Frederick Bearsch - CEO at DistroLogic

Welcome to another CEO Wisdom pod. We have Frederic Biersch with us today. Uh, Fred is a visionary revenue creator. Uh, he is CEO at Distrologic, which is a very interesting company, uh, mostly, um, operating at the intersection of logistics, innovation, marketplace connectivity, and scalable technology. Uh, he's also running a couple of other companies, Charleston Brothers Construction and so forth. Interesting guy altogether. Fred, welcome to the pod. Tell us a bit more about yourself and what you're building here.

Yeah, um, well, I mean, uh, Distrologik has really kind of been my main focus as of late. Uh, it's really something that actually stemmed off of something that we really needed to solve ourselves. We were tired of waiting for all of these things that would happen. This seemed to be in delay, uh, where you'd send an email to someone and you would hope that they would respond and tell you where your product was in some type of logistical nightmare. That was something that we would see on a regular basis, and it drove us nuts ourselves. So rather than trying to figure out a way to work with the system, we decided to design a new system that would, that would solve the problem. That's where DistroLogic was born. That turned into what we have today, which has kind of evolved like any other startup typically do, it typically does, we constantly tried to define the problem in a way that would work for us until we realized that we should actually be sending this out and solving this problem for other people. Before we knew it, we had several different customers. We got notified by, or really just nominated by, the state of South Carolina through several different grants and other things, and And now we're, you know, well on our way. Recently we just came back from the Farnborough Air Show with lots of opportunities. We're heavily now into the automotive sector and aerospace sectors, and we're running as fast as we can forward, right?

Um, tell me a bit more about what you built before that, right? Like, you're the founder of Charleston Brothers Construction, and I believe another business, but I also see you've been like CRO at some companies. So yeah, who are you?

I'm trying to, uh, yeah, so give a little background. I started off as a physics major, a computer engineering major at RIT. Then I, um, I really didn't— I mean, I still don't even know. I mean, I, if I was honest with everyone, I would tell you I still don't know what I want to do. I mean, I think that's the, I think that's the dream, right? You, you get— you're constantly challenging yourself, and as soon as you figured it out or get close to what you figured out, you get afraid you're going to get bored, so you go and you pick something else to to really explore and really challenge your brain. So for me, that ended up after physics and computer engineering. I went into architecture and, and traditional architecture. And really, architecture is just a way to define and design a solution to a problem. My father is an architect. My grandfather was a tool and die maker that actually worked on building tool and die equipment for the punch card machines of IBM. I grew up in that town where IBM was founded, and I found myself at, at Clemson for architectural school. And when I got into architecture, I found myself really always working in the sales and marketing side of things. So that kind of led me into revenue creation and finding out ways that, that I would bring money into the organizations that I was actually a part of. It was not something that was traditionally an architect's role. An architect always thought, well, if I'm the best designer, if I come up with the best building, uh, the Frank Lloyd Wright attitude was then they'll just come to you. That's not really the world we live in today. You could be the best of the best of the best, but if you don't market yourself really well, um, people never find you. Uh, so with what, what I've done in the past, I've, uh, I worked on a project which was called DigiDNA, um, and that was a it was a technology called vibromimology where we were actually working with a patent that was out of Binghamton University that would study the vibration of a muscle when a synapse would fire. So, you could determine what the fatigue falloff rate was of a muscle. Something that maybe you would very much be familiar with in your running is that there is a lactic acid reuptake level of your muscles itself, and that's really what determines when you're going to bonk. Trainers and things would also— would typically push people to the very edge of— or what they thought was the very edge of what they could work out. Or they could— they could really, just to say, break down their muscles so they can actually build it back as much as in the most efficient manner as possible. Well, that's That's great if they really truly know that that person's working to the right edge. That's what we were trying to prove. The great part about that project was we got to work with technology that wasn't available in the market at the time. That was MyoWave, or that was Hexoskin, that was OhmSignal. There was lots of technologies at the time that they thought, okay, but, you know, wearable computing is the future.. And we played in that space as best we could until we realized, you know, when we were working with a couple of different Division I football teams that they saw the value in the technology while the cost to implement it into their systems was just— the benefits that they saw wasn't quite there for what they thought they could get out of it. And our problem was that the sensors themselves, because they needed to be be and something that can go into a commercial laundry just wasn't, uh, sustainable enough. And so if they could only wash the, um, the product, uh, 5 or 6 times before we had to replace a, you know, $700 garment, it didn't really work. So that through those challenges brings kind of different opportunities. So you figure out different ways to try to figure out that solution. And using closed-loop technology, we were able to work with a couple of different laboratories and then spin off that technology to some other developments, which was exciting. And that's kind of where I've always kind of directed myself, is how to, how to pull something out even if there really wasn't any path. So I've worked in different consulting arrangements. Most of the time it's either contract manufacturing or building MRAP vehicles for the government or jig fixturing for aerospace programs. And now I realize how important the supply chain is, especially with the global supply chains that we have today. And so that with DistroLogic, we were originally trying to just optimize a supply chain for products that were really inexpensive, really low margin, super, super thin. And then at the same time, we decided that we were going to put together an automated HTS code assignment engine. This was something that would tell you what the landed costs were for duty, so you knew what the tariff was going to be before that product got to the point that it actually was going to reach. This was all done in the fall of 2024, and then February of 2025 happened, and tariffs became a really big deal. That was very good for us. And now we are, you know, leveraging all of those different components that we've developed into a solution for the clients in which we're working with.

Right. And through all these years, what was your cash cow? Was that Charleston Brothers Construction, like, what financed the full portfolio?

I've developed, uh, ETTS was really probably the cash cow. I mean, I would say that we've developed over the years several different pieces of IP. Um, those pieces of IP have either been software or they've been hardware, um, for different clients. And most of the time they've been in a contract environment. Um, Jarlson Brothers Construction was always consistent. It's always been consistent because it was something I knew and I could build something. But as far as a cash cow would go, I would say that when you're able to develop something and then, and then it actually spins off on a repeatable, um, payday. Um, and that's really what DigiDNA became. It became more of a lab. Um, we would, we'd build something in the lab, um, and then we would go ahead and then sell it off, or we'd develop it for a client and they would have it already purchased. Uh, Charleston Brothers Construction is something right now where I've been taking a lot of the technology that I've knew used for years. And now there's just a pretty high demand in a specific area of it. But I would say, you know, really, that's just been consistent, a consistency of revenue more than anything else.

Interesting. And yeah, like, where does the sales part happen? And you, because you mentioned the engineer, the manager part, but like I said, I've read the CRO, I've looked at various sales roles, right? You seem to be like a weird hybrid between someone that is technical, that is visionary, but also can sell. Are you like the full stack? Did you create that on purpose or were you always that way, sort of polymath?

I think what happened was, is I always really loved the technical side of things. I mean, I would get really heady and go drive, you know, I would go into every rabbit hole there was to solve it. And when I would get, I would get really frustrated whenever I was in a sales role, and I would go to an engineer and they would tell me, a software engineer, computer engineer, whatever it was, and they'd tell me, no, you can't do that because it's going to cost too much or whatever else. So I would have to just dive in and say, no, okay, I'm going to take it over a weekend and I'll spend 24 hours straight figuring out on how to code the solution. Um, and so it was really not a necessity, um, because I needed to go and prove to the engineers or whoever I was working with the developer that it can be done, and this is how you're going to do it, and this is how it's going to be done, and the budgets in which we can sell it for. Because most of the time when I'd work with software developers, they would come up with a solution, but it would be 5, 10x what the budget was for whatever the sale needed to be. And I said, well, that just doesn't work. So for me, I just always had to do it myself so I would have confidence enough that I had something that I could work with. So from the beginning, I always had to rely always on myself to be able to develop whatever I was going to sell. Then I would have to find the market to sell it. Then I would have to refine what I was selling, and then I would have to sell it myself. The good thing that I had is I was never afraid of talking to people. I mean, actually, I reveled in it. That was probably my biggest— the biggest fear that I had is that I was gonna be stuck in all in a lab someplace, not being able to talk to anybody and working behind a computer all day. I mean, I go to a show, or I'll go to the air show, or I'll go to, you know, I don't care where it is, and my favorite part is how many new people can I meet at that event, how many new people can I engage with, because I'm going to find out something new about something, and then I can start using that in what I'm going to develop for my next solution that is going to be either felt folded into, developed from, or possibly refining that IP that we already have. And then that's really how my brain works. It's not a— it's not a, oh, I'm trying to be everything. It's more of I'm just trying to understand all the different parts, because if I don't understand all the different parts, if I can't have really just the understanding, maybe the empathy of how somebody actually works themselves, how they actually think, um, I can't be very effective in either providing them a solution, selling to them, or being their best possible consultant.

So how do people work with you? Like, typically when you're in an organization like this, so you're visionary CEO, you code, you talk to high-level clients. What— how do others complete you? Um, that's usually a challenge with the visionary leader. So yeah, I mean, in the interactions, like, you, you're the main node, and who, who does what around you typically?

My goal lately has been to try to figure out different parts of myself and to clone them and spin them off almost like whirlpools. Like, if, if you think of it, everything is like a flywheel, right? And if everything's a flywheel, I think of every, every cog in that flywheel I could spin along against it. And if I, if I'm, if I get to critical velocity with them and they can actually take, maybe they can't, they may not be able to think of everything that's going on in my head. But if I can say, here, define yourself to some type of pinpoint focus and you work on this specific project and you work on this, something that you can get your head around, and it may be a subset of that particular client solution that we're developing. And then I can get them spun up enough that they can just focus on that. Then I can send them off and they can keep me organized. Because then that's the goal, is because if I get working on too many things, I become the bottleneck for everything else that's going on. So I have to make sure that I spin them up enough that they actually get that project done and they can do it autonomously without my oversight. And that's the only way that I know I'm being effective.

Distro, what was the idea behind it? Um, how did you start it, and why do you think that can be big?

Uh, initially we really thought about it— was like I said, we were, we were working with an Asian manufacturer, and we, we were trying to sell consumer goods that were extremely extremely inexpensive. The initial product started because we were selling items that were between $15 and $30, and they needed to be JIT, you know, JIT production, just in time, shipped internationally in 20 days or less to the end customer. And we needed to make sure that that product, including the margin, was profitable and delivered in the time frame in which they required. At first we thought, well, maybe it could happen, and then we realized that the thing that was going to break us was going to be the logistics. It wasn't— we could control the manufacturing, we could control the sale, and we could get all the sales, but the time to live and traceability and cost of that, of the logistics and especially the cost of logistics of not knowing what's happening during the process, that's what's going to break it. So when we first approached this, that's what we were trying to solve. Now, when we realized it was going to be something big was this, that intersection where we realized that other people were facing the same problem. They were saying, okay, well, our margins are okay, We have a supply chain that's stable. What's unstable is the logistics behind it. We can't, we don't have the faith in the, we don't have the faith in the auditability of where is that product at any given time once it leaves a controlled facility until it arrives. And then once we started looking at things that were much more complex, Flex, where in today's day and age, nobody, nobody has storage. Nobody in, like, especially in the United States, nobody wants to store product and have it on the shelf because the rental cost of the space to keep it on the shelf, the cost to load it, load it into inventory and then load it out of inventory, is going to be as much or more than the cost of the product or the margin that at least they have to sell it. So everybody wants to have it show up right at the right time. They can't have it show up early and they can't have it show up late. And so then what do you do to make it work? And that's where we started realizing there are some advantages that we could do with the product that we developed. We can use all of those different delays. We can use all of the different complexities of the logistics carriers to our advantage and essentially create space out of delays or time frames in which that delivery was normally going to just happen in a normal course of business.

And your ICP, it's, um, CIOs, COOs, aerospace executives, manufacturing leaders, supply chain innovators, uh, is that who you target generally?

Yeah, ICP would be any manufacturer or OEM that has— or distributor that has a large number of SKUs coming from a diverse supply chain that's all over the world, and that they need to make sure that they have full visibility of the products in which they're delivering, and they have the ability to make sure that all the paperwork and auditability of the HTS codes and tariff landed cost can be traced and more importantly controlled. Because what is changing today, of course, with fuel surcharges, cost of delivery, delays in transit, and more importantly tariff costs, is what's, is what's actually eating that lunch.

And how do you get to these folks' pipelines? Because ultimately you're a new company, right? Yes, you have a sales background, but if you target a government, you're pretty much high risk for them because you don't have that much established experience, right? So how do you convince them to— well, first start, how do you get in touch with them, and then how do you convince them to use you?

So if we're working with, um, you know, one of the things is, you know, we're not naive enough to think, okay, we can go to a tier 1 supplier supplier and be their main solution. I made that mistake a long time ago where I had a great opportunity and I was able to catch a tier 1 supplier when it was a brand new startup company. The problem with that was as soon as I got the contract, I couldn't fulfill it. That was probably the biggest disappointment you could ever have. Here you're new, here you're a startup, here you really haven't even gotten off the ground. And here's a, you know, an 8-figure contract potential, and you can't do anything with it because now you, you're the dog that caught the car and you're just being dragged along behind it. And you have one choice: let go. Now, what we've done is we've specifically targeted the companies in which we are big enough and we have the support behind us enough to be stable for them. And then the other part of it is we have enough contacts, at least we— where we're operating, let's just say in the state of South Carolina, that we can be recognized as a formidable player. The good part about this is we're in a relatively small state. We are— we have participated at a level that at least in the state of South Carolina and in the foreign areas that we are operating, that we are a significant enough player. We've been recognized by the state and SC Commerce to be part of the South Carolina delegation for the United States Pavilion in, at Farnborough. And we've leveraged each one of those steps to give us credibility. It's not From day one, you jump and you go to the top of the heap, and we're still climbing the ladder and we're taking the advantages what we have, and each one of them becomes extremely valuable to us. So we treat each one and triage each one as a valuable stepping stone. We are a small organization, so we have to make sure that we're only paying attention ones that we think are going to be most aligned with our ICP, also with our ability to give them the best possible value-added return on their investment. And more importantly, we want to make sure that they see an ROI immediately from the time they engage with us.

You told me last time we spoke that you signed a couple of clients, right? Um, and they have, uh, you already signed like a multi-six-figure, uh, contracts with, uh, these, uh, clients. How did that happen, right? Because just curious of your sales pipeline, how do you, how you do GTM, right? And how, uh, ultimately you sell to these guys, because the folks you target also have a pretty long, uh, sales cycle, right? Yeah, I mean, you get time to, to take a decision and then on your side, you need to stay alive long enough to sell to them. You're sort of bootstrap or you fund your own empire, right? So just curious to know how you unlock these clients. Were they like existing friends or referrals or connections of yours? How did you unlock them?

Yeah, so we had some, you know, going into this, we had a couple, The benefit was, is we started this organization and immediately we had a couple of clients. There was a couple, and I think that's where if I had, so any, you know, somebody else told me this a while back is that, you know, the best possible funding are the clients in which you actually land first. Because if you can land these, at least a few that can keep the lights on, they can allow you to continue to develop your technology, those are the best ones to have because now you don't have to go into debt. You don't have to be beholden to anybody and you can actually make it work. So that's really where we went and that's where we, you know, where we pushed forward, you know, full tilt. We said, okay, this is where we're going to go. Then from those initial clients that we had, we went to that next step and said, okay, we're going to invest and go to some of these targeted shows. And we went to some of these targeted shows that were industry shows, industry-specific, industry-specific opportunities. And we were able to really then capitalize on this as well. And that's really where our sales cycle started. And now we're seeing those on a regular basis over and over again. Producing more opportunities. We've seen that happen now over the period of like a sales cycle. Sometimes they're as short as 8 months, sometimes they're as long as 18.

Interesting. Um, right now you have these couple of clients, like how much is software, how much is service, right? Uh, looking at, uh, you from a Palantir lens of things, so Is it for deployed engineering? You have a main piece of software and then you modify it for these clients and their requests? How do you go with that?

Yeah, so we have a modularized approach for that. We made our, you know, we own all of our code. We developed it from scratch based upon a couple of clients, and then we started, you know, paving that path for forward in kind of a modularized system that we knew we could kind of pick and choose different things that would work best if we put it together for their solution. So when we're working with a new client, we're, we're trying to fit them into, you know, one of the, one of the, let's just say, 4 main lanes that we have, the 4 main building blocks that we have. And then we're trying to make sure that when we're giving them an actionable solution, that they have that in front them in a way that we don't have to redevelop the product every time. I mean, I would say that we're, we're possibly developing 20% new product on the regular basis, and that's really because we're trying to push our, our direction where we think the next opportunity is going to be, not necessarily where the next client is going to be. And then we're trying to use the 80% of the existing products that we have and has already developed and implement those on the clients that we've identified or that have come to us. So 80% of everything that we're doing, we already have built. So it probably takes us from the time the engagement happens to be ready. We could probably be ready in 30 days and have implemented. And it doesn't really matter what software or what systems they're operating in. We like to pride ourselves in like from the time that we get some sample data to the time that we can show them a demo using their data with their information and why our system will immediately bring them revenue. We can do that within a week's time. So the, the question is less, can we do it? It's more the comfortability level, like you said, that is where we're going to find the, uh, the— that is where we're going to be defined, and that's where we're going to find the solution with the client. And then once they're comfortable, that's when they make the decision. So yeah, sales cycles tend to be a little long, um, but some of the sales cycles that I thought would be really long tend to, you know, tend to be a quarter or maybe even a tenth the time that I thought they were going to take. Um, that's, that's what's interesting in sales. That's what's interesting in the product we're selling. Once there's a perfect product fit with the client, that's the, the implementation time, or at least the decision to, to, to go with us is almost immediate.

Is your beachhead tariffs— is that like how you enter organizations initially? The main problem you, you you help solve?

I would say that's actually— it's something that we can do really well. However, we're not a customs broker. We are— we're focusing on making sure that we're doing an assessment to tell people exactly how much they've spent or overspent on tariffs, and we're providing them a mechanism that can show them how to mitigate tariffs in the future. It's more of a solution that is part of our platform, but it's not something that is I think sustainable in the long term because we don't know what's going to happen with it. We don't know if it's going to be consistent. We don't know if it's going to change tomorrow. We don't know if it's going to go up, if it's going to go down, or if you can ever get your money back in the first place. So we like to show them exactly how much it's going to cost or how much it's going to— or how much it's costing them and how much they potentially could get back. However, we build our, we build our entire solution and our offering on What is the revenue that they can see back to their bottom line EBITDA number from day one if they use our system, including the cost of our system? So that really they see, okay, I really want to work with them. They want to really work with us now. And how can they make that happen? And what are going to— what are they going to be the holdbacks from IT or whoever else that are going to say, well, we don't really want to implement this because it's another layer of software. It's going to be another headache. And that's why we— when I talked to you before, it's important that we talk to the CFO or we talk to the CIO right from the get-go because they realize, well, wait a minute, this is actually not going to be something that's going to be a heavy lift on the IT side of things. They're going to take care of that part, and more importantly, they're going to initially bring us revenue.

What's your main goal this year? What do you want to accomplish for Distro?

Uh, well, this year we've, we've gone forward and we've opened up an entity in the UK. I think our next step is to further expand into Europe. We want to make sure that we have several other opportunities that we already have slated, you know, come to fruition by year-end, which would be, you know, full international expansion. So we can actually buoy ourselves with several different international clients so that we can really leverage ourselves to be as stable as possible. I don't really know what's going to happen with the economy across, you know, when I look at a global I, you know, especially after going to Farnborough, I felt like I see more nationalization, isolation. However, I still think that we are in a global ecosystem no matter if we like it or not. You can't make everything in one place, and because of that, we're going to make sure that we're in as many places as we get to. And that's our goal, is if, if we've already accomplished one international beachhead, our goal is to have two more by the end of the year.

Got it. Fred, thanks for being on the pod. Where can people find out more about you?

Uh, well, we, we're pretty active on our, uh, distrologic.com webpage. We're constantly updating that in the news once we have it. We're going to have a new software release in the the next 30 days. And there's, there'll be several announcements that will happen probably in the next 60 days about new clients that we're working with, and more importantly, where we're, where our next expansion is going to be.

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