Building a Workplace People Love: How Denim Stands Out in a Competitive Industry

Welcome to The Leader Show.

I'm Louis Carter. Today we're joined by Bharath Krishnamoorthy, CEO and co-founder of Denim, a tech-forward freight factoring company accelerating the movement of money and data throughout the supply chain. From Columbia Law graduate to M&A lawyer at Gibson Dunn, Bharath co-founded Denim to provide flexible factoring solutions that help freight brokerages access critical working capital. What sets Denim apart in financial services? Their Most Loved Workplace certification reveals a powerful business insight: transparent internal culture directly builds client trust. And as Broth puts it, loved workplace culture isn't just beneficial for employees. It builds confidence with customers and business partners who want to work with a company that truly values its people. Today, we'll explore this trust multiplier effect and how Denim's commitment to transparency has helped them stand out in their competitive industry by proving that they just don't talk about culture, they live it.

Care about each other and we care about the customer, and that is the one legacy. That's the name of the game. And by the way, it's, it's not up here, it's here, it's in the heart.

So I talked to so many people, uh, especially lately, about the impact of having a transparent culture. At work. And the people say to me, well, Lou, I don't get it. So what? Transparent culture, so what? And the interesting part of that is that there is a great answer to it, right? It impacts customer, it impacts employees, it has a competitive advantage to it. And with companies where there's so many competitors these days, you ask yourself, Well, how do you stand out, right? And the way to stand out, and we'll be talking to B about this today at Denim in crowded industries, is by creating a love culture, right, that's transparent. And B's done just that. He's CEO at Denim. It's awesome to have him on because we're going to dive into this topic of transparent cultures. Really, it's how you help customers and partners who value working with companies like Denim that genuinely prioritize their people. So we're gonna dig in that today with B. B, welcome, CEO at Denim. Great to have you.

Yeah, thank you for having me here, Louis. I'm excited.

Me too. Well, let's dive in. Let's first talk about Denim 'cause what a cool background you have. And what you've done now at Denim and what it provides to your customers and partners. What a great, amazing thing you've done. You're one of these people that I see that exponential leaders, right? They just create amazing things for the world and have done incredible things that most of us don't do, right?

That's very flattering.

It's a little bit too flattering. Well, it's the truth and you deserve to have that. So let's dive in, talk about Denim. Right, talk about Denim and what you've created and how you're, you know, what you've, who you are, what you've achieved has helped propel that.

Yeah.

Yeah, so I guess the insight we had that sort of drew us into the space is that logistics has been really slow to innovate for a very long time. And around like 5, 10 years ago, that started to change. But the way that it changed is that there were a few big like digital freight intermediaries, right? So if you think about like Flexport, Convoy, Uber, who are basically raising a ton of venture capital to fund their own development of proprietary software tools that allowed them to basically, you know, take the game to another level. And it was a great strategy. But one thing that it lacked is that a lot of these, you know, you can do a lot with that, but you can't solve the entire market with a couple of players who are brand new, who have like this great technology. There is a lot of value to the incumbents that have these like really deep relationships with other people in the ecosystem who have been in the industry for years and who really understand the nuts and bolts of how to get the freight where it needs to go. And our investment thesis was basically like, look, if we can find a way to bring that type of cutting-edge tools and technology to the incumbents, we can empower them to operate better businesses. It's sort of a best of both worlds, um, idea, right? Which is like, they'll bring the relationships and expertise, and we'll bring the software and the, uh, the technology. And, um, you know, I think we just got lucky that we sort of hit the market at the right time, where a lot of these incumbent brokers were sort of realizing the same thing, like, hey, we really need to digitize, uh, we don't have the luxury of having, you know, $100 million of venture capital flowing to us. So if we want to digitize, We need to use our profits to pay for software and tools that are going to give us the equivalent capabilities. And so we kind of just like found them at the right time. And that's how— that's kind of where Denim was birthed, right? And the idea was that we can build a digital factoring solution that will not only protect them from the slow-moving payments in the industry, but also automate a lot of their really manual labor-intensive workflows and then provide them an analytics layer on top so that they can drive more intelligent business decisions and be more responsive to the dynamic market that they find themselves in.

Tremendous. You know, the fact that you put it together at the right time as well when they needed you sounds like— and building that trust with those partners and customers, I mean, how did that happen? How did you ensure that you had that trust with them at that point in time and they were ready for you? Did you How did you back into that relationship?

Yeah, it's kind of like a chicken and an egg problem where, you know, when you're starting out, you know, it's like, hey, I think I'm a trustworthy guy, but I can't— that doesn't do anything for them. If I'm like, hey, I have no track record in this space. We haven't built anything. We don't really know what we're talking about yet, but you should trust us to solve this problem for you. It's not a super compelling pitch, but surprisingly it'll work on 1 or 2 people, right? Who are like, who really feel the pain point and who are willing to bet on someone who's gonna be sort of like proactive and honest about what they don't know and what they do know. And so a few of our early customers basically like helped us not only learn the space, but understand their problems really deeply. They gave us the opportunity to build for them. And after the first few, it starts to get easier, right? Because now we actually have a product. We actually do know a little bit what we're talking about and We can add real value to each new client that comes in the door. And you know, as that snowball sort of starts to build, it helps you build this other snowball, which is like the team, right? Where early on it was really hard to convince people to work for us because we really, we didn't have anything, right? We were like, we're really just like a dream that people were buying into. And so the people who joined at the early stages are, you know, they're the crazy ones who are like, you know what? Screw it, I wanna try and, and, and like make this thing happen with you. But as we start to build that trust with the clients and that snowball's growing, we start to become more credible to the employees. And as we become more credible to the sort of employee market, we're able to attract and retain better and better talent, which allows us to do a better job servicing the clients. And, and those two things sort of like feed back and forth, allowing us to, you know, kind of create something where before there was nothing.

And since it's hard to define culture, right? But yet yours is coming out very clearly to me of transparency. And I'll tell you why. You said something really key, which is your customers gave you an opportunity to build for them. And that kind of entrepreneurial mindset is exactly what makes for transparent, awesome, love cultures. Because it says, look, we're working for our customers. We have a vision in mind. We wanna build for them, we wanna help them, we wanna get straight in and give them what they want, right? Rather than create something we think we really want. It's the Apple methodology. It's the way Steve Jobs ran his company. Think about the end user first, understand the end user, love them, see what they want, and then give them this awesome thing that just blows them away. And so that sounds like what you're doing here and what you do with your culture, it stands out. Really because of this internal culture, which directly impacts your client relationships around transparency. Can you elaborate on that internal culture for us so we can kind of get a feel, sense for it and see how that connects to the customer, like the theme of the show?

Yeah.

Yeah. So culture is a bit of a nebulous concept. And when you talk to a lot of different people, it becomes clear that a lot of people will They think that culture is important, but they really don't have any sort of internal definition for what culture is. And I think that if you are trying, it's a terrible position to be in, right? Like you can't optimize something or improve it if you don't even know what you're talking about. And so I won't pretend that this is like the universal definition of culture that everyone agrees to, but the way that my co-founder and I think about it is that it's the implicit set of like rules, assumptions, and beliefs that govern the way a group of people behave. Right. And every group of people has a culture. Like me and my siblings, we have a culture. When we hang out together, we behave in a certain way. And there's a lot of implicit rules and beliefs we have that dictate those behaviors. And, you know, me and my wife have a culture and the way we behave at home and the way that me and my, like, group of friends behave. Right. There's a culture to every organization. There's a culture in the US, there's a culture in New York City, there's a culture for every company. And that's a really important idea because it means there's going to be a culture whether you think about it or not. So it's not a question of like, do I want to create a company culture? Like you're gonna create a company culture. And the question is, what kind of company culture do you create? So if you start from that premise, I think it, it makes it a lot easier to think about how do you build a great company culture. And the first piece is to be really intentional and to not let it happen by accident. Because if you're not intentional, you're gonna wind up with a culture you didn't design. That doesn't mean you're gonna design the perfect one, But, you know, designing something is better than just freestyling it. And so we were, we were really thoughtful about what the culture was that we wanted to create. And the way we approached it was that my co-founder and I— he's my high school best friend, so we go way, way back, but we have very different personalities. And so we sat down and we tried to figure out what are the core values that we have in common despite all of our differences. That we think are also drivers of the success that we've seen in life. And if we can narrow that down to 4 or 5 core values, then we can make sure that we hire people that sort of match those values. And they can be different in every other way, right? They can look different. They can be different. They can be diverse in terms of gender, in terms of sexual orientation. They can be different politics. They can come from different parts of the world. But if they are the same in these core values, we know we're gonna get along with them and we know that they're gonna be pushing with the same intensity in the same direction as us. So that was part one is figuring out, you know, designing the culture. And then that kind of implies part two, which is like hiring the right people. And I think that's the most important step. You know, we are hiring like grown men and women, so I can bring a, you know, 35-year-old into the door and I can write a bunch of words on the wall. And say like, hey, I want you to be this from now on. And you know, it's not gonna do much. Like it might marginally move them a couple degrees to the left, to the right, but you're not gonna fundamentally change this person in the span of like the 2 or 3 years that they may be with you.

Right?

And so instead you wanna hire people that already share those values and you wanna make clear the operating principles that are sort of like the behaviors that are amplifying that culture or the ones that would sort of like do the opposite, right? Take away from the culture. And then the last step, right? After designing the culture, after hiring the right people is leading by example, which is like really living those cultural values because you're hiring great people and that means they're not stupid, right? So if you are saying like, this is what we aspire to be and you're constantly doing the opposite, it, that cognitive dissonance is gonna create a lot of problems for them and for you. And, you know, you talked a lot about transparency at the beginning and I think that's an interesting one because most of the elements of our culture are pretty easy to live, right? At least, because we decided them based on how do we already live our lives? And then we're building a culture around that. Transparency is an interesting one because we're first-time founders and so we're constantly getting advice from different people who have been through this before. And often the advice is on the opposite side of transparency, right? Because it can be— information can be really dangerous. And when you share too much information, it can create uncertainty. It can, like, people sometimes get part of the picture, not the whole picture. It can make them anxious. It can make it hard for people to figure out what to do. And so a lot of times we're given advice to, like, oh, don't share that information, or, like, you know, don't talk about this number, just, like, ignore this thing for now and, like, try to bring it up later. And Personally, my co-founder and I have made a decision to err on the side of transparency every time unless there's some extreme justification for not doing it. If it's going to breach the confidentiality of an individual person, we're not going to air their dirty laundry. But to the extent that we're able to, we try to be very, very transparent with things. It has created short-term problems. There have definitely been cases where we've said stuff, and it has created anxiety and fear, and maybe we would've been better off not sharing that information. But in the aggregate, it goes a very long way to building a lot of trust with the team so that when we say something, I think they know they can kind of like take it at face value. And that's what we strive to do, right? I won't pretend that we're like achieve all of these things perfectly, but I think we've overall done a really great job of that. And it's something we strive to continue as the years go on.

Let me offer this up too. It seems that transparency, even if let's say it's information that may cause anxiety, is like, is, is, is, is another way of being honest owners of the company. Let's experience what we're experiencing as a whole system rather than just as from the top. So we all get to feel it, experience it. And then if we have anxiety, how do we deal with it? How does that impact how we may overcompensate, help, help the customer even more at the moment or get prepared for more investment rounds or whatever it may be so that we amp up what the best strengths are within the culture so that everybody can get, get to the game quicker, get to the game even with even more gusto than before, perhaps understanding that transparency. And you do this, Vi, with regularity in your practices. You, You have regular CEO updates, fireside chats, open executive sessions. It's a real part of it. So how does that internal commitment, like, you know, translate to even the freight and logistics and clients, like how that helps with your clients, in fact, right? Seems like it does, in fact.

Yeah, I think there's a lot of different ways that it impacts it. One is like when the employees have more information, they are better equipped to to act based on that information, right? And if they may have like the best intentions, but if you are withholding a lot of important information from them, they may make bad decisions. So by sharing all this information with the team, we're equipping them to make better decisions, which ultimately comes down to like servicing the clients better, right? And I think that's one big piece. The second is that, you know, we try to be really transparent with our clients too. Like we have, we have screwed some stuff up before. And there have been times where it would've been a lot easier to just like pretend it didn't happen or try to like sweep it under the rug. And instead we've taken the approach every time of like coming out right and letting the clients know what happened, trying to figure out how to make it better with them. And I would say all in all, it has worked really well for us. Like we've had, we've had some situations that like really could have blown up and it actually ended with the clients loving us even more because we treated them in a way that none of their other partners or vendors would.. And, you know, I think we as like a whole company, right? So it's not just like me and my co-founder, it's like the, that element of transparency bleeds into every employee in the way that they interface with the clients. And then I would say the last thing is that the value of having a great culture, like there's so much value to it, but one big piece of it is that the, the, your partners and your customers can like feel that energy, right? They can feel that they're working with a sales rep or a client success rep or a partnership manager who loves the company they work for and it makes them want to work with you. Right. And I think that is like, we get that feedback all the time from clients and partners, which is like, hey, you have a great team. Your team seems to love working here that, you know, we love that because like, you know, at the end of the day, these are all other businesses. There are entrepreneurs on the other end who are trying to do the same thing and create a culture where people really love to work there and they feel really great about their jobs.. And you want to be in business with other people who are sort of like-minded in that respect.

Exactly why we're doing this. Exactly what you just described, because the outcomes go beyond just employee satisfaction, right? You know, it sounds like you have a way of measuring that ROI for culture investments and being a love workplace culture.

Yeah, measuring it sort of, right? Like we do like engagement surveys. We We will like poll the team and I think those things give you data points on how you're doing. But at, at the end of the day, like, yeah, I don't think culture is something you can reduce to a number, right? It's, it's something that we're just like constantly trying to understand where are the gaps and how to improve it. So an analogy I might draw is like product development. You could measure it by like lines of code or something, but that's not really telling you how much is getting done. And so what you, what you really wanna do is you're looking at how much impact are you producing each quarter? And how do we identify the bottlenecks and resolve those bottlenecks so we can produce more impact each quarter? So all these metrics are great and they kind of like give us some validation. Like getting this award is great. It gives us some validation that we're doing the right thing. It definitely doesn't mean that the culture is perfect, right? And so every, every day we're still looking for opportunities like where, where is the culture not as good as we want it to be or where is it degrading or moving in the wrong direction and how do we, you know, how do we problem solve around that?

So let's move to scaling this awesome love culture because it's really awesome what you've created. And just like I said in the beginning, you live it. You don't just say it. It's not just on your walls. You live it, which is awesome. And so growth challenges. As you're growing beyond 65 employees, what are the strategies that you see or you've been implementing to maintain the transparent culture that really does help clients have more trust?

So like specific practices you're talking about?

Yeah, scale beyond what do you know?

There's a lot of things. Like one of them, one of the things we do is every month we do an open executive session. So we have our regular exec meeting and we just open it up. Anyone can join and we just go through the same stuff we would go through and we debate them the same way we would. And And you know, this is a great example of like, you get the downside and the upside of the transparency. The downside is that we've gotten feedback like, hey, it seems like you guys don't really know what you're talking about because like you debated for 30 minutes and didn't get to an answer. Or like, oh, we're like feeling a lot of uncertainty because we, you know, you finished that meeting and we still like don't know where this thing is landing. Or like we flipped from where we were 3 weeks ago. But the reality is like, That's what building a business is like, right? That's what building a startup is like, is that there's a ton of uncertainty. You're constantly getting new data. You need to make decisions with like really imperfect datasets. And sometimes you need to reverse course when you realize you're going in the wrong direction. And those debates is how we sort of like process that information and try to get to the truth. And it can be— I'm sure that if you come into a startup with this idea that like, oh, the execs, know exactly what to do, everything is already figured out. Like we just need to execute against this plan that's been set in stone 3 years ago and everything's gonna be fine. Then seeing how the sausage gets made is probably terrifying. But you know, maybe that's not the right person to be at an early stage startup, right? And instead what we see is like a lot of the team will be like, oh, this, like they wanna participate in those conversations. They will add questions, they will provide feedback. They will give us feedback on how we can like communicate the end results to them to sort of resolve that anxiety. And we get to a best of both worlds, right? Where we bring the team into these discussions, they can see how the sausage gets made, and we can understand what's causing anxiety and sort of address those concerns individually rather than taking the approach of like, let's just keep it all behind the curtain and that way no one will get stressed out.

And it takes a certain amount of intellectual humility, right, to get there, as you say too, because look, people come in and they expect so much specificity, right? And what to do, when to do it. In a startup, and people, when we're creating, we're innovating, we're constantly testing, we can't do 4-week tests. We can't do 2-month unit and regression tests. You know, we can't do this stuff, but we can do a day unit regression test. We, that's right. So the, you know, it's runway, whatever it is. I think personally it's better because we force ourselves to create, create, create, innovate, innovate, innovate, and we create this beautiful diamond quickly with a lot of pressure, a lot of focus. So it does require a mindset for that, an intellectual, a humility mindset, a critical thinker that can move beyond the confines of the way the world should be, right? To where the world is and can be.

Yeah, I think one thing that we have done a very good job of eventually, like we, you know, we made some mistakes along the way, but ultimately we got to a place where our whole leadership team is very low ego and they are, that's really important because like, you know, we have a bunch of smart people around the table and if everyone is hyper-focused on proving they're the smartest person at the table, you just like don't really make a lot of progress. It becomes very not fun to have. Discussions with those people, you rarely get to the truth because it becomes much more about proving you're right. When the other person starts to do it, you kind of like naturally start to do it as well. And instead, what the culture we try to create, and I think where we've been able to get to, is that we all know that each other is smart and we don't feel the need to kind of like prove it back and forth.

Absolutely. There is, yeah. And you don't need to prove it, right? It's not about proving, it's about creating together.

Right. And so everyone can just focus on getting to the truth, right? And there's like less ego involved. It's more about what's best for the company. And that's, that's worked out well.

Yeah, it works much better. Future vision. Let's look at the future with regard to Most Loved Workplace. I mean, you're, you're certified, right? And which is accomplishment on its own. And, and, you know, so, you know, how else do you, do you use that, the certification, to really build, to grow, to recruit, to keep it in the culture. Tell me how you're using that and what you see as part of the future vision of your company.

Yeah, I think it, um, it kind of helps in the two things we already talked about, right? Like, we're talking about building those snowballs and the trust that's there, and this certification is just like a ton of snow packed on top of that snowball. Uh, it's, it's a lot easier to go to the market when we're recruiting and to be able to say, like, hey, we're not just saying we're a great place to work, like, everyone else is saying it too. And that's a pretty compelling data point, right? Because at the end of the day, you know, the employees, they're looking at comp, they're looking at the mission, but like they also really want to work somewhere that they're going to enjoy working. And, um, you know, this gives some proof that we can do that. And I think it is also, although to a lesser extent, I think it's important to the clients and the partners, right? For the same reason we talked about, which is like they're striving to create those kinds of businesses too. And so when they see us do it, it tells them like, hey, this is a partner that we want to be in business with.

Then the last thing is your leadership advice to other CEOs like you. And really, it's in a traditional industry, CEOs in traditional industries, about the connection between internal culture and external trust. What would you say to them, give them advice in these kinds of traditional, highly competitive industries?

Man, I never feel qualified to give advice. I would say that, so specifically with respect to culture, I would say that you should be really thoughtful about how you design your culture. It's worth carving out a lot of time with, you know, you, your leadership team, whoever are like the key employees that you feel really embody the culture you wanna create. And to be really thoughtful about what does a good culture mean to you specifically? And it's not gonna be the same as it does for every other company. What does great culture mean to you? How are you going to hire for people that live those values? And what institutions and policies are you going to put into place to ensure that you as a leadership team are living those cultural values? And I think if you do that, things are going to go wrong here and there, but it's going to put you on the right track.

So awesome, B. First of all, I think you're uniquely and perfectly qualified to answer that question. So I wanted to let you know that, as well as, you know, awesome, awesome advice on the trust multiplier effect and what you've done to connect into clients, to employees, to build, to grow, to scale. It's just the perfect competitive differentiator for your company. And you've done so well at it. And I'm certain we'll have so much more to share with the world and give advice to so many more CEOs. Entrepreneurs who are also, um, on that same path and really dealing and challenge with the same challenges you are, and you're doing it so well. B, thank you so much for joining us on the show today. It's great to have you, and congrats on all of your accomplishments.

Thank you so much. You're too kind.

That was fun.