Breaking the Rules with Brian Glick

I just have to go into the office in the morning and dial a phone and hit a switch , like in an old movie it would call the mainframe at the company , literally the building behind us to upload data . That was data integration . We had one computer system , we had this big mainframe and they had one computer system .

As SaaS has become prevalent and saw this before it happened suddenly companies have 100 internal systems , and so do their customers , and so do their trading partners , and so does their accounting firm and everyone else . It's really hard to make all that stuff work together .

Instead of asking everyone to solve that problem , we set out to solve that problem and let everyone else plug into us , and then data moves as it's supposed to .

Companies want to do things differently . It's a differentiator . Things are moving across international borders . Things are moving very quickly . The terminology used to describe a lot number in a pharmaceutical or a serial number in electronics . You're talking about a very similar but not exactly the same thing .

You need a layer that doesn't force everyone else to all agree on one word , because it just doesn't happen . By being what's called a vertical specific IPAS solution , the VC category , you would stick us into that vertical specific means .

Our software understands supply chain first and then it's an integration platform , as opposed to an integration platform that somebody bolted some supply chain specs onto .

Maybe people are sending who I've subjected to this exercise , but it would be like a half a day of show me everything that happens , from the time you decide you want to make a product until you give that product to your customer and you can only use these index cards . I have to hand them like we get all the people from the departments in the room .

You just have to write the information down and hand it to someone else . If they couldn't do that , then they didn't understand their own processes and then all the computers do is make that faster .

I'm actually going to steal that because it simplifies it , because I sometimes believe the lack of insight into how a digital process is happening creates ambiguity , and then people fill in those ambiguities with assumptions that are often wrong , and so we might say something like this is how we fulfill an order , it goes through this system and then it goes and it

dumps into the warehouse , and then they ship and order this way , when in reality there are 27 sequences that have to be run in order for that to happen that very few people can fully understand , because it is so opaque once it's behind your computer screen and you can't actually see how all those widgets connect .

So the crux of my maybe silly theory is that it will reach a point of so much complexity that , in the absence of someone to make sense of all of that , for the human it will become unintelligible and we won't be able to actually make progress anymore and we'll have to revert back to physical note cards .

That will happen over time . We're in this very nascent usage of electronic technology . We're in the first century of this . Think about the first century of writing . We don't even know what the first century of writing was , because none of that writing even probably exists . The cave paintings that we find are probably not the first century of writing happening .

So if we're in the first century of it , and at some point you end up with the Magna Carta , and some point you end up with the Bible , and some point you end up with the Quran , and sometimes you end up with the Game of Thrones novels , whatever it is , whatever your definition of beauty is , there's a millennia in between .

So we're looking at the very dirty , ugly beginnings of something that may end up being very beautiful at the end .

You were an SVP at a forwarding company . From all appearances you had it made , probably didn't have a ton of risk at that point . You were probably doing just fine .

Some folks would say why can't you just be happy , just do that thing the rest of your life and realize that you've made it ?

I didn't love sitting in very long meetings every month where I didn't feel like we accomplished a lot . This was really the first experience and I didn't love not being able to push as hard as I wanted to push on something , and sometimes when you're in a large organization you have to .

I won't say you go to the slowest person's pace , but you go to a common pace , right ? Look , you cannot make FedEx as a small company . Problem defines the size of that company . You cannot have a global distribution network that isn't large and global . That doesn't mean it's fun for everybody .

When I sold my first company to Vandegrift who was that second freight forwarder I signed a three-year contract and I told my family three years in one day I'm getting a new job .

I stayed for , I think , seven years and the reason I left and the reason I started this was actually I loved it there , but I saw this problem and I'm one of those people who starts companies , because I'm a fix-it person at heart and this problem was too interesting to not solve , and so I don't feel like I had a choice .

I don't aspire to this theoretical like oh my God , it's better to be a founder and there's some ego in the founding of companies . It's the mechanism by which I can scratch the itch of . I see a problem in the world that needs to be fixed , and I think there's different kinds of founders .

Right , there's ones who are like especially in the last decade , who are very caught up in the culture of founders and the culture of like it's cool to do this and it doesn't matter what the company is , and we actually have a VC that's invested in us , who comes up with ideas and then finds founders and pairs them with the ideas , which is so far into the

way that I approach the world that I can't even conceptualize founding a company based on someone else's idea . Like it is the last course of action you could take . To found a company versus any other option is easier , but I don't have a choice . My brain is just built for this .

If I was , you know , taking bookings at MSC and I said , what did you do this week ? Well , I took more bookings , Like I wouldn't do that either , but this is my hobby and it's the consuming thing in my life besides my family , and they might argue otherwise . But until this problem is fixed , I can't think about anything else .

If I look at the mistakes that I've made in the business and anyone who tells you that they're not making mistakes in their business is not either not doing something interesting or lying the mistakes have often been falling on the wrong side of that spectrum , Figuring out that I was stubborn and not listening to people or that I was being too easily swayed by

other people's opinions when I knew the vision of the company and I should have been more rigid .

That balance for me has always been really , really difficult , because I think part of having the size ego it takes sometimes to try to do something big you know sometimes have a tendency not to listen , and then part of being self-aware is then you try to compensate for that and sometimes you overcompensate in the other direction .

Then that like okay , I have a great team and when do I get involved and when do I not get involved , is really probably the hardest thing it sounds a lot more art than science . It , unfortunately , is because you're trying to predict the future . Right , it's okay , I'm going to take this behavior and I'm going to create this reaction in the organization .

Thank you , there's no science of the future at scale right , Like the physics . Sure you know . Like if I apply this pressure , this will happen , but not at scale right and not when there's , you know , the wet machines that we call people involved .

What is still out there , that you are inspired by and that you're reaching for , that you may be conceived of all the way back in the beginning .

Whereas for the last six years , anytime we've wanted to add software to our network , a chain IE employee has sat with that software company and built a plugin inside of our network that connects to that .

The original vision of the company was actually what we're now calling OpenConnect , and the thing we did for the last six years was compensate for the fact that nobody's going to build to a network that doesn't do anything . Yet Day one you walk up to SAP and say , hey , build a connection to this network . And they go well , who's on the network ?

Well , nobody . But we really would like SAP because they don't get a lot of people . They would laugh at you . And the second was that in logistics and supply chain six years ago we were getting on panels at conferences and answering the question what's an API ? So this idea of creating an open network ? No , I can see you on video , nobody else can .

But you just did a spit tape with your coffee and I said I did .

It was like the buzzword before . Blockchain was the buzzword , but nobody really understood what it meant or what the impact was . So building an API based network when the industry and the other software companies in the industry and the internal IT departments were just learning the concept that you were basing it on wasn't going to work .

So there's been this patience that we've had to have , and I won't even pretend that it was like oh , we knew that , okay , in six years we will just flip this switch so much as we just did what worked and what was going to make us commercially viable .

And then we're finally getting to the point where it was almost like we came up with this idea again from scratch last year and said , oh , we should open the network up , and then it was only when we went to write the press release that I went back to my original notes for the company and went oh wait , a minute .

This is what I wanted to do all along and it was pretty cool , we'll get there . So it always . You can make it look much more on purpose publicly if you want to .

Last year just internally as a team , we said we're where the cool kids are now . We were the scrappy little thing and now we're suddenly this is where all the cool kids want to be and that was kind of another really genuinely inspiring moment to know you worked at something so hard and then to get that external feedback that it's validating .

I guess what's it like to be a cool kid ? I'm still trying to figure that out . So cool kid within the logistics and supply chain and compliance space is a we're going to gray on a curve here right . But no , the vision of this thing requires everyone in the industry to participate . My big vision is that everything is easier for everyone .

The only way we get there and we talk about this all the time internally is that we're creating value for everybody , that it's not a marketplace where value is just transferred from one party to another and somebody wins and someone loses , but that the software companies , the shippers , the freight forwarders , the customs brokers , the audit companies , whoever it is

everyone is getting an additive benefit by not having to deal with this really crappy problem of data integration that nobody wants to deal with .

We'll go into a freight forwarder and talk to them about what we can do and you'll see these people in IT just sort of go . Oh , that sounds like you're replacing my job , and no one has ever lost their job because we've been implemented . What ends up happening is say , oh , okay , chayna is not going to deal with all these uninteresting things .

Here's these much more interesting things that have been in the backlog for the last decade . Go solve one of those . There's no finite limit to the amount of innovation that a company can do , but there is sort of that feeling sometimes that this is going to displace some legacy things , and it very rarely does . It usually is sort of an head on value .

Go back to okay . Why do I do this ? A I saw that problem .

The other reason is because it's fun and because it's exciting and it's interesting and I tell almost every new employee who I get to interview part of the reason I exist as a company is it's a vehicle for me to have a place to work that I like to work at , and I happen to like to work at places where people are nice to each other , right , and where we

get along with our customers and we get along with our competitors and have lunch with them and are social and friendly and all of these things while we're doing our jobs right .

That also has to happen , but I'm incredibly stubborn in the belief that if you create the world around you that you want to live in through a lot of willful ignorance of other people's bad behaviors , you're going to be happier . What ? do you mean by that ?

Everyone always says sort of hope for the best and prepare for the worst , but sometimes you spend so much time preparing for the worst that you never get to the best or you cut off the opportunity . Like think about you have a contract negotiation with someone . You sit down with somebody you want to work with and who you trust .

Then you put a piece of paper in front of everybody to negotiate a contract and you start arguing about the most inane little details like well , if we don't write it this way , this person's going to steal this from me .

I'm always like , if you think that person's going to steal that from you , maybe you shouldn't be getting into business with them in the first place .

And so there's this idea that you can approach everyone from a position of granting them a great deal of trust and faith at the beginning until they prove otherwise , instead of granting everyone no trust and making them earn it .

And when you do that , you spend so much less time being defensive or negotiating or arguing or all of those things that for the one time you get burned out of 100 . The amount of energy you saved on the other 99 and the value you've created in that time well offsets .

However , you get burned as long as there's certain things you just can't like intellectual property law and that kind of stuff .

But , like in the grand scheme of things , you say , well , like we're going to release this feature and somebody could combine this feature , this feature and this feature to like exploit our billing model and get a bunch of usage for free . But is anyone really going to do that ?

And if we find someone doing this , can we just call them and tell them that we'd like them to stop ? Or we could spend six months coding around that or throw away this entire business model because this one theoretical bad actor could do something bad .

But one of the things that he was very good at explaining to us when we were kids you would kind of talk about work a lot was and say , okay , I went into this situation and we were at this bank and we were negotiating this bankruptcy with this car dealer , whatever the thing was , and everybody wanted to do this .

And I said you know , that probably is what the textbook answer is , but if we did this other thing there's a very low chance of it backfiring . And he wouldn't express it this way .

But like searching for that third path where everyone else saw A and B , and I think I kind of took that to heart and realized there's no , really is no such thing as A and B decisions . There's always sort of infinite ability . And I think I kind of took that lesson from my dad , or at least from observing him , and then kind of combined that with .

You know , I've done a lot of reading in my life around people from different cultures and I read a lot of biographies and kind of look for patterns and just fascinated by different religions and different kind of historical people , and you start to see these things , that these patterns emerge , and a lot of them are kind of people who just say I am not going

to accept that the way that everyone is saying everything is the way that it is , and they very rarely overtly say that . They just behave in a way that everyone thought was not a way you could behave and then you go , oh my God , like after they do it , you go , oh , now everyone can behave that way .

They're very rarely the ones pontificating about groundbreaking which is a little scary because that's what I'm doing right now but like , they're often just going out and doing it right and then later somebody figures out that they were doing something groundbreaking and they're going .

Well , I just , you know , you take like a classic example would be Gandhi going out and doing nonviolent protests and disruption and going , you know , just saying this is what we're going to do , right , and then later you write a book about it . But you don't write the book in the moment of doing it . Usually you write the book later .

What you do in the moment is just the thing that you think is necessary and you just have to have sort of the willingness to accept not that everything is possible , but that in the moment that the rules are only rules because somebody else called them a rule .

What we want to do is enjoy ourselves for the next couple of hours , and if we think it's more fun to take all these pieces and turn it into the world's weirdest Jenga game , let's just do that Right . What makes it that when there's a chessboard , you have to play chess ?

People who are better athletes than me can get into that flow state in other ways , but that idea that I actually actively search for things that make me stop thinking about work and it generally is things like that where it's like you are things that just take in some of . The other one is video games actually .

But you have certain gifts and it's nice to occasionally be able to set them down and just rest .

As someone who successfully raised venture capital and has a great relationship with your investors , can you take us back to the point in time where you realize that you wanted to raise money and the steps that you took to bring it to completion ? And then how do you maintain a positive relationship for the long term with an investor ?

And he's always it's the people who lied to me , right , and so trust is whether it's easily earned or not is definitely easily destroyed In 2023 , any founder who's sitting down with a board and saying everything's perfect and the market's great is just lying . I'm assuming there's some founder somewhere , but most of us .

I've surveyed a lot of CEOs in the last six months and 100% of them are going through difficult things at some level . Your VCs are not stupid or unaware , right .

They have a portfolio of companies and if you were like , there's no reason not to be honest with them and , frankly , when you're fundraising is the time when you should kind of be the most honest , because it establishes a lot of credibility and they know you're not perfect , right , and they know you're not perfect before they give you the money and they're waiting

for that moment . Remember when I raised my seed around one of our VCs . Like six weeks after we got the money he said to me he goes , man , we usually wait for the shoe to drop of like what's all the horrible crap that they didn't tell us and you kind of told us all that beforehand . So it's been very low drama because they know it's coming right .

So you don't have to be perfect , but you have to keep that trust . Now , as far as the question of why did we raise money or when did I know that we need to raise money , when I found in my first company , I didn't even know there was a thing called VC .

I just worked in a freight company and needed to fix a problem , which in that case was customs classification , and the fact that I did not have enough money to build the company led to me probably selling it a little earlier than I would have liked .

When I went out to do this , one realized that the dynamics of this business because we're building this network and we knew this was going to take a long time and , as we were just talking , six years later we're just sort of at the beginning as far as we're concerned that takes a lot of cash right , like you have to be there and you have to grow at the

right pace , and we're core infrastructure companies so we can't be too risky with the way we do things , which is even more expensive . So I knew that there was going to need to be an investment .

The other thing that I think a lot of founders or people who haven't raised money before don't understand is the unit economics of why venture capital and SaaS , which are two different things . You can build a SaaS company without venture capital and you can take venture capital to do something that's not a SaaS company .

The reason they pair so well venture capitalists want to give you a little bit of money now and they're willing to wait for an outsized return . Saas companies are annuity businesses that are very expensive to acquire customers and very expensive to build the software , but then your customers pay you every year forever .

You build this accretive value and you say , if I sign a customer and I'm going to have that customer , especially in B2B infrastructure , for 10 years or 15 years , if VC gives me $50 now and I invest that $50 in the product and the customer relationship and we sign a contract with a customer , and that customer is going to give us $50 .

They're going to give us $50 a year for a decade , they're going to give us $500 . That creates a lot of value , which then really works well .

And I knew that with Chainio as opposed to my last software company that was going to be especially true , that it was going to be very expensive to build at the beginning , but that that money was going to throw out for a long period of time .

When you do that , that matches how VC functions and that in turn said okay , well , this is a good pairing then , because essentially , what I'm doing is giving away a piece of the business . It's like a loan that pays itself back , because part of that annuity doesn't come to me at the end , it goes to them .

If you think of everyone of your customers , if I think of each of them as we bought an annuity , then what I'm really doing is taking a loan to buy an annuity . Assuming that you can make your annuity bigger than the loan amount , then everything works out great for everybody . If you can't , then it doesn't work out great for everybody .

If you look at your business and you say my customer acquisition cost and my cost of building , it's going to be this big fat lump at the beginning and then it's going to pay out over a long period of time . You're going to make venture capitalists very interested .

A bootstrapper will say , okay , I'm very happy with a straight line that maybe is at a 30 degree angle , as opposed to having to curve like a parabola . Figuring out that I also am the kind of person who's always afraid that if you feel like you got there then you're going to immediately lose it . We do well , we're solving the problem , we making the money .

It's really hard for me to sit here and go , but we've achieved it , because I always feel like saying that is the recipe for disaster .

We're chasing the this is not a popular analogy anymore but the rabbit at the dog track . It's just going to be in front of us , no matter how fast we run . That's exciting to me .

I'm sure that there are people If I look at people who I have a good friend who likes to acquire companies and sell them and do more of the engineering of finances around companies that already exist . He thinks about exits . He thinks about okay , I got a one-year window , I'm going to do this project and it's going to . These are private equity firms .

I got a five-year window . In that five years we're going to do this . At the end there's going to be a lot of money . Then maybe we'll go do it again . It's a window that you operate within . I don't think that way . It's no criticism of that . What I'm at here is I don't think of myself as a tech person anymore .

I certainly don't think of myself as a founder first . I think of myself as a supply chain person . I want to fix the supply chain . That's an impossible ask . I've set myself up to fail , but it's a hell of a lot fun running the race anyway .

What advice would you give to another founder that is in 2023 , in a challenging market with a lot more uncertainty and perhaps less investment dollars available than any point in the last 5 , 10 years ? What would you say to somebody who's on the ropes right now and questioning whether or not they should keep going ? Trust your instincts .

memories . If you need to wrap something up , just do it . It's okay .

Not everything works If you think , hey , I just have to buckle down and what I need to do is go take a loan from one of my customers or give some equity , or go back to one of my customers and say , hey , I really need some advanced cash and we're going to make this work and we're going to ride it out , whatever . If that's what you believe .

You're the founder , it's your job to be the one who makes that call and you got to trust yourself . Don't run yourself personally into the ground over it , giving everyone permission to fail .

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