The Achieve Podcast - John Morgan (Pelagic)

Welcome to another episode of the Achieve Podcast, the show where we highlight leaders, creators, and entrepreneurs, those who are building meaningful businesses, shaping their industries, and having an impact. I'm Taylor, your host, and excited today to be joined by John Morgan, the founder and CEO of Pelagic. You can find them at pelagic.co. That's P-E-L-A-G-I-C. Agi.co.

You got it.

So hey, John, thanks for joining us today.

Yeah, really happy to be here, Taylor. Um, yeah, excited to give value however I can to your audience.

Well, thank you. And for those getting to know you and the company and what you guys do, give us the backstory, because you're in a little bit of a niche here. How did you get into this space, and who are you currently serving?

Yeah, so I, I was lucky enough to fall into the supply chain world, my early in my career. The first job I had out of college was working at SpaceX. We were working on some really crazy structures. So I got to work on components of the rocket that we were outsourcing because we were producing more and more of the rocket and then worked on some really advanced thermal systems as the pace of innovation in the company continued to grow. After SpaceX, I was crazy enough to jump into an early startup called Seed Health. If you're a probiotics taker or recognize big consumer brands, they're a really fast-growing venture-backed consumer products company, of which I was kind of the, the, the first or second hire of a really small team. We grew that business to about $100 million in revenue over 3 years and COVID and other crazy things. So, yeah, really cut my teeth on supply chain in a startup environment, even smaller with a really small team there. And then in that COVID experience, kind of realized like, wow, there are— I'm working with all these very specialized, awesome service or tech providers to help people grow their businesses, but there's really nothing that exists for supply chain expertise in high-growth CPG products, specifically when you're scaling from tens to millions, right? And And yeah, that's what Pelagic has kind of set out to try and fix for all my friends that are building consumer product brands now in the industry. And I have some personal credibility, but, uh, have been very thoughtfully crafting how to service the supply chain in a really high-trust, best-in-class way. And we're now in a pretty exciting growth and scale-up phase at Pelagic where people are starting to hear about us. We've done a lot of great work. And the team is, you know, 30, 33 going on 40 here in the next like month or so. So we're just, we're hiring, we're growing, we're adding a lot of new really exciting clients and also trying to change a lot about the business internally to adjust for all that growth.

Wow, and what would you say is driving that growth right now?

Um, I think it helps when there's just very few other providers and the market and the demand is massive. But I think we've done a really great job being kind of going the Tesla Roadster route. Like, we wanted to work with these really high-caliber, best-in-class brands that I knew a lot of my founder friends were kind of like, oh, well, if they work with that brand, it's good enough for me, right? So you signal to the broader industry about the quality of the, the customer or the, um, kind of that, that you are an industry standard setter. Uh, so I think that's really helped. And then honestly, everything else has been, um, one really awesome high-trust salesperson who knows how to tell our story and, uh, being available for our community that really loves and appreciates the work that we do to refer us to the, the next great client. So yeah, all that growth is really Via community and referrals.

Wow, that's impressive to grow that much from that. But it says a lot, and I love that strategy. So for you looking back, what turning points, positive or negative, have molded the way you think about running the organization?

Yeah, I think there's a couple like turning points just at the start where you kind of are figuring out what to if you're going to do this thing, right? And I think it's important to remember, like, mark those points because they guide you as you continue to grow, to go back to those original key things. But one big one was I was in a— I was at an offsite in Brazil with some of my best friends and business partners and just watching them in kind of a post-context, post-COVID world, get to work and workshop and give people jobs and work with humans and collaborate and innovate together. I was like, wow, okay, I, I want to have an amazing team. I'm in it for the people. I'm all about people. If I have an amazing team, like, I, I would do this the right way. I wouldn't be a consultant. I'd be an embedded service provider. I'd kind of do this in a way that I think is best. Um, I think there was another point in time where I had maybe like 1 or 2 hires. We were testing a couple of different ways we could help a supply chain. And there are so many, and there's so much, there's so many different ways to approach a problem in, in the product, by the category of supply chain, by the size of growth for that company. And, um, I just remember the day that I stopped saying yes and said, okay, we're going to focus on these core things that we are going to do really well. We're going to stay really within this supply chain box. We're going to get really good at these products. We're going to approach it in this organized way. I think that was a big— that was a big transition from like being a bunch of capable humans who could solve problems into like a brand and a business who does this thing and does it better than everyone else, rinse and repeatably. And then, yeah, I think we— I'm sure there will be many more moments. I think we have like kind of an AI moment coming up here that is going to change the whole course of the company. But the humans and then realizing kind of it's— we're actually becoming a brand and a business beyond just the people that we are have been pretty memorable shift points.

That makes sense. I love that, that focus. Get rid of the noise and like, this is what we do and the problem we solve. So when you think about your marketing and messaging out there, what do you feel like has worked well to attract and retain good clients?

Yeah, I think, um, once you pick those things you're gonna do well, there's still so much fun customer experience engineering, and you can do a lot of great analytics and math and like try to upsell or figure out other ways to keep your clients around and keep them very happy. We continue to work on that and workshop it today and then also try to empower a larger team to be connected to all those kind of subtle and not subtle pieces of the service that matter to keep people around. I will say there's, there's kind of early days we signed up or paid someone to say like, look, I can I can fully automate all this automated, like, lead gen via LinkedIn. And we paid a lot of money, but not too much money for that. Explored it, looked at it, and I realized I was spamming all the customers or the people that I already could text or knew well. And it was more about engineering how we showed up to them and how they opted into our service. I think that was a pretty like counterintuitive thing. You're like, look, I can— it's just a numbers game. Just go get every lead you can. And we flipped the script and went straight into more like, how do we get the highest quality leads or the best possible way to be introduced to then be available for these customers when they're ready for us? And then being very confident that you will need our service. It's just a matter of when. So we want you to know we exist for when that time comes, right? Um, that was a pretty big marketing mindset shift.

I love that, the way you worded that— fun customer engineering. And it's like, versus like just throw the net out there and go for whatever. So when it comes to your sales and marketing, where do you feel like there's still more opportunity or money on the table?

Yeah, so, uh, we still seem to have a very healthy amount of demand. We're, we're always in this, playing this game of trying to have barely enough people hired and ready to staff, um, for the amount of inbound coming, which is such a challenging game for, I think, for companies in our industry. Um, I just am, I'm very excited and have been. We, we, we're bringing on our fractional head of marketing full-time, so she starts in July. I think we're entering a really exciting new phase where I'm so confident in the caliber of our team and the work we can deliver. It's more about just spreading the news and making sure more communities and people online are aware of us. So I think that'll be heavy into LinkedIn. And then we all— we do really well in person at events, so we'll start investing in curating our own events and more, more kind of human-to-human gatherings where we can build that trust with the founders. On top of that, I'm sure, I'm sure people like— there's another really big hire we're close to finalizing this week that is, you know, a head of partnerships. And I say that because our business specifically works with so many different businesses within the supply chain, but then many different businesses who are also working on or supporting our customer through finance or customer service or marketing or these other kind of categories of the business. So there are so many of those people, it takes just a full-time person to manage those relationships. Bless you. And, and yeah, so I think partnerships are going to be a huge one for us. It's another great way to just like accelerate or incentivize that referral that wouldn't have happened otherwise unless your ecosystem is thinking about you.

That makes a lot of sense. Now, you had mentioned AI and some changes that are coming there. Where have you guys found ways to utilize it and what are some of these changes you're looking at?

Yeah, AI is, uh, we're, we're AI cautious or AI responsible, I guess I would put it. Like, we spent a few, a few extra years trying to earn the trust enough of these companies to manage their inventory and their margins and their COGS. And so, like, we're not ones to just go plug in an AI and let it run wild and do that. You see all these articles starting to come out of the amount of compute spend that happens or goes awry. So yeah, I'd say like we are in a, a bottoms-up education and up-leveling of the team approach right now. So we're incrementally— we started with a couple power users. Now we're moving and rolling out a standardized AI education program to the entire team. So The whole project team will be AI fluent and AI capable, but then we will continue to train and empower them on when and how to use AI. It's not in, you know, a bunch of slop in a giant report that your client won't read. It's not only like you do have to manually QA the deliverables you're going to create for the client. Like there's a lot of really best practices we're building. So there's like a very lightweight efficiency gain. I think where I'm really the most excited about the future of AI is that we are, as supply chain operators and systems builders, are now by building our own tools, products, and technology. And so we have access to certain data. We have really unique perspectives in our marketplace. And we're able to actually pretty effectively and efficiently, like, create whole new software and tools that either, like, quickly solve a very manual pain point task or can be, like, um, crazy up-leveling new advantages. So, like, we've custom-built our entire operating system for how we manage and staff the different services we provide and Having that internally managed versus like an off-the-shelf software is so, so powerful for our own flexibility and growth. And yeah, so that is really cool. And then we're actually exploring kind of spinning out separate businesses and incentivizing founders to run with the technology and the AI that we're using or just kind of MVPing and then let them like see if there's a market for that externally. And then, yeah, I can go on for a while, but there's this like AI brain concept where the more we can connect it to high-fidelity data and context, the more it can be like real-time, like this like powerful guide, but also an education tool, but also a knowledge library. So all these like very multi-factored unlocks for a day-to-day operating team. And so, yeah, with that future vision in mind, we're in a data organization and cleanup phase. And that's what I would encourage for everyone in the whole world, in the entire industry. It's like the reason these huge corporations are struggling to adopt AI is mainly just because they don't have well-organized, clean core datasets for their internal organizational structure. And so like the AI is only as good as the data you can feed it. And so we're, we're in a— we're having a hot data summer and we're just focusing on the cleanest, standardized, organized internal datasets to then start testing more AI brains on top of.

That's awesome. And I love the way you put that, like it's a responsible approach, not just like the quickest grab to the latest, shiniest tool. Because you get the AI bloat or garbage.

Yeah, and I also don't want to like fire half the team with the expectation that all their jobs will be automated tomorrow. It's actually like, great, this will be so— this will make all of you more efficient. It should augment things. It should make— allow us to grow even faster.

Yes, and I think that is the best approach people can take. It's like, this doesn't replace, it enhances my team, allows me to hire more people, and get them more efficient. Oh, I love that responsible approach. So when you think about the trajectory of the business, if you had to pick one constraint to focus on and solve over the next 90 days, what would it be?

Um, yeah, I, I think if you think about the different levers of the business, uh, we are— I haven't found the ceiling on growth yet, so we have very low very high efficiency, low cost, new customers coming in. And, and in that, I'm sure that will change at some point as we grow. I'm sure it'll get harder to find more customers, but it's not going to be our problem for the next 2 years. So, um, I'm very focused on, uh, every tool or system I can build to standardize and empower a growing team. Who are all being hired and share like common values and common culture and common approaches, but they have very different experience or skill sets to develop them, teach them, train them, empower them. And yeah, like that's for sure our focus is in a very like— I used to be able to get on a call on a weekly basis and kind of workshop all the problems with a very small team. But if We're now to a scale that I personally, the CEO, I'm not able to be aware of the like 80+ clients and the things they need. So I have to kind of empower these new frameworks in a much larger organization to know how to do the work and deliver the service. So yeah, I think the biggest thing I'm focused on is just like, what is— how is— how do I train and support that team? But also I'm very— there is a, a very cool, uh, application of AI there that would be very innovative and next level, um, for the, for the training of those teams.

Yes, keep duplicating your time, your skills, and oversight. So when you look at your own journey, the wins and the mistakes, what lessons stand out to you?

Um, I think, I think we've done really well, and I've heard about other people really struggling with— like, the smartest thing we ever did was over-invest in growth because it allows us to, um, say no to certain customers. And I think, like, if I think about how teams burn out or how these different— I've heard different agencies struggle as they get stuck or sued or break or have really, really terrible— like, there are bad customers out there, and, um, we've gotten better and better at like vetting, identifying them, and then transitioning them out if they are that. And we're— we were never in such a place where like, oh, I need that, I need that customer, so I can't say no to them, right? I think, um, that has made the whole experience fundamentally more exciting and better for my own health and my team's health than I think a lot of people sometimes, like, can realize as they're just starting out. They're like, oh, I got another opportunity, just, just do another one, do another one, do another. It's like, wait, wait, wait, wait. Like, that, that controlled growth is actually far more valuable to let your team and your processes and your business kind of mature. Yeah, and then I guess I'm also just really proud of our culture. So I'd say the cult— like, having a culture, investing in culture, it's like almost more, more important than investing in the marketing or the brand, um, because you need those people to stick around. And especially as you're getting up and going and off the ground, like, you really, you need all the lessons learned that those loyal original humans and team members that stick with you can continue to share with the team as you kind of hire 1 and then 2 and then 10 new people. So, um, yeah, invest in your humans.

I love that. Invest in your humans and that controlled growth plus good culture. And I'm curious what helped you articulate, this is my ICP, this is the client we want, this is not who we want. Like, what helped you make that differentiation? Because so many businesses are like, I'll just take on any business, and you get a lot of bad clients.

Yeah, I think there's like, there's a bad client in the sense of like the human and the founder running it. Like, there's just some like really chaotic, bad, struggling people out there that are gonna not be able to listen or engage or interact with like the type of culture we and humans I have at the team and value. Um, I think there is sometimes also like a timing struggle, you know, very ironic. Many, many times we've had like our favorite clients are these early-stage startups that can't pay us or can barely pay us. And then, you know, the much larger ones that can definitely afford us are like, you know, penny-pinchy and like very, you know, mad about every dollar they give us. So there's like that hilarious kind of just the timing of the business itself. Yeah, I think where we've stayed generously broad in the right way is just very like product agnostic. So if we're only like these size of startups or only really appreciative, humble, good founders, like we've not shied away from like challenging new product complexity. Or we're not trying to say like, hey, we're, you know, only beauty product experts. Like, hey, we will fix a supply chain. And we've messed with industrialized solar panels to ice cream factories to genetically modified bacteria to everything. So I love the systems-first engineering mentality to supply chain problem solving on almost any product, which has made our market size large enough, I think.

Okay, that makes sense. So last question for you. You think, you look at the business and, and the, the trajectory and the next stages of it, what are you most excited about?

Uh, I should be the most excited about all the AI potential and AI future. Um, I think that's like what the hype cycle wants us to say for sure, but, um, I'm a human-first guy, so I think the two things I'm the most excited about are, um, one, seeing a lot of our younger original talent start really developing. Like, we're big on promoting internally, and they're like growing really fast in our world and are now leading the new hires and really building and creating a lot of the company. And I'm so excited to see them continue to develop and lead us into the future. And on top of that, as we mature and get more financially stable as a business, I'm also very excited to see like who the new humans are we're able to bring in. And how they up-level us and completely like change us and bring a lot of new perspective and experience to us as we continue to grow. So yeah, the humans I get to continue to teach and develop, but also the new ones I'll meet as we hire them.

That's awesome. John, thank you for coming on and sharing your story and the wisdom and what you're doing to solve these problems. Any final thoughts for for our listeners or others on a similar journey?

Yeah, I think it is, I work with a lot of founders, it's been incredibly revealing to become one and like, go through my own process while trying to help the founders as well. And it's such an incredibly challenging and hard experience that I would just say, Make sure you love what you're doing and that you could do it for free every day because like there are really hard days and there are really good days and they tend to net out no matter what. And so yeah, just like enjoy the journey on the way because like it's, it's never going to really be very different a year from now at SCaLE, just same type of problems, just in a new, new style.

So I love that. It's not about the getting there, it's enjoying the process of getting—

wow.

So for those who want to learn more, they can reach out LinkedIn, uh, palijic.co, anywhere else you want to send them.

Um, we're pretty, uh, engaged on our LinkedIn now, so we— and we're posting more and more great content and talking a lot about the future of supply chain and AI and sustainability there. And then we also have a young up-and-coming Instagram, so Pelagic Ops, if you want to give us a follow. But yeah, this is great. I really enjoyed being here, and thanks for having me, Taylor Baker Baker.

Oh, absolutely. Thank you for coming on and sharing. And thank you to our sponsors of today's episode, Achieve Fractional, which provides fractional executive leadership for growing businesses. And if you enjoyed the episode, share it with a friend, with a colleague. If you're stuck in your supply chain process, you're not sure what to do, Reach out to John and the team. Like, they'll diagnostic, they'll look at it and see if it's a good fit and how to help you out. So reach out and we'll see you in the next episode of the Achieve Podcast.