Inside the Founders’ Studio with Jason Traff

What makes a great company? And just as importantly, what makes a great company founder?

Join Shipwell president and co-founder Jason Traff and industry expert Joe Lynch as they discuss the incredible entrepreneurial journey that led to Shipwell’s creation, and the challenges faced along the way on Inside the Founders’ Studio — a podcast dedicated to uncovering the grit that makes founders, entrepreneurs, and innovative thinkers tick, and what’s driving them and their company towards the future in one of the most crucial industries on the planet… supply chain.

Jason Traff

Jason Traff is the President and Co-founder of Shipwell, a cloud-based TMS solution based in Austin, TX that is transforming the supply chain industry by replacing opaque and manual processes through a tech-enabled, fully connected logistics ecosystem with more than 500,000 carrier partners. Prior to Shipwell, he co-founded and ran CopyCat Paintings, a global art reproduction company based in Shenzhen, China that employed over 1,000 artists and shipped to four continents, and Leaky, an insurance technology startup backed by Y-Combinator that provided over $300 million of insurance quotes. He is a Chartered Financial Analyst and holds an MBA from the MIT Sloan School of Management.

Joe Lynch

Joe Lynch is the host of The Logistics of Logistics podcast, one of the top-ranked logistics podcasts. Joe interviews logistics, transportation, and supply chain industry leaders about innovation, technology, trends, and the future of freight. Prior to founding The Logistics of Logistics, Joe served as General Manager and Chief Operating Officer of a non-asset based 3PL, managing less-than-truckload and truckload shipping for automotive suppliers, wholesalers, retailers, and distribution clients. Earlier in his career, Joe led a supply chain consultancy, which focused on the automotive sector. Engagements included: value stream mapping, supply chain optimization, lean product development, module strategy, and quality improvement. Joe began his career as an automotive design engineer and eventually rose to program launch manager for Jeeps built in Thailand and China. Joe earned a Bachelor of Business Administration and from Cleary University and a Master of Arts in Education from the University of Michigan-Dearborn (program specifically designed for facilitators, trainers, and consultants).

Ryan Schreiber

Ryan Schreiber is the Director of Engagement at CarrierDirect in Chicago. Ryan was born and raised in Tampa Florida. Ryan earned a degree in History from the University of South Florida and then a Law degree from Michigan State University.  Prior to joining CarrierDirect, Ryan worked at a variety of logistics companies and even started and exited a few tech-enabled freight brokerage start-ups. Ryan is a skilled technologist and strategist who has helped transform many leading transportation and logistics companies. In Ryan’s experience great technology is important but finding and keeping the right people is the key to success in the 3PL business.

Transcript

Joe Lynch:  

Hello, friends. Welcome to Inside the Founders’ Studio. Today we’re going to tell the Shipwell story with Jason Traff. Welcome, Jason.

Jason Traff:  

Hey, Joe.

Joe Lynch:  

Hey, please introduce yourself and your company

Jason Traff:  

Hey everybody. I’m Jason Traff. I’m the president and co-founder of Shipwell.

Joe Lynch:  

I’m very excited to be doing this podcast, we’ve been talking about doing this for quite a while, emails back and forth, back and forth. And this is only — depending how we count it — the second interview we’re doing with Inside the Founders Studio, that’s the podcast I’m doing with Ryan Schreiber. Our goal is to interview a whole bunch of founders in this business because Ryan and I both said the same thing. We’re fascinated by founders in this space. And there’s so many different businesses. There are tech businesses, warehousing or fulfillment companies, old school companies that have been around for 30 years, newer companies like Jason’s, and what Brian wants to know, what I want to know, is what makes these guys tick. And along the way, we help to tell the story so Jason doesn’t feel like he’s on the doctor’s couch being analyzed. So Jason, please tell us a little bit about Shipwell.

Jason Traff:  

Sure, I’m happy to! And it’s okay being analyzed, I’m not used to talking about myself this much. So it’ll be alright, we’ll get through it. So Shipwell is a vertically integrated shipping technology company. So we’re best known for our connected shipping platform, that’s a TMS — transportation management system — that integrates visibility natively into the platform for better workflow automation and alerts. It’s also backed by a partner network so that our users can get better access to carrier capacity and best in class tools.

Joe Lynch:  

So when you say visibility tool, so speak to that, I think there’s a spectrum of visibility. You know, somebody might say, well, we have real time visibility, and then making phone calls. I’ll call that a 1. And I’ll say what Shipwell doing is a 10, but explain why your visibility is different and better.

Jason Traff:  

Sure. And that’s right, because your idea of visibility will change based on who you are in the company. Right? It can be a shipment level visibility, if something’s at the dock or in transit, or if you’re C level, it might be a dashboard with all your analytics. And so for us, we focus on the full spectrum. You know, we track trucks, I think it’s over a half dozen different ways, everything from PLDs, VDI, mobile apps, we even do automated check calls with natural language processing. So it’s like a Siri type voice calling a trucker and asking for location. And then the entire platform is built on top of a REST API and the business intelligence layer, so that we can build dashboards for anything and everything you want to know.

Joe Lynch:  

Yeah, I’ve worked with Genie Catalog in the past. I’ve always heard all about this. And I know Shipwell is different and better when it comes to that tech. So I’m excited to learn more. But before we get into all that, I want to talk to you about your upbringing. Where did you grow up? Where did you go to school? And tell us a little bit about your childhood?

Jason Traff:  

Sure. Now, it feels like I’m on the couch. So, I’m half Chinese, half Swedish. And I grew up in East Texas.

Joe Lynch:  

That’s all American right there.

Jason Traff:  

Yeah. And so you know, I grew up in East Texas. I actually grew up on the same street as Matthew McConaughey in Longview, Texas. So it’s a real throwback there.

Joe Lynch:  

Wow.

Jason Traff:  

I know! That’s my claim to fame.

Joe Lynch:  

Is your mom from China?

Jason Traff:  

She is, yeah.

Joe Lynch:  

And is your dad from Sweden?

Jason Traff:  

He is third generation Swedish. So he’s Swedish in the way that like Americans will say he’s Swedish. You know, lots of umlauts over our last name a few generations ago.

Joe Lynch:  

Yeah. Well, I was saying to you that knowing that you have a Chinese mom, we haven’t heard it lately. But we heard a whole bunch about the success of children who had a Tiger Mom, would you say your mom was a Tiger Mom?

Jason Traff:  

I would say that. She’ll hear this, but I think she’ll be okay with my saying that.

Joe Lynch:  

Well my mom listens to this podcast, I hope your mom does, too. So would you say that she would drive you a little more than the average American mom?

Jason Traff:  

I would think so. But I think the main thing I took away from my childhood is my parents made me make lots of choices early on. They were okay with me making choices as long as I live with the consequences of them. And so in this case, the Tiger Mom part was I got to choose whether I was going to learn the piano or the violin, but I was choosing one of them.

Joe Lynch:  

TV wasn’t a choice or Xbox wasn’t a choice.

Jason Traff:  

We work that in there. That’s that’s learning. That’s computers.

Joe Lynch:  

Yeah. So what do you play? Which instrument?

Jason Traff:  

So I played piano competitively, about through I think until I was about 15, then I moved over to guitar.

Joe Lynch:  

Oh, you know, it’s interesting, one of my good buddies, and he’s from Shanghai, originally, he went to a music recital, his son was playing piano and he said, “You know, I made an observation that all the kids playing piano at the recital were all Chinese or Asian, and all the kids playing guitar were from the US or their parents were born here,” and he said, “I’m gonna have my son switch to guitar.”

Jason Traff:  

Yeah, I think for me, I was at a place where I was discovering music I liked rather than music I had to play. And I realized I was not able to play the songs I really wanted to play on the piano, not in the same way I would understand them. So I feel like I could have turned that corner I would have stuck with piano, but I was too into pop.

Joe Lynch:  

Right. I don’t know of any groupies who are chasing after the piano player. So good decision to switch over. Rockstars seem to have it all made. So you had a lot of jobs. You told me when you were a kid, you always had jobs early on, right?

Jason Traff:  

I did. I mean, my father ran his own business. I think at an early age, I became very comfortable with that idea. Just seeing how someone was passionate about something and starting it myself. And so I started a pool cleaning business. I was like eight or nine, which was fun, because I had all the chemicals that I probably should have had when I was eight or nine. And then up through high school, I worked as a janitor, which was actually a really nice job. I mean, it was gross at times, but it paid really well. So that was alright.

Joe Lynch:  

I was a janitor at college. It was pretty prestigious. I thought

Jason Traff:  

All about those groupies!

Joe Lynch:  

Yeah, like girls love a guy wearing a uniform cleaning up the gym. So what kind of business did your dad have? If you don’t mind me asking.

Jason Traff:  

He’s always been a self starter. He really found his footing when he started a stock brokerage firm around the time I was born. And so I grew up with the boom and bust of him owning a stock brokerage firm at an early age.

Joe Lynch:  

So you were influenced, obviously, by your dad having been an entrepreneur and your mom being, I’ll call it a Tiger Mom. And I hope everybody thinks that’s a positive thing. I think it is. I think all of us need to be pushed a little bit as children. I know my parents were when I was a kid always pushed me. I either had a job or I had sports. There was no in between. There was no, “I’ll just go home and watch TV.” They always pushed me into something. And I remember one time saying to my Dad, I’m not so sure I want to play football. And he goes, “Oh, I didn’t ask.” I was like, “Okay,” and then I played and I loved it. But it was funny because kids naturally will be a little shy and want to do the stuff they always do. That’s great.

Jason Traff:  

Yeah. I mean, I think there’s a good natured way of doing it. For me, I don’t think I felt pressured into anything I didn’t want to do. But my parents made sure that I tried everything. I have three kids now. And so what I hope for them is not so much that they play the sport that I love, but just that they find something like that they can enjoy as much as I enjoyed like tennis, for example.

Joe Lynch:  

Right. So you were playing tennis also, you said.

Jason Traff:  

Yeah, a general theme of my life is everything that I’ve ever liked or been good at, I played competitively. I played tennis up through high school, and I went to a smaller regional school, but I was a three time state champion.

Joe Lynch:  

Well, I think that’s a detail you should have shared. That’s, that’s incredible. So you were driven as a kid, I think this is a very interesting insights into kind of the entrepreneur brain. So you came from a family background that encouraged entrepreneurship. And you did all these activities as a kid. That’s fantastic. So switching gears, where did you go to college? And what did you study there?

Jason Traff:  

So undergrad, I did at Texas A&M. It’s funny because back then I was scared of going to the big city. I wanted to go to a place that felt small. So with, like 100,000, Aggies and College Station, Texas, I went to Texas A&M and studied finance. So I have this wonderful thing where I keep going to engineering schools and studying business, because later I would go to MIT for grad school and get my MBA.

Joe Lynch:  

Really? So you got your undergrad in finance. Was your goal to do something along lines what your dad was doing?

Jason Traff:  

No, I think the biggest part was I didn’t know what I wanted to do. All my friends were choosing majors that felt very narrow. And all I knew was I wanted something that was going to help me in the future. I knew that if I went down, you know, a specific engineering or different route, that there would be things I would get really good at, but I would feel like I was specializing in them. And so for me, with this finance, accounting background, you know, I knew I was always going to be starting a business. I’d always been doing this since a young age and it felt like probably outside of sales, one of the best experiences I could have had. And so that’s why I focused on that.

Joe Lynch:  

So, did you have some internships while you’re at college?

Jason Traff:  

I did. Actually, my junior internship turned into a full time job because they offered me to come back. And that’s what took me to Hong Kong.

Joe Lynch:  

Oh, so tell us about that.

Jason Traff:  

So my first job out of college, I was a private equity analyst for an infrastructure investment firm called AIF Capital, based in Hong Kong. And through that, I traveled all across Asia, we were a pan Asian investment fund. So every two weeks, you know, I was learning about a new company, a new industry, whether it was you know, logistics in Malaysia or vineyards in China, and I enjoyed that intellectual exercise so much.

Joe Lynch:  

Now, do these speak. I know they speak some English in Hong Kong. Is that the main language?

Jason Traff:  

Yeah, and actually, the running joke is my Mandarin got worse living in Hong Kong because they speak Cantonese, but our office spoke English. And so I was one of two native English speakers at the firm and so I spoke English constantly. And my Chinese got worse while living in China.

Joe Lynch:  

I’ve heard, somebody corrected me the other day and said they don’t like to say Mandarin or Cantonese anymore. They say it’s one language. It’s Chinese. But did you grow up speaking Mandarin with your mother?

Jason Traff:  

I didn’t actually, and this is something that we’ve tried to fix with my kids by getting them into language immersion. As you can imagine, there’s not a great deal of Chinese speaking that was happening in the 80s in East Texas, and my dad didn’t speak it. And so this is one of the things that we try with my kids and me being — I don’t think a Tiger Dad — but just making sure my kids have the opportunity to speak to other members of their family.

Joe Lynch:  

Did your mother speak Cantonese, or Mandarin?

Jason Traff:  

My mom, I think actually speaks six or seven languages. So she speaks both, along with a few other dialects of Chinese, but growing up tried to teach me both Cantonese and Mandarin.

Joe Lynch:  

So you spent some time in Hong Kong. How long? Were you over there for?

Jason Traff:  

About three and a half years.

Joe Lynch:  

And so then you came back and went to MIT?

Jason Traff:  

Yeah. So let’s see. So Hong Kong was fantastic. I loved living abroad in terms of defining moments in a person’s life. I think traveling has gotta be one of them. I also started my first business that made its way onto my resume in Hong Kong, and I met my now wife.

Joe Lynch:  

So let me ask what was that business that you started in Hong Kong?

Jason Traff:  

Yeah, I started an oil painting reproduction business called copycat paintings that grew to employ around 1000 people and ship paintings to four continents.

Joe Lynch:  

Nice, nice. So whatever happened with that business?

Jason Traff:  

I sold that business to my partners, I think around 2009 or so. I loved Hong Kong, but I knew I wasn’t gonna stay there forever. And so I wanted to get back to the US, go through Business School, and then get on to my next big thing.

Joe Lynch:  

Now is your wife from Hong Kong? Or is she from somewhere else?

Jason Traff:  

So my wife is English, British English, and she was running some English second language schools in Hong Kong when I met her.

Joe Lynch:  

Oh, wow. So you brought an English girl back to America after meeting her in Hong Kong? Holy moly.

Jason Traff:  

Yeah, she often jokes that she would have never pictured her life being married to an Asian cowboy living in Texas.

Joe Lynch:  

That is a rarity! I like to watch a lot of these YouTube channels. I’ve watched one from Ireland, Scotland, England, one by a girl from from North Korea, who’s in South Korea now. And a few others. But what’s always interesting is that they say, “I went to Texas, and I had no idea there’d be skyscrapers and traffic jams there.” They have this impression that somehow you go there, and it’s just gonna be a whole bunch of Cowboys, riding around?

Jason Traff:  

It’s okay, we have those too. They’re still here.

Joe Lynch:  

It’s a big state. Yeah, exactly. A little bit, everything. So you left Hong Kong, found a bride. Good for you. And then you went to MIT? Why did you choose MIT?

Jason Traff:  

I knew I wanted to start more companies. And I think there have been very few groups. You know, most groups, I think you end up getting closer to and you realize, “wow, this is not what I thought it was gonna be.” But the more time I spent with people from MIT on MIT campus, I just became more energized by the work they were doing and the legacy of the institution. And, you know, I thought in terms of things that I want to be closer to, this just seems amazing. And I’ve loved the time I’ve spent there. Technically, I dropped out and went back to finish. But I did finish because it felt important to to actually say that I graduated from MIT and not just be a drop out, which I think still has merit. And honestly, Boston’s whole atmosphere is amazing because it has such a big student population relative to the overall population. And so I think it has a really great feel for a city. The weather is too cold for me, but I love the energy of the city.

Joe Lynch:  

It’s a cool city. Anyway, so you went to MIT, then what was your first job leaving MIT?

Jason Traff:  

Oh, so I actually dropped out of MIT after my first year of my MBA because I started an insurance technology company that got funded by Y Combinator, which is a startup accelerator.

Joe Lynch:  

Wow, that’s impressive.

Jason Traff:  

It was a great experience. And my goal of going to MIT was to start a business. And so I started a business and they got funding from some great investors. And so I ran off to pursue that.

Joe Lynch:  

And then what happened to that company?

Jason Traff:  

So we sold $300 million of insurance before we got acquired by one of our insurance partners. And that was 2003. I think? 2003 or 2004. And then this is where my mom’s Tiger Mom thing comes in, where she was very proud of me, but at that point, she wanted me to go back and finish. So I had a gap in my schedule, so I went back to MIT for a semester and finished with a different class.

Joe Lynch:  

I heard somebody say regarding Bill Gates one time, he said he dropped out of Harvard, imagine how well he’d done had he finished? I wonder if his mom’s not saying “Come on, get back to school. What are you gonna do with yourself?” So you mentioned Y Combinator. For those who are not familiar, please tell us a little bit about what is Y Combinator because I think it’s a fascinating business and business model.

Jason Traff:  

So Y Combinator has changed a lot since I went through it in 2011. But it’s a startup accelerator where they will, as a professional investor, place seed stage bets on lots of different companies. So in my batch that was much smaller, but now there might be 100 or so companies they’ll fund once or twice a year, they’ll take an equity stake in those companies and help them through the seed stage when the founders initial product goes to market. And it’s, I think, widely regarded as the most successful startup accelerator in history. It’s produced companies like Dropbox, Airbnb, Stripe, that have gone on to become unicorns, which is a billion dollar plus valuation

Joe Lynch:  

Right. So I think, and you can please expand on this, when other venture capital investors see that a firm went through Y Combinator and Y Combinator has invested. They’re more apt to invest. Correct?

Jason Traff:  

I believe that’s true. Yeah. But typically Y Combinator firms, I mean, there is a stamp of approval that that goes along with it. Plus, you know that it’s been set up right. And they’re focused on the highest impact things, they probably couldn’t be focused on.

Joe Lynch:  

Right. I also heard that one out of every 100 companies that applies actually gets through Y Combinator. Is that correct?

Jason Traff:  

Yeah, I don’t know if the stat is now but I remember when we applied, they used to bandy around that it had a lower acceptance rate than Stanford.

Joe Lynch:  

But you got into MIT! So you said you met your partner, Greg, price at MIT. Talk about that.

Jason Traff:  

Yeah. So Greg, and I share MIT in common. And, you know, in terms of startup dynamics, Greg would be the hacker and I would be the hustler. Greg is the technical one. He did engineering for undergrad. But he also spent time at MIT where he was working for Lincoln Laboratory doing machine learning for the US government on things he can’t talk about, because it’s on a bunch of documents about treason and natural secrets and things.

Joe Lynch:  

That’s a baller move. I’m going to start saying that about some of my career. I’m not gonna say it was a boring engineering job I used to have I’m gonna say, “Yeah, I can’t talk about it.”

Jason Traff:  

Yeah, you know, I think if you can get away with it, it’s worth a try.

Joe Lynch:  

So you met him there. And then did you start Shipwell after that?

Jason Traff:  

There were a few years in between, you know, the point we reconnected is, I was back in Austin, Texas, and so it was Greg. And Greg, had actually just left McKinsey, where he was doing Fortune 100 supply chain consulting. And the genesis for Shipwell was Greg just left and he was telling me these stories of these gigantic companies that had all the same problems with shipping that I had with my oil painting company Copycat. And everyone has the story of a part that goes missing that shuts down an oil rig or a factory. And for some of these companies, the impact was a million dollars an hour, plus, easy.

Joe Lynch:  

Oh, yeah, automotive when you shut down an assembly plant, they’ll tell you it’s a million dollars a day or something. It’s ridiculous numbers.

Jason Traff:  

Yeah, absolutely. I mean, even for a big company. Granted, the companies weren’t sure if they’d spend, you know, two or $3 billion a year on shipping. But either way, a million dollars a minute or a million dollars an hour. It’s still a big number.

Joe Lynch:  

Oh, yeah. So you guys started this company? First off, when did you start it? And then what opportunities did you see in that space? I know you started to allude to it, talk a little more about it.

Jason Traff:  

Yeah. So Shipwell started in 2016. And it really got started in 2017. And the original idea was to be a pure analytics company. If we could have companies send us their shipping data, we could give them ideas about price benchmarking, or different efficiencies they could have achieved. And that was the original goal was how do we help a company become more vertically integrated so that it can become the relative version of an Amazon like experience.

Joe Lynch:  

Did you get VC money or bootstrapping? Or how did you fund this?

Jason Traff:  

So the company was originally founded with Greg’s 401k money. And then I joined and I put in some money too. At the time, there were a handful of us, only five of us, and we hadn’t raised any money. But there were four engineers and me. And we needed a way to pay them. And we didn’t do a very good job at paying them. Early days, it was a lot of looking for free meals and the co-working space we were in. It was important that they could make rent. We funded the first part of the company.

Joe Lynch:  

Nice. And then how long was it before you got venture capital involved.

Jason Traff:  

So spring of 2017, that was one of those early early stage grit moments. I moved out to Silicon Valley. I think at the time, I had two and a half kids, two and a half of my three kids. But I left my wife back home with them, I moved into a shared apartment, where I had this giant whiteboard where I wrote down all my meetings. And so I made something like 90 pitches before we finally found our lead investor, which was First Round Capital. Who is phenomenal. I think they’re regarded as one of the top 10 series seed venture capital firms. So they’ve been phenomenal.

Joe Lynch:  

You know, it’s interesting, I hear your story. And you seem like you’re kind of custom made to be successful in business. But what I think people would miss is you had to do 90 pitches. And that must have been a lot of work to get 90 venture capital, or angel investors, or kind of a combination of both.

Jason Traff:  

Absolutely. This is the emotional roller coaster of being a founder, right? And this is the part that we try and shield the rest of the company from, because everyone else is back home making minimum wage, if that, wondering how my day is gone, and I’m thinking, Oh, one guy cancelled. I drove around town for like six hours with the other meetings like they all said, “No,” but we’re doing it again tomorrow. I think you have to have a certain amount of fortitude and belief in the mission of the company to push through that because it’s all relative, but everyone goes through those peaks and valleys.

Joe Lynch:  

And I think, and we’ll get to this in a minute, but I think when I talk to a lot of people about business and starting their business, they usually talk about all these failures. And you get the sense sometimes is that the people who are successful are riding on the back of a whole bunch of failures. And if you were to kind of look at your life at that point, if you had 89 “No’s” before you got a “Yes,” that’s a lot of failure that you have to swallow along the way.

Jason Traff:  

Yeah. And I did the personality tests growing up that tell me that because my dad ran a business, I have a higher degree of risk tolerance. But I’ll always remember my first job, I was working as a private equity analyst and in Hong Kong, and I was making good money. I had this thought that was like, you know, if I get fired tomorrow, I’m not bilingual, I can’t get a job at McDonald’s here. And that was a terrifying thought. But I’ve always been very comfortable with this idea that there was no safety net, that I was going to have to succeed, one way or the other.

Joe Lynch:  

It’s also interesting, when you say safety net, it’s not the same as it was a couple 100 years ago. You legitimately could die of a million things. You could starve to death a couple 100 years ago. It’s hard to starve to death in most places in the world now. And so what you lost in those 89 was just a little bit of face. Maybe you got escorted out of the office after 15 minutes of pitching. And that’s it. So and when I said swallow, I think it’s kind of interesting, because some people would swallow that and go, “Oh, my God, I’m a failure. I hate this. I can’t do this tomorrow.” I’m assuming that you kind of said, “Who cares. On to the next one.”

Jason Traff:  

Yeah, I mean, I think I experienced the full range of emotions, like the anger? I still had that part. But, you know, I think especially what I’ve seen this past year, is how many different factors came together, for me to be successful. I grew up in a mostly middle class family. I didn’t have a whole lot of problems like paying for college. That gave me the freedom to pursue a job overseas. Aall these things kind of lead together. And so that’s sort of why even though it’s very hard, it’s all sort of relative, because it can be much harder for somebody else,

Joe Lynch:  

Right. I’ll tell you, and you played sports, and so you would know this. I never played sports at the high level that you did. That’s incredible what you were able to do in tennis, but having coaches and hockey and football and baseball, swimming… they’re chasing behind you making you work your butt off. A lot of times, you’re not forced to do that. And I think that I always say I haven’t had a hard workout since I stopped having a coach calling me names. Let’s talk more about your company. And so talk about some key events along the way beyond the founding.

Jason Traff:  

Yeah. So I mean, I guess just to give people a sense, because not everyone will be familiar with Shipwell and where we are today. You know, we do about a quarter of a billion dollars a year through the platform.

Joe Lynch:  

How many employees do you have now?

Jason Traff:  

We’re at about 135. Through that, I think about 60 or 70 of them work in our product and engineering departments, where they’ll process 100 million rows of data to feed back into our ETA and pricing algorithms to try to provide a better experience for our shippers. Over the past few years we’ve grown 300x. 2020, I think was a hard year for everybody. But we had some great wins with new customers as attention shifted toward supply chains. And we also were named to Forbes is 2020 next Billion Dollar Startup list.

Joe Lynch:  

Nice. Somebody from Freightways, I think it was Kevin Hill or Dooner said that Freightwaves is a ‘soonicorn’ — a soon-to-be unicorn. And that’s what you guys are, you’re a soonicorn.

Jason Traff:  

We also made the Freightwaves Top 25 for  freight tech for the second year in a row.

Joe Lynch:  

Yes, I saw that. I saw that. So do you sell your technology? Or do you sell it as a freight brokerage? Or is it both?

Jason Traff:  

It’s both. So very early, we want it to be a pure analytics company. And what we found was no one had the data. This is a very heavy-handed self-serving metaphor, but it’s kind of like giving someone a Ferrari, but they can’t drive a stick. And what we found is that we really had to, one give people an easier way to improve their supply chain. We talk about this curve of sophistication, where some companies that we know, they’re running 10s of millions of dollars of shipping a year, they’re still using Excel, or Google spreadsheets, and how do we take them, get everything digitized, connected, and give them this pathway towards becoming a vertically integrated company so they can compete with an Amazon that has the full loop between their procurement strategy, to shipping, to everything. And we found that there is a service component to that. And so as a vertically integrated company, a little bit of it’s up to the customer. What are they looking for? We can be a vanilla TMS, we can be a vanilla 3PL. Ideally, we’re generally a blend of those where there’s some service component and some technology component.

Joe Lynch:  

Right, there’s a time in every software where you’ve created this great software, but then you find out that the information required to fill it isn’t there, and so you’re not gonna get the value you want. And so you do need to do a little bit of what you guys are doing, which is making sure you have the service to go along with the cool software. So talk about turning points in your company. I mean, you’ve grown like a weed. So you went from zero in 2016, two quarter billion dollars and soon to be a billion dollar valuation. To talk about some of the turning points in there. There had to be some good days and some bad days talk about some of those.

Jason Traff:  

I think one of the real turning points was the first big one was around the reason why Greg and I started the company. We had two big bets that we thought we’re going to just be true about supply chain. The first was that shipping was going to become part of the brand experience.

Joe Lynch:  

You’re right on there.

Jason Traff:  

And the second one was that supply chains were going to speed up. And so all teams are going to have to do more in the future. And Greg, and I used to pitch that to everybody. I mean, like we’re talking about my 90 pitches. Back in 2016, 2017, that still seemed like a really remote idea. People would often say, “Why are two guys from MIT talking to truckers all the time?” We kept saying, “It’s gonna change, it’s gonna be big.” And then COVID happened. And I don’t know if we talk about COVID? Do you use COVID? Do I have to refer to as the pandemic?

Joe Lynch:  

Right, please do, please do.

Jason Traff:  

So what we found, you know, for all the hardship that it created in the world, it really shined a spotlight on the underinvestment many companies had put into shipping, and how they viewed it as a cost center. And it was not empowered to be the competitive advantage it could be. And so, you know, between March and April, we saw 10 years of e-commerce growth as a percentage of total sales in the US just as people went into lockdown. And that caused a lot of issues with people in terms of shipping visibility, the number of shipments that companies were expected to handle. And almost instantly everyone realized shipping is part of the brand value, because as soon as you decide between Amazon Prime and regular Amazon, that’s part of the decision making. And once we saw the number of e-commerce shipments, some of our companies were doing, lots of Shipwell’s customers did 300% more shipments in April than they did in January.

Joe Lynch:  

Yeah, we absolutely blew up during this time. And it’s interesting, some things that are in my mind become front and center that were kind of fringy before, like Doordash. I mean, I’m not a big user of that myself. But all of a sudden, it was the difference between going out, you know, in an environment that had COVID, or getting your food delivered, and then Shipped. My 80 something year old mom uses Shipped. Goes on her iPad and orders groceries. I was thinking that’s pretty slick. That wouldn’t have happened pre-COVID.

Jason Traff:  

Absolutely. And what history would normally tell us is when consumers are exposed to like an easier digital way of doing things, that tide never recedes. So even if we were to just fast forward a few years from now and say, “Great! We’ve got the pandemic knocked. Everyone’s vaccinated. Back to work like normal.” Odds are the percentage of e-commerce shipments has not dropped. Everyone that’s used it says “Oh, it’s actually really easy.” For me with three kids, I don’t have to drag them to a store, like every time.

Joe Lynch:  

Right, right. So talk a little bit about the culture that you’re trying to develop over at Shipwell. When you’re growing that fast, you had to have had all sorts of stops and starts when it comes to culture.

Jason Traff:  

From everything I’ve ever done, culture is generally the most important aspect to get right. Because you have to get it right so early on.

Joe Lynch:  

And definitely the hardest.

Jason Traff:  

It’s always hard. And the thing is, it’s always different too, and I think what I learned is that there are good cultures and bad cultures, and there are strong cultures and weak cultures. The difference is that all good cultures are strong cultures. But not all strong cultures are good cultures. And so very early on it was, “How do we build a strong culture around the right things?” And so we tried to be very deliberate with some of the choices we made. And it’s everything from who you hire, to why you hire them. But also how do you build the behavior that you want? And so at Shipwell, one of the deliberate choices we made is we don’t talk about the values that we have, because values are hard to measure, you know, how do you measure honesty or integrity or transparency? Instead, we would try and talk about the behaviors. Did you act as a Shipping Hero? Were you outcome oriented? Did you show a bias for fast paced excellence? Those are things that are easier to measure. And once you have a group of people that all sort of have those behaviors in place, that becomes the new culture.

Joe Lynch:  

How do you make that happen day to day, though? I mean, so if you’re wandering around the office, how do you make that happen?

Jason Traff:  

Oh, so one is hiring and making sure that you have people that are on board with that. That see the right behavior and want to reward it. And then it’s everything from public recognition to having it be a part of the hiring process to having it be a part of the review process. And so basically, every point in someone being at Shipwell, you know, what we’ve learned is the people that are very close to our core behaviors, those people generally do the best. And so you know, if you can have that entire cycle captured from  how you screen candidates, to how you incentivize them, to how you  publicly recognize them. That’s how we’ve at least chosen to go about it

Joe Lynch:  

Nice. Now, I want to ask you some more questions about you. You’ve obviously been successful, and I don’t want to make you feel uncomfortable with me saying that, but you are successful and you did a great job. Congrats. You were lucky, but you were also good. And I know we talked a little bit when we were prepping. It’s not all lucky or all good. Talk about kind of the differences that you saw in your success. I mean, what caused this?

Jason Traff:  

Yeah, you know, it’s, it’s interesting. Have you ever done this question where, if you had one superpower, what would it be? I’ll tell you what mine is. Mine is, if I had one superpower, it would be luck, the ability to be lucky. Kind of like the superhero Domino. I think that luck can make up for so much. The question then becomes, how do you get lucky? Right? I mean, if you can just choose it, that’s great. But assuming you can’t just choose it. How do you manufacture your own luck? And to the extent you can do that, you should absolutely do that. But if I had to ever choose, I would choose lucky.

Joe Lynch:  

But you know, it’s interesting. So when somebody says, Oh, well, yeah, you were lucky because you were able to get VC money. And somebody else didn’t. Right? You were good in that you were willing to have 89 rejections before you got lucky. And I’ll throw this other thing out there. You were lucky that you were born and raised by the parents that you were raised by, and had the environment that you had, that made you good. I think you can argue all day, whether lucky or good, you have a good share of both. But at some point in this lucky environment, you became good.

Jason Traff:  

I think that’s right. And I think this is why it’s hard to separate them. Right. I mean, some of the things. Absolutely. You know, I was lucky to have parents that made sure I didn’t leave college with a boatload of student loans that didn’t let me take the job where I learned the most and grew the most. I was lucky that I found a spouse that was really supportive of me chasing off to tilt at windmills.

Joe Lynch:  

Well, there’s a lot of English girls who want to marry a Asian cowboy from Texas.

Jason Traff:  

I’ll take your word on it.

Joe Lynch:  

Another question here. How do you manage failure? You’ve obviously had some failure. So how did you manage when you were having all these rejections? How would you say that you’ve managed it differently than someone who’s maybe taking it more to heart?

Jason Traff:  

Yeah, I knew this question might come up. And I was thinking on it. And the thing is, I think I’m really bad at internalizing failure. If I think through just high level failures I’ve had in my life, I’ve had so many, you know, at Copycat, what we used to joke about was, we had all of the problems the startup have, plus, we had the China specific problems of like blackmail, and extortion. My co-founder got kidnapped.

Joe Lynch:  

Those are problems.

Jason Traff:  

Yeah, I mean, those aren’t great days, right? And you still have to find success relative to all of that. You know, with my second company, the one that went through Y Combinator, we earned the distinction of legal threats faster than any other Y Combinator company, because we were trying to aggregate and show a bunch of insurance prices and people that we’ve been working with that these insurance companies were okay with it until we went live. And then we had four cease-and-desists within 24 hours of our launch. And we had to find our way out of that and just keep working and working and working until we pivoted enough that we found some amazing partners that were really happy to work with us. And all along that string is failure after failure, looking for incremental success until you sort of become an overnight.

Joe Lynch:  

Right. It’s interesting. I heard Noah Kagan was on a podcast the other day with James Altucher. And he said, so Noah Kagan is the founder of what’s his company again?

Jason Traff:  

Sumo. He’s in Austin. That’s how I know it.

Joe Lynch:  

Yeah, so Sumo. So if you want to get a discount on software, that’s the one who’s talking to James Altucher. And what’s interesting is they said, you want to start a podcast, you want to do something like YouTube, you want to start writing articles, you have to get to 100. You have to do at least 100 episodes, or 100 articles, because it’s kind of that critical mass. And what’s interesting is I’ve seen a lot of people start and don’t get to that 100. And I always think that they quit too soon. And, and my goal initially when I started my podcast is get to 100 podcasts as fast as you can. And it’s not easy, but it’s the right way to go about it. Right?

Jason Traff:  

Yeah, there’s so much conflicting advice on this, right? Because some of it’s, “stick with it,” and another one is “learn when to cut your losses.” I think the difference is for some things like for you, for example, I don’t know your business. I’m definitely not in the podcast business. But if it’s a pursuit you enjoy, and it’s something you feel conviction over, it’s easy to look through the part where you want to stop. Because you want to keep going.

Joe Lynch:  

It’s also easier if you start off with a big following like I had. And I also enjoyed it, to your  point. And so it made it a little easier to say, “well, to kind of take a while to get this thing going.” Interesting stuff. So Ryan Schreiber and I talked a lot about this offline. And he always says, “I want to know whether guys like you have imposter syndrome.”

Jason Traff:  

Imposter syndrome is, I’m going to try and tell you what I understand about it. It’s basically the idea that I shouldn’t be here. I’m not the right person for this.

Joe Lynch:  

Yeah. Like you think you’re a fraud inside, and people are going to eventually see that.

Jason Traff:  

I think everyone struggles with imposter syndrome. I know that I do. And it’s because, for me, at least I’ve chosen a road that I’m very passionate about. But it is, by nature, a lonely road. Especially I think when everyone’s working from home and sheltering in place and all that and I’m able to recognize the accomplishments that the team has done and how I’ve been a part of those. But on the other hand, a lot of it has moved faster than I’ve been able to internalize and so it feels…

Joe Lynch:  

I keep coming back to this but you had these 89 rejections. At some point, a lot of people go “Oh, this is a horrible idea.” And you didn’t, you said, “No, I’m gonna keep doing it. I’m gonna go and have another meeting tomorrow. To hell with it.” And so you must have at some point said, either have something good or I don’t care. I’m just gonna do it anyway. Interesting stuff. And again, congrats on your success. But I want to wrap this up. But before we do, I want you to talk about what you think is happening in the future of this industry, and then what’s going on with your company?

Jason Traff:  

Sure. So the industry is in a really interesting place, you know, I think in terms of, there have been so many people working so hard on this mission of like visibility, and connecting supply chains and driving innovation for so long. And I feel like we’re really at this pinnacle, where not only our public interest — shedding a new light and driving investment into supply chain technology companies — but even within companies themselves, they’re starting to empower their own shipping departments to make these decisions and embrace innovation. At the same time, there’s technology that supports it 40 or 50 years ago, before mobile apps or API’s, so much of this was so hard to do. And so for the industry, I feel like the pandemic, in the same way it drove the ability for vaccines to innovate so quickly, I think we’re also going to see that for supply chains. This idea that all companies need to find some version of being vertically integrated, to turn shipping into a competitive advantage. I think that’s here now. And I wouldn’t be surprised if, in the same way people say that, in the future, all companies are technology companies. That was the one that we heard years ago. Then it became all companies become payment companies. And I think the next one is going to be, all companies are logistics companies.

Joe Lynch:  

Well, it’s very interesting to me. And again, I’m in my 50s. I started off in automotive. And when you think about automotive, you think about suppliers, and you think about the big manufacturing plants. For a long time, the big important jobs were always in engineering and in finance and in sales. And then I would say in the last 25 to 30 years, all of a sudden became your supply chain. Because we weren’t making everything in house, we have to go develop suppliers. And when we talk about supply chain, we’re talking about logistics, right? So. And also what’s interesting is it used be that your suppliers were in the Midwest. Well, now your suppliers are in Mexico, and China, and India, and who knows where. And so what used to be a truckload away is now a truckload in China, to a port over the ocean, to California, and then rail or truck all the way to the Midwest, or wherever it’s going. It’s just gotten so much more complex. And, you know, again, 25 or 30 years ago, with somebody mentioned supply chain to me, I didn’t know what they were talking about. It didn’t resonate. I worked in the biggest, baddest supply chain on earth. And I didn’t know what a supply chain was. Nobody did. It’s amazing how quickly that became the industry. So what’s going on with Shipwell, where do you see yourself going in the future?

Jason Traff:  

Yeah. So, I think our core mission is how do we continue delivering impact for our customers. Helping them connect their supply chain and get a better control on what’s a very big and important part of their business. And so, you know, when we look forward to 2021, and beyond, obviously, we’re continuing to scale and grow and continue to attract more and more mid market companies that are looking for ways to modernize their supply chain and provide a better experience both internally and to their customers. That’s going to continue to be true. One of the things we found that sort of drives us on this is that our combination of a TMS with visibility, and an integrated Partner Network results in a much faster and higher ROI over other TMS solutions. And so it’s not uncommon for people to generally recover their entire cost of Shipwell, before they’re out of their implementation phase, which is like six months into their contract with us. So we’re gonna continue doing that. And then the other part of this is we recently completed our NPS survey of customers. So NPS is a Net Promoter Score, it’s for tech companies — how much are you willing to recommend this company. And we finished with a 68 across our company, which basically means our customers enjoy our software nearly as much as they enjoy Netflix. So the idea that the team has built supply chain software that’s not only having a really big, outsized impact on our customers, but is also enjoyable to use is I feel a very high bar, and it’s one that we’re committed to in the future.

Joe Lynch:  

Very nice, very nice. Now, during the pandemic, people got a little upset with Netflix because they could not pump out enough great content for us to keep binging.

Jason Traff:  

I’m guilty of that, too. I watched a lot of shows I didn’t think I’d ever watch.

Joe Lynch:  

I’m watching Peaky Blinders for the second time. I can’t stop myself. Yep. So who’s your ideal customer over at Shipwell?

Jason Traff:  

So we target mid market customers, shippers, that’s kind of it’s a broad range between like 100 million to a billion dollars plus in revenue. And it’s typically just because at that point, they’re sufficiently involved in shipping, that it’s a big enough problem, that they’re looking for solutions. But they’re not so big, like the enterprise customers that have had to have a TMS for the past 20 years. It also means that they’re nimble enough that they’re generally able to take our entire platform into their company. We’re built on top of a REST API. API. So if they ever have to just take one small sliver like voting or tracking, they always can. But we always find the best experience happens when they’re able to take the full platform.

Joe Lynch:  

Very nice, very nice. So, before we wrap this up, Jen Cohen said you were supposed to talk about a webinar that’s coming?

Jason Traff:  

Oh, that’s right.

Joe Lynch:  

When is that webinar?

Jason Traff:  

So, February 4, we’re having a webinar with Chris Gloztbach our COO, and Jake Gordon our head of data science, to talk about procurement problems. And one of the things that we saw, I think especially from COVID, was how so many companies had very rigid procurement problems. Lots of consumer goods companies might have seen a 20% spike in demand for vinegar, or mac and cheese or something. And it took them months to get those products back on the shelf, because it was so disconnected from their sourcing and the point of sale. And so one of the things that we’re going to talk about is how Shipwell empowers real time procurement to speed up and improve that part of the company’s life.

Joe Lynch:  

And that’s what Freightwaves, right?

Jason Traff:  

It is with Freightwaves, and you can find details about it on our website shipwell.com.

Joe Lynch:  

Yeah, I’m gonna put a link to your LinkedIn profile, a link to Shipwell, and a link to that webinar in the show notes so if anyone listening wants to check that out I’ll have a link to it. Well this is excellent. I really appreciate you being kind of the guinea pig, you’re the first founder that I’ve interviewed. I felt like I was going all over the place, but you stuck with me and I appreciate that. I am very fascinated by the journey that entrepreneurs like you have taken because it’s not an easy one. And I think there’s something we can all pull from it too.

Jason Traff:  

Thanks Joe, it’s been fun to go through it. And I didn’t feel like I was on a therapist.

Joe Lynch:  

Ryan and I had to adjust the podcast because I said, “I can’t ask these questions. They’re gonna hang up on me.” And again, my goal is always on these podcasts is, I want to highlight the companies because no one wants to just be on a show and talk about themselves, so I’m glad we got a chance to talk about Shipwell. Thank you so much though I appreciate you taking the time, and it’s great to get to know you. And thank you to Jen Cohen, your marketing manager.

Jason Traff:  

Thanks so much, Joe.

Joe Lynch:  

Yep, and thank all of you for listening, the podcast. Your support is very much appreciated. Until next time, onward and upward.

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