Confidence & Humility with Gabe Pankonin

We are bootstrapping this podcast ourselves as we go and figuring it out , just like the founders that we feature on the show . So , speaking of founders , I'd like to personally say thank you to every single founder who's trusted me to share their story .

It's not something I take lightly , and I always aim to tell the story truthfully and honestly behind the scenes , in a way that honors them as individuals and who they are , as people more than anything . So a heartfelt thank you to every single one from season one that participated . With that , let's just jump right in .

I'm glad to start this new chapter with you with a new founder story . Gabe Pankonin is the founder of Rocket Shipping , a mid-market managed trans slash Silicon Valley Tech meets Midwest Brokerage company in the Midwest . Gabe , welcome to the show , and I think we're going to have to have someone figure out how to edit our accents .

Where did that come from , other than the state that you live in ? What's your background ?

I had a good middle class upbringing and my dad is just he's known as the nicest guy anybody knows , and so that rubbed off on me quite a bit . However , my mom is pretty driven and pretty aggressive and she really goes and gets it , and she is a small business owner as well .

So I got a pretty good mix of both of my parents and then , I think , being the fifth of five kids , I got to see interactions from all of my older siblings and that helped make me who I am today .

Uniquely , my sister's 14 years older than me , and then in between there is like 14 , 12 , 10 , and then my other sister is a year and a half older than me , so there was a big age gap there . So I had a lot of guidance as a middle schooler . We'll put it that way . So that's where that comes from .

I'm very competitive , but I was always taught to be super humble and so mixing those is difficult . Being a business owner , you have to have an ego because you have to believe in yourself and be able to take risk .

But I think I got lucky with my upbringing that just because you have an ego and you believe in yourself does not mean you need to come off that way and under the surface I always think I'm going to succeed , but I want to make sure that I come off as somebody who's approachable and humble .

And I oftentimes will say no , I'm optimistically delusional , like I don't see the risk . However , if I just , like , went off my own discretion on all things in business , I would have lost more money than I have and I'd have lost more employees and lost more deals .

Because I need to have that intellectual side of like , hey , listen to the other people that might know more than you , right , or that you know know more than you , and then you know if you can at least take their advice . And it curves my you know adventure side a bit and says , hey , we don't have to take risks every week .

But on the other side of that too , like knowing what you don't know , and that's one thing . But you know , there's a lot of stuff that you don't even know , you don't know yet , and so there's like three paradigms in that circle , and I'm always trying to learn something that I didn't even know . I didn't know if that makes sense it does .

So I think , like I would say , alex Formozzi , gary V Stile I think that the reason I have an affinity to them is because I have a similar personality and I just I have an affinity towards that . And then you know , I think early on it was more I was like a pre-med student , so I just read .

I read a lot of books and so I just read like every leadership book and every sales book and every you know that type of style . And that's where I learned .

We were in college and I needed to have a job .

It turns out one day I was playing Call of Duty and in between , studying for my exams , I was like senior year , taking all the 400 level classes and I was playing Call of Duty and my wife was leaving to go to her 12 hour shift as a nurse and she maybe mentioned on the way out the door that I should potentially get a job .

She maybe didn't say it quite that nicely she's a little more sternness there but she kicked me out of the nest and said find something and believe it or not , like I think I would have been a great waiter at , like , a restaurant , because I wasn't in sales ever until I was , but I was , you know , pre-med student .

I was like I can probably be a waiter , I can talk to people , but I interviewed at five restaurants and I didn't get any of the jobs , and so , on the way home , not wanting to come in with my tail tucked and tell her that I couldn't get a job , I stopped at Walmart and put in an application and I got a job there and I did not like working there ,

believe it or not . I didn't feel like that was where I was going . And so while I was at Walmart working , there was a bulletin board and it was basically like , hey , where did you , you know , like all these job opportunities ? And I took one that said $15 an hour , cash bonuses , and I was like , all right , I'm calling the number .

And it was a company called the Unishippers and they are a third party logistics brand and they're now worldwide , global Unishippers , the whole thing . So I started as an intern there and they had me make a hundred cold calls a day for a year and so I made like over a year and a half I made like 30,000 cold calls .

I was just a sales rep intern , no commissions , just cash bonuses if I got somebody to ship something one time . So my cold call pitch was do you have anything to ship today ? I'll do it for cheaper . And so instead of trading stocks , I was trading LTL prices . But I started doing that . Well , I was doing that .

My wife decided that she was going to go back to be an RN instead of an LPN in nursing . So I said , hey , I'll keep working , I'm done with school , but I'll take a gap year , I'll work and I'll put you through school . So I was like I'm a good husband , Look at that , I'll work .

And my school was going to cost a lot Med school , as you probably know right . And so I got good at selling . I asked for a promotion and they said no .

And so a guy at the local CrossFit gym I'm weaving here , but there's a local CrossFit gym that one of the guys there owned a franchise for a competitor of UNI shippers called DLS Worldwide or RR Donnelly , and he said I'll hire you to be a sales rep commission only . And I said what does that mean exactly ?

And he goes well , you don't get paid unless you have customers , but you'll be fine . And so I went to my wife and I said , hey , I can go to med school or chiropractic school . Those were the two options . I got my four year degree and I did all the tests and all the exams and all this stuff and I got in .

But I could also at the same time kind of sell commission only . This is perfect . I'd have to move for the job to another city in Minnesota called St Cloud . So I had to move to do it . We took the chance and the first month our rent was $1,100 and I made like $700 in commissions , and so we're a little short for a month's work .

So yeah for a month's work I made $700 . And I was making like 40 grand before that or 50 grand . So I was like wasn't making a ton , but to me I was 24 . I was like this is a ton of money . And so I gave that up and started working commission only , and it wasn't working all that well .

For the first three months I made like $2,000 total and so we were just living on credit cards and we were going to go to the chiropractic school and all of that . I had chosen chiropractic and as I was about to go there , I got like a good customer and they started shipping a lot .

And then I got another one and another one and I was like , hey , now this works . It took 90 days , but this is working . And I started making real money and I decided , hey , let's just take another six months and try this instead of chiropractic school .

Because I was about to take out our student loans and we were signing up for food stamps , quite literally Like we were going to take student loans for 200 grand to go to four more years of school and we were applying for food stamps in Bloomington , minnesota and I was like , maybe , maybe we shouldn't do that . We're still newlyweds , we don't have like .

We're not newlyweds , we're three years into marriage , we don't have kids yet . No-transcript . We kind of wanted some and I was like I don't think we can raise kids and like , do the food stamps in the school ? This isn't going to work . And so I just started working like 12 hours a day cold calling , like I had been .

I just went back to 100 cold calls a day and Mike just went nuts and I built a book of business of LTL and the next year I made 250 grand doing commissions . And so we just never went to school . And then that's how I got into freight . I just stuck with it .

You make it , you try really hard for 10 days and something doesn't work and you quit . And so to stay with something that long , to even have the opportunity for success to find you , combined with , sometimes there's just chance , the right customer accepts at the right time , and it has fundamentally changed the course of your life .

Do you consider like the impact of what you have acted upon the world versus how chance and random encounters have put you in the position that you are today ? Or are you like ? No , this is just how I live , this is just every day .

But if you don't actually take the chance , then , like you have to take risk every time .

There's just always opportunities and if you don't take them then you end up not having that opportunity and you didn't even know it existed maybe , but I think that one I was very wise to get married to Mari , my wife , because she gives me such wise counsel when I'm ready to take a risk .

And both times I left out in the story , both times when I said , hey , I'm going to take this commission only job , or the first time , she's like okay , what does that mean ? I said it means we don't make any money . And she didn't hesitate . She's like I got you and so , like I had a teammate , she's like I'll go back and put more nursing hours on .

And so I had a teammate and I took the chance . And the second time was when I started rocket shipping , it was almost the same thing . It was like , hey , I'm making all this money , now I'm going to go back to zero and take another giant risk . And she said I got you , this is the right move . So one that was a really wise choice .

Getting married to my wife . And then , second , like I do think about I never like when I was growing up , I never thought sales was a job . Like I never considered being a salesman . In fact , I almost had a negative connotation , but I didn't look at it as like a business instead of just sales right .

And so I believe now and I tell this to my employees too is like hey , if you can sell , you can convince people to give you money for value and if you can provide more value , then their money is worth right , if they think it's better than what they paid . You can pretty much do anything in your career .

Whether you can convince somebody to hire you , you can convince people to be on your podcast or your brand , or you can convince people to invest . It's all selling at its core .

That's not easy though that is constant rejection , constantly being , you know , the phone hung up on you , and yet oftentimes the greatest reward goes to those who are willing to do the hard things consistently over time , with no promise of success . So I'm curious . Obviously there are financial rewards that come along , that can come along with entrepreneurship .

There's also immense financial risk a lot of the time , but it's usually one of the top two reasons why somebody goes off and does something is the upside potential . There's often something else , though , too . It might be . I just have to know . There's something out there and I just have to know .

Or I have an idea that I'm obsessed with and I have to pursue it , or it could be something entirely different . It could be for your grandkids and you're trying to leave a legacy . Other than the financial rewards , what's the other thing that fuels you ?

And so I kind of had this cool life set up . I had built a house , we had a little bit of land , we were making good money and I was working with a lot of e-commerce brands and that's why my book of business was growing so fast , because it was 2017 to 2019 .

And so I worked with a lot of these companies who were putting up a Shopify store and then going to five million revenue and they shipped their first shipment with me and they were also shipping 30 LTL shipments a day with me years later . And so I saw this massive growth opportunity and also I was I'm just so competitive and I want to .

I didn't know that I wanted to lead , but I wanted to like work my way up an org . I always had that Like . So at the spot I was at I couldn't because I was an independent contractor , and so it didn't matter if I was the top sales rep .

I couldn't get a VP position , even though I had asked for it and said , hey , I'd like to lead other sellers , I'd like to train , I'd like to do all these things , and wasn't in the cards .

And so at one point I had said , hey , I think I could do exactly what I'm doing in LTL at the time , and I could probably do it on my own if I would just figure out how I could get the rates . And so that was always the problem . Like , how do I offer rates to somebody ? I'm doing all the service . And so it was .

Just I had this idea that e-commerce delivering to residences and the LTL curbside in home delivery , like that was such a Pandora's box of an industry .

And then I thought and I still think that at Rocket I thought I had a cornered of like I got this figured out where I can convince somebody to do it with me instead of our competitor by saying these three things and doing things differently . And so I always was like my pitch was always I'll do the reconcilments , returns and the claims .

You guys focus on your SEO and your revenue . And they'd say , oh , we need somebody to do that Now that Rocket .

Obviously that's turned into much more with all of the integrations and tech , but as core , it was just me in an apartment calling Roadrunner and sending a letter of authorization to get something reconciled , so they didn't have to do it , so I just believed that that product would work .

And when I brought it to the leadership at the company I was with , they said , hey , e-commerce is not really like going to stick , like I think they're going to change to like retail and it'll be more like Ashley furniture , where they deliver it on their own trucks . It's not going to go drop ship . And I was like I really think you're wrong .

And so , in 2020 , in the middle of the pandemic and with a newborn baby in the NICU , I decided to start rocket shipping and say , hey , e-commerce is going to be here in 2021 . It was , and so that was good timing for my risk assessment there .

There is a better quote , better way to do this , and you have a unique insight and a set of skills and personal assets not just financial , but personal abilities that afford you a unique entrance into this absolutely massive industry of supply chain . Yeah , you can't outstrip it . There's no matter how effective or perfectly somebody solves a problem .

There's new ones being created all the time for those willing to look and turn over the stone and find a gold nugget just waiting to be picked up . We're at the point where we should probably talk a little bit more about what rocket shipping does , and I'm also really curious about your team .

So first , why don't you take us through the basics of rocket shipping ?

have to hire more staff just to enter BOLs , we'll handle the logistics part . You focus on revenue .

We were getting people referred to us saying I now have to ship straight to consumers instead of shipping to businesses and I heard you know how to do it , and so from that we grew and were able to just reinvest and bootstrap , as your podcast has always been about , is like we just reinvest profit from new customers into tech and like the bigger problem that we

solve now and like what I'm super excited about in the next couple of years as we build it out , is that there's more than just third party brokerage .

A lot of our clients use their own tariffs and a lot of their clients have LTL and truck load and their siloed and so we have created and not from scratch right , we partner with some some main brands that have decent architecture of a TMS and we just built our own front end on top of it specifically to solve the problem of hey , we have our third party

rates , you have your direct tariffs , but there's not a platform out there that is going to offer the management of all of it and be agnostic to whether you use our rates or yours .

We just want to provide a platform that has all the data , has all the tracking and the rocket team manages the exceptions , whether that be e-commerce , residential deliveries and white glove , or if you want to use your truck load carriers and ours and bring them in and create a waterfall .

We just want to have one platform for just LTL truck load , not parcel , not international . I think that's probably where others have gone astray is they need to have it all ? We're just domestic LTL truck load and we manage it with the same model as we did with e-commerce , where we have like a more ops than sales .

We do all of the exceptions reconcilments , claims , returns , billing variances , everything and they can now use their tariffs .

Instead of working with clients that maybe ship $500,000 a year of LTL which we still do and we love those clients we can work with the mid market and so it's mid market managed trans , where maybe they spend 70 million a year on their portfolio between truck load and LTL . They're too big for a broker .

They don't have a big enough in-house team to manage all those direct relationships , but they're too small for Transplace or Uber Freight and so they're just kind of using a couple brokers and they've got some portals and so at Raga shipping they can bring all of that in-house and pick all a car how much they want us to manage and how much they want their team

to manage .

If you work for a large , tech-enabled 3PL in the billions and they have a managed trans offering , they're going to say , yeah , we do 4PL , but they don't really do 4PL globally .

They will also themselves do it in particular segments and for the smaller and mid-market it's a totally different set of needs , and so philosophy is often around the essence of something . What is it when distilled down ? I've been having this conversation for two decades now on what is the essence of a 4PL .

I don't know if we're ever going to answer it , but it's a fun thought experiment and we'll have to meet in halfway between Fargo and Minneapolis sometime and sit down for coffee . Yeah for sure .

Typically and this is what I know of right they use , like all of the other big brokers , to like they're just going to procure everything and they're going to put a cost plus on top of everything .

And these mid-market players you know , the startup CPG is like prime energy drinks , right For Logan Paul's brand like they're not big enough to work with Uber Freight just yet Now they're on a trajectory where they can do whatever they want because of growth .

But there's so many energy drink brands or so many big box retailers that are , you know , competitors to Dick's Sporting Goods they're not quite that big that , you know , transplacer rider might not look at .

And then , in the middle , instead of like managed trans being what I think it should be , which is tech first , right , the TMS and then the team around the TMS they're basically creating their own little portal to connect to Mercury Gate and connect to BlueJ EDI and it's like , no , the tech should be the source of truth and then the management team's on top of

that . I see that as the problem in the market that hasn't been solved just yet .

In the beginning it's just you , and then you convince somebody else to join you on this crazy ride and they say yes , and then it becomes three people , and then it becomes nine people , and then suddenly you have to do recruiting and HR policies and infrastructure and administration . How did you build your founding team and the founding team ? Okay , go ahead .

. I had a best friend , his name's Troy and he was a CrossFit guy with me and he owned the gym that I was talking to you about the other guy I worked with , so mutual connection through fitness there he is a full stack developer .

He built like 300 websites and he just hosted them and kept them going and we had , I would guess , pontificated for a while on like , hey , you have tech and I have logistics . We should probably work together .

One side story on that is we did have a we have a failed business together as well , an e-commerce furniture business that we tried to do because I was doing furniture and or furniture logistics and he was tech that failed . So we were like , well , let's try again with just actual shipping , let's build shipping tech .

So I got him to join commission only 1099 , basically like a founder partner , no equity . And then , oddly enough , my wife's brother , so my brother-in-law he you know , and I attribute a lot to him for this . He took a risk as well and he quit his job as a agriculture salesman . He was selling fertilizer and that type of stuff .

He had asked me what the heck are you doing ? And I think this is a funny part of the industry is like , what are you doing in logistics the last couple of years ? How'd you build that house and how do you have that Like what are you doing ? And he never understood it .

But he was curious and so I started explaining it to him and I said you could do this with me . It's just a lot of sales . And so he quit and joined on the first day . So it was me and Troy and Michael and that was like the founding three . But all of us were tech sales or sales and I knew how to do ops . I had to .

I was cradle of the grave where I was , but I actually wanted to bring with a couple of the people I worked with at DLS and like they were some of the operators that I knew that I knew they were doing a really great job .

They weren't the leaders there , but I knew that they had it and so I convinced them to come with , except for they couldn't for a while . And so I was just me and Michael and Troy . And , I kid you not , it goes back to Unishippers .

I went on Facebook and I remembered somebody who worked at Unishippers in their version of ops , which is like a back desk , so like they might manage 10 different groups out of that back desk . But it was in Fargo , north Dakota , and that's where I am at , and I was like that back desk is actually here . I remember that .

And so I called , I went on Facebook , I said would you work with me ? It's a company called Rocket Shipping , it's pretty cool . And then I interviewed her in person and I said would you do this ? And she's like so it's like how much revenue you got , how many shipments ?

But it was an integration , an API thing , and it was going to go live the next like week on Monday , and this is between Christmas and New Year's . It's going to go live at the New Year and that would be my first customer at Rocket . She texted and said , hey , I can't take the job , it's too big of a risk .

And so then again I was like , oh no , I can't bring with who I thought I could . Now this next person who I thought I had . Now I've got three days to find an operator because it's 200 shipments a day that's coming and it's going to be real ops and I can't just do that on my own . And she texted back the next day she goes .

But I know someone and at the time I had no idea , but it was her boyfriend and I think that what happened is they had like a dinner table conversation and it was a I was paying like 75K for the first operator because I was like I'll pay whatever to get somebody and Fargo , that's good money , and so it was a raise for them .

And I think that she said , hey , I got this sweet new job . It's super risky . And I think him Brandon , who's our operations manager and he was our first hire and he's still here today and he's awesome I think he said no , no , no , I take that risk . You stay safe . You got some kids , I'll take the risk . Give me that job . And so we got Brandon .

Brandon then started January 4th . He quit his job that day and just started with Rocket on a whim and we had no business . And so I go back to you know we talked about in this episode being able to convince somebody to work for you is the same as being able to convince somebody to sell for you or to ship with you . It's all the same skill .

And so I was trying to flex that sales muscle and say , hey , I had to paint a big picture , a big vision of what this is going to be . But I couldn't be too big because it would sound too risky . So I had to be like but it is pretty stable . You know , like we got some , some shipments and you know , I know how to run payroll .

I did not know how to run payroll but you believe you could figure it out . And so that was a founding team . He referred me another in February .

We started growing and then the two or three transplants that I was able to eventually get from my prior role were able to join halfway through the next year and we built out a sixth person operations team with two sellers , because that was the model is . It was much more ops heavy than than sales heavy . So we went from there Again .

I told you in 2021 we grew quite a bit and I maybe I'll let you ask the question . So that was the founding team . Hey , how much did you grow in 2021 ? Yeah , I know , we went from doing nothing , like no shipments at all , in 20 . In January 4th 2021 was our first day of business .

Right , we started in December , but first shipment was January 4th 2021 . And we did 15 and a half million in LTL spend that year and so we went from zero to 15 and a half million , which that's not like we did that .

It's not like we had crazy margins or anything because we were running lean , but we were able to build an entire team off of that because and those were all except for two customers it was all net new business . We went and got . We didn't like . Take a book of business . It was just two customers followed and we added 35 more .

Well , all of them basically e-commerce space , and so we were hiring like crazy that year .

How is leading a company today different than it was , let's just say , two years ago ? So you're six months in , you've got some revenue , you've got some team . What is it required of you and how have you had to evolve ?

That's what creates the culture . It's just like , hey , we all have this thing in common where we're all trying to build the same thing .

And now we have about I think we have 29 employees as of today and so , like it's a lot harder to have everybody in the same boat going exactly the same direction and rowing in the same like it's a lot harder and as a leader , it was easier because I was in the trenches doing it with them .

And now I'm working more on and I'm still selling and I still do a lot . I'm still utility knife , but I'm more separated . I have a general manager , I have a director of business operations , I have three or four VPs .

I don't do the day to day and I don't talk to the team every single day like I used to and help solve the problems , and so the hardest thing for me has been keeping that vision and having them feel like I'm still in the same boat .

When I'm thinking about 18 months from now and I'm like , hey , our product roadmap is the TMS , and should we do parcel or not ? No , I think we're going to focus walk final mile instead . What pivot should we make there ? What about freight bill auditing ? Who should we integrate with that ?

There's some cool companies and they're like , hey , this customer had this rescue and I don't talk to you anymore about it . So they feel this connected . That's our , that's my biggest struggle is staying connected and making sure we have 18 months runway , and so that's that's where the difference for me .

I think it's a much bigger challenge to manage 29 people and personalities and and a product roadmap and hiring new people . Like people just think of hiring as like hey , you got to interview them and you need to hire them , and then they start and I'm like no hiring is once they start .

I'm constantly convincing other people on the org that it's a good idea for this person to be here and that it would work if we do it this way and if you just ignore it and I've had to fire I don't know four , three or four or five people along the way for multitude of reasons .

All you know , from HR to non-performance to you know all of the other variables . But I think the biggest challenge I have now is how do I add team members without subtracting from other people's roles and without

you know ? I guess we would call it politics and office politics of like , why did that person get hired instead of me getting promoted , and so that's like the biggest challenge I have . And on top of that it's people .

So I might have some awesome employees , but some of those employees might be as good as me or better at some of the things they're doing , and so now it's a different thing , with my own ego of like battling should I be involved in that or just let them do it .

So at the same time , I'm giving up control of certain departments , I'm bringing in new people and I'm having to basically sell my own people right my own employees on why it's a good idea and how it's going to fit , and make sure that their vision matches up with mine or that they can understand where I'm coming from and if I'm not super intentional which , as

you can probably tell , I haven't been super intentional on all of these decisions and there's hardships in between I'm really focusing on , like , when I have a new hire , does everybody at the org understand what they're going to do , how they're going to add value and why they're coming instead of hiring a different position ?

And so now that's my newest challenge , but I enjoy this more because it's a bigger challenge and next year it will be a bigger one and you know there's probably next year . It'll be more about like , how do we raise investment now that we have this tech , or should we raise , because we've never done that ? So it'll be a new challenge .

I thought it was a unique voice in the space because you came from a different angle and you were able to not bring on just founders and all of that , but you're able to speak to it because of the way that you know the industry , and so I'm excited to keep watching .