to think of. But if you had four pallets of commercially manufactured goods and you're in LA and you want to ship them out to Chicago, you would otherwise move them through the LTL industry, less than truckload industry, or hub and spoke model. So just think terminal, terminal, terminal.
UPS without the aircraft. What we do is we come in and we use some really sophisticated algorithms to match your palletized freight with our other customers' palletized freight. and instead create a carpool or a shared truckload.
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Chapter 2: What is Flock Freight and how does it operate?
That would be like a standard unit of measurement in this industry. A freight bill would be not a pallet, but it would be a shipment. So a shipment might be two pallets. It might be 15 pallets, but we would call that one freight bill. And we've seen our, so how many shipments we move on an annual basis. We had 400% growth in the year of 2020.
Chapter 3: How does shared truckload technology improve shipping efficiency?
That's incredible. Are you sharing with the actual, I mean, it's gotta be in the millions, right? Tens of millions? In terms of shipments or in terms of revenue? That number you just gave me, freight bills.
No, it's not millions yet. That's a fair question. It's tens and tens of thousands. I don't know if we're at quite 100,000 yet, but we're getting very close.
That's got it. So somewhere between 10K and 100K. And that's just, again, number of freight bills, as small as two pallets, as large as...
24, almost a full truck where we can still optimize and we can take that very big shipment and find a couple pallets, a small shipment and put them together and ride share, create a shared truck with.
And can you put a face on this? I mean, is this the Etsy e-commerce seller that needs to move like three, like what is the face of the person that actually, you know,
Yeah, we launched the business in the SMB, so small, medium businesses that were small. They had small quantities, and they did not ship very often. It's a great playing ground to embed. If not, it's a little messy. Now we're playing much more in the middle market with enterprise customers. So it could actually be a very big customer. We'll use an almond manufacturer.
is one of our biggest customers, where a full truckload of almonds could be 40,000 pounds. That's a lot of almonds to go into a Fox or to go into a 7-Eleven. So even though they're a $10 billion a year massive enterprise shipper, they would have a need to only ship four pallets out of their facility going to a distribution point. Now, they may ship a full truckload of almonds into a Costco,
Or to an Amazon fulfillment center. But then they may turn around and ship a single pallet to 7-Eleven. So it's all B2B or what we call in the industry kind of dock to dock. So what we don't yet do is residential. We've done it in the past, but it's not who we are. It's not who we believe we should be for quite some time.
Instead, we're going from a manufacturer that has made something or is a distributor of something. and going to the receiver or their customer. A very common pattern would be people who make stuff and it's going to an Amazon fulfillment center or they make things and it's going to a mall or some type of distribution center. So I would not quite say Etsy.
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Chapter 4: What are the financial implications of Flock Freight's model?
It could be 1200 the day after that, especially around the holiday time. So the context of your question, given holiday, you're right, right? Demand is surging right now. Supply is kind of fixed.
Yeah.
This is not a gig economy the way we see with Uber and Lyft and Rideshare or DoorDash or Instacart. Those are gig economies whereby, in theory, supply conflicts with demand. In our space, you're a commercial truck driver driving a $100,000 tractor trailer full-time. You're drug and alcohol tested. This is what you do. It's not a side hustle.
Like you were either a truck driver or you're not a truck driver. So supply is changing, don't get me wrong, but it's relatively static. Demand is porpoising like crazy, whether it's COVID or holiday time.
So that's where the data and the analytics and the data science and trying to predict what the future is going to look like all the way through to, in our case, not just can we get a truck or not, and not just how much is that truck going to cost, but what is the probability that we'll have many different customers' freight bills or shipments that are going to Tetris fit together and
into that truck and at what varying costs.
I mean, that's honestly, I think, the number one reason why SoftBank made the investment in estate data is they looked at the hard science, the hard, the algorithms, the mathematicians, the data scientists that we employ to not just predict the future of is there a truck or not, but to slice those trucks into little bits and pieces and then try to determine, can you see the future?
And in our case, with all the data that we're building, every shipment we move becomes a data point.
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Chapter 5: What metrics does Flock Freight track for growth?
in an industry that supports like 10 to 12. So we have many times higher margin potential than anybody ever in freight before because of this financial arbitrage that gets unlocked. We have not publicly disclosed as of yet revenue, but I can tell you we are orders, many orders of magnitude higher. um, higher than a million bucks.
I'm going, I'm missing something very obvious here. And it's the obvious thing you gave a metaphor chart, you know, renting out a whole shipment, a truck, it costs way more than 26 bucks for the truck.
Yeah. I apologize in real dollars. It'd be like $3,000, $4,000 to run that lane. And if it's four grand, I could charge eight grand, you know, it was the two to one that I was hoping to highlight.
Yeah. Yeah. Okay. Got it. But, but generally like a truck like that, LA to Chicago, it's like four grand and something like that.
In today's market, yeah.
Yeah, yeah. Okay, interesting. I want to talk Volvo real quick because this is going to go back to your roots in terms of you maybe buying your first truck, running those first routes back when you were younger. At some point, it makes sense for you to start, if you're not already, holding cars, maybe autonomous trucks on your balance sheet, maybe from Volvo, by the way.
What is the tipping point where that starts to make sense?
It's a good question. Look, I've told people, whether it's media or colleagues or people on the team, I don't personally think we're going to see another parcel carrier. Parcel would be like FedEx UPS. Start ground up like ever.
I think what we'll see is Amazon come in and build the largest parcel carrier in the world, sort of from the side door or top down, depending on how you want to think about the metaphor. You know, we're seeing Amazon become the world's most vertically integrated firm, which is not to say they don't use a tremendous amount of contract support, top to bottom, they do.
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Chapter 6: Who are the typical customers of Flock Freight?
We believe passionately there can be a 40% reduction in greenhouse gas through our model, so much so that we're on the precipice of being able to launch actual carbon credits worldwide. to our customer for buying from us because the model is so much more efficient. You're actually kind of getting the first word on that externally that we're in the process of bringing that to market right now.
The outside world doesn't know it yet, but we've got a certifying entity of actual carbon credits, not some white-labeled off-market product, but Tesla carbon credits, so to speak, to Toyota. of bringing that to market now because the certification entities are looking at what we're doing and saying, man, that is no joke. That is so much more efficient.
And of course, we believe that it's an awesome opportunity to drive additional acquisition, retention, but to further drive our purpose of saying, you know, we think we can build a very viable asset while at the same time helping to do our part to save the world.
Or an incredible story. Let's wrap up with the famous five quick answers here. Number one, favorite business book.
Five dysfunctions of the team.
Number two is, it's a good one. Yeah. Number two, is there a CEO you're following or studying? Bezos constantly. Are you in acquisition talks right now with Amazon? No. Okay. Number three. That's good. Straight face. You like how I sneak that in like that. That was pretty good, right? I'm under so many non-disclosures right now. I can't remember how many. All right. Good. Number three.
What's your favorite online tool for building the business?
Oof. Online tool for building the business. God, we live on slack. It's just horrifying, but we couldn't live without it.
Number four, how many hours of sleeping every night? Six. That's pretty good. And situation, married, single kiddos? Married, two kids, 14. Wow. And how old are you? 46. Take us home. What do you wish you knew when you were 20?
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