We are going to start in three, two, and one. All right, ladies and gentlemen, welcome back to another episode of coffee with the freight coach. My name is Chris Jolly. I am your host, and I am the freight coach. Before we jump into the episode, as always, you guys, thank you so much for coming out and listening to this podcast. If this is your first time tuning in, welcome. This is the real side of freight, ladies and gentlemen, and I say that before every single show. And what I mean by that is I only speak to transportation professionals, you guys, because at the end of the day, I want to talk to the right individuals who have done what you're looking to do or who are currently doing what you're trying to achieve.
So you can take that information, apply it, utilize it, and see a meaningful difference in your business and your life. I do have one small favor to ask. I know you're going to get value out of this episode, but if you do and you're not subscribed, subscribe to the show. You guys share it out there. Dear network, because if you see value, your network's going to see value as well. All right, I got a very special guest for you guys here today. I always love talking to founders out there, and selfishly, it's because I'm a young entrepreneur and I don't know what is, you know, going to happen in the future. I just know that I got to work really hard every single day just to keep my head above water.
And I always like talking to individuals who are further along the path than me, who've been through, you know, they've been acquired or, you know, maybe they've made some mergers and stuff like that. And my guest today embodies all of that. So I got Mister Drew McElroy here. He is the co founder of Transfix. So, Drew, thank you so much for joining me.
Chris, it's a pleasure, man. Thanks very much for having me.
No, I'm looking forward to this, man. Like, we literally, it's been seven minutes since you jumped on the call here, and I can already tell we're going to have a great conversation just based on interactions.
Yeah, man. Well, you know how it goes when you get a bunch of freight people together. It either goes really well or really badly. But I'm going to stick with the really well part of things. And, you know, at the end of the day, most of us are just dorks, right? So I can talk about this stuff all day long. So I'm happy to be here and I'm appreciative of the invite.
No, absolutely, man. So, dude, how did you get your start in transportation? Drew, what brought you into this industry?
So there's a picture of me that I have shown to a few people and told them that they cannot share under penalty of death. But my. I'm. I have the story that most people have. I'm a lifer. I. The picture I'm referencing is me behind the wheel of a truck. At 18 months old. My father had started a trucking company by the name of Andrews Express, which obviously is my full name. So I've been literally around freight since I was born. And then my dad, like a lot of other folks, found out how hard owning assets can be. And he somewhat like transfix, changed his approach, his business model, when I was about five years old, and he started an old school one man show, one man freight brokerage out of the spare bedroom of our house.
So I literally grew up listening to him cover loads and, like, you know, all the stories that go along with that, like, oh, baseball practice is canceled. Well, guess who's making delivery appointments to Walmart today, despite being, you know, nine years old and whatnot. So I've. I was around it my whole life. And as is often the case, I thought I wanted nothing to do with it. I was fortunate. I went to the. I was first person in my family to go to college. I went to the business school in Georgetown. And as you sort of do, you know, I thought I was super cool and I was going to go work in finance or, you know, something like that, consulting.
And then I had this epiphany that I should not do that and I should pitch my old man about joining the family brokerage upon graduation. So I graduated on a Saturday, and on Monday, I was employee number three of the family brokerage, and my dad was employee number one. And by that point, my mom was employee number two. And my dad said, okay, kid, you want to learn? Well, it's no more delivery appointments. Here's a list of leads. And I started as a cradle to grave broker, wearing a headset at 22 years old and working for my dad and getting yelled at by my dad every day. So that was my indoctrination. Welcome to the space, kid.
Dude, that is how many other kids that graduated from Georgetown went into freight brokerage.
I think I'm the only one who has that particular problem with my brain or that opportunity, depending on how you want to look at it, because obviously we're a unique community. And, yeah, man, I mean, like, it was. It was, you know, full send from day one, right? That's the only way to do this. And so I. I spent about four years there driving my parents crazy because, as anyone who knows me will tell you, like, I I can't really sit still, right? Like, there's. There's so much opportunity in this business, and I I feel, like, somewhat compelled to constantly push the envelope. And my, you know, again, old school family brokerage, my parents were like, hey, this is kind of our retirement plan here. You know, could you knock it off?
And ultimately, it was that led me to say, okay, there's some pretty grand ambition here, but maybe my family's very nice, but otherwise, you know, pretty small. Three pl was maybe not the launch pad that I was looking for. And so that ultimately led me down the path of meeting a whole bunch of folks. But one of them ultimately was my partner, Jonathan Salamandere, who, you know, at the time.
Right.
I had. I had a lot of opinions and ideas about how we can do this all collectively in a better way. But I'm not an engineer, so I could describe them, but I couldn't build them. And so when John and I came together, it was pretty great, I think, for both of us, because that was, you know, we combined sort of the knowledge of how the industry works and maybe ideas about how it should work with, you know, world class skills and experience and actually building solutions to do things in the real world. And that's. That's been our story now for. For, you know, going on ten years.
How much hustle is required to work in freight? Because I think, like, that's one of the most common misconceptions out there, Drew, is I think, like, it's almost the. The facade is that, oh, you just call a couple of customers, and then you just bid on all this freight, and then you're a millionaire. And I think people highly underestimate how much work is required to get in the door with somebody. And then, because, like, I try and tell people all the time, Drew, like, selling is the easy part. And, like, fundamentally, when it boils down to it, selling is the easy part.
It's the execution of, like, we're literally, as we speak right now, Drew, inside of my brokerage, we had a customer hit us up right now that needed to get a power only option to come in and move a trailer that was dropped in the fire lane on their property. We have that going on right now. We also have a customer that's coming to us with a level twelve emergency to get some hazmat containers removed from the port last minute because somebody dropped the ball out there. And these are all like within the first couple of loads of doing anything with these customers. And you know, to me it's like that level of hustle and understanding, I think it's under, it's not understood well, what is required to get these things off the ground.
Yeah, I mean, I think your examples are funny in that they're very classic, but they're also never the same, right. That's the thing about freight, is it's like, it's never a dull moment, right? And like this industry is, in my experience, with all respect, it's decidedly not for everyone, right? Like the pace and the general non stop insanity, it really goes one way or the other. Like we've joked about this for years, right? Like you can tell on day one, right? Like if you come in and like a new class of reps, right, totally green. And you're shadowing for the sake of, you know, example, like you're shadowing a senior broker, right? And you're just learning, right? And the senior broker says, oh, excuse me for 1 second, I have to take this call, right?
And so now you're just sort of sitting there twiddling your thumbs, you know, for 30 seconds on day one and the phone on your desk rings, right? Like to me it's sort of like the bifurcating are you going to make it or not? Right, because there's two types of people. There's a person who looks at the ringing phone like a poisonous snake and says, I don't know what to do, right? And there's the person who looks at it and picks it up and says, you know, thank you for calling transfix. This is Drew, how can I help you? Right. And I may not know the details, but I have the engagement, right. I'm switched on and ready to go. Yeah, you have to be switched on in this industry or you're just never going to make it, right?
Because it's too dynamic, it's too constant. And the people that you're ultimately competing with are killers. If you have a significant book of freight business, there's a reason for that and you've worked your butt off to get it and it's presumably funding your family's livelihood, so you will protect it the way a person protects their livelihood. And that involves treating it with respect, right? So to answer your question, I think the hustle and the sort of, like, energy and, like, you know how everybody in freight is, right? Like, it's a. It's a weird business, right. Because we're all very serious about it. But then there's also the sort of, like, personal dynamism, too. You don't want to do business with somebody that you don't trust and you can't pick up the phone.
Technology is wonderful, but if I can't pick up the phone and talk to my partner in a way that I know we're on the same page, that's a problem too. Right. So the list of requirements is not insubstantial. Right. But the sort of trade off is when you get it. You know, there's how many examples of. There are people who have done well by their family, like in a generational way, from freight. And that's a, you know, that's the opportunity, but everybody wants it.
Yeah. No, man. So you get going with transfix, you know, the co founder of that. What were the early days of transfix like, man, what was it like when you guys just started? Was it started out of the bedroom or how did this all roll?
So it was. It was. There was actually a number of bedrooms. It's funny that you say it that way. Then. One of the things that we joked about in the early days was the number offices we had because of the. Because of how scrappy it was. Right. And we started the company because we're extra gluttons for punishment. We started the company in Manhattan, which is obviously not an easy or low cost place to have an office. So, yeah, the company was literally started in a bunch of different living rooms. And then in the first, I think, six years, I think we had nine offices, including one that was condemned shortly after we left the building. And so it was an interesting spatial experience, certainly from a business perspective. The early days were great.
To be totally candid, there is a purity about starting something, whether it's a pure tech business or it's a freight business, or in our case, obviously both. But there's a. You've just raised a little bit of capital. A bunch of fairly or very sophisticated people have taken a leap of faith with you. You've made all these promises, and now they're like, okay, cool, go do it, kid. And it's like, oh, right, here we go. And so in the early days, it was myself and Jonathan and a small team of incredibly devoted people. And it was quite simple. The mandate was straightforward. My job was to win freight and to ultimately handle sort of commercial and operational side of the business. Right. Like, I'm a believer that our industry is demand led, which is to say, you know, you got to get the loads first.
Right. You can't get the carriers without the loads. The carriers aren't going to care. Right. But it was, you know, win customers. Win carriers with the customers and, you know, go, baby, go, right. Because, you know, especially in the early days, you know, the amount of ability you have to influence the trajectory of your company via numbers is incredibly significant because the numbers are all small. We did 30 loads last month. We did 90 this month. Holy shit. That's 300% growth. Down the road, you're not going to be able to get 300% growth. But in the early days, you can have this outsized, exponential looking impact. And depending on what your business strategy is, it almost doesn't matter, no matter who you are, that kind of growth is a good thing.
But in the case of a business like ours, where we had both grand ambition and the need for additional capital from investors to realize that vision, that growth was incredibly important to us. Trey, would you.
To kind of talk about capital from investors, would you advise people to take on capital after a certain point in business, or would it be wise to have somebody take it right away before they start? And I'm asking that because my opinion now, because, like, I'm just over four years of being in business here, Drew, and I don't think I could have properly allocated the funds if I would have taken on capital right away. But now I think after a couple of years, with my business acumen being what it is, I'm not a genius or anything like that, but I feel like if somebody was like, hey, we're going to give you $10 million, I wouldn't go out and do anything stupid with it, right.
Like, I would actually use it to build my business in a way that I feel like would beneficial for long term growth.
Yeah, I think it's a great question. I think it's very difficult to give a specific answer in sort of a vacuum, right. Because I think ultimately the answer is entirely dependent, not even on the company. I mean, the company is very important, but it actually, to me, goes one step further. It's really about the founders or the whomever owns the equity of the company and what their goals are and how I think the best way to say it is what their goals are, because I guess there's a couple of things about that firstly, you sort of framed it as, should you take capital at the beginning or later? I would suggest that there's a step before that, which is, should we take capital at all? Yeah. Because taking other people's money is a trade off.
It's inherently a trade off that now you are not. You're not the solo steward of your own ship, right. Because you now have a fiduciary obligation to other people, which changes a lot of things very quickly. Right. And it changes the expectations, and it changes how you have to view the world. Right. Because if it's your business, you can make decisions that you think are right. If you are running a business on behalf of shareholders, of course you do things that you think are right, but there's, I would say, a narrower path of how to get there once other people's money, and therefore expectations and your fiduciary responsibility come into play. So I think that's the first question. And I would suggest that, candidly, there has to be a very good reason, or else, honestly, I would say, bootstrap it.
Keep going as far as you can on your own, because even if you eventually have to raise capital, the further you've made it before you raise it, not only is there that you're smarter, hopefully we're all smarter versions of our previous self. I find that looking back on anything I've ever done, I feel, like, hopelessly naive. Right. As an old guy now I'm like, oh, my God. So there's always that. But there's also the component that your business will, as it makes progress, not only will you know it better, but it'll be inherently more valuable, which will make the raising capital process both just easier to do because it's really hard, but it will also allow you to have more leverage in that negotiation. Right. When you're raising capital, it's very important to always think about leverage. Right. Because investors are very smart.
They're professionals. Their job is to get the best deal on behalf of their investors. Right. So they have a fiduciary, too. And their fiduciary often involves squeezing your head as hard as they can. Right. And so your job is to be able to bat their hands away. Right. And that comes with leverage and optionality. Right. And it takes different forms in different businesses. So I can't be too specific because it depends on. On who you are and what you want to accomplish. But I. I always think about it in sort of. In that way. Yeah, I think that's the best way to frame that.
No, absolutely. Man, I think, like, this is a battle that a lot of people go into because it's like there's so many people that are, you know, they're boasting about, oh, we're raising all this capital. But then you see the after effect of a lot of these large cap raises a few years after the fact. And, you know, these are just thoughts that kind of come to mind. Like, this is the stuff that I think about when I'm not, you know, trying to build my businesses is when I'm at home, I'm like, well, dang, maybe I should take on investment. And then I look at some of the recent case studies, especially in our industry. I'm like, there's companies out there that have raised hundreds of millions, if not almost like a billion dollars, and they're gone. And I'm wondering, why was that?
Was it because they raised too quick? Maybe they didn't know the industry as well as they thought they did. I know there's a lot of external factors, but, like, those are just kind of things that go through my head. And I, because I have bootstrapped everything drew up to this point, right? And, and I look at it as like, I'm just going to continue to bootstrap at this point unless somebody for some reason comes to me and says, hey, we're going to give you $100 million and we want no equity in your business, or say, we just love you that much, which I don't think that exists.
If you meet that person, can you give them my number? Like, I would. I would love to meet them. Yeah. No, I think it's right, man. Right. Because, like, you know, these companies are our babies, right? And, like, not to be, like, overly, like, silly or metaphorical about it, but it's true, right? Like, we give birth to them and then we put all of our sort of energy and soul into them, especially in the early days, right? And then they become teenagers and they, like, go off on their own and they, you know, they yell at you or whatever, right? But, like, the early days, it's super personal. And I think when you, again, when you take on outside capital, you limit your optionality, right?
Like, again, if you're, if it's just your business, you get to go at the speed and pace you want and you get to make decisions that are not purely capitalism driven, right? Like, of course we're all capitalists. We're here to make money. But there are lifestyle trade offs that go with that individual owners get to think about. Once you start taking outside capital, it's like, no, there's. There's only one path here, and it's up. And that is part of the reason. Again, without talking about anybody specifically, but investors, generally speaking, make many investments, and they don't want singles for the most part. They want home runs. And so their risk tolerance at the individual company level is often going to be very different than a founder who has put, again, all of their blood, sweat, and tears into this.
And investors are like, yeah, that's cool and all, but, like, we got to exit by doing x, y, and z, or else this is not what we signed up for. And so there can be friction there depending on what the founder wants to do. So I think it's just very important to go in very eyes wide open and very deliberate about what you're raising the capital for. Right? Like, if you can very clearly articulate, hey, if I bring in, you know, to use your numbers, right? If I bring in this $10 million, I can use that in the next 18 months to create $100 million in value, right? Like, I can ten x this in 18 months. If that's really true, well, then, like, shit, okay, like, maybe we should take the 10 million, right?
But like you, again, it's about being deliberate and why are we doing this and what are we going to do with it?
Yeah. And I think, like, you know, it's also looking at what all of your financing options are. Maybe it is taking out, you know, maybe you get a line of credit from a bank and you start there and kind of build it up. I just think that there's a lot of options out there. And I think so many people silo themselves thinking, oh, I got this napkin idea, I got to go get venture funding, or I got to go get private equity to buy into this stuff. And it's like, no, I think there's a lot of value in getting your face absolutely beat in for a couple of years to get a better feeling of a, do you actually want this? Because, like, this life, man, and going out there, and this isn't just a transportation thing. This is a business thing in general.
If you're going to go out and try and carve your own piece of the american dream, you better be willing to put in way more than you think. And it's not as easy as just going out there and raising a little bit of money and thinking that you got it all figured out, because, like, this is big stakes. There are people who throw literal billions of dollars out there that they have investments and stuff like that. And, yeah, man, they need their money back.
It's all. It's all very serious. There's no. I mean, there's no doubt about it. And, like, of course, you know, from an outside perspective, there's always things that, like, you know, go wrong or, like, don't make sense when they happen, right? So, like, I can appreciate that people are sometimes, like, you know, like, oh, my God, like, let's go compete with these guys, right? But, like, the reality is, in my experience, at least the vast majority of investors and anyone really, like, the world is a competitive place, right? And so anything that you want, you're gonna have to win. And I don't necessarily mean it's not like purely dog eat dog. You don't have to go take it from somebody in that sort of sense, but you have to have a reason to exist.
You have to have a way that you move the needle for people to actually, you know, give a damn. Right? And, like, that's. Again, it's a big world out there, and there's a lot of smart people doing a lot of clever things, right? So to get cut through that noise and capture not only one person's attention, but a lot of people's attention, it better be good or it's going to be hard. I mean, it's going to be hard anyway. And if it's not good, it's going to be, you know, next to impossible.
So, you know, you've been in this industry. It sounds like about the same timeframe as I have. And, you know, we know what this world was like pre technology, you know, when you had to fax rate confirmations over and stuff like that.
And I still remember the curly paper faxes. Like, that's how old I am.
And, you know, it's like, I look at it like this, Drew, because, you know, you guys are. You guys recently pivoted in your business a little bit, and you guys are very. I mean, anybody can go out there and Google the news article if you guys want to find out more about that in particular, unless you want to talk about that a little bit. But I would like to focus in on where you guys are now and with data and everything else that's out there. Do you think that most transportation companies are not using data, misunderstanding their data, or are using it, but aren't really applying it the way that they should?
Yeah, I think it's. I think it's a great question. So what I will say is our mission at Transfix from the very beginning, right? Like, I appreciate what you said about before tech and after tech, right? But like, you know, even if our industry in an old school way had a little bit of like, you know, luddite esque behavior, right, there's always been technology. Like you mentioned, a fax machine qualifies as technology, right. It's better than a carrier pigeon. Right? So the way we've always looked at it is that maybe technology wasn't applied as robustly as it could have been in our vision, right? I mean, that was when we founded transfix. That was sort of the whole point, right?
And maybe, you know, maybe the idea of naming the business transfix as if, as in we're going to fix all this, maybe there's a little bit of arrogance in that, but that was just a naming, right? And I think, like, at the core of it, right, it's like anybody who's touched this space knows how big it is and just how, like, frustrating it can be. And most of that frustration manifests itself in waste of one form or another, right? Whether it's in the real world waste of like, drivers, you know, sitting or deadheading or like, you know, whatever, all the stuff that leaving trailers in the fire lane, as you mentioned earlier in the call, right, there's always just real world, you know, crap, so to speak, right?
And then within a brokerage, the folks who are actually trying to manage all of this, right. There's also a lot of inefficiency, right? Whether it's faxing a rate confirmation and waiting for some, you know, guy in office to sign it and fax it back or that's also a very old school issue. But like just the stuff, right? And anybody who's ever again worked in a brokerage knows the good loads, still have a bunch of paperwork associated with them. And like, God forbid when something goes wrong, like we know how long we're going to spend, right? And so our mission from the beginning, which for the record has not changed, was to use new applications of technology to improve this in one form or another, right?
Like either in the real world, you know, via intelligent matching or whatever it might be, to eliminate dwell and eliminate deadhead or to increase the speed at which brokers can process a load, right? Which is to say lower variable cost, right? Like attack the P and L. So that is, as everybody knows, like that. That has been what we have been talking about for a very long time. What has changed recently at Transfix ultimately is the business model with which we deploy these solutions. So historically, as probably everybody knows, were an actual broker. We were selling services to move freight to shippers and we would use the platform that has all of this wonderful enabling technology and the carriers, frankly, would interact with it as much, if not more than the shippers, right, accepting loads, tracking trace, et cetera.
What we've sort of like realized in the last year is that the fastest way to like. So I kind of look at it as infrastructure, right? Like it's the pipes of moving freight in the most efficient way. It looks like utilities, right? So in order to get that software where it needs to be, what I think one of the things that makes this very unique is that it was built alongside the broker. We can literally talk to all of the modules and features and tools that we built and almost every one of them has a funny anecdote. It's like, oh wait, this shipper was doing this. We built this tool and then it grew into this larger concept and now it powers the business.
Once we got to the point where those tools were mature, it's like, well, how do you go as fast as possible? Is it by building the brokerage, right, and continuing to like have hand to hand combat and win one shipper at a time and do frankly all of the things that a brokerage is required to do that isn't really like related to sort of our core mission of building tools, right? Like, you know, AP and AR and, you know, claims and insurance and all this stuff, right? Like, as we all know, those things are hard and capital intensive and they weren't really directly relevant to the sort of value creation that we sort of exist to provide. So anyway, all of that notwithstanding, as well as some like Dave broring at NFI has been using the phrase freight karma, which I think is appropriate.
Like this sort of all came together and from our perspective, it's a way that we can bring more of these tools to a larger percentage of the freight industry more rapidly because now we don't have to compete with all of these brokers with whom we have been competing for a very long time. We now exist to serve them, right? It's like, listen, we've got these tools and we think frankly that they're quite powerful and the value they create is quite self evident. And with all humility, I don't think there's much like this out there. In general, we've done a pretty deep dive and we've talked to a lot of folks and I think that they're, like I say, powerful and unique, which is, from our perspective, candidly, good place to be. And so that's why we're doing this the way that we are now.
Because enabling all of these brokers is, you can imagine it's the problems that we're serving are the problems that we have been thinking about every day for ten years. And they're nothing unique, right? Like every broker has to deal with some version of the same B's, right? And it's like, well, you know, we've, like I said, we've got some pretty good tools. All right, so let's talk about it and at least, you know, knock on wood. So far so good. The conversations we've been having since we've, you know, it's weird, even for my own brain, right? Like, I've spent my long time, like, these folks are our competitors and now it's like, no, we're not. We're, we can all do this together.
It's a, I've had to retrain myself to think about it that way, but it's actually, incredibly empowering, because, you know, everybody wants to do better. So.
Yeah, man, I think that with where we are, you know, with the ability through technology that is out there right now, I think that, you know, because from my perspective, as I grow and scale my company out, I want to leverage my team with the right technology to maximize their outputs. And that's not for me as the business owner to make as much money as possible. It's for them to be as efficient as possible and for them to make as much as possible. Because I don't believe in cap commissions for sales reps. Like, I've gone record saying that and I'm never going to cap my sales reps. And if I do, sue me, you know, like this is like that. That would be, I wouldn't be myself if I ever did that.
And I think that, you know, with where we are right now, I think a lot of brokers are. They, I think most people have too much technology. They have too much that they don't necessarily need for what they're actually trying to accomplish. Because I think it's been death by tech stack for a lot of companies because they thought like, oh, if I sign up for this service and this service and this service, we're going to get all of this. And now they're locked into contracts and like, wait a second, I don't need 90% of what I got. So like, are you guys going in there and assessing what brokers have and, or trying to like connect them all and be like the backs office API that actually makes all of these systems talk?
So it depends a little bit on the individual company to whom we're speaking. So for the most part, or not even for the most part, I think I can just say this objectively. We want to be easy to work with and easy to partner with. And as you sit, technological decisions at a brokerage are obviously critical but also kind of complicated. Right. There's a lot of politics within a brokerage and different folks have different opinions, et cetera, right. It's funny that you mentioned what you did about commissions, right? Because sometimes people get sensitive about that. It's like, well, what is this going to do? Like is this going to somehow upset my Apple card? And now all of a sudden I personally am taking a hit because of this tool, right?
And so I think specifically talking about us, we have gone out of our way to ensure that our outputs are aligned with the objectives of the people to whom we're outputting them. Not to put too fine a point on it, but at the end of the day, literally everything we've built directly maps to your p and l. And because what we've built is module, it's not a full rip and replace. We don't need to come in and start messing around with what you're doing today. It starts with tell me what is causing you problems. And of course we can help you with this because we've got all of the data. To me it all breaks down to the lifecycle of a shipment. It starts all the way back at pricing, whether it's an RFP for contract pricing or spot pricing.
And it moves all the way through the individual steps like pricing, tender acceptance, scheduling, matching and booking and covering track and trace. And then even like the document management and the AP and the AR, right? That's how these things flow. And a good broker is what makes a good broker, right? Well, you're able to optimize in the front end. You're able to win as many loads at the right price as possible. You're winning the right load so that you don't find a high percentage of them being underwater, right? So you got the top of the p and ld in terms of the freight you're winning at the price you're winning and the rate you're paying the carriers. You got to get that, right?
You got to win as many loads as you possibly can, but then you need to actually move the loads and it doesn't really matter if you make take around numbers, if you make 15% gross margin, but then you spend 6 hours babysitting that load, guess what? You really didn't make that much money because your cost to move it is going to be hundreds of dollars in terms of labor and everything else. And so from our perspective it's tell us what you're doing today, we can help you, but you probably know where your pain points are, right? Oh, I've got this customer, they've got this crazy contract and it's one load a week or it's 52 annual, but they think that means 35 in the week of July 4, right? And the reps are so busy they don't even realize it.
They see loads come over, they get excited and they just accept all of them, right? And now we've got a problem because we're underwater on all these loads on our board and a lane we don't use. Or it's, you know, I'm constantly overpaying carriers, right? Like we have tools that map to each of these individual problems and it's like how can we start by plugging them in a way that meets you where you are, right? So maybe it's using the UI that you already got and we're just, you know, using data to come in, right? Or maybe it's, you know, one screen that one team uses through the flow. Maybe it's the scheduling tool and you have your schedule, right? But like, to me it's always mapping it back to the economics of the decision makers, right?
And that is usually multiple constituencies, but it's like who owns the business and who owns the. Who owns the business, right? Like the equity of the entire brokerage. And then there's the, no matter how you're set up, right, there's somebody in there that is owning it from a commission basis, the business as well, right? And it's how, you know, their interest should be aligned. The owner wants to make more money. He or she wants the p and L to look better at the end of the year. Bigger top line, less cogs, less processing costs, more profit, more free cash at the end of the day. Well if we're doing this correctly, that person's high comp, high commission people should have a similar objective. You run a pod. Well, how many loads did your pod do last year? How much revenue did your pod do?
Or how much gross profit or net profit did your pod do well, if we improve those numbers, will you make more money? Most likely the answer is yes. Well, then, if so, our tools are for you, too. Right? And it's literally, again, how are you measuring it? Well, we're measuring it by loads person per day. Well, if software can make that number grow by 33% because the time it's you're doing, each individual thing goes down significantly and you have tools to bid on more loads and win more loads, that's pretty good, right? That's what software is supposed to do. It's not supposed to be, oh, another stupid system. I got to go in there and enter all this. Like, if the value isn't self evident, then the value probably doesn't exist.
And I guess at least, you know, speaking selfishly, from our perspective, we don't have any of that. Like, there's nothing in there that's just sort of like, oh, it's just a thing, right? It's like, no, if it's there, and I'm pitching it to you, like, there is underlying data as to how this will improve your business in a measurable way. We talk about it's ROI positive from day one, and if that's not true and you don't realize that, then we've done something wrong and it's probably not going to work, because if the software is not paying for itself, why do you have it? And at least in our case, it's so far so good.
I look at it like this. I'm in a unique position as I grow and scale my company, because when I say I want to give my people the right technology to maximize their outputs for. For their. To maximize their own earnings, I'm in a unique position where it's like, I look at technology like this, Drew, because, like, back in the day, where, you know, a lot of companies, they hire 25, 30 people, and they know only, like, three are going to make it long term, right? Maybe if they're lucky. I want to eliminate hiring classes, and if I only need to hire three people, I'm going to hire the right three people and I'm going to arm them with an arsenal of stuff to be successful because I think, like, there's. I don't ever want.
And again, like, it's easy for me to say this because, like, I'm not looking down the barrel of should I hire 25 people or not? Right? And I want to try and take this approach as I grow and scale in the right way to where it's like, hey, instead of hiring ten, hoping five make it. I just want to hire the right five, give them the right tools and then hire, maybe hire ten more later on in the year. But it's ten people that I know are going to be needed in the long term instead of. I see a lot out there, man, of, as the markets, you know, peaks and valleys of it's like higher, oh, mass layoffs. Higher up, mass layoffs.
I want, you know, and again, this is a lot of pie in the sky mentality, but like, I want to do the right thing and hire the right people as I grow and scale.
Yeah, I mean, I think that's the right way to look at it, right? Like our job as I see it, as founders and executives, like, my job these days is no longer to be like, I'm not a broker, right. I haven't covered a load in years, right? Like, my job is to build a team that can fulfill our mission, right. Whether that's executing freight or building software to do it. Our job is to build an amazing team and enable them. Right. And that's where the tooling comes in. Right. Historically, to your point, the survival rate in brokerage is incredibly low. And it's because like, it's this sort of dark art, right?
Like you need to be able to do, especially if you're like a cradle to grave broker who like, aspires to like, own a pod and you've got to do all of this, right? Like it's incredibly hard and people burn out and everything else, right? And so that, again, that's where we look at it. We're like, listen, we're not here. I'll give, I'll give you a good example, right? Like, I've seen a lot of folks, they get worried when you start talking about pricing because they're like, no, no, you're not coming anywhere near my pricing, right? Like, I own the pricing, which means I control the revenue and the win rate and my margin and that's how I, like, earn my living, right? And so you start talking about automated pricing and I start going, what if you get it wrong? Right.
It's a very legitimate concern that I think anybody who's like, earning a commission off of a book has to think about. So we have a tool that's called rate coach and it's literally data infused, poaching the load level. So you're on the phone with a carrier, you literally, it knows the lane youre talking about. And its giving you guardrails, its giving you suggestions. Hey heres what the cost looks like, heres what the market looks like on the pricing side. Heres what your historical payables look like and its bringing all these things together, not where youve got a screen of like 7000 things but it ultimately leads to a recommendation so that if youre on the phone you dont have to trust it but it gives you guardrails. And increasingly we find that people do trust it but its nothing.
Hey we've taken that and you no longer have any visibility to it. And it's automated, that is, it's gone, it's a no, it's still yours. But now we are making it easier to do, we're making you smarter with technology, but you're still the human in the loop, you're still the one who pulls the trigger, right? But now mister and misses, you know, mister and misses, senior broker who knows every pricing in every lane at all times because there's one of these savants who did make it out of the class of 100. Not everyone on their team is at that point yet, right. And it's like so now we can enable you and your team to do more loads because maybe junior reps can take advantage of this and they can be smarter, maybe not.
Again, the decision isn't being taken away, but it's being enabled, right? If you do that throughout the entire lifecycle of a shipment on the appointment module, if you have a bunch of schedulers, some of the appointments can be automated, right? Some people, some facilities will respond and we can just fully pull that cost out. Sometimes it's not possible. You still need to make a phone call, but you now have a tool that is not only efficiently queuing the appointments you need, so you can make more phone calls and more appointments, but you've also got intelligence infused in there that is coaching them. What time should the appointment be so as to be able to cover the load at the lowest cost? Oftentimes in my experience, the schedulers in a brokerage are nothing.
The most experienced freight people, they might not know that a 09:00 a.m. Delivery appointment is much better than a 09:00 p.m. Delivery appointment or some of the subtleties in there. So again, you use technology and information to guide them to the right solution and it makes them able to do more and it makes the quality of the individual decisions higher. And when you're doing this at the sort of volume of decision making that a brokerage needs, you know, again, if on, you know, 40% of decisions you do 30% better over the course of a year. Like, that's going to have a very substantial impact on the financial performance of that brokerage.
I mean, I'm going to just let everybody know. Drew didn't pay me to say this, but I truly think what you have right here is what has been missing from the market, Drew, because there's a lot of different technology that's out there that's promising the world for a lot of businesses. And I think the main benefit, and I've been saying this often, and, you know, as the kids say, I have receipts, so you can go back to old podcasts of mine and listen to this. I say the best technology comes from the industry. And that's not to say that outsiders can't come in and create good technology. But literally, if you guys go back and rewind and relisten to what Drew said, what he's talking about, there is literal pain points that you face inside of your business.
And I know everybody who brokers that's listening to this is going to be like, holy shit. Yeah. Yeah, that's exactly what's going on. Drew's got that because, like, man, you talk about pricing, for example, there. I think, you know, like, the biggest issue, you know, for a lot of sales reps is like, man, I don't want to take vacation. You know, how do I know that they're going to price it right or, you know, we're going to do this? What's going to go on with my customers? And, you know, they're all out there working, like, what you're describing right there, it brings that experienced rep, because that's the thing, man. Like, that's the biggest disconnect is how do you get that person who's been doing this for 15 years to stop and show the person who's fresh out of the training class?
Hey, this is how it's done, and here's why. Now it's like you have modules that they can go in and they can learn this stuff. They can learn the why behind it because, you know, again, you brought up the appointment times. 09:00 p.m. To 09:00 a.m. Most of these fuckers are out there, man, and they're like, oh, just take the appointment. Just schedule the appointment. Why would you take that? You know, again, nobody took the time to tell them the importance of that stuff. So it's like, these are, this is the blocking and tackling of freight that will never go away because there's always going to be technology. There's always going to be something that's going to come in and do this and do that. But those are the bare bones fundamentals that will never go away from this industry.
They never will, because that is what customers look for again. I've never had a customer. I might be, you know, the only one, but I've never had a customer sit down and be like, hey, why don't you tell me about your tech stack and. And everything else? They're like, can you actually move my freight? Can it pick up on time and deliver on time? And can you do it the way that we need it done? That's, like, the overwhelming response that I get out there in the market. But again, like, when, earlier in the episode when I said, selling is the easy part, you guys, what drew just described is what I mean. Selling is the easy part because it's when your numbers called, when it's, hey, come pick this up and take care of this right now.
That's when you need to show up.
I couldn't say it any better, man. I firstly, I appreciate the compliment, and I like it for what it's worth. Like, it's not magic, right? Like, it just. We happen to be very, I think, at least unique in that we didn't build it in a vacuum. Right? Like, we built it alongside the brokerage. Right? Like, I literally. I could, like, I can tell these stories because they're. They're real and they're shit we encountered along the way. And it's like, well, we just happened to be fortunate that we have a team of 120 of the smartest engineers in the world.
And so when we come across these problems, like, we literally called it the freight lab, we have people had people who know how to move freight, the best in the world, and we have people who know how to solve problems the best in the world. And we literally built these tools alongside the real world problems. And it wasn't, you know, like, oh, we're just going to design this, like, grandiose theoretical thing in a bag, and then we're going to come in and save the day and take everything you're doing and throw it in the bin, and here comes our solution. Like, that's crazy. That's not how the world works, right? Like, we want to help people with real tools. So I'll tell you a funny story. So, Jonathan, our CEO, my partner, is like me, but different in that we're both big dorks.
And one of his dorky manifestations is that he's a huge marvel fan. So in the very early days of our company, every technology component had a Marvel code name, and the sort of the core platform was called Stark for Tony Stark. Right. And like, that is the idea of the platform. It's the Ironman suit for you as a broker. It's not. We're not a robot. We're not. You're not going away. It's. We're giving you this armament to be the best broker you can possibly be. And if you're the owner of said brokerage, we want to make your entire team an army of enhanced killers because they have all of these tools.
And I'm going to let this metaphor go in a minute, but if you're one of those soldiers who, again, is earning their salary, it's influenced by their performance, which is to say commission based, then this is great for you, too, because you can just do more. Again, it depends on which thing you want to start with, how it impacts it again. But the modules existed throughout the lifecycle of this shipment. Right? And if you, somebody works with us in, like, a truly robust way and implements all of them, it's like, oh, now, you know, you're. You're really cooking with grease here, right? And I don't know of, you know, too many other companies or products that were sort of built in that way. Right? And that's.
That's, you know, perhaps why we're, you know, in this position to sort of uniquely add value to our customers.
I love it, man. Well, Drew, I appreciate your time. I really do, man. And how has anybody to reach out to you guys to find out more about what you guys got going on?
Yeah, I mean, we're pretty easy to find, Chris. Our website is transfix IO. We're active on most socials. I think LinkedIn is probably the one where we're most active on. But, you know, you can find us on X and you can find us on Facebook and things like that as well. But, like, listen, we're really open, and this is all pretty new to us, right. As we talked about earlier, this is a little bit of a change from our historical approach to the market, and we're obviously very excited about it, but we're eager to have as many conversations as we can. So to the extent that somebody finds this interesting or not, that they think this is really stupid and they want to yell at me, I'm open to that, too.
We just want to chat with folks because, again, historically, we've been competing with a lot of these folks and not anymore. And so we want to extend the olive branch is not the right word. We want to extend our hand in friendship, like, hi, how's it going? And so we'd love to meet everybody and chat and listen, explore in a very low pressure kind of way if there's a way to work together, because, frankly, we're very, like, so far, right? Knock on wood. Like I said earlier, the momentum has been really good. The response we've gotten has been genuinely super exciting for us. And so I promise there's no hard sells around here. It either is a good fit and there's an opportunity to work together or there's not. And that's okay, too. We can both learn, and that's the way we're approaching things.
So to the extent that anybody wants to have a conversation, please come find us, because we're. We're available.
I love it. Drew, thank you so much for your time. And for some reason, if you guys can't find Drew or transfix out there, hit me up. I will gladly put you guys in direct contact with them, but this was actually. I can't believe this episode went as fast as it did. And I know you guys got value because this was intense. It was very tactical. And what you guys need to do out there, and you guys need to hit up Drew. You guys need to hit up transfix. And if you made it this far and you're not subscribed, subscribe to the show. You guys share it out there. Dear network, because if you see value, your network's going to see value as well. I appreciate you guys. I love you guys, and we'll be talking to you soon.