Ep. #4: Doug Waggoner

He sees Bill Cosby and this is before Bill got in a bunch of trouble but Bill Cosby on the face of a magazine that says Bill Cosby , 50 , funny and filthy rich . And Dave , as a 14 year old , looked at that and said I want to be that . And 36 years later he stood at the United Center stage and reflected on the fact that he built that life for himself .

And it just cool to see someone who followed their passion and it led them to accomplishing their wildest dreams and seeing that . It just was very cool and Dave Chappelle is very funny . So that was . It was a good night . That's good .

But I think what we're trying to do here is tell that backstory of like , yeah , but what happened before that magazine cover ? And that's what we get into with our guests and our interviews .

And you know , just taking a step back to the interview with Craig , I mean man talking about something that you know has kind of been through it all Right , I mean I think people know him as the face of this huge media company , the face of a trucking company , but you know , to get really , really deep into the nuts and bolts of like everything that happened

along the way and just I mean that's what we set out to do when we started this podcast was to get to those layers , learn more about ourselves , for our guests to be able to learn more , and I felt like we were able to do that . So I don't know what do you think back on that episode . What are your thoughts on it ?

Look at what they've done for themselves and you don't necessarily see the struggles they endure to get there Right and it just takes a tremendous amount of risk and being willing to put yourself out there to even have a chance to reach some level of success .

So you think about a comedian and the amount of times that they have to go up on stage and probably eat crow and get you off stage . Just the ego hit that that takes . And you know Craig talks about , you know , killing your ego or letting your ego die , because you know I've learned your ego is meant to protect you .

It's this false thing we create to make ourselves feel better and feel safe and protected . But it's not necessarily beneficial to us . It doesn't help us necessarily in the sense of keeping us grounded or self aware to our faults or things that we're missing . So I appreciate Craig kind of diving into that and helping us see that side of himself .

The reality is that you know you take a step back , or , you know , take a peek behind the curtain and you know you have no clue where people are coming from and the different things that they're up against . And you know we thought the whole part of this journey is we're going to get into that too , not just about our guests .

But you know , andy , you've been pretty candid a few times , just getting really deep on you . You've had a tremendous amount of success already , but you know , you're kind of going through some things as well .

I haven't shared as much of my story just yet , but I mean , I've been there too , been there , done that and had those moments , and so it's just a good reminder for us all that you know , when you look around you and you maybe see a bunch of happy people in a room , yeah , that may be what it looks like now , but yeah , you have no clue , right , what's

going on in the background , and so it's good time for some self-reflection and good opportunity to . You know , think through your own . You know your own situation where you're at , and that's what we're going to do . We're going to get deep talking about those sorts of things , you know , as a listener . You know , share your story with us , man .

You know you may not be on the pot itself , but we've got all these different ways to interact with one another through social media . We want to hear your stories , too , and tell us the stories that you want to hear about as it relates to this , this aspect of business or this aspect of being , just being a person .

But , yeah , we're pumped and you know we feel like we're on our way as far as what we're trying to accomplish here . So , that being said , we've got episode number four . Who we got today .

Thanks for having me . Excited to be here , absolutely . So I'll give a quick background on you , and I did pull this from the Echo website , so if it's wrong , that's on your marketing team . Doug is the Chief Executive Officer of Echo Global Logistics , where he's been working since 2006 .

He's been in the industry a little bit longer than I've been alive , if we're being honest , to age him , starting in 86 and spending 12 years at what is now defunct yellow YRC formerly , and some time at Daylight Transport as well as USF Corp , kind of working his way up through the ranks before founding a free management software business called Selectrans , which I

believe was acquired by Echo , if I did my research correctly , and joined Echo in 2006 , where he's been the CEO ever since . Welcome , doug , we're happy to have you . Did I miss anything ? Glad you got it . Good job .

Like we just mentioned , hopefully we've done our research well , but just want to learn a little bit more about you , and so this is a segment that we're calling this or that , and so I'm going to ask you a couple of short-handed questions and just looking for you to expand on your answers a little bit . So the first question is football or wrestling ?

If you think about the movie , moneyball , you know , and all the other sports basketball , football , you know . Data , science and statistics and mathematics have become an important part of the sport . So a few years ago I was talking to some D1 head coaches and discussing that topic , like why don't you guys have any statistics ?

The only thing you track are wins and losses . And so I developed some technology and actually started with a mobile app to track all of the activities that happen in a wrestling match .

So if you think about playing a video game where you click buttons and things happen , I've got a mobile app that tracks all of the activities that can occur in a wrestling match , you know .

So the red wrestler shoots a left-low single to take down the green wrestler and he either gets the take down , they scramble and nothing happens , it's defended , or there's a defensive take down .

So we track 43 different activities that can happen in a wrestling match and every one of them is time stamped and because of that time dimension we can calculate multiple statistics . You know , for instance , you know how many shots per minute does a wrestler take , and in fact we track 555 statistics .

And then we have a mobile app that coaches and wrestlers and fans and parents can use to actually , you know , look at a dashboard of , you know , offensive activities , defensive , how effective they score , what they're good at , what they're bad at . It's a great scouting application and it also can predict the outcome of a match .

We predicted the NCAA tournament last year and got 85% of the matches from the last three rounds correct and we got the average point spread within one and a half points .

Growing up , what kind of student were you ? What kind of activities were you into ?

I played football , baseball and wrestling all throughout high school and a little bit of college . And I moved to California and I was a pretty extreme introvert , you know . So it was kind of a difficult move for me because I felt like I didn't fit in very well , being the dorky kid from Kansas as I mentioned .

But I think what saved me was sports because you know , I could go out and play sports and connect with people and so that was very fortunate for me . I was an average student , you know , probably a V plus a minus student , and I think I actually became a better student later in life , but in the early days , you know , I didn't find it that interesting .

What experiences do you draw on that may be impacted how you then operated professionally later in life ?

I think the level of competition is an important driver , and I really do credit the sport of wrestling with a lot of you know my drive , because when you're on a wrestling mat it's just you and the other person , and you know it's hard to imagine , if you haven't done it , how exhausting you know a six or seven minute wrestling match can be , because it's just

100% exertion all of the time . And so there's a huge mental component , you know in the sport of wrestling , and I think that you've got to be disciplined , you've got to put in the work , you've got to drill . You know the technique portion , the physical portion , the conditioning portion and then the mental portion .

You know when you're dead tired and you can't hardly breathe , there's 30 seconds left and you're down by a point . You've got to summon up the strength to make it happen . And so I actually did pretty good in wrestling and I think I learned a lot from it that I apply still today , and I see it in my son as well .

So University of California would be like UCLA , berkeley , so forth , and at the time those schools were , even though they were state universities , they were more expensive than the state colleges . So my family didn't have a lot of money so we couldn't really afford college .

I didn't have an athletic scholarship , I was a walk-on and so I would say that , you know , financial necessity sent me to state colleges . I initially enrolled in Chico , and Chico has a different Chico State , has a different reputation . It was the stoner school .

Oh yeah , and I was more interested in beaches and so I went to San Diego State and in those days Playboy Magazine ranked colleges every year and I think for the four years that I was there San Diego State was the number one party school . Three of the four years .

If you wanted to go to Stanford or USC it was about 4500 a quarter . So you know , the state college system was a good system and it was a lot cheaper . So that's where I went .

I grew up 20 miles east of Berkeley in the 70s , so if that says anything to you , and one of the things that was prominent at that time was trans-adventure meditation , and so I ended up taking I knew a guy that had taken TM . He was a real high-strung guy and played football with him and he was singing the praises of meditation .

So I took a TM class and started meditating twice a day , you know , and that was in 1975 . And I still do it .

You know , since then I've studied many different forms of meditations and meditation a number of other things , and along the way , you know , now meditation is sort of in vogue , everybody's talking about it and doing it , but , as you can imagine , over the last , you know , 30 , 40 years it wasn't always that way .

It was kind of one of those woo-woo things that people didn't quite get or understand , and I would frequently have people , you know , executive times would come up to me and say , hey , I heard you meditate . And I'd go , yeah , and they'd say , you know , can you tell me about it ?

And like , almost like it was the secret ritual or something , and so I would teach a lot of people how to meditate . And then I don't know , that website that you're talking about is probably 15 years old . Once upon a time I just you know , I'm going to teach myself HTML and JavaScript and you know how to create web pages .

So I thought what could my project be ? I thought I'll create a website that teaches people how to meditate . So that's how 100Breathscom was born . It's a little meditation site that teaches you sort of how to meditate , why it works , how to do it , and I send a lot of people

there .

So that's probably the main thing you learn how to remove the distractions that are in your mind and be entirely focused on what you're doing in the moment . It's helpful in sports . It's helpful in work .

At Harvard University back in the 70s or 80s did some research on meditation and found that in 20 minutes of meditation you can provide as much rest for your mind as you can get in six hours of sleep . So I also find that if I'm just tired , if I meditate for 20 minutes , I feel refreshed when I'm done .

I mean , it was hard for me to stay in a meeting dial , unless I was really interested in what we were talking about . It was hard . So I'm curious , like how long did it take you to get from someone I remember in listening to the teachers talking about let the thoughts pretend they're a cloud passing by and just let them go .

But it's so hard because I see the thought in my head and I just want to think about it , and then the next thing two minutes .

You've got to do what your instructor had said and just let go of the thought and you get used to doing that and at first you get frustrated because you can't clear the thoughts out of your mind and over time it becomes easier . I tell people it's like physical exercise .

You know , if you want to get stronger and get in shape , you've got to go to the gym and you can't miss . And once you do it enough times , you form the habit and it becomes easy . So I always tell people just commit to doing it twice a day for 30 days , and if you can do that you'll be hooked . You know you'll have it down .

You'll know how to do it . It'll be easy to do . You know , just like you , andrew , when I first started I couldn't focus for more than a couple of minutes . You know now I could meditate in a train station and nothing would bother me .

So I would just say commit , commit some amount of time 20 or 30 days do it twice a day , religiously , have a log , make sure you do it and then you'll find that it's easy to do and you get a lot better at it .

I actually started a meditation group that I just put a zoom on the calendar once a day I think it was 830 or 9am and anyone from the company could join and you could turn your camera off or turn it on , and we'd all sit there and I'd put on one of the meditation things we found online and it would , you know , tell us what to do , and we'd sit there

for five , 10 minutes and try to meditate . I didn't stick to it , though , so that's why I was still kind of lost , but I did enjoy that opportunity to kind of connect with employees while doing it that way .

I tell you what to do and then , after you've done that , when a couple of times , you can do the unguided one , which is just music , and but it's music that directs you how to breathe and focuses you on your breath .

So tell us about what that journey has been like and how you made that happen

.

So they've started many , many companies and their MO is sort of to put in a little bit of their own capital , apply technology to a business and bring in an executive from the industry to sort of take it over and run it . So they started Groupon .

If you've heard of Groupon , it was actually one of my employees that had the idea and they gave them a little money and he built up Groupon . They've got their own venture capital fund . Today they've got two companies .

One's called Tempus , which does DNA sequencing and all of the bio data science for treating cancer , and then the other one is a company called Uptake that does internet of things type analytics .

Anyway , brad and Eric brought me in the first year of the company and they said you know , we're building a company , we're planning to take it public and we're looking for a technology savvy CEO .

And the time I had started SelectTrans I really wasn't interested in doing anything else because I , you know , for the first time in my life , had my own company and we built the technology and we're starting to sell it to customers .

So I was meeting with Brad and Eric and they were , you know , kind of pitching their story and telling me , you know , about Echo and trying to get me interested . And so at one point they said well , let us give you a tech demo .

And I said , okay , they didn't know how to work the tech , so they brought somebody in , they did a demo of the system and so when they were done with the demo , they go well , what do you think ? And you know I really wasn't trying to get a job , so I thought I'm just going to be honest with you guys . So I said what do you think ?

And I said I think it kind of sucks . And they looked at me kind of offended to say well , what do you mean ? It sucks Like . Well , then show us your system . So I said , okay , give me the keyboard .

So I logged on to my system it was cloud based and gave them a demo and Eric you know Eric and Brad fashioned themselves as tech guys , which I guess they are . They started a lot of tech companies and you know , eric said I did my demo and Eric said that's it You're our CEO . I go what do you mean ?

He goes , you know , I've never seen anybody do a tech demo like that . And you know you look like me and Brad . I go , okay , well , I don't know if I want to be your CEO , I've just started this company . And Eric said that's okay , we'll buy it . And I said , well , yeah , but I have customers , what do I do with it ?

And he goes do whatever you want . He says you can write it on the side . You can , you know , build it into Echo . You know , whatever , whatever you want to do . And so that's how I came to work at Echo and they were already starting other companies at that time . So they very quickly got out of the way and sort of , let me run the business .

And yeah , it was $6 million revenue that first year , I think . We had about 35 employees and the original business model was managed transportation . You know we didn't know anything about truckload brokerage and I was an LTO guy from my experience .

So you know the original concept that Brad and Eric had was to basically contract with small and mid-sized shippers to manage their transportation for them , and so that was where most of our revenue was coming from . They were deals that Brad had closed . And about the time I joined we decided , well , let's hire some salespeople .

You know , we there was this company called CH Robinson that had a lot of salespeople and they were , you know , obviously successful . And we thought , well , we just need salespeople . And we really didn't know what we were doing . I came from an LTO trucking background so you know it was a different sales model than what I was used to .

But we just started hiring salespeople . We'd hired 12 every month , you know , and in those days we didn't know how to broker truckload .

So because I knew LTO and I had relationships with most of the industry CEOs , I went out on a roadshow and started pitching to all the LTO carriers why they should let Echo resell their capacity , and so we got blanket pricing with nearly all of the LTO carriers . And it was a time when LTO carriers didn't like brokers .

You know they saw us as a middleman that was unnecessary getting between them and their customers . And I convinced them that and there were a lot of bad actors out there too that would play games with the classification and things like that and pricing . So I convinced a number of the carriers that hey , we're going to play by the rules .

If you don't like business , you know we won't move it for you . Well , you set the price , we're just going to resell it . And so we really built the company in the early days as an LTO broker along with the managed transportation business , and then later on , we tried to start figuring out how to be a truckload broker .

So by 2009 , our revenue was about 260 million . We were predominantly an LTO broker , along with a little bit of truckload brokerage , although we weren't very good at it , and we also had the managed transportation business . So we did the IPO in 2009 .

And you know , we had sold Echo to Wall Street as a growth story and we had to figure out strategies to continue growing the company . We've had great growth up until that point , you know , from zero to 260 . So we said , well , we better figure out how to do truckload brokerage , because that's where the big market is .

And we started , you know , we hired a lot of guys , and guys probably know Noam Frankel and there's a lot of characters that we hired that you know had worked at backhaulers or Robinson or somewhere like that , and they all , you know , had an idea of how to do truckload brokerage .

So it was really kind of in that 2010 and 11 timeframe that we would cry a lot of different approaches to truckload brokerage . Of course , the biggest problem is we didn't have scale right and we couldn't compete with people like Robinson on contract freight .

You know , we would bid on into a routing guide and the shipper would come back and tell us you're not even close . And when we say , well , what's their price ? And they would tell us the price and we'd say , um , you know , you're , you're here and Robinson's here , you know , and I'd say , well , I don't know how they can be at that price .

We can't even buy for that price . And I remember it was actually a conversation with your dad , right ? I was talking to him one day and I said , hey , jeff , how many , how much truckload volume do you have to have to be good ? And he said I think you need about 3,500 loads a day .

And looking back on it , I think he was almost exactly right , because it wasn't until we got to that sort of scale and density that we Actually could be competitive on contract freight , you know , with the big boys .

I think is probably the way to think about it is you've got to take more chances on that contract business and just have a high level of confidence in the carrier group you're building that they can Execute , and find that the relationship , because once you have the freight , it's possible to execute it effectively if , if , if you , you know , take care of the

carriers the right way and build it the right way .

We were using proprietary technology , some of it which I wrote the code on , actually and and . So we had to not only have LTO , we had to have truckload , we have to have medic manage transportation . So , as I used to say , our technology was not very deep but it was very wide . It could do everything a little bit .

And when we bought command later , they had very deep truckload technology which served us well . We were able to integrate that .

But some of the early problems were things like we couldn't open up our mail test Like we did . We had manual processes . I remember the LTO carriers were getting angry with us . This is probably in the 2008 789 time print .

The LTO carriers were angry with us because we weren't paying our bills and I would literally have to call the CEO and say , look , we've got three million dollars of cash in the bank . We just can't Process the invoice is fast enough . You know , we didn't have . We didn't have the technology in those days , the back office technology .

We didn't have the document handling technology . Um , in LCL , as you probably know , you've got a huge problem with you know , you get an invoice from the care that's different than what you thought it was going to be , so now you have to resolve that . So , um , yeah , those , those were the kind of problems we had .

We couldn't , we couldn't pay our bills because we couldn't open the mail fast enough .

But when I joined echo , it was a startup , right , and and I Wasn't an entrepreneur Brad and Eric were entrepreneurs , so it was actually a pretty good marriage because they didn't know anything about building a company and creating processes and uh , but but I didn't know anything about being an entrepreneur .

So they , they taught me to take risk , to make decisions quickly , trust my gut , and I taught them things like why you have to have an HR department .

So , uh , that was actually a discussion we had at one point , I think we were up to 400 employees and , uh , I told Eric , I said I'm , I'm gonna hire somebody to run HR and he goes , we were outsourcing it to a p E O in those days , you know .

So they had a lady that would come over once a week and , you know , if there were any employee complaints they would , they would talk to her and , um , they would onboard and outboard employees . And so I remember having a conversation with Eric and I said I'm gonna hire somebody to run HR . And he goes why are you gonna do that ? That's a waste of EBITDA .

And I go no man , this is a people business , like our number one Investment is people , and today we're not investing anything in the people you know . So we've got to have you know , training , onboarding , culture , career development , career patting and and so , uh , I think that you know .

Back to one of your earlier questions , one of the big challenges that we had at echo was transitioning how you run the company From the startup days to the fortune , to the uh , you know , fortune 1000 days , because it's different .

Right , you have to grow up as a company and you have to have more processes , more bureaucracy , more procedures and at the same time , you're trying not to lose your entrepreneurial spirit . You know that got you there in the first place . So it's kind of walking a tightrope between staying agile and acting like a real company .

used to . And I sat back and meditated on it and , uh , realized that we were getting in our own way because we created all this process and procedure and rules and guidelines and hierarchy and bureaucracy , you know . But but in the early days it was like , okay , something's broken , let's fix it . And we would try something .

And if it didn't work , we would stop and we would try something else . And if we , if we tried it and it did work , we would just do it harder . And and in the early days I remember having to continuously apologize to the employees for changing things all the time . But that's how we , you know , figured things out and and fix problems .

Um , they there's sort of a limping mentality like they , and they're all afraid of their shadow . Like I , have much more respect for venture capital investors and private equity investors than I do public equity investors because , um , you know wall street is , it's like nervous now , like you , you could .

You could do nine out of ten things beautifully and beat your numbers , and the one thing that you miss , they go . Oh , my god , you know what does that mean ? You know , and sounds like every I remember hauled for , yeah , and it's a big time suck when you're a public , you , you every quarter .

You got to get ready for an earnings call , you got to go through your audit , you've got to Prepare for their earnings call . And then , after the earnings call , there's a whole series of investor conferences that you go to , you know , and private companies get invited to those as well for what investors call channel checks .

But for the public companies , you know you , you go to a conference and you're locked up in a hotel Day with you know , 14 meetings that are 30 minutes each where you get asked the same dumb questions and give the same answers . And , um , I remember meeting with investors .

You know like I would go to a bear conference on , you know , this week and next week I'd be at a credit suites conference and the week after that I'd be at a morgan staley conference and these investors signed up for meetings with management and I would see the same investor three weeks in a row and they didn't even own our stock and I , finally , I would

say , why do you keep meeting with me when you don't even own our stock ? They go over doing our work and , and some of these guys will study you for years before they ever buy a share of stock , and yet they want to spend all this time with you . And the other thing that I resented about being public is you would have um , still happens today .

You have investors that own ch robins of stock or they own jb hot stock and they want to figure out how those companies are doing based on how we're doing right . So there They'll . A bunch of people would schedule meetings with me . I'd spend a whole day talking to people None of whom owned at the stock .

They all are trying to go to school on me to figure out if they , if they should buy more or sell some of their ch robins . So I felt like I was being used .

So If you look at , you know , a company like fidelity , you know I would , I would have a meeting with fidelity and they'd say , hey , we love your company , we love the team , we love the story , but we can't buy your stock . And I go , why ? And they go , well , you're not big enough , you know , you don't trade enough volume every day .

So for us to take the size positions that we need to take , it would move the price of your stock and , most importantly , when we need to get out , it'll move the price of your stock . So , um , but fidelity still want to meet with me because they own ch robins of stock , right , um ?

So there was a lot of that and and there's this , you know , magic number of kind of a billion dollars of market cap that you got to get to and that sort of magically increases the trading volume and and that creates enough flow for investors to be able to get in and get out Uh efficiently without moving the price .

I got to ask them you know why do you buy stocks ? You know what , what do you like , what do you not like , what do you analyze ? What do you think about ? Um ? So , from a sort of a intellectual curiosity standpoint , it was fascinating to be a public company and see the inner workings Of wall street , and in the beginning it was exciting .

You know , doing the road show was fun , um , so I would say I liked it . It just got old and , um , we were . There's an old saying that says , you know , as a public company You're not for sale , but you're for sale every day Because people can buy and sell your stock .

So along the way , there were a couple times where our board said , hey , maybe we should . You know we're not getting valued correctly by the public market , so maybe we should um sell the company , and there were two occasions where we . We looked at that , we sort of ran out . It was usually it was usually spawned because we got an inbound call .

Somebody would call and say , hey , you know , we're interested in the company was a public company . You've got to do the best you can to get the most value for your shareholders . So , um , we would run a little mini process and you know that happened twice and we weren't really satisfied with the outcome . So we just called it off , went back to work .

Um , it wasn't until June of 2021 that we got a call from the jordan company and , um , you know , they said Would you consider taking the company private ? And I gave them the the standard answer that you'd give us a public company , which is we're not for sale , but we're always for sale Make an offer . And , uh , they did . You know .

So , um , that's how we went from public to private . We were , we weren't seeking it out . They sought us out and the more they learned about the company , the more excited they got about making it at all .

You have to be mindful that you know they're not going to forget , and so if something in your story changes , you have to Take them through why it's changing . It also holds you accountable to the numbers , and so what happens is that makes it very difficult to pivot .

You know , like I described earlier in the early days , if something didn't work , we did something else . It's harder to do that as a public company because you have so much scrutiny on you . Um , and it also , you know , making investments . Let's say that you want to spend 20 million dollars on some new little piece of technology .

Well , that's a lot of money . So you know , investors say what's the ROI on that ? You know , okay , what do you get for spending that 20 million dollars and how soon will we see it ? And oh , by the way , they're going to start asking you every quarter what do you see in so far ? And so they really hold you accountable to a to a very short timeline .

That's , frankly , unreasonable . A lot of the time , as a private company , I can go to my , my single shareholder and say I want to invest 20 million dollars on this little piece of technology . Here's why I think it's a good idea .

We won't see any results for two years , but after two years , you know this is what we're going to do with this , and if you convince them , they go okay , great , go for it . You know , and and two years from now it'll it'll create a lot of value .

So you can I think you can run the business more strategically and for the longer term as a private company . Then you can as a public company , unless you're just so big . You know your , your google or your amazon and you've got so much money Skulled away that you can do these little projects and nobody even notices them .

And when we bought command , they were a $500 million truckload brokerage . So we effectively doubled the size of our truckload business with that acquisition .

So we went from $500 million of truckload revenue to $1 billion of truckload revenue , plus our LTO and our managed trans business , and it gave us the density and the scale that we needed to be competitive , you know . And so then all we had to do was get through the integration part of it , but it was a very significant acquisition for us .

We've made 26 acquisitions along the way , and most of them were little tuck ins that nobody noticed , but on that one I would say a couple things happened . You know , command was a very good truckload broker .

We were a so-so truckload broker who probably didn't understand it the way we should , and so buying command helped us learn how to be a better truckload broker . They had some really interesting technology that we integrated into our system and they had very talented people , so it was very transformative for the company .

And you know they say in M&A that the three biggest challenges are people , technology and process , and that was the case with us . You know we told Wall Street we would have it integrated in 12 months . It took us about 18 , mostly because we had to do the technology piece . But you know , it changed the company .

And then , right when we had those hurricanes in 2017 , I think it was late 17 , there was a hurricane in Houston and one in Miami and it disrupted the freight market and the market got tight . We had just finished integrating command and we were able to capitalize on the tight market conditions and really , you know , have a huge boom in 2018 .

They always stood out , you know , as exceptional in the space , and so I think you did a slam dunk there . So congrats .

So we , we , we had agreed on a multiple . We just didn't know what the EBITDA was because we were waiting for the final , you know , conversion to a cruel basis accounting . So we're waiting and we're waiting , and Paul says , yeah , I think it's going to be done next week .

And you know , as soon as we have that , then we can paper the deal and go forward .

So I was getting ready to go to I think it was the Ben Gordon conference or somewhere down in Florida , and I was driving to O'Hare and I get a phone call from Paul Lowe when he says we , we got the numbers back from the accounting and we kind of knew what the numbers were at that time . We just needed the official audited version .

So I said well , I'm going to the airport , but let me change my plans . I'll meet you at the Starbucks in Deerfield . I said , I said 30 minutes . He says okay . So I had already had a term sheet that was in my briefcase made out . So I called my assistant , said I'm not going to Florida , I'm going to go meet with Paul Lowe from command .

I drive to the Starbucks in Deerfield . I get there about 10 minutes early . So I took out the term sheet out of my briefcase and I took one of the Starbucks napkins and flipped it over and I wrote all the deal terms and valuations on the back of the napkin and then I flipped it over and put the term sheet back in my briefcase .

So Paul shows up , gets his cup of coffee and he comes and sits down . He had a little smile on his face and he says well , we're going to do this . And I said yeah . I said I'm going to do something that I've always wanted to do . And he said what's that ? And I took my napkin over and I flipped it over . I said a deal on the back of a napkin .

He picked up the napkin and he looked at it and he goes you got yourself a deal . That's incredible .

How do you bring those two together where you're going to have , you know , two people for every one job at the leadership level ? I mean , that must have been a real challenge . I you know it's hard to . I've struggled to see a lot of successful M&A in terms of integrating cultures and people .

Where do you feel like you did really well there , but also where do you feel like there were mistakes made ? Just talk about that for a bit , if you don't mind .

But it's hard because it means there's change for everybody . Right , if you just said , hey , we're going to put everybody on the ecosystem , then all the command people have to learn a new system and vice versa . And so , because we took a best of both approach , everybody's world changed . So that was one issue .

Another issue was just the customer overlap and the carrier overlap . You know , as you mentioned , for every shared customer that we have , there were two sales people calling on that customer . So we had to referee that and , to be honest with you , that wasn't as bad as I thought it would be .

It just speaks to the size of our industry how little overlap there actually was . And same with the carriers . So you know , we went through sort of a draft day where , okay , you get this account , you lose that account . We smooth some feathers and , you know , tweak some compensation here and there to make everybody happy .

I mean , our goal is that nobody felt like it was a bad deal for them , and so I think we got through that . Okay , the technology piece was hard because you know , it was two different systems and that was , you know , when we turned , when we flipped the switch at the end it didn't work .

So then we had two or three days of outages and crisis mode and you know , you probably know what that's like . But the other thing that was hard is the people and the culture side of things . I would say that , you know , at the Echo culture we had compared to the typical brokerage company in those days , we had a lot more women working for us .

I think the Echo culture was very collegial and kind of rah-rah , and I would say the command culture was a little more hard nose , mercenary , let's make money and so , but yet when we did the deal , our thinking was hey , we're both recruiting kids out of college . You know how different can it be . What was a lot different ?

When we started putting the people together , the Echo people thought that the command people were mean and the command people thought the Echo people were f***** . So we had to go through all that . The other thing that was kind of interesting is there were some people from command that were really fighting it .

You know they didn't , and we didn't want to lose anybody , right ? Because especially in sales , they controlled revenue , so we had to make sure we keep them happy . So we spent a year bending over backwards , you know , kind of kissing everybody's ass to make them happy so they wouldn't leave .

But then in the end we just got tired of it and we said , hey , you know what F***** it If you don't like it , leave . And they did .

And the day after they left everything got better , you know , because they weren't complaining , they weren't whining , and so I think one of my lessons was you know , take the people that are behind the change and run with them , and the people that can't get behind the change , cut you losses . It's an interesting lesson .

I find it fascinating that you had this executive leadership , or at least partner that's been with you for a very long time , I think . In today's world , you know , you don't see executive leadership teams stay together like that , so I'm curious what role Dave played in all of this .

When I hired Dave in 2008 as a CFO you know he comes from an accounting background . He worked at Arthur Anderson and then , after Arthur Anderson , he worked in some tech startups as a CFO and then he came to Echo as a CFO and we have had a lot of stability in our executive team .

You know we've gone through a couple of CIOs , but Zach , our current CIO , has been with Echo since he graduated from college , so he's been a long term part of the team and there's a lot of value to having that stability , which got to have the right people , and for me , dave has been my right hand person . He started out as a CFO .

After a few years he said , you know , I want to get more involved in the business and not just do the accounting .

So I made him the CIO and Dave's a really smart guy and this good people person and you know , picked up the business very well and so he just kept doing more and more and we were getting bigger and bigger and I was dealing with Wall Street a lot and so over time , you know , made him president and so he's obviously running the company for the most part

day to day and those are great job with it . You know , I've kind of got the management philosophy that when you hire somebody new you look over their shoulder quite a bit in the beginning and give them whatever coaching and guidance they need . But as they prove themselves you got to step back and let them run and they'll find the job a lot more satisfying .

Having that autonomy They'll . You'll get more out of them if they feel unencumbered and free to go do their job . So I've got an executive team that's really self-sufficient . You know , I give them light . I say I manage with a light touch because they're all very capable and a lot of that's just because of Dave .

Dave's a great leader and he knows the business well and he works hard . He knows how to play pretty mean game golf .

So the first one is and I'm paraphrasing here a little bit but if you solve a problem for a customer , you breed loyalty .

We had six hundred and forty terminals and we recreated all that work in two highly automated call centers . And Because they were greenfield operations , we hired all new employees , we trained them , we did everything the right way and we were getting really good results .

And so after about a year of the new call centers being in operation , as vice president customer service I had two files . I had my adaboy letters and my bad boy letters . So when a customer would write , you know , right me , take the time to write me . You know I would read them and respond .

And if it was a letter congratulating me , you know and yellow did a great job I would go put it in the adaboy file and if they were upset about something , I put it in the bad boy file . After about a year my adaboy file was about two inches thick and my bad boy file was about a quarter inch .

So I started reading , rereading all those adaboy letters where a customer had taken the time to tell me that you know we had done a good job for them and a hundred percent of them started with a problem . So it would go something like this hey , your company really screwed up my shipment . You picked it up late .

It was damaged , you know it got there late , whatever the problem was . But Sally came through , you know she came in and fixed the problem . She communicated well and I just want to let you know that if it weren't for Sally , I wouldn't be doing this to your company .

And just reading all those letters made me realize the difference that people make , especially when they're fixing a problem and making something right .

And the way we thought about it was it always starts with an apology , right , I'm sorry we screwed this up . You know , I'm gonna watch it very closely next time . But we gave our people we came our customer service reps a budget and they could spend money up to a hundred dollars For a dissatisfied customer .

They could send them flowers , they could send them a box of chocolate , cinema , starbucks gift card , they could knock money off the freight bill and they didn't have to get a manager's approval , they could just do it .

And and at the time that we did it and in the industry that was heresy , like , like , we never give away , rather , you know that's that's not allowed . But we said well , the best in class customer service companies empower their people to fix problems .

I felt like a duck out of the water , you know , and , uh , you know I , I talked all of our incoming new classes and I especially the sales classes , and I told them , you know , I started in the industry , just like they did , you know , in a management training program right out of college and I told them the story of my very first sales call .

And you know it was embarrassing . If you asked me what's the most embarrassing thing that's ever happened to you , I would tell you it was the first sales call that I made .

And and so , yeah , I , just in the early days , I just , you know , I was trying to get by and trying to learn the business and trying to come out of my shell as an introvert , and and being a CEO was never , you know , on my radar .

You know , and one had a kind of Where's me out ? The other hand , I go . Well , I was just like that , you know , I , I guess I can't . I should probably Admire them and not be critical of them .

I , you know it's like I'm Sure you guys have had to terminate somebody before and and Some people just make a decision and do it and I'm a personable procrastinate , sit on it and think about it for a while and so yeah , I mean I think it's it's a weakness and it's a strength , right , you know , my style is empowers the people around me and hopefully gives

them the right amount of guidance , but may not be as decisive as other people would be and is that where Dave is , is a really good compliment .

So , yeah , I'm the kind of guy that's got all the wild and crazy ideas and Dave Sort of holds me down on the ground and keeps me planted in reality . And then , on the flip side , you know , dave's very conservative , so I have to push him out of his comfort zone and and make him take risks and do things that he otherwise might not want to do .

So I think it's always great , it's . It's an important ingredient in a leadership team Is to have the self-awareness to know what you're good at and what you're bad at , and for those things that you're bad at , surround yourself with people that are good at it .

How many employees did they have at the time ? Oh , it's about oh , 500 600 , so five or 600 people who I'm sure were very loyal to all Um . How do you get there buying like I ? Obviously you know that lesson you mentioned before of . You know the people who are in , bring them with you and the ones who don't .

You got to cut your losses , but how do you get them to go from following paul to following you ?

You know , paul told his people look , you know Um Echo's writing a check , they're gonna make the decisions . Don't come to me and , and paul stood behind that . And so when people would come to him and complain or be upset that they didn't like what echo Was doing or how we were thinking about something , he just said , hey , it's not my problem , you know .

So I'm sure it was hard for him to do that , but he did it and and it helped us a lot .

At echo and I think , again , it's very basic , but more so , what I'm getting at here is you're always referencing the team , so that seems to be a focal point for you In making sure that you know they're getting the recognition that they deserve .

You know we get better answers when we collaborate and we have a pretty collaborative approach . Like you know , I have a weekly staff meeting . Everybody gives an update on their area . We talk about issues , but I never tell them what the answer is . I never tell them what we're gonna do .

We just talk about , you know , and generally when we talk about it , we arrive at the answer and everybody agrees . So so it's not like we have to vote , it's not like we have to I have to dictate what's gonna happen .

We just we talk it through , we argue , we call each other out and we arrive at the right answer and I think that's sort of culture , sort of disseminated down over time through the whole Company .

Now we probably spend more time in meetings than I would like , but I think we get to good answers and we get buy-in , because everybody gets to be a part of the answer . Teamwork makes the dream work .

That maybe call it a bold prediction , so to speak . And the second part is how long do you see yourself doing this ?

I'd like to stay involved in the industry , whether it's , you know , being on boards or working with a private equity firm to , you know , help them with diligence and doing deals and maybe mentoring some CEOs and that sort of thing . I have a couple of young CEOs I work with now that I mentor and I enjoy that . You know giving back .

So , yeah , I will dial it back in the next year or two and but stay involved in the industry , you know , maybe as an investor or a board member or what have you .

As for the changes , I mean we're seeing a lot of changes right now . Right , this tough freight market that we're in is putting a strain on all the companies , and for those companies that are profitable , it's pretty easy to weather the storm .

For the companies that are unprofitable , you know it's tough if you're burning through your cash and you know the venture capital markets closed . What are you going to do ?

You know , and I can't really predict , I wouldn't want to predict outcomes , especially for individual companies , but I do think there's going to be some consolidation in the in the call it the brokerage space On the other side of it . You know the various the entry or consolidation , or you're saying extinction .

Oh , combination of both , it's not really several , sorry , go ahead .

Yeah , I think that you know there's , there's companies right now and , like a lot of , it's just bad timing , right , the market , the market got tough and if you're in the wrong part of the cycle and you're not sitting on a bunch of cash and you're not profitable , you don't have a lot of options .

So I think it's actually very tragic because you know , I know everybody in the industry and they're all good people , but I think the reality is is that it's it's a tough market right now and everybody's gross margin per load is is squeezed , and so if you don't have , if you don't have the you know , the staying power , you're going to have a tough time .

So I think you know , and how does it end for those companies ? It's hard to say . You know they , they could get purchased for , you know , less than their , their originally worth , they might close . So I think there'll be some consolidation , just like you saw in the LTL industry , um , but at the same time , you know there's no barriers to entry , you know .

So , andrew , we could start a brokerage tomorrow in my garage and you know we could fund it ourselves , and probably a year from now . We'd be making a pretty good good living at it , right .

I think it's different today than when we got into business , um , but you know , that's what I see . And then I think you know it's a cycle , right , the cycle's soft right now and and uh , prices are down , but at some point it'll tighten up again and everybody will get healthy .

And if you know what that distribution looks like , that bell curve , you can Incent your people to buy better , you can negotiate better on the sell side , you can create better , uh , gross margins .

So you know , I think , like at Echo , we have some of the best gross gross profit per load in the industry , and it's because we use AI , both on the buy side and the sell side , to figure out what the price ought to be . Um , one of the things I've been talking about lately is , uh , natural language processing .

You know , we , uh Echo , we get about a million inbound emails every day and , uh , 30,000 of those emails are customers saying , hey , give me a rate quote . And there's another 30,000 emails let's say where's my freight ?

And so , through natural language processing and the stuff we're working on it's not implemented yet we can , we can eliminate those 60,000 emails every day and and have an AI read the email , determine what the customer is asking for and give them the answer totally automated , and that accounts to the equivalent of 300 people .

Um , you know speech to text , text to speech . You know being able to read an email , sentiment analysis . You know there's a lots of different types of AI and and a lot of companies are already using them . They don't even know they are . Yeah , you know the , the . You know the machine learning , the neural networks .

You know that's more of the new stuff and that's what enables us to do things . Like you know , read , read 60,000 emails a day and respond to them , uh , and figure out the pricing , and that's where we would use machine learning .

That you know , andrew , there's , there's a people component of this and if you ignore that , you're going to miss a big part of the market . So I always say , you know there's this . If you think about a carrier or a shipper , there's a spectrum of sophistication Over here it's all automated API connectivity .

You know , over here it's a whiteboard or it's an Excel spreadsheet , and so customers and cures exist on that spectrum from end to end and everywhere in between . And so if you want to optimize your market penetration , you have to be able to deploy against any point in that spectrum .

So you need people and you need relationships , because people that we call on , that matters , that matters to them and it influences them . And so I think you just need to use technology to make your people more productive , and so one of the reasons we don't talk about it as much as maybe you're thinking is is that a lot of our technology is inwardly facing .

The customers don't see it , the carriers don't see it . It just internally makes us more efficient .

They just want to be the first to say it because , you know , sounds different and it is so hard to be different in this industry . It's not as hard to sound different , but those that actually understand the business can see through the BS .

So you know I have every confidence that , with how you're describing it , that it's being used in a very effective way to again make the people who move the business and make the business a lot more successful .

But I do know that some people wanted that to be a way to describe a business because certain people would be interested in that , and I just you know , I think I have a mutual respect , or lack thereof , for the public equity folks that you do so , or the best .