Ben was the CRO of Flexport for 6 years and the CCO for another 2 years—growing sales at Flexport from zero to 2 billion dollars in run rate.
After leading Flexport to an 8 billion dollar valuation, Ben shifted to the role of venture capitalist, running Flexport’s VC fund.
Recently, Ben’s started a new chapter as the Chief Business Officer of Hadrian, a space and defense manufacturing company.
Flexport is a freight forwarder. They help book, track, and deliver freight shipments.
So not only did Flexport’s sales team have to cope with the usual challenges of growing a SaaS company, they also had to handle the real-world logistical challenges that come from working with factories, customs agencies, and 747s.
Alex and Ben became friends when Flexport invested in our company: Dock.
In this episode, Alex and Ben talk about:
He’s also our first-ever guest to call in from a pickup truck in Wyoming.
Alex Kracov: Hey, Ben. I'm super excited to talk with you today. What are you doing? You're calling in from a car. I think this is the first podcast we've recorded from a car. Where are you at?
Ben Braverman: Yeah, man. This is a Ford truck. It was made for work, and so I'm working from it. It's awesome to be here. I'm a huge fan of yours and the company, obviously. Very tiny, tiny investor. So yeah, thrilled to be here. Thank you for having me.
Alex Kracov: Yeah, I guess this is just what conference calls look like in Wyoming now as ever. You don't have meeting rooms. You just do it from pickup trucks. It's what I imagine.
Ben Braverman: Correct. I'm trying to build a whole brand. TJ from PillPack is now a partner in Matrix. He's like the leading mountain man startup guy. I'm trying to be the number two. There's still a number two slot open.
Alex Kracov: I love it. On the next podcast, we'll put on a cowboy hat, cowboy boots. You'll be really into it. But yeah, I'd love to start the conversation with kind of your decision to join Flexport, because that's what I mainly want to talk about today. You had a couple of years of experience before Flexport. So I'm curious, how did you find out about the company? What made you take a chance on kind of joining an early-stage startup?
Ben Braverman: This is why it's so important. Young people listening, you have to have a dog. If you don't have a dog, I don't know how you're going to find any success in this life. Because I met Ryan Petersen, the Founder of Flexport, at the Duboce Dog Park in San Francisco. If you don't have a dog, you have no reason to be at the Duboce Dog Park. Therefore, you will not see a founder wearing a YC hoodie, and walk up to them and say, "What's up, man. I work at a YC company. How are you doing?" That moment of serendipity won't happen to you. So go out right now and get a dog.
I met Ryan really at the dog park. It turned out it was his brother's. Tony, his brother, is another amazing founder. I was even in YC prior to Flexport. This was before Flexport was a company. I met Ryan, and he was obsessed with this thing that was going to become Flexport. He told me like, "You wouldn't believe it. There's $50 billion companies with basically no website. Many of them are built via acquisition. So when you go to their customer login, it's like 12 different logins for each customer. Depending on what they want, if you log in 12 times-" he's like, "You wouldn't believe it." And to tell you the truth was, I didn't believe it. I was like, "No, it sounds too good to be true. It couldn't be that there was such a big market that the internet hadn't gotten to." Then I spent a year just literally walking our dogs together. And it became clear that Ryan was right. This was a massive market. That through some combination of complexity, regulation, and maybe just like the self-preservation instincts of the people in the industry, technology had not come in. I'd never seen an opportunity that was so obvious, so I both invested and begged for a job. Ultimately, Ryan acquiesced. And we were off the races.
Alex Kracov: Can you set the stage a little bit for what Flexport was like when you joined? I think you were the first or fifth employee for sales hire or something like that. Was there even a working product? Was there a team? Do you remember what it was like?
Ben Braverman: Yeah, I mean, so there was - the product was, basically, there was a website. There was no actual customer login yet. We were only a customs broker. So Flexport was not actually moving cargo yet. We were only handling the regulatory filings associated with moving cargo. One of my observations, or maybe because I'm lazy, I didn't want to build a business in an aerospace, I sort of in the first couple weeks went to Ryan and said, "Look, you've been working on getting this thing called NVOCC license. It turns out this is not a nice-to-have. It's a must-have." Customers don't want us just to handle the regulatory filing; they want an end-to-end solution. By the way, I think this is applicable to every business. In general, customers want you to solve the whole problem, and they will pay you way more to solve the whole problem. The market is way bigger for solving a whole problem than it is for solving a subset of a problem.
And so, in our case, if you were an Amazon seller whose business was taking off, you might have found Flexport because you were having a regulatory problem. Because your factory, it ships some cargo. It was stuck at the port, and you found one of the ads that Ryan was running. But ultimately, on your next shipment, you didn't want to have your factory ship it and having it stuck in the port again. You wanted someone who would just handle the problem for you end to end. So pretty quickly, we went from being just a customs broker to being licensed to do the full end-to-end service. That's sort of when the business really exploded.
There was fewer than 10 of us certainly. The team was like really ragtag. It was like, on the surface, other than Ryan, he was like very shiny, Columbia Business School import genius, which printed a ton of cash. The rest of us were like The Bad News Bears. It was just a couple of people who were from industry. Think folks in their 50s. It's like the first hire of employees, non-technical. But you needed these folks who they know how the industry worked. Actually, in the case of a couple of them, they were essential to our regulatory standing. It was me who was like the most unproven sales leader in the history of companies that got this big probably. You have a couple of like - you have Anthony Chen, who was a recent college grad who worked a couple of years in investment banking. Then you have one or two software engineers. And that was it. So it was sort of like improbable that we ended up being this thing that got to what it became.
Alex Kracov: And so you had zero experience in freight forwarding. You and Flexport were sort of these software experts who are trying to sell into the super old-school industries. How did you think about trying to break into these industries, and how did you yourself learn about freight forwarding?
Ben Braverman: Honestly, I have one man to thank. It's a Danish gentleman by the name of Michael Baekboel. Michael Baekboel, his retirement job or so he thought - because he's now have been working on it for almost 10 years - he always said, he was like he started at Flexport as sort of the catch-all guy who understood freight forwarding. He had been the GM of a mid-sized forwarder. Somehow, he had found Ryan Petersen and was captivated like the rest of us. He agreed to just be sort of like the guy who knew how it all worked.
And so my first couple of weeks were literally sitting at a whiteboard with Michael. This is like a super cool guy with a ponytail, a Danish guy in his 60s, rides a Harley. He white-boarded for me - John Nash, A Beautiful Mind style - what global transportation looks like end to end and every micro process that has to happen for the end-to-end process to actually work. It ended up being like literally 40 feet of whiteboard just end to end across the whole wall of a double loft office in San Francisco. It stayed up. This crazy scroll he wrote stayed up on the board for the first year. It's unbelievable what you can learn from someone if they're willing just to tell you all the secrets they've learned over their whole career. Jeff Bezos has this quote, that he didn't have to start off that smart. But he spent 30 years having all the smartest people in the world give him their best five minutes. So now he's really smart. I feel like we had sort of a similar situation where we got 40 years of Michael Baekboel's experience, I got to condense into his best two weeks. And as a result, I know the industry.
Alex Kracov: Then so you have this general understanding of the industry. Then how did you apply that to these early-sales conversations? Because I assume the product didn't do everything on that 40-foot whiteboard. And so yeah, what did those early-sales conversations look like? Was it sort of like customers were asking for specific features, and you're running back to the product team to go build it? Can you take us into the room of those early calls?
Ben Braverman: Yeah, the early calls, it's so funny. There are so many blessings we had at Flexport that I didn't recognize at the time. One of our many blessings was that we had this insane long tail of potential customers. E-com was exploding. The whole notion of being like a third-party reseller on Amazon was exploding. I think there was a million third-party Amazon sellers. They were doing at least a million dollars a year in sales. A huge percentage of them were importing or exporting goods depending on how you look at it, depending if they're in China or in the US on their residency. It was just a massive, massive market. And so we just knew we had to be volume players initially. The world was too complicated. You can't go after Apple on day one, but we could just go after a huge list of these Amazon sellers. That was really like - it got us in the habit of winning quickly.
Because we were talking to people who literally couldn't get service from the incumbent vendors. If you're an incumbent $50-billion freight forwarder, your company is built around serving the biggest conglomerates in the world. You have no time or patience for a first-time importer. And guess what? There's not a million of those folks to go target. So we started just fishing in the easiest, most well-stocked pond imaginable. Even though if you look at the operational CAC - I don't mean the cost to acquire from a sales perspective, but the cost to acquire from a, '"Hey, here's how freight forwarding works. Oh, no. You have the wrong document. Oh, no. You uploaded your tax ID wrong." These people just need a - at least, at this point 10 years ago, you need an incredible amount of hand holding. If you look at the operational CAC of serving them, you're not building the best business in the world. But it got us in the habit quickly of onboarding customers, learning how to serve them. The stakes were pretty low. That was how we learned and cut our teeth.
Then by the second year, it's so funny. This is like it's amazing. Even though the company on an observation is so simple. We had the observation that is, the customer's core problem is they don't feel in control. It's like from the moment you pay your factory, to the moment your stuff arrives for sale in the US, or gets to your customer in the US, it can be months. That's kind of nightmarish for a small business owner. So we were like, okay, listen. Let's give them a map. Let's put a map where it has their factory on one side and has the destination on the other. Let's show them exactly where their stuff is. So even if they can't physically touch it, they know where their possessions are. Again, in many cases, our customers had put their own money into these small businesses. It was material for them where that stuff was. And building this visual just totally changed the customer's ability to feel like they were in control of the problem. The combination of that, plus just being willing to serve these smaller customers, allowed us to grow in sort of a ridiculous rate.
Alex Kracov: Yeah, it's interesting. It sounds like that was sort of the aha moment for Flexport, at least in the early days, when I was like, okay, there's this map we just give them. We just show them where their stuff is. Then that's when they start to get to understand, okay, how Flexport is so powerful. Then you can kind of go in and then just build all the products that actually happened across that map and moving things from China to the U.S. or wherever it's coming from.
Ben Braverman: Totally. There were so many things that we didn't do initially from a revenue perspective that we charged for now. Initially, we were like, "Oh, no. We don't want to handle the factory, pick up at the origin location in China or Turkey or wherever it may have been." But now yeah, pay us end to end. We'll contract the trucker at origin. We didn't want to handle the export customs clearance. Now we gladly handle that. That's the regulatory process of the goods leaving the country that they are manufactured in. To your point, there were all of these things that we weren't able to monetize initially but that were sort of in the value chain that we were covering on our map that eventually we were able to monetize.
Alex Kracov: Then from my understanding, over time, Flexport sort of moved up market and started focusing on not just the long tail but more mid-market and enterprise customers. What was that journey like, starting to work with the bigger companies in the space?
Ben Braverman: One of the problems with human memory is: you don't think of time correctly. It's like timing your memory get to work. It's like a psychedelic journey we're all on. And so when I actually think about the time from when one of the large smartphone makers - I almost said the name. I won't - one of the largest smartphone makers became engaged with Flexport, to the time where we became one of their anchor vendors, you're literally talking about four or five years. Because an anchor vendor means hundreds of millions of dollars annually. It's like, yeah, of course, it's going to take four or five years to get there. Because from our side, we had to build a global network of freighters, of literal 747 freighters, our own landing rights, our own ability to consolidate, deconsolidate cargo around the world. This giant physical network had to be built.
At the same time, our software had to progress, to the point where one of the biggest companies in the world would use it and have it work. It's effectively like you can delude yourself into thinking it's going to happen faster. I think when we were onboarding a lot of these folks, I thought we were going to get that 100 million dollars a year in spend in year two or year three. It turns out, at least as a startup, it takes a lot longer than that. But yes, we always did move up market.
I'd say the two core motions were: one, building physical services that are useful. The fact that we have been through a partnership in Vietnam, we have a warehouse on the tarmac. So cargo can come in an hour before a freighter is supposed to take off. We can tag it for flight, make sure it's certified for export, make sure it passes all the regulatory stuff, and it can be loaded on a plane as physically fast as humanly possible. Therefore, we have a ton of apparel enterprise customers out of Vietnam. You can't speed that up overnight. But it's like when you build things in the physical world, it's very, very powerful. The other thing that worked is - this was again like a much slower burn that I wish it had been.
The whole idea of Flexport was like, look, you get this software platform totally for free because you're doing the transactions with us. You're physically moving your goods with us. This worked pretty well as you moved up market. But at a certain point, the companies you're serving are so big that they go, "Look. My budget is a billion dollar. I can't spend it all with one vendor. But your software is pretty great. I'd love for all of my logistics data to be in one place. Why don't I use you as like a logistics vendor in some places. But as a software vendor, be agnostic and just feed data in from all my other vendors so we have one source of truth. Clean up all the data from other vendors. Make it so it can go into RARP cleanly, yada, yada, yada." I thought that was going to be like a 12-month build.
It turns out getting a building for the enterprise, making sure everything's secure, again, it was years before that went fully online. But we were able to sell the dream really in both directions. We were able to sell the dream of, look at all this physical, powerful stuff we're building. And look, we promise the software that you love so much transactionally is going to be available institutionally. Even though it took a lot longer than it probably should have on both fronts, or at least probably longer than our customers wanted, we've built up enough goodwill that they waited for both dreams to become reality.
Alex Kracov: And so it sounds like you were just waiting as a sales person, waiting for all this infrastructure get built out and all the software. You were like nurturing these enterprise relationships along the way and promising, "Okay. We're going to go build that warehouse of the tarmac in Vietnam or whatever." Then once they saw you sort of fulfill those promises, then you are in trust and you sort of want those enterprise deals. So it seems like that's sort of how it went down over the years.
Ben Braverman: Very, very succinct and well said. You have to be delusional to do this job well. The idea that I would visit some of these customers 10, or 15, or 20 times over the course of several years while their spend just didn't justify it, you can look really dumb doing things like that. You can look really dumb making these kinds of bets. But now Flexport is a nine-year-old company, and the bets are paying off. The kind of growth that we're seeing now from these major logos that, frankly, that's the only way you can grow when you're in the billions of scale. But you just can't grow at 20%, 30%, 50% year over year unless you have these massive accounts that are giving you more and more stairwell in every year. There's just no other way physically for the math to pencil. So I think now we're all glad we made that. But at the time, there was definitely like - even myself, I was like, why am I not just spending every ounce of energy in the mid-market where we're crushing? But I think it's because we knew someday we were going to need the growth from these monsters.
Alex Kracov: What did the top of funnel look like for Flexport? How did you actually set these meetings? Was it just outbounding to people? How did all that work?
Ben Braverman: We were 90% outbound. However, what I will say is your outbound strategy - like when people talk about marketing versus SDR, it's such an artificial separation. The more press we got, the better our brand seemed to be in the market. The easier our SDRs lives were, the higher their quotas could be, the faster the deals would progress through the cycle. These things are highly correlated.
I hate to admit it. Because spending on brand sucks. It's one of those things that when you think about how much money it costs to effectively build a brand in reality, yeah, there's some things that go viral or whatever. But to build a brand over the course of the lifecycle of a company, it's a lot of in-person events. It's a ton of founder time. It's like it has to be a core part of your strategy that you care about and nurture. Some of it you do just by having customers love you. But a lot of it is like being in market, and spending the time, and telling your story and teaching, teaching, teaching at every opportunity. Just being that source of value that people find not just for things that are buying things from your company, but across the whole industry. It takes a huge amount of money and effort to do well.
But the truth is like when we look at the times where our SDRs were just cranking and way overachieving, it was always at the same time as we were investing in the brand. Even some of the dumb brand spend worked. Just being on the front page of the Wall Street Journal works. We had a bunch of stupid paid Forbes articles that I hated. But frankly, our outbound worked better when those articles were running. It's frustrating to believe. It's frustrating to admit too, but it's true.
Alex Kracov: We found the same thing at Lattice. I was on the other side running all the marketing. But as we put up billboards around San Francisco, rebuilt the community and did more high profile events, it just makes everything better. The funny analogy I give is honestly like war. It's like marketing is the air cover. It's like the bombers, and the sales reps are the ones who are on the ground actually making the should happen. But you need both things to be successful in your motion. That's what I think about it. Switching gears a little bit.
Ben Braverman: Were SDR and marketing at Lattice one org, or were you all separate?
Alex Kracov: Yeah, it was a separate org because I always thought of it as like I am not the best at sales. So me being able to teach an SDR the right way to become an AE, it was really a proving ground for an SDR to become an AE. I can help them write a better email. I can help them follow-up with marketing campaigns. But a lot of the motion that we found that worked was some marketing touchpoint, whether it's them joining our Slack community, joining the e-book, watching the podcast, whatever it is. We would get their email and then follow up from an SDR motion. So it wasn't as much like cold, cold outbound. It was like outbound off of a marketing touchpoint. And that worked. I think it was like 80% of our outbound deals started with a marketing touch point. It's something like that.
Ben Braverman: That's awesome. We were never that good at measuring it honestly. I got so bogged down in trying to do perfect attribution. And so what I ultimately concluded was, let's just assume it works. Let's assume the smart stuff that marketing is doing works. As long as the events are good, as long as the webinars are teaching people valuable things, let's assume it's working. And let's not spend a ton of time and money trying to measure everything perfectly. It's like you can spend forever trying to measure it all and just define every dollar attribution perfectly. And then these enterprise sales, you're never going to do it in a way that's accurate.
Alex Kracov: Totally. And everyone wants it to work like consumer, where it's like you see an Instagram ad and you buy the shoes. It's just like, that's not how this works. I think it takes leadership. Jack was amazing and understanding this. Then Josh Brown, who was the CFO at Lattice, he was the first finance person I met who didn't just look at the numbers and spreadsheet. He actually knew what the numbers meant, and knew how it was hard. He wasn't just like, "This $100 should turn into $1,000." There's a lot of gray. It's not just a black and white thing to get all this working.
Ben Braverman: Yeah. For the people listening, Jack Altman, he's like one of the world's great humans. So not surprising he did this well. But it's super hard especially for first-time founders to do well. Because to your point, everybody wants that. Like, what is our cost per click? What is our cost per install? It's like, dude, it's not mobile gaming. We're not going to have that level of precision, sadly. But yeah, I'm not surprised that Jack did this well.
Alex Kracov: Yeah, and it just takes so long. But yeah, it's attribution. We could spend an hour talking about it. I'd love to talk though about building sales teams, because I think you were very methodical about building the sales team. I think you would get shit for sort of not hiring fast enough, right? And so can you talk about your approach to building the sales team?
Ben Braverman: Yeah, I think we were so lucky that Parker exists, Parker Conrad. All of us. Everybody with a great company right now learned from Parker Conrad, whether they know it or not. The whole notion of modern outbound, the SDR structure, all of it, it being a compound startup - there were so many things that Parker taught us. When it comes to building the sales or one of the many lessons we took from him was that, you should not add reps to the team until their calendars are jammed. Where it's like someone or your rep should be coming to you screaming, "I have too many leads. I'm not closing enough business because I'm so spread," hire more reps. If they're not doing that, it means that their days are actually pretty empty. It means that anybody you have that is effective is actually being underutilized. And it means that whoever you add to the team is going to be particularly dilutive, because they're going to be taking leads away from people who are already ramped up, who actually have capacity to work more.
This is a beautiful lesson. I think we mostly honored it. There were a few times where I think we over hired a little bit because some model said we were supposed to go faster, or that a rep couldn't get more productive. But one of the things we saw was, what a rep can do in year one versus year five, it's just unreal how different the number is. Where it's like the company is so much better; our deal sizes are so much bigger. They are much more sophisticated rep obviously. In some cases, they're improving. But in a lot of cases, it's just like the company is a different place, that that same person can be literally 5 or 10 times more effective for the same dollar you're paying them. And so if you don't believe that, the model says you've just got to hire some insane number of people to keep growing.
What happens though is, every time you over hire, this horrible thing happens to your machine. Where it's like, because there's not enough total opportunities coming in for the number of people receiving them, they're no longer fully busy. Therefore, their total energy level goes down. Therefore, they're less aggressive on the calls that they're on. This whole machine slows down because you're not running it at the right pace. And so, yeah, we got really comfortable with the idea that, yeah, individual quotas could double each year, and we will be fine with it because they knew it was possible. And we showed every time and time again it was possible.
Alex Kracov: Did you have a specific hiring profile for sales reps? Were you sourcing from a specific place? How did you think about kind of who to bring in?
Ben Braverman: Yeah, so I have a couple of recruiting third parties that I relied on for years and years and years, I've been super loyal to. I generally don't like using internal recruiting for sales roles. I think internal is not - there are companies that do sales hiring really, really well. In the first couple of years of a company, you don't have time to figure out how do I build it. It's hard enough building your sales motion. Building and recruiting motion is building an entirely second sales motion inside the company. Chances are you're not going to have the caliber of people working on it that you're going to have working on the core sales motion. That's just how the market has allocated talent for the most part. In some cases, that's totally wrong. In some cases, you have talent partners that are way better than their counterparts in sales. But in general, sales roles are more highly compensated than people who have sales skills that tend to go to them. So you have a lot of folks who have less of a background in building a systematic sales process in a talent function, especially at a super early-stage company. So I like to use third parties. I don't negotiate with them generally on this structure. I have a couple of partners who I think they charge a very fair percentage of base. They're able to get me candidates within like 14 days of starting a search, that are like to a tee what I'm looking for.
In general, Flexport and Hadrian are very different companies. Flexport really was three businesses in one. It's an SMB business, a mid-market business and a key account business or enterprise, whatever you call it. Each of those sales is a totally different profile. The SMB motion, the people we saw that were the best at it, it was purely a function of positivity, energy, project management. Because one of our SMB sellers might literally do 10 or 12 demos in a day. There are some people for whom that is a nightmare. There are some people that like at the end of that day, they couldn't even talk to their spouse kind of thing. There are some people who's like, "That's awesome." It's super high volume. They hear yes a lot. It's super fun. That profile for SMB generally does not translate that well into key account.
SMB, you might get 10 dopamine hits a day. And so therefore, you tend to have those nice, super fun. You don't have to know that much about the client's supply chain. You don't have to be an expert in transportation. The profile for mid-market is very different than our mid-market profile. It's a road warrior. Our SMB seller, in office, on the phone, demos on Zoom, super high volume, onboarding your uncle who's selling party sets on Amazon. Our mid-market seller is a road warrior who is basically like they're selling to a professional buyer of this commodity. Literally, their whole job is to buy transportation services. They have no other job in the company, generally. It's not that important to supply chains. You have someone who owns it. They are not going to buy from someone they don't know and trust. These are seven-figure annual deals. These are committed contracts where we're going and signing a contract with an ocean carrier. We're basically saying, "Hey, this customer is going to ship so many thousands of containers with you." The customers agreeing to do it. Everybody believes the supply chain is going to run smoothly. It's an in-person sale. It's highly methodical.
But it's not like a key account sale in the sense that there's no integration. There's no ERP to figure out. The process is pretty much the same on every account. You can onboard maybe not 20 of these folks a year. But a good seller will have 5 to 10 of these accounts onboard a year pretty predictably that are spending seven figures. It's like it's a relationship sale. It's really the customer needs to feel like you were an extension of their company. Because they're not quite big enough to have a size logistics team that they need, and they need Flexport to fill that role. They're almost interviewing the people we send to be members in their team.
Key accounts is like your BCG, your McKinsey, your Bain, you're Deloitte, whatever your consultancy of choice is. We are mapping an organization. We are onboarding in some cases 30 or 40 people to the software, making sure they all know how to use it, making sure Flexport has been customized. So that when one division logs in, they only see data that's relevant to them. It is like a project launch. Even if they're not buying the software platform, even if it's a purely "logistics sale," even if it's just someone who wants to buy $50 million a year of airfreight from us, it's like, "Hey, we need to build a process to make sure that we understand how to pick up cargo from their factory, get it to the airport. We make sure we understand how everything needs to be packed for transport." It's a project plan, where you're talking about potentially nine figures of spend, and the timelines are a year. So it's like very low dopamine, very high stress, tons of project management, and the engagement looks a lot more like a consultancy than a sale.
Alex Kracov: What was this like for you personally? Because Flexport had offices all over the world, and then you have these sellers traveling around all these different places and different segments of the team. What was that like for you? Were you traveling like crazy? How did you just kind of manage all this stuff?
Ben Braverman: Yeah, my wife is a living statement. I was on the road every single week for the most part, which was like cool pre-children, much harder post-children. Pre-children, she would come along in a lot of trips. Her job was flexible, and that was pretty awesome. Then post-kids where she was like having to be a mom, there's no way to be good at the job of CRO at Flexport and not be on the road constantly. I truly believe it's impossible. Because, one, the deals are so big. That on the enterprise side, you need a level C stakeholder involved to sell something that costs as much as a 747. You're going to need C level engagement to get those deals over the finish line. You have so many different people in so many different offices, all of whom are running frankly very different kinds of businesses that you've got like the SMB business, maybe you can run more remotely. You got to listen to a ton of the calls. It's a lot more of like a metrics. You're going to drive by the numbers kind of approach. The team was so spread out geographically. The customer was so frankly invested in us seeing them physically. Yeah, these businesses are brutal to scale. When you look at anybody from this industry, people age quickly.
Alex Kracov: I think one of the things you did that was really smart was you had this squad model - I think I've heard you talk about this - where you gave sellers a lot of leverage, and it kind of helped them with this big project management component of things. Can you talk a little bit about that?
Ben Braverman: Yeah, so what we figured out pretty early on is: the customer didn't want to talk to anyone about an operational problem that couldn't actually solve their problem. So you couldn't separate customer service from the actual operations of the company that easily. And so what that meant was, if you're a seller, if you didn't have a team supporting you - even though obviously it's other people. We're not driving the trucks. For the most part, we're not driving the boat to the planes either. Even though we are this non-asset-based business, there's a whole workflow of operationally moving the cargo, which is uploading documents, talking to trucking companies, talking to warehouses, all this stuff that has to happen.
Then if you have the person who's doing onboarding who's actually selling net new, if they get bogged down in trying to communicate that world of operations to the customer, their ability to sell net new goes to zero. It truly goes to zero. One, because the same person who's good at selling net new is generally not that good operationally. And two, because it is to serve the customer is so operationally intense in freight forwarding customs brokerage that you're almost forced to give the customer a direct line to the people that are doing the operational work. So what we found was, okay, let's pair up an operational leader and a sales leader, or a seller and an operations person, and have them basically be CEO, COO of their own little business.
The squads had their own swag budgets. They all had cool jackets and patches. On the monitors, it wasn't like individual names. It was the names of the squad. So you had this very healthy internal competition. They all had equal access to the resources that were Flexport or that are Flexport. Obviously, they all have equal access to our air contracts, ocean contracts, whatever it may be. But everything that their customer needed - let's say you and I were the squad. Everybody that Ben and Alex had onboarded knew that whatever they needed from Flexport, they could get it from Ben and Alex. They didn't have to think about anyone else. They didn't have to know anyone else's name. They didn't have to go, "Oh, if it's a customs brokerage question, who do I call? If it's an air freight question, who do I call?" They just know. Let's say, you're the account manager, and I'm the seller. They know day to day for a question they're going to call you because you're literally the one moving their cargo. They know if there's a huge problem, and they're like, "Man, Alex really is not doing what I need for him right now," they're going to call me and go, "Hey, Ben. You sold me on this f*cking thing. And it's not working the way you promised. What do we do?"
And so it's like the operations leader is like day to day point of contact. The salesperson stays involved. We call it the salesperson for years. In the case of our mid marketing, key accounts. Even though a lot of the work is being done by the squad, because you need that relief out and because the squad itself basically becomes an extension of the customer, they almost think of the people operationally serving them as their own employees. You can't have your own employees telling you that something costs more, or you've got to pay a penalty because you didn't pick the container up on time, whatever. It's nice to have a seller who can come in and do some of that more unpleasant work or some of the work that requires a little more brute force. So yeah, the model worked incredibly well. Buildings look very similar at Hadrian. I'm trying not to be the general despite the last word over and over again. But I think in these ops-heavy businesses, this model just works.
Alex Kracov: It must've been really intimidating for new sellers to join Flexport. I mean, there's just so much to learn. Especially, I don't know, most people probably don't know much about freight forwarding. How did you get the best sellers to even care about training other sales reps? Because those sellers are trying to hit their number too. And so what did you do there to kind of incentivize them?
Ben Braverman: One, the squad model helped tremendously with this. Because generally, it would be an account leader who knew the industry. And so even if you were a seller who didn't know anything about what they were selling, literally, during the sale, they could be slacking their business partner going, "Hey, what does this mean? Hey, this customer just asked me this." And as long as the seller had good poise, it can say to the customer, "Hey, I think I have this answer for you. But my operational leader who, by the way, is the best and you're going to love. They're going to serve you end to end once you buy from us. Let me just check in with her because she's so good. Then I'll get you a hard answer." That model allows you to hire people who don't know the domain and still crank in a way that if they were left for their own devices, it wouldn't have been impossible.
The other thing we did was, we had a few really special folks who were great at ramping other leaders. Probably the most well-known is this guy named Justin Schafer, who actually now is VP sales for a company called Expedock, that sells software that arms legacy freight forwarders to get to be with Flexport. It was hilarious. But Justin, we basically realized that Justin would do anything. He was an ex pro baseball player - he'd blown out his shoulder - the most competitive person on planet earth. He would just do anything to make a person that he hired succeed. If he had said this person's good, I'm hiring them. He just couldn't live with the idea that he was wrong, and he would go to the ends of the earth to help do a ramp-up, even if that meant just going on the road with them and doing the deals for them.
Ultimately, there's a few folks we had to let go because Justin was just doing their jobs. But really, that's how you ramp the sellers. The way you ramp a seller is you take them on the road with someone who knows the dance. They they get to watch it first, and they join them a little, and then waiting. Then before you know, their dancing on their own. That's what worked for us. We figured out an equity model. Generally, sellers don't get enough equity. And so we figured out, for folks who were able to ramp new sellers as sales managers, if you were end to end responsible for hiring someone and then they hit their year one quota, you just instantly got a chunk of vested equity. And for the right people, that worked really well.
Alex Kracov: There must have been just a giant learning curve for yourself, right? You were never the CRO of a billion-dollar company before. This is a brand new industry, right? How did you think about scaling yourself? Like at Lattice, I feel like I had to reinvent myself every six months or something like that. I'm constantly worrying about getting layered and stuff. What was that like for you to keep going and growing with the company?
Ben Braverman: You know, this is going to sound a little bit Machiavellian. I don't know that I've admitted this before. But I basically was managing this process of like - because there was always this question. Flexport was doing so well. Even though I was partially responsible for how well it was doing, it was doing so well that a lot of smart people were starting to go like, "Should we just bring in 40-year-olds from sales force to run sales here?" Why not? We can get anybody. This business is a winner. Why don't we have this relatively unproven person in the role, even though things are going really well? These are the questions you could ask.
And so rather than fight it, I just sort of pretended to be on board with it, which I obviously wasn't. That would be f*cking crazy. But I pretended to be on board with it. I just was like, "Look, let me be a part of this process. I'll interview all these people. And if we find someone great, I'll step down or whatever." I got to spend two years meeting all the best sales leaders in the world, asking them how to run sales forces or sales orgs, and taking notes and stealing the best ideas. And then in the background, fighting to keep my job and not hiring any of them. Then eventually, we hired someone who was much more of just a people manager. I was able to stay as the sales leader. They took over the squad. They took over the operational management. But yeah, that's how it went down.
Alex Kracov: It was honestly very similar honestly with my experience at Lattice, which was not as big of a success as Flexport. But it was like, 'All right. This is going well. Can Alex keep doing being the head of marketing?" I was like, "I've been doing it. I've been crushing, Jack. Let me do it." Then we interviewed a couple of people. I was like, "Alright, I'm sucking what I can." Then eventually, the compromise was I got a marketing coach - this guy Francoise, who's awesome, and helps me understand and sharpen sort of the rough edges of things I didn't know, how to talk to a board and how to professionalize myself and all this stuff. So yeah, it's a funny, personal journey. Because you're like, "I'm being successful. And yeah, I've never done this before. But I think I can." So yeah, I don't know. It's hard.
Ben Braverman: It's super interesting. I actually think the cycle that we were building these companies in, like you in Lattice and me in Flexport, it was a time when things were going so well across the whole industry. For me, a lot of the folks who would have wanted jobs like that now retired over the last cycle. I think this generation's group of first-time marketing leaders, sales leaders, it may not be quite as cutthroat for their jobs it was for our generation. I also think a lot of VCs learned over the last cycle, it's really hard to replace the people who built the thing. Even if people look amazing on paper, the number of 15-year Google SVPs that I've seen fail, CRO or CMO, in the last 36 months is staggering.
Alex Kracov: It's just a very different beast. Alright. I'd love to talk about what you're up to now. Because you're working at Hadrian, and you're the CRO. Hadrian does space manufacturing. What is space manufacturing? Can you tell us what you're up to?
Ben Braverman: I would say the company that's really doing space manufacturing is Varda, which is Delian's company, one of our big investors. So Varda, they're sending a capsule into space, and they're trying to actually manufacture in space. Hadrian is much more down the earth, both literally and physically, in that we just have factories here on planet Earth that make things both for the space race and the defense industry. I'm not necessarily the most creative person in the world. And I found a company that has many parallels to Flexport they possibly could, which is highly regulated. In the case of Flexport, it's regulated in the sense that being a customs broker is super regulated, being a freight forwarder, being able to buy and sell ocean freight is regulated because they want to avoid price gouging.
Hadrian is regulated by something called ITAR. Technically, ITAR stipulates that anything that goes into various parts of the most important space and defense supply chains have to be manufactured domestically. Even down into the source materials like the raw aluminum, steel, whatever that goes into an F-22, all of it has to be U.S.-sourced, US manufacturer. That's for pretty obvious reasons. Pretty easy for an adversary to attack us in the supply chain if the supply chain is not U.S. controlled. So this is all highly regulated. It was also a jobs program, in the sense that after World War Two, this regulation allowed tens of thousands of machine shops all around the U.S. to spring up. Because, hey, all the stuff for the military supply chain in the space race has to be made here anyway. We got to build a machine shop. Over 1940 to 2020, there were a lot of families that build amazing lives, a couple million dollars a year even on one little location selling one or two parts into the DoD supply chain.
What has happened now though is, the folks who are running those companies have retired. In many cases, the companies have been sold to private equity. Their sons and daughters were not interested in running machine shops. And so now the number of shops that are actually basically certified to do what I would call real space and defense manufacturing, there's only 2,000 of them left. There's like 20,000 machine shops or so in the U.S. 2,000 of them have the kind of certifications that we have that allow you to serve human spaceflight, rockets, things that can go boom. There's a very limited list of vendors that can do it. There's an even more limited number of machinists that can work inside of these companies. So the estimate is like, ballpark, we would need a million more skilled machinists tomorrow just to meet the current space race and NATO demand. Not going to happen.
The whole premise of a Hadrian is: can you use software and automation to allow someone who does not necessarily have 5 or 10 years of machining apprenticeship behind them to get in front of a million-dollar CNC machine? CNC is a machine that's either cutting into or taking metal around a block of aluminum steel, titanium, whatever it maybe. Can you put them in front of a million-dollar machine, maybe a $2,000 part that's going to send a satellite into low Earth orbit? Can you have them doing it in 60 days instead of 5 years? The answer of Hadrian seems to be yes, that you can get it as possible if you constrain the environment enough.
So it's like we have built the most, in some ways, complicated but automated process for taking a 3D model and making it into a part, with as little human involvement as possible. So it's like very complicated from a software perspective. But from a human perspective, it's really as simple as like, follow a list of instructions on a screen. Insert a piece of metal in exactly the way the screen is telling you to visually. The machine checks that it was inserted correctly, and then the machine runs. Our overnight shift, where you have these million-dollar machines running overnight, making tens of thousands of dollars for the parts, it's overseen by one gentleman at home on CCTV, who started as Hadrian's first security guard. It may be that there's something that can break overnight, of course. But there's enough redundancy in place that if one operation fails, another operation is to start it's in its place. And in the morning when the engineers get in, they can troubleshoot the 1% edge case that didn't work overnight. So it's pretty amazing.
Alex Kracov: Yeah, it's crazy. You just talked about a bunch of stuff I didn't even know existed or had never even thought about before. What does your early-stage sales look like? It sounds like you're selling to the machine shops and the actual factories. Because originally, I was like, oh, it's government contracts. You're selling to Lockheed Martin or something. But it sounds like you're actually deeper in the supply chain.
Ben Braverman: We're selling both to the primes. A prime is like a Lockheed, or a Northrop, or it's basically anyone who has the direct contract for the final product with the DoD. So we sell to a lot of those people. We sell to a lot of aerospace suppliers. Think of the companies that supply engines and components to the aviation industry. Those are our big customers today.
One of the biggest challenges at Hadrian is that we don't have the long tail like Flexport had. In many ways, we're very blessed. These markets are big. Our customers can spend hundreds of millions or billions of dollars a year just on machine parts. They have to buy them domestically, so we're not competing against government subsidized operations around the world. It's an amazing business in a lot of ways. The big challenge though is, a small customer for us is someone who could spend $500,000 a year, is going to require fairly significant onboarding. And really, our target customers, we're going for like seven figures a month minimum. Because it's very transactionally taxing don more of these customers. One of my aviation customers has a 200-page contract. We've been working through since the day I started with Hadrian almost three months ago. These deals only make sense if you're getting massive revenue out of the customer. There's really only 200 customers on earth that matter. So we have got to nail every one of these engagements. It's very different than in Flexport. We're friendly. We could be a lot more cavalier on how we approach the deals.
Alex Kracov: I'd love to end on a more forward-looking note. What do you think about the future of the space industry? I mean, it's been amazing to see all the progress over the last 10 years with SpaceX and Varda, and now Hadrian. I don't know. What do you think the future looks like? Are we going to be living on Mars eventually?
Ben Braverman: Yeah, I have no idea. Thank God for Elon. If it weren't for Elon, the U.S. would be so behind in launch count. Basically, if you take every launch company in China - government, non-government, everything - they technically did a few more launches than the U.S. did total last year. But without SpaceX, it would have just been dramatic. Actually, in terms of payload, in terms of the amount of stuff we put into orbit, because of SpaceX, the US crushed everybody else. That dynamic, I think, is really important. The future of global defense, potentially global transportation, a lot of it is going to be determined by what happens in space. Pretty exciting that SpaceX has sort of opened up the field, and now you have tons of cool, new projects. You have Sierra Space. You have Ursa Major. You have folks that are following in SpaceX's footstep. Blue Origin is doing amazing stuff. Amazon with their Kuifer Project is pretty amazing, which is like a Starlink competitor. There's just so much cool stuff going on right now. I have no idea where it's going to go, but I think we're going to be sort of shocked at what comes next.
The cool thing about this new space race is, it's kind of pushing the physics. The human's understanding of physics is being pushed forward as a result of a lot of the stuff that's happening in space. SpaceX has a new thing called the Space Laser, which basically aligns the satellites in space. It's like a technology that people thought was physically impossible. Who knows what other applications will come off this? But they pushed the human understanding of what you could do with lasers, and transmitting information forward by some massive leap. Yeah, I'm not smart enough to know where it's all going to go. But it's definitely going somewhere cool.
Alex Kracov: Yeah. Well, thank you so much for the wonderful conversation, Ben. If people want to follow along on your journey, where is the best place for them to find you?
Ben Braverman: We can go fishing.
Alex Kracov: I love it.
Ben Braverman: I'm @braveben on Twitter.
Alex Kracov: Drive to Ben's house in Wyoming.
Ben Braverman: Yeah, exactly. It's only a brisk 13-hour drive from San Francisco. So I'll see you soon. And yeah, what time is it now? So if you started driving now, we can have a very late dinner.
Alex Kracov: Yeah, and you're already in the car so I know you're coming over at my house later. All right. Thank you so much, Ben. Take it easy.
Ben Braverman: Thanks, Alex.