Ben Braverman (Chief Customer/Revenue Officer at Flexport)

Hey everyone, this is Erik Torenberg and you're listening to Execs by On Deck. Execs is a show for founders, operators, and leaders who want to understand the playbooks, frameworks, and tactics that leading tech companies today have used to scale. Our guests are tech execs in key roles at top tech companies who share their hard-won, earned secrets on how to scale faster. Today's guest is Ben Braverman. Ben is currently Chief Customer Officer at Flexport after 6 years of being their Chief Revenue Officer during Flexport's hypergrowth period. In this episode, we discuss how to build a good sales machine from the ground up. Ben also shares his thoughts on all things revenue, from marketing to BD to forming early SDR teams. On Deck and Flexport are co-building the future of logistics. Learn more about our joint accelerator at beyonddeck.com/x/flexport. Adam Gelman, On Deck's SVP of Revenue, joined me in this episode as guest co-host. Hope you enjoy. Ben, thank you for coming on the Earned Secrets podcast.

Hey, thank you for having me. Always good to see you, Erik, and Adam, awesome to meet you a minute ago and again now.

Awesome. Ben, in preparing for this podcast, it became apparent to me, or I learned that you have gone deep down the path of studying Buddhism, and I'm curious what makes an enlightened CRO?

It's interesting. It's a hilarious and wonderful question. So Ryan, who I work for, recently hired a meditation coach.

Yes.

And I have to say, he is the calmest and most decisive that I've ever seen him, and he's always been pretty calm. But decisive. So I actually feel like I need to step up my metaphysical game and hire a meditation coach. But ultimately, I think so much of being a human and being a sales leader, you don't actually know what the right thing to do is. You have hunches, you have a sense of what the right thing to do is. You try to look at data and understand how your decisions are impacting the outcomes. But ultimately, you just sort of have to show up in every decision, optimize for the company's outcome over your own. And just trust that you're gonna have wonderful outcomes if you do that with some level of consistency. I think that's the same lesson of Buddhism generally that you're trying to discover during meditation, and certainly that I discovered as a CRO. Like, in the best moments, you're just trying in earnest to do well. You've given the team a clear message, a mantra, if you will, and you just show up every day and repeat the mantra. You execute against the plan you put in place. And hopefully you feel relative peace with the topic because you're executing in good faith.

You took my trolling question and made it great.

I'm serious. Yeah, I'm serious.

I know. That's great. No, I dig it a lot. We've gotten the metaphysical out the way. We're going to get really tactical. Ben, why don't you give an overview of how your role has evolved at Flexport and how you've sort of grown your skillset to evolve alongside with the role as the company has scaled? Because a lot of people who are with the company early, they don't make it all the way, right?

Well, I had a lot of brushes with death along the way, a lot of tears. Yeah, there's no linear path in being a first-time executive, especially at a company that is as special as Flexport has ultimately been. I would say in the beginning, my path was very traditional in the sense that I just sold a lot of stuff. And I don't think you can ever really get away from that being the fundamental element of what you're there on earth to accomplish as sales leader. At a certain scale, sure, you're operating a machine, but at every level of the game, you are trying to move as much product into the customer's hands as humanly possible and delight them in the process without breaking the— whether it's the engineering or operations, wherever the bottleneck is in your company, your job is to push it to the absolute limit without one of those 2 things totally breaking and therefore losing the ability to serve the customers you've onboarded. So if If all that is true, you know, you effectively have, you know, you cannot forget your job as a B2B seller. So that's how I earned Ryan's trust. The first 12 months of Flexport, I think the things that I did really well were sell a lot of Flexport, figure out what our product should be, define the early playbook for how other sellers would do it. And we brought in some really special people. So like Justin Schaefer, who's now head of sales at Assembled, Taylor Oliver, who just got a new job. I can't remember where she's VP sales. Mariana Kessel, who was VP sales at DataGrail after us, and I think is moving on to a new opportunity right now. Like all these people who came in in the first 18 months of Flexport, they were super aligned with the mission. They were super aligned with the idea that we could be one of the most important companies in the world. And I think together we figured out what the customer wanted. We figured out how the customer wanted to be spoken to. We wrote it all down. And we ultimately built a code of conduct, a culture, an ethos that scaled pretty far. Ultimately, the Flexport sale hasn't had to change or evolve that much really until the last 18 or 24 months.

Wow.

COVID and the supply chain crisis, those were 2 things that have totally changed the way we go to market. But ultimately, the stuff that we figured out in months 0 through 18 ended up being pretty durable. And the playbook that we wrote in those months ended up being fairly durable. And the playbook for hiring that we figured out ended up being pretty durable. So I think like the foundation we laid in the first 18 months bought me a lot of headway. I interviewed like maybe 100+ VP sales and CROs along the way. In some cases because I was like, am I in over my head? Do I need a boss? Should I bring in someone who can help me as a right hand? Like there was so much pressure to make sure we continued executing well. that we were just interviewed constantly. And I was low ego enough, I think, in the interviews to just tell some of these people, like, I don't know what I'm doing. Like, I've never seen a company at this scale. I've never seen a company that's growing this fast. I need you to tell me what you would do in this context. And like, not everything I learned from these people was always the right thing to do, but synthesizing the learnings of 100 VP sales, CROs, VPs marketing, you know, I spent 18 months hiring a head of inside sales/SDR. We interviewed probably 45 heads of SDR in that time. If you ask these people, how do you do your job? Like, what are your, what do you, what do you, how do you define success in a given year? What are the playbooks you've put in place? What are the experiments you've run recently that worked and what didn't? And you just write this shit down. Eventually you'll get better at doing the job yourself. And so I can't, I can't thank all these people enough. Like some of whom ended up coming to work for us, some, most of whom obviously didn't. But I learned more from interviewing people than I think from any other, any other path. And then, you know, in 2020, when I stepped down as CRO and a guy, a gentleman named Will Urban, who came from one of our big traditional competitors, he, you know, a longtime executive, when he stepped in, frankly, the moment where our challenge has really evolved from 2014 to 2020, the challenge was how do you go from, you know, $200K in revenue to $1.3 billion, which is what we did last year. And at this point in our history, the challenge is, okay, the market says Deflect's where we believe you can grow. The challenge is, can you be an operationally world-class freight forwarder, an operationally world-class customs broker? Can you transactionally just have a better cost of operating than any legacy competitor with a higher NPS? And we got to a stage where like it was just rational for someone to come from the market and replace me. And so that's what happened. That's my journey.

Awesome. Thanks for sharing that. I'm curious, a couple of things. One, what you learned from those interviews And then 2, if you could go back and give Ben advice on day 1 of being CRO at Flexport, what would that be?

Don't sell any secondary. No, I think the advice I'd give myself is enjoy it more. I think the early years are so stressful in the sense that it's actually not fun to grow from— I think we grew from $2 million in 1 year to $81 million within 24 months to $227 million the year after. It feels amazing in one sense, and obviously it enabled a lot of growth, enabled us to raise a lot of money, build a brand. But at the time, it's kind of horrifying. And you never feel like you're up for it, especially doing it for the first time. I think if I were to go back and do another one of these, having seen it all and seen, okay, just because you lose a great seller, Doesn't mean that the business is over. Just because you didn't close QVC in 2017 doesn't mean you're a bad CRO. All these things that you take so personally, it's the first time you're seeing one of these things end to end, I probably would take less personally the next time and I would just have more fun with it. Because I feel like we did this really special thing. And when I look back on my time as CRO, I enjoyed it. It's one of the highlights of my life. But I do think there were moments where I was just stressed where I could have just been enjoying it.

Yeah. You invest and advise a bunch of founders as well, and we're lucky to do that together with ODX Flexport. As these founders that you advise, as they scale and they hire executives, particularly CROs, how do you advise them in terms of when to hire for experience or when to hire for slope?

It's such an interesting question. Ultimately, I think it also depends on the founder. What does that founder need? Is the founder a capable seller? Does their sale necessitate a founder-led sale? I mean, there's a lot of companies that are selling products that are either so big or so complicated or have such a high point of entry that before you have a brand, if you're ultimately going to be a founder-led sale, which I think a lot of companies ultimately find is their most effective go-to-market in the first, call it, 12 months, you have to be really careful about who you bring in and when. And it may be that you're better off bringing in someone who's going to be a number 2, who's going to be a Robin to your Batman, so to speak, versus someone who wants to own a big machine and who feels like they need to rewrite a playbook. You really got to figure out where you are as a founder, where you are in your company's lifecycle, and then figure out who the complement to you is. I think the exception here where it really makes sense to bring in someone who's operated a big machine Is in particular, if you're gonna run a high-volume sales playbook where you're just gonna have to hire, call it dozens or even 100 or more sellers in 24 months. Like if you're building, let's say you were building vertical SaaS in the restaurant industry and I thought you were gonna have to set up a 200-person call center just to get to $50 million a year in net. I would advise you to really heavily consider bringing someone in who's operated an organization at that scale, who's built a hiring machine that can fill a funnel. Whereas if you're a more— if you're a sale that's, call it, $500,000 a year, it takes 18 months to onboard a customer, you're still figuring out the exact deal mechanics, I'd be really nervous bringing in a super expensive outside VP sales who might not be as competent as the founder at discovering product market fit, really figuring out what the playbook should be, and ultimately making connections with the customer. In that case, I would be looking for someone who's almost either Like a project manager who's going to help me organize the world and make sure that we— I'm speaking as the founder here— make sure we execute against those first, call it 3 to 10 deals versus someone who's going to come in and try to operate a giant machine.

That makes a lot of sense. And then in terms of building that machine, how do you get that really right? Or what misconceptions do founders have or mistakes do they make when trying to build that machine? Or what's really important to get right?

Gosh. Are you talking about the hiring machine or the sales machine?

The sales machine.

So I think all good things start with list construction. Parker Conrad, when he was— by the way, I'm so old, everybody who's listening, that I was getting advice from Parker when he was the CEO of Zenefits, not the now titan CEO of Rippling. I went into Zenefits' office literally my first week as Flexport's CRO. And at that point, Zenefits was known as one of the fastest-growing companies of all time. And for better or for worse, whatever their outcome was at that moment in history, Their go-to-market machine was something truly special. Kudos, Sam Blonde, who's now CRO at Brex. We went in to learn and we wanted to learn what machine they were building, what was working so well. This was like in the early days of like high-quality outbound sales where like you're not dialing for dollars, but you're actually doing an outbound motion that can generate high-quality opportunities in great volume without alienating your customer base. So we went in and talked and met with Parker. And I'm so grateful that he took the time as CEO of a hypergrowth company to do this with us. He said, look, it all comes down to list construction. All good things that are going to happen in your sales machine, in whatever waterfall you build that starts with, hey, this is our concept of a customer, all the way through, hey, this is a happy customer from whom we have full share of wallet, everything that's gonna happen from here to there, it all begins with list construction. And if you can figure out a way to automate list construction, Automate the majority of enrichment so that every single month you are working from a larger and larger dataset. You're able to refine your ideal customer within that dataset. You automatically are assigning those people. Flexport's 90% outbound, so I can't disclose this year's revenue. It was enormous, but last year's was $1.3 billion. 90% of those dollars started as an outbound email or call. So we are a heavily outbound motivated business. And what Parker really impressed upon us was Everything else you're going to build, there is going to be this pressure in the system from list construction that as you get better and better at building the list, as the list gets bigger, as you get better at assigning the right leads to your reps, there's just this positive momentum that starts building up in whatever system that you've built such that if you, if you put pretty good guidelines in place then for how the SDRs work those lists, the copy they use, the tooling they use, ultimately you enable them to do things like quickly cross-reference the executive team's LinkedIn against the list. You really help them be, in our case, like one of the things we always said was if you could automate the job of being an SDR, and for those of you who are new to outbound sales, SDR is a sales development representative. This is the person who's actually getting the list initially and working through it, trying to generate meetings for the full cycle salespeople. If you're an SDR and you can automate the job, it's called marketing. So we do not want you, like everybody we hire for this job, we impressed upon them, Your job is to generate 8 to 12 of the highest quality opportunities under the sun. We're gonna give you a dedicated list of 100. The only way something moves in or out of your list is you either generate an opportunity, which means you set a meeting for a full cycle sales rep, or you say, I failed. And, or, hey, I'm not able to activate this. It goes back into the central, into the central pool to be reallocated to another rep. If you don't do one of those 2 things, you are stuck with the same 100 that we assigned to you in the beginning. That we found that constraint to be pretty helpful. We found our best SDRs consistently would only even then work 40% of the list. So if you gave them a list of 100, our best SDRs consistently are flipping it and going, okay, what are the best 40 they've assigned to me? What is the gold in this list they've assigned me? We do our level best to assign them a great list that's enriched with all the contact info, titles, org chart, whatever we're able to get from public datasets. But then their job is to fill in the rest and sort of force rank it and say, okay, I'm going to spend my time here this month. And from these 40 that I'm going to work manually, that I'm going to— and, you know, every company has a different playbook for how they should work and what the tone should be and what the messaging should be and where you start in the org. And I'm not here to be too prescriptive on that front. But the idea that an SDR is going to be— it's a creative role. Your job is to look at this list and think, Who are the best fits for Flexport or whatever your company is? How do I get them to know who we are, to have an affinity to who we are, and at least be curious enough to take a meeting with this person sitting next to me? And I'm going to figure out a way to do this scalably every single month. The machine that we built, our covenant with the sellers was always 12 to 18 months as an SDR, and you will graduate to being a full-cycle rep. It's not that you're going to be promoted. It's really a graduation. Where you have learned enough by doing discoveries, by reading about these companies, by generating what ultimately is like 150 opportunities in a really amazing year. That's all it is. But through those 150 opportunities, you're going to learn enough to become a full-cycle seller at Flexport or whatever the company may be. And so you start building a machine, one for hiring, where people can see, oh, if I come in in this part of the system and I do exactly this, we lay out exactly what you have to do. I will make my way through the system and get what I want from my career. The same thing we built for the sales funnel, which is if we make a really wonderful list, we assign it to the SDRs, they work it according to our standards. And then the other thing we learned from Zenefits is your AEs can really handle a lot of volume. So like an AE is an account executive. This is a closer, if you will. This is the person for whom the SDR is setting meetings. You don't need as many of them as you think. If you have great people who are willing to work their asses off. So when we met the Zenefits team, and it's so funny, I'm like referencing this defunct or semi-defunct company from 10 years ago. But when we met the Zenefits team, their AEs were doing 8 calls a day. I had never seen anything like it. I had never seen that kind of volume. I'd never seen people that were frankly doing that much sales activity in a given day. But the SDR to AE ratio was such that their AEs were full. Like they were fully booked from morning to night with meetings. And so we set about trying to design a very similar system where if you were an AE at Flexport, we wanted you just to be jammed with net new meetings because we didn't really have our ICP that refined, our ideal customer profile. We didn't, you know, we didn't know what was gonna close. We didn't know how long our sales cycles were gonna be. So the only variable that we had control over was like total number of interactions we have with customers. Let's maximize that. And I think we learned this amazing lesson early on, which is that a few sellers with a lot of opportunities can generate a tremendous amount of volume. So if you look at the first, call it 1,000 days of Flexport's revenue, you can attribute almost all of it to 4 humans. Like, there's 4 people that got a company to a unicorn valuation in sales because we built this enormous system that was generating meetings for them on the backend. You know, that's like sort of the— those are the basics of how we onboard customers. The other thing we did really well, which I've talked a little about in the past— so Sana Manders, our COO, came from BCG. BCG does a lot of crazy things. I think they do a lot of— they design matrix orgs that are maybe more complicated than anybody needs. But one thing they do really well is serve customers and understand how to serve customers. And one thing Sana pointed out was so much of our customer value happens after the first transaction. So if you look at a given Flexport customer, like an extreme example would be call it a really large apparel maker, a really large smartphone maker, these kinds of companies, our relationship with them may start 4 or 5 years before we actually get meaningful share of wallet because their scale is so outrageous. If you look at a smartphone launch, some of these companies are spending billions of dollars a year on air freight, ocean freight, customs brokerage. For us to actually capture a meaningful share of that, you're going to run a process to first do a First, prove your worth. So first, prove that you're competent at all, because our stakeholders, generally a VP of operations, their job is to make sure that the house doesn't burn down. So bringing on a new vendor is actually something you have to take pretty seriously. The thing that our best sellers helped us figure out how to really build a formula around was this process of going from a customer who's interested to a customer who's actually going to ramp and give Flexport a significant share of wallet. And what we did was we built our whole sale around an if-then statement. So we would design a trial with a customer, and a trial is generally— it had to be meaningful. So our best sellers would say no. So our best sellers, and like I've referenced these people already, Mariana, Justin, all of our best people had the courage to say no to a customer when a customer wanted to do a single transaction. Like the whole idea of Flexport is it's a single source of truth. There's more value in our platform the more data you put through it, the more transactions you're doing with us, the richer the dataset becomes. There's a real value for a customer to basically single source from Flexport. And yet, if your job is to make sure the company has minimized risk on the buy side, it's— that feels like a high-risk decision to make, that you're gonna put all your eggs in one basket with Flexport. Our best sellers address that challenge head-on, and they did it by designing a sales cycle around if-then. So with a customer who's ready to buy, what you say to them is, look, I fully understand that you're good at your job and you would never expose your company to the kind of risk that it would be just to give Flexport all of your business overnight with no trial, no understanding of our ability to execute. You're literally risking the store shelves being empty, your stock price tanking, whatever it is. So I acknowledge that's your position. How do I prove to you through the course of a trial that all of your concerns are assuaged, All the goals that we've set together over the course of this sales cycle, we're going to accomplish. Let's design a statement that says, if we do X, Y, and Z for you during this trial, then you're going to give us, whether it's this portion of your business, this trade lane, this business unit, this exact, you know, this specific dollar amount, whatever it is. Let's just lay it all on the table that we understand that we have to do very specific things during your trust. And then let's just say, hey, if we do those things specifically, what are you going to give us in return? And in general, the thing we're looking for them to give us in return is we want them to say to us explicitly, Flexport, you are the front runner in our annual bid. We're in an industry that is— we're effectively— it's a giant dollar value commodity. So like I said, like an Apple, a Facebook, a Google, any of these companies can spend hundreds of millions or billions of dollars a year on transportation. So it's not something that you're just going to— you're not going to allocate that kind of spend carelessly. You're going to run a process every single year where every vendor in your network gets an Excel sheet, in most cases, where that Excel sheet has all the trade lanes. So it says, okay, I move cargo from this place to this place. We do it this many times a year. This is our product type. This is how much of it we're going to do. And then all of us, you know, all the vendors in their ecosystem, we all have to sing for our supper. We fill that document in and send it back. What the customer has not told everyone is they've already picked the winner. That by the time you've submitted that document, by the time they— by the way, each one of these takes like 12 hours, so it's like an outrageous amount of work. By the time you've submitted it, they already know who's gonna win. Like, they don't actually need to read them. They just— it's just a process to make sure, one, they can prove there's no favoritism, that they actually ran a rigorous process. And two, they wanna make sure that they got the best price for their company, but ultimately they know who they want to win. And so what we're trying to do in a trial, and we really formalize this in our Salesforce instance, the way we train sellers, we want them to tell us, Flexport, this is what you'd have to prove to me in the last 7 months of this year to be our front runner going into next year for that bid. And if you have a customer who has— there's enough mutual trust where you can have that conversation directly. And what we found is about 70% of companies with whom we run a successful trial, We end up hitting our goals in their upcoming RFP. So it's an insanely high success rate relative to about 20% of RFP wins without running a formal trial in advance. So all this stuff, you formalize, you hopefully apply some rigor at each stage of the waterfall, you hire wonderful people, and you hope for the best.

That's awesome. There's a lot of great stuff there. Thanks for sharing that. I want to go one layer deeper on how you think about comp and incentives. What's your framework there? Who should be the highest person? How should comp plans change or evolve or be flexible as the company grows?

I think the thing that Silicon Valley has done the best job of just generally is compensation. If you look at why have tech companies accrued such an advantage relative to legacy corporations in the last 30, 40 years, you look at the ownership structure. Founder-led companies, people with skin in the game, outperform almost every single time. It's one of those things, it sounds trite, but it's becoming a truism. And I think one of the things we forget in sales is that the way to give people skin in the game is not always to give them a bunch of cash. It's to give them a way to earn ownership of the business. Historically, there's all these historical reasons that sellers are paid a lot of cash. In many cases, sellers are paid with a lot of that cash at risk. The spectrum of outcomes for a seller is just different from a normal employee where it's okay, my salary band might fluctuate 20% in a given year. Your salary fluctuates from, I'm going to get fired if I don't sell enough, All the way to 3 or 4x what you could theoretically make as an average. So it's an enormous distribution outcome. And so I understand why it can seem uncomfortable for a seller to either give up some of that upside. It can be uncomfortable for a company to want to also give equity in addition to paying a seller who's already seemingly got an aggressive cash comp plan. But what we found is the people who stuck around, the people who have really consistently made decisions that were aligned with the best interest of Flexport, and not with the short-term interest of the deal. They were always people where they were fairly compensated in terms of equity. One of my favorite things that we ever experimented with was when we're an apprenticeship model. So like, I do, we do, you do is something that we say a lot. This idea that as a seller, when you hire someone new, especially we're in a weird industry where you have to learn all kinds of crazy acronyms. The customer generally comes from the industry and many of our sellers did not. So like there's this very steep learning curve. If you don't have mentors, if you don't have people that are gonna really sit next to you and take you or take you for, you know, really in most cases it was literally going on the airplane, going to see a bunch of customers and taking you along on their sales cycles. It was really hard to ramp as a seller at Flexport. So we wanted to find ways to incentivize our sales leaders to really care about their team ramping and not just hitting a short-term goal. So what we told them was, okay, look, your goal is a roll-up of your team's goal. Very simple. Like if you have 8 people on your team and you're the 9th as the leader, well, guess what? Your total goal is actually 9x. If x is the amount we think one human can generate, we are not giving you an 8x quota because there's 8 sellers. We're giving you a 9x quota because we believe you plus your sales team is the total capacity we should have. We don't believe that we are losing capacity by promoting you. We believe we're just, we're allocating the capacity differently. So that's statement 1. Statement 2 is that we don't care how you hit the goal. So Flexport today, I don't think runs like this, by the way, but these were the early years. We don't care how you hit the goal. It can be any constellation of your team can generate the revenue number we've assigned to you, or you can do it on your own. If you want to tell them all, hey, you guys stay home, I'll go fly 300,000 miles this year, sell it all myself, you can hit your quota that way even as a sales leader. I mean, it's probably not gonna be sustainable, but what we say is, okay, but there is a kicker for every one of your reps that ramps. So everyone who achieves above a certain threshold that we set, you get a pretty significant slug of equity. And this was actually the main venue by which our sales leaders could earn good-sized slugs of equity was by ramping new reps. And I think this combination of like, you have the short-term goal, which is gotta hit the revenue number for the quarter, for the year. And then you have this longer-term goal, which is that you're going to earn really meaningful equity at a really low strike price on a company that's growing really fast by doing something hard, which is hiring well and then taking these people along with you as you go and do the Lord's work in self-export. If you're willing to do that, if you can manage both those goals, we will pay you a lot in cash and you will be rewarded in equity. And they're like, this doesn't apply to that many people. There's not that many people that are going to move the needle for you in both of these areas. But the few people that do, I think you've got to make sure they're not just being rewarded short-term, that they are getting ownership in the business. Otherwise, especially in this market where so many companies are raising rounds of funding, it's easier than ever for someone to go from great seller, promoted once director of sales in one company, moves up one level when they move to a new company, and all of a sudden they're VP sales in 3 or 4 years. This stuff didn't used to happen. It's happening now. So if you want to keep these people on the reservation as long as you possibly can, They've gotta be owners of the business.

That was really cool to hear. Thanks for sharing that. Going back to the hiring machine and some of the things that you've done around philosophy around interviews and talent, I'm curious, what's your favorite interview question and what specifically are you testing for?

So I couldn't talk about this without shouting out Kristen Hayward. I think she's now head of people at Superhuman. She was our head of talent during these years. You cannot, you can't scale a sales org without someone like Kristen. Who is just a machine, who's going to build her own hiring machine to complement your sales machine, it becomes impossible. We also leaned heavily on outsourced recruiters. As far as actually hitting the hiring goals, I think you just, you can't forget to invest there too. You can't forget that you need a partner in the HR team that's gonna build a funnel that really mirrors your sales funnel. That's okay. I know exactly how many reps you, Mr. or Mrs. CRO, needs next year. And I am building my own funnel of candidates to make sure we're gonna be able to fill it for you. So like big shout out to Kristen. As far as interview questions, I don't know that we had one question that was really that special. The thing that I think we looked for that like our secret that we figured out is that curious people are great sellers and that the people in the interview process who we felt like, oh my God, like this person really wants to learn about our business, our industry, how we fit together with our competitors, Why Ryan founded Flexport? And you can tell when someone's genuinely curious, by the way. Like, everybody listening to this, I'm sure, is a smart person. You can tell when you're talking to someone who is just trying to fluff you up versus someone who is actually wrestling with what is this company, what do they do, why do customers value it? And we found that consistently the people who succeed at Flexport are the people who are just dying to understand during the interview, almost to the point where you're like, hold on, hold on, buddy. I have to ask some question. I have to learn something about you. And I don't want to tell people who are applying for jobs, like, go in and be a maniac and just ask stupid questions over and over again. But if you are genuinely curious about how the puzzle fits together, about all the whys, from why the company exists to why the opportunity exists, it will come through. And we just found those people tended to be really high performers. Part of it's because our business is so complicated. You almost couldn't succeed at Flexport unless you're willing to do that work.

And how do you evaluate what makes a great CRO when you interview?

Gosh, I don't know. I've never hired one. I think the thing I would look for, when founders ask me this question, it just comes back to who is the right partner to the CEO. You are effectively a conduit to the market for both the CEO and the engineering organization and everyone else. if your team is not translating information effectively, is not working in earnest to understand customer demand, and is not honestly trying to evolve your understanding of the business every single day and report back to the executive team what they're learning, your business is going to stagnate. And part of the scariest thing about a founder giving up something so important, like giving up the conduit to their literal customer base, is that happening. So I think it's really just Finding a partner to the CEO who they feel like is the right complement for the stage they're in. And I'd be sort of afraid to give advice that was any more specific than that.

Talk about the composition of a revenue team. From what's the first couple hires or things to really get right, to as you're scaling it, how do you think about the composition and how that evolves?

The biggest thing that we didn't invest in early that we're still unvarying from, is sales operations. And I think like obviously companies reflect the strengths and weaknesses of their leaders. One of my weaknesses was always general organization. We were really good at hitting the number. We were less good at updating Salesforce. And I think that's okay when it's 4 people. I probably underinvested in changing the culture early on. I certainly underinvested in the tooling that was needed to manage all the sales cycles we were running, manage the volume of payments we were having to issue. And some of these things, like there really is like death by a thousand paper cuts where, you know, if you screw up bonus payouts a couple times, it doesn't matter how happy the team is or how great you are. Like it hurts if you don't have territories designed correctly and therefore like one region is getting 3 times the lead flow as another for even for a week. And you have to go explain to that region, hey, I'm sorry, like you, the reason your goal is gonna be harder to hit this quarter is 'cause we didn't allocate the right leads to you. These things are just brutal. You never wanna experience them. You never want to let your team down like that. And so I think, like, I've talked about this on another podcast, I think. I think you're gonna see more and more, like Salesforce calls it 2 in a box. I think you're gonna see more and more models of sales leadership where you have a CRO and then you have like a, almost like a sales COO, where it's someone who's responsible for all the tooling, who's responsible for all the analytics. Who own— and you see this at really big companies and really, frankly, really well-run companies, but smaller companies, I almost never see it. Just the act of preparing a great update for the board once a quarter, just the act of making sure that your pipeline data is as up to date as possible so that when you're trying to understand for the engineering team, do you build this feature or that feature? Why didn't anybody close out of this vertical or whatever it may be? All these questions that become harder and harder to answer as you scale. if you don't have good systems and process in place. I think you can, if you're a sales leader who naturally isn't as good at building that part of the organization, I think you've gotta have a partner who's able to do it. And like in my case, like a lot of that was filled in by our COO, Sana Manders. One of the other things that I think I was gonna mention this earlier and I trailed off a little bit, Sana figured out early on that because our sale, like I was talking about, is such a land and expand motion, that we had to assign both a sales leader and an account manager to a lot of accounts. And just assume we were gonna double pay and like get really excited about doing it. And if you're in a sales cycle where you have a lot of revenue to gain from a customer in years, call it 2 through 5, I don't think you can shy away from having one resource that's just responsible for their success dealing with your organization, and then having one person who's responsible for commercially how much revenue do we generate from that customer in a given year. The customer needs both, and frankly, your organization needs both. And every time we took the pedal off the gas in terms of, oh, we think this is a house account, we had the term house accounts where they no longer needed a sales rep. You always saw some atrophy. You always saw the churn risk go up. And at least for us, where the dollar amounts are just big enough that you can easily justify it, this 2-in-a-box model, both for sales leadership, where I think you can invest heavily in a VP of operations or a COO type, and then ultimately for servicing the account where you have an account manager and a sales rep. that are paired together at the hip, they're gold together, they can't really succeed without each other. That's what we found worked really well.

Tell us about a time at Flexport when you had to choose between speed and quality and why you made the decision that you did.

In a macro sense, because we were what's called a hot-swap business, this is a term that Roy Bahad at Bloomberg coined, this is a business where your core innovation is not necessarily that you've redesigned a business model, that you're doing something totally novel, Your innovation is that you found effectively a low NPS industry that is a really big market where you're able to hot swap in and just be a better vendor in that market. The problem with this kind of business model is investors always wonder, is this a software company or is it some just prettier version of a prior art? And I think one of the ways that you prove to investors that you're a software company is that you grow like crazy and you say, look, even if we're not a pure software company, we are going to roll up this market. And the only way that it's plausible that you're going to roll up a market is if you're growing really, really fast. I talked to, I think, one of the highest-performing VCs. I think when the track records are all settled, I think this person will be one of the highest-performing VCs of the generation. And he effectively told me their criteria is they cannot invest in anything growing less than 100% year over year, because at some point, we're all going to be dead. It doesn't matter how good the business is, if it's not growing really, really fast, It's not a high-growth startup by definition. So in the case of Flexport, or in the case of really any hot swap business, I think the pressure to grow is even greater because everyone wants to see, can it really be as big as they claim? Can they really get to the scale they need to have a competitive advantage against these legacy players? Because that's another disadvantage of a hot swap. You have comps. A business like Stripe doesn't really have a comp. What are you going to compare it to? It's like Visa, no, it doesn't make any sense. A company like Flexport, we have publicly traded, very large competitors that we technically compete for business on deals, that at some point we felt like if we weren't growing at a pace that really made us one of the fastest-growing companies in the world, somehow we were going to fail on this path to be a viable venture business. So I think we made some decisions in the early days That made our CTO, our first CTO, Amos Ellison, who I love, I think it really gave him ulcers. Like, the amount of volume we took on, the amount of product changes we said yes to, it was unsustainable. And I think if you look at Flexport today, a lot of what our engineering team has to do is they've re-architected almost everything. I mean, maybe that's just a thing that has to happen when you get to our scale. Every company I know that's gotten to our scale has had to do some version of this re-architecting. So it may be it's a necessary evil of hypergrowth, but at every stage where we had the decision, do we slow down and just make sure that everything is 100% perfect on the backend, or do we just keep onboarding customers? As long as the customers were happy, we always said yes to business. And I think there's some version of reality where maybe we didn't do that, But we certainly wouldn't be at the scale we're at today. And so there's all these things, there's no right answer. It's all like, what can your business tolerate? What can your team tolerate? And I think any company that's going to grow as fast as probably most of the people listening to this want their companies to grow, you're going to push the limits of both those things.

Talk a bit about how the team evolved during hypergrowth and just the idea of you start as more generalists and emerging people and you transition to more seasoned specialists, or I'm making assumptions there. Is that what happened at Flexport? And just how do you think about the talent that you need and making that transition as you scale?

The number one evolution for us that's like super stark is in the early days of Flexport, we had zero success hiring out of the industry, and people who joined us from the industry were uniformly miserable. So it was like, it was a bad fit in both directions. Whereas today, if you look at a huge percentage of our leadership team, A huge percentage of our functional leaders across the company, they are all people that have come from other parts of the traditional quote-unquote legacy freight forwarding industry. And they joined Flexport because they saw, oh, there's a company that's building all the things that I've always wished our industry could do. The problem with years, call it 0 through 3, is when you're building something really big and complicated like we're building, there's going to be this dead zone where what you've built will not live up to the promise. By definition, because there's just not enough time. Venture capital requires you making big, bold promises. Obviously, if you don't live up to those, you won't raise your next round. But what folks who've never worked in tech, who've never worked in a high-growth startup, what they don't understand is this is normal. It's normal that we're laying the tracks just as the train is arriving. This is all very normal for people who come from this world. But if you're from a traditional business with 25,000 employees where everybody wears a suit and on Fridays you get to wear a Hawaiian shirt. And then all of a sudden you come into a company where, oh, we don't have this PDF editor that my last company had, therefore all the tech must be fake. Like, oh, there's this one feature that we haven't developed yet because the company's, you know, 75 days old that I'm— that, oh, my old company could already do this, therefore the tech must not be real. And now, you know, it's a complete opposite experience where people come in and they're blown away. Like they're blown away by the quality of the internal tools. They're blown away by the quality we built for the customer. And I think you've just got to be honest with yourself in the early days of a business, particularly one where you have a giant ambitious building ahead of you, it's going to be tough for people from the legacy industry to come in. And there was an early member of our team who called it pissing in the soup, who said like, there's a certain magic in a startup and you can't have people come in and pee in the soup, meaning you can't have people that are going to come in and constantly point out everything that's wrong. You need people who are going to come in and go, I am bought in on this vision. The things that are imperfect today, I am here to solve. Like, literally, the reason we are here is to figure out all the things we haven't built yet and build them together versus people who are going to thrive in a more developed ecosystem. And I think if we had tried to recruit senior leaders from our industry too early, they would have come in and been like, oh, well, this adorable little startup will never be viable. You kind of need some of that naive enthusiasm that people who don't have domain expertise bring. And then over time, the ratio changes pretty dramatically.

Is there something to really make sure to get right when the ratio changes? I guess maybe just calling it out and saying, hey, the culture's going to change?

I think in our case, we've been very fortunate that our industry is in some ways so stodgy and so antiquated that the people who wanted to leave it are really unique people. And they're all people who They were watching Flexport for the first five years, and they were just waiting for us to get big enough that it wasn't a career risk. Because yeah, these are all people who've who've built good lives, and like you know, if if you're an executive at a big airline, like you've you've achieved a lot. To join Flexport is a risk. The kinds of people that are willing to do that sort of thing, they've they've been watching our progress. They've waited until we achieved a milestone where they felt like it was de-risked enough, and they made the jump. They're not people that we begged. They're not people that we said, "Oh, come on." Don't you think software is useful? They're people that understood the value and premise of the internet, and they were just waiting for us to be de-risked enough to tap into it.

Talk about, for sales managers onboarding new team members, what's the right way in order to do that? And maybe as they start working, what's a reasonable amount of feedback for a sales manager to be giving?

As I mentioned with this phrase, I do, we do, you do, I think a great sales manager, their team is attached to their hip for the first 6 months. when someone joins the team. There's a woman named Julie Harris who leads our global key accounts function to this day. She joined us as an IC 6 years ago. Her first year at the company, she and I hit the road. She supported an enormous number of sales cycles, some of which came to fruition, some of which did not. But she learned everything I learned. Like, there were other people, you know, her background was big enterprise deals. So this is obviously a unique situation where we wanted to give her even more exposure to the deals. But she effectively was in every room that I was in as a CRO other than internal planning and that sort of thing. But every customer-facing meeting that I was in as a CRO, she was in. And in the beginning, she was not her sale. It was very much my sale. And by month 4 or 5, it was really our sale. And then by the end of our road trip, it was really, hey, Julie, you got this. I'm going to take notes and I'll meet you guys for drinks after the meeting. But this is your meeting, you run it. And that evolution from me doing it to us doing it together to her doing it, the moment that I think a lot of sales leaders have a hard time with is that last one where they actually have to let go of the sales cycles. So I think it's mutual though. So a lot of sellers have a hard time with the first stage and a lot of sales leaders have a hard time with the last stage. So every seller joins your company believing they, because they're highly compensated, there's a lot of stress, whatever it may be, because it's a role where 50% of your comp is at risk. They believe they've got to prove themselves immediately, and you've got to kind of say to them, "Look, the way you prove yourself is by lowering your ego a little bit and coming along with me on the sale. And I'm going to tell you when you're ready, or you can tell me when you think you're ready. Either way, but we're going to have this really open dialogue." And and and this structure, I think, makes it easier for for one for you to be a teacher if you're a sales leader, because it's it kind of takes away the awkwardness. Like frankly, teaching another grown-up to do something is weird. If you're not used to it. So this just makes it very clear, hey, my job is to teach you in the beginning. Like, my job is to just do this thing in front of you. And for the other person, it's like very clear that when you're giving them feedback, it's because the sales leader has made it clear, hey, my job is to get you to a point where you can do this on your own. So whenever I give you feedback after a meeting, it's because I'm trying to get you to that point. It sort of takes all the weirdness out of the relationship in both directions, I think. The hardest thing though is as a sales leader, A lot of us like being in deals, myself included. And at some point you've gotta let people run. And it's fine to be an executive sponsor on a deal. And that's really when the company's big enough that you can have that sort of function and when your sales leaders are really mature. But I think that's really the stage where I, as a CRO, you kind of go from, okay, I'm not gonna own any of my own deals anymore at some stage, but I'll be the exec sponsor on as many as I can physically get to.

What's your advice on how to find a mentor and who's been your most impactful professional mentor?

Oh God, you're gonna make me say nice things about my existing boss. Honestly, there's no other way to get real mentorship from someone other than to work for them. Sure, you can have useful conversations. There's people who can share wisdom. The way you learn from someone when you work for them, when you are just— when you are there to execute against their vision, if it's the right vision and they know things about the world that you don't, It's a special position to be in. And when I met Ryan, he had already built a company called importgenius.com before Flexport. This is one of the reasons it was such a hot company in YC, is Import Genius actually prints cash. It's a business that takes a publicly available dataset, it's a pure SaaS, there's no outside investors, it's owned by the Peterson brothers and one other partner. I was so impressed by this business they had built. I was so impressed by— Silicon Valley is full of people who've raised lots of money, Very few people actually cash flow businesses. I knew this was a person who understood something about the world that I didn't understand, and I wanted to learn from him. Frankly, that's a rational thing to do. I think the only time it's rational to work for another human being is if you're in a position to develop in that kind of way. If you feel like you need mentorship at all, there's 2 modes. You either don't need a mentor, in which case you can hire a coach and they'll make you feel good once a month. But if you really feel like you need mentorship, I recommend going to work for someone that you think is a full degree further in life than you are and listening a lot. That's how I've— that's the only way I found useful mentorship.

And then tell us a little bit about the transition from CRO to CCO and how your roles evolved and what the biggest difference has been so far.

Honestly, CCO was sort of a nice clean way for me to hand off customer relationships. over the course of the last year. I think pretty shortly, I will no longer be CCO. I will be founder of the Flexport Fund or whatever we end up calling it, our investment arm. Really, I mean, my tour of duty ended when I was done being the CRO, but there's a lot of customers that I built 7-year relationships with. There's a lot of people in the organization that I'm very close to, and this was a nice sort of graceful way to Hand off those relationships, both internally and externally, still feel proud of my position in the universe, but gracefully step down.

Makes sense. Talk a little bit about the future of the Flexport Fund and maybe a little bit on ODX Flexport.

Oh gosh, so I love ODX Flexport. Those of you who are listening who have not heard of ODX Flexport, the On Deck program, as you all know, how many startups have gone through it, Erik? Already?

I think over 700.

Yeah, so over 700 companies. At this point, I mean, in my humble opinion, other than YC, probably the most prestigious program going. We were super fortunate that we were the first people that came to Erik with this idea to run a vertically focused track. And the reason we had this idea was, well, one, we'd seen what On Deck had been building and were super excited by it. And in our own travels, we've invested in about 100 companies in the last 6 or 7 months, there is a true renaissance going on right now. Every industry is being rebuilt before our eyes. When you look at the dataset from the federal government about new business incorporations, LLC formations, C-corp incorporations, it's all just off the charts right now. And the quality of great companies being created right now is insane. Even having done 100 investments over the last 7 months, we still felt like we were totally missing out on this ability to tap into really early-stage great founders. And it just so happens that one of the companies that we were most excited about in the market, There's a space called fuel cards that's led— there's a publicly traded company called FleetCorps. They're known for their CEO being really well paid and their customers suing them a lot. There's another company called A2B that went through the On Deck accelerator and has recently raised a really impressive valuation, really incredible founder, incredible company operating in an incredible space. And we said, okay, so the On Deck team was able to, A, support this company through that journey, also, On Deck had a good enough brand and program, it was able to attract a super high, top-tier founder like Vignan. And we decided, okay, if there's some way that we can build a program to help people who— obviously, Vignan found his way into supply chain on his own, but a lot of people wouldn't know how many opportunities exist in this space. A lot of the people who know about the opportunities don't know how to build startups. And it just felt like this magical combination of Flexport and On Deck we could actually target the earliest stages of companies and founders who are just thinking about getting going, uh, to actually build in this space that we, that we know and love. So that's, that's the, that's the ODX program. And, and really, I, I feel very fortunate that the Flexport story gets me into conversations with great founders. Like, that's, that's like, that's the honest-to-God truth of my, my current existence, is the only reason I think I have a half-decent shot of being a successful investor is the Flexport story and the brand that we've built over the last better part of a decade. It allows me to get into conversations with companies that have no shortage of people who want to fund them. So I'm super grateful. I'm super grateful that we connected early and were the first-ever vertical partner for ODX. And yeah, that's my current gig.

Yeah, we're really grateful too. The interaction that we had really materially impacted our strategy, just seeing like, wow, this is possible. And, you know, ODX Flexport is just announced a few weeks ago, but already got some great companies in it and really excited to kick off that first cohort. Ben, this has been a great, great episode. Thank you so much for coming on and thanks for all your support and partnership.

Oh yeah, thank you so much for having me and let's get together soon in person.

Thanks for listening to today's episode. Execs is produced by On Deck, where top talent goes to start companies, find their next roles, or invest in their careers. If you're looking to start a company, uplevel your career, or navigate a career transition, I encourage you to visit beyonddeck.com. See you next time.