The Playbook to Scaling Your Team in Hypergrowth with Flexport CRO Ben Braverman (Video + Transcript)

Ben Braverman explains how Flexport entered a competitive market with a unique model and continues to grow. Hiring senior leaders can set companies up to fail and see how sticking with a current, successful model can be the key to hypergrowth. Rely on your success, know you are doing something right and scale faster.

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Ben Braverman | CRO @ Flexport

FULL TRANSCRIPT BELOW

That was the most over the top entrance that the sales leader for a company that moves boxes around the world has ever gotten. My name is Ben Braverman. I’m Chief Revenue Officer at Flexport. We do international shipping, so I’m honored to be speaking to people like you that were smart enough to get into high margin businesses. We are in a different business. We move boxes around the world for our customers. We literally pick up their goods at factories, we put it on to trucks, we take those trucks to docs and airports around the world and we literally move their cargo from point A to point B. When they pay us to do that, we give them access to a best in class software platform. So it’s a unique model. We’ve scaled it pretty far pretty quickly. So we did about 442 million in sales last year. We founded the company five years ago.

My comms team has told me I can’t disclose this year’s revenue number but I will tell you we set a very aggressive goal and we are on track to hit it. The unique thing about Flexport, and I was just talking to Mr. Lemkin over there, whose Twitter by the way, is part of the reason that I am so addicted to Twitter, so thank you very much for everything you do. We were just talking about the fact that there are two kinds of businesses. You have a business that has figured out how to sell into an industry that needs IT and the budget is just exploding, which is obviously why he regrets parting ways with EchoSign when he did. Or you have a business that your customer, no matter how big they may be, they don’t have the budget, they’re not going to find the budget, they do not value the revolution that software is bringing.

That was Flexport’s case, so we compete against companies that are generally 100 plus years old. In some cases, they’re even owned by governments. In every case, they are government regulated, and they were not buying software. So the largest vendor of software in our industry is a company called Wise Tech. I think the enterprise value of it is maybe $300 million. The top 25 freight forwarders combined to do 100 billion a year in sales. So 100 billion a year in sales, collectively, these are spending 300 million a year on software. So if you cannot sell them software, your only alternative is to build a business to compete with them. That’s what Flexport did. So today, we’re global. We have offices in San Francisco, L.A., Dallas, Chicago, Atlanta, New York, Philly, Amsterdam, Hamburg, Shenzhen, Hong Kong, and a few others. And almost 2000 people.

Like I said, Oh, just shy of … I can’t give the number. At any rate, we’re on track to have a productive year after 442 million in sales last year, all on the back of doing one thing, we provide an incredible customer experience. Our service model is fairly unique. We are not a software business. We are not as fortunate as some of the folks in this room that if we sign a contract, regardless of how our customer feels about what they’ve bought, they’re going to continue paying. We are not a SaaS business, despite being invited to this conference. If we drop the ball, if we do not deliver a shipment as promised on time, if a container gets stolen, if a boat sinks, we get fired. And although none of these things are our fault, we don’t control the assets, although we do have a 747, which some of you may have seen on the internet recently.

For the most part, it’s other people’s assets we’re coordinating. If we drop the ball, if our customer doesn’t get what they need, and by the way, our customers generally spend on the low end 200,000 a year, our largest customer spent 33 million with us last year, if they don’t get what they’re expecting, they fire us immediately. There’s generally no contract in place. There’s no multi-year agreement. There’s no attempt to fix a feature. We’re just out. So, to sort of honor that reality we’ve designed a squad model. All of our customers are served by a global team. That global team is united by software and that team is paired up with a seller. So we have a one-to-one ratio. For every seller at Flexport, there is one squad. And if you were a Flexport customer, your experience with that squad, which is generally a seller, an account management type person who is really an operator, this is someone who knows logistics very deeply, a number of operations associates and a licensed customs broker, this is sort of the entire factory that you need to move goods around the world, they are assigned one-to-one with a seller.

And as a customer, you never experience anything at Flexport other than that squad. No matter what you’re calling about, no matter what you need from us, you’re either calling your rep or you’re calling the squad paired with your rep. You never have a 1-800-EXPERIENCE whether you’re one of our smaller customers or whether you’re one of our largest. So I didn’t realize that all of you are coming from larger companies. I thought maybe there were some true startups here, so the first slide is not super relevant, which I’ll get to in a second. Obviously, all of you have found a product-market fit, it sounds like. I don’t need to tell you this, but if you’re hiring an early sales leader and they are not out selling themselves, please fire that person immediately. If they are building a team before you’ve hit two, three, four million in revenue and they’re not actively bringing on deals themselves, at least I personally would question if I had the right person in place.

All of our first sellers were nontraditional for the role. My top rep who is still one of our VPs to date after I was lucky enough to not just sell myself, he was doing door to door sales for a trucking company before he joined us. He was a professional baseball player who blew out his arm. Had no interest in SaaS, didn’t know what the technology business was, just knew that Flexport sounded like a better version of the kinds of companies he’d been working for and he was willing to go on a really aggressive journey with us. So when I say build the gorilla, this has not been edited, build the guerrilla team crew that thrives in ambiguity, the level of ambiguity that you will find below 10 million in ARR is staggering. Even as you built the product, you often don’t know why people are giving you money for it. We had a number of people join us early on who’d come from blue chip companies and the number one rep from a large telephony business ended up flaming out after 90 days.

If you are used to the structure that a big company provides, it’s going to be a real struggle coming into a company like anyone’s in this room or one of mine for instance. 10 to 50 is when things get exciting and frankly when I think the greatest risk for a sales leader to fail becomes a reality, once you get past 100 million in recurring or 75 million in recurring, the job actually in some ways gets easier, you can hire the world’s best people. But it at 10 to 50 or really 10 to 25, you have big company problems and you have no infrastructure and you don’t necessarily have the ability to recruit people who’ve played the game before. So what we found at Flexport is you effectively can divide your managers into two camps and keep your best reps in the field longer than you would otherwise. So we have a divide and conquer mentality.

We take our sales leaders who are better suited to be on the outside of the office and we let them do only sales. They run a weekly quite blind call, but in general, their job is to be out in the field closing business. They’ll take a group of six to eight reps under their wing. They generally can do one, one cohort a year and they don’t take any new reps. They don’t hire anyone off the street themselves. They’re generally absolved of hiring targets. For the most part, they’ll add one to two people themselves to their teams each year. Everybody else is a graduate from a lower segment. These are the folks who are out in the field. They carry 70% of our number. By not shouldering them with a lot of the traditional sales management overhead that you would think of as being a great sales manager, hiring, training, running pipeline reviews, reporting a number back up to the executive team, by sort of freeing them from all these constraints, we’ve been able to give them much larger targets.

So to give you an example. That same door to door trucking salesman I was mentioning earlier, he carried almost a $100 million number last year. This is gross. We’re a freight forwarder so obviously our net is a percentage of that. There’s another young woman named Julie Harris who’s become a VP for us in the last year. Her team carried a $250 million number. The ability for these people to carry larger and larger bags and to drive greater results for your business actually expands the less you ask them to do. And we’re coming to a scale now where this is starting to break. We’ve started to look at ourselves and go, “Okay, some of the things that great companies traditionally do in terms of sales management, we’re starting to need.” But in the early days, we were able to scale much faster than people expected because we didn’t necessarily take anybody out of the field. Our bestsellers were able to keep selling. We also didn’t try to build a lot of centralized functions too early. We didn’t build an enablement team.

Our recruiting team was fairly bare bones. We didn’t ask our managers to do a ton of recruiting. All of it was done by third parties. We didn’t have a hire fast fire fast mentality. The people we brought in, we genuinely believed they were really good and we had really low attrition, sub 10% year over year. But all of the training was done by what we called the SMB managers. So we sort of artificially created segments in our business. We’re lucky that we sell to a lot different sized. And the real purpose was not necessarily the service model being different. The purpose was to allow reps to come in, only touch smaller accounts, not have to go through formal training like a larger company would be able to provide, and have a manager whose job it was not to close any business, not to ever leave the office, but to effectively be their coach and sit in every discovery, sit in every closing call, help them with every term sheet and ultimately get every deal over the line.

And by separating these teams and by effectively allowing these two managers to split what would have traditionally been a sales leadership role, we were able to go a lot further without hiring external folks. The biggest mistake I think all of us make is looking for our Buck Steel. When I say Buck Steel, I mean a traditional sales leader who comes in and tells you everything that’s fucked up in your business and everything you need to fix and all the ways you’re dropping of ball, and how they’ve seen every problem before. They’ve never missed a quota. It’s tempting. These people are alluring, they’re good at sales, that’s why they have the jobs they’ve had. And they all tend to believe your business is simpler than it is and it is our job as leaders, as stewards of the business to resist the temptation to over-index on senior hires.

In general, and I think Sam talked a lot about this in his presentation, in general at our pace, the business is moving so quickly, the idea that someone’s going to come in from the outside and rapidly get up to speed and add value, the probability is just pretty low. So all you’re doing when you over-index on senior hires is setting yourself up to fail, you set your team up to be a little bit disgruntled because there’s someone in the business who they’re reporting into who doesn’t understand what’s going on and can’t move at their pace, and in general you don’t need them. If you’ve gotten this far, if you have a business that’s doing 7, 10, 15 million a year in run rate, you’ve figured it out, you’re doing something right. You are your own savior. Where we are now is a little bit different.

So as I said, we did 442 last year, aggressive goal this year. It is time for us to do all of the things that I said we would never do, which is become a professional sales organization. We actually have started hiring senior leaders and we actually have the space now for them to thrive. We are able to make plans that are 90, 180, 365 days instead of 30. We’re not necessarily doing every decision based on trying to get the next funding round done. And as a result, we have senior leaders that are coming in and they’re adding lots of value, they’re leveling up the team. We were able to spend the years it took to hire them. I just brought on a North America VP or SVP of Sales. We spent a full year on the search. It was the right move. He’s now 100 days in and he’s really starting to make an impact.

If we had brought him in a year or two years earlier when we were really only thinking in 30-day terms, it would have been a disaster. And where we are right now is, frankly, we have to basically burn down the entire sale that got us this far. And hopefully bringing on this senior team will give us space to do it. It’s not so much that I think our competitors are that good, is that I think when you get to 100 million in ARR, 150 million in ARR, and talking in net terms now, you’re thinking about going public, the level of scrutiny, and Pete Thiel talks a lot about this, that going public is in some ways the worst decision you can make as a business because your competitors who have never taken you seriously before will begin to. Frankly at Flexport, we’d be fools to not think that was a possibility. So we’re in the process of redesigning our sale Soup To Nuts.

So today our sale is a classic outbound motion. 90% of every dollar we bring in is the result of a cold outbound from an SDR. That motion is as simple as it gets. It is, “Hey, this is Tina from Flexport. Would you like to talk to one of our reps about X?” We are moving towards a model that is hopefully much more consultative, much more about ingesting their data and coming back with a proposal. We want to move an industry from one year sales deal terms to three year terms. We have to burn down a lot of what got us here because if we don’t if we aren’t willing to change our sale, if we aren’t willing to change the way we operate, if we aren’t willing to fundamentally upgrade our model, someone’s going to come in who’s just as nimble as we were three, four, five years ago, as nimble as some of you are probably in the audience today and they’re going to eat our lunch.

So with that, I will say we have 15 minutes left. I’d love to take some questions. I know you all had a super long day, excited to be here and happy to tell you anything that that Ramen, our amazing head of comms will let me.

Take a look at the Q&A!

QUESTION: What was the biggest pivot you guys made your time there as far as just anything, sales strategy, all that?

Yeah, the biggest pivot was we started at the bottom of the market. We thought we were going to be TurboTax for importers. We thought that this was going to be a business that was going to have 3000 people in one massive office somewhere in the middle of the country doing transactional volume. Serving small businesses that needed to move a pallet here or a container of tchotchke into Amazon. And you actually can build quite a big business there. Years zero to one, that’s really how we got the flywheel moving, but we found out that part of the market was troubled, that the amount of energy it took to really teach someone how to do international trade, to onboard them to the platform, to really get them up and running as an importer, and then many of these companies end up only importing once or twice in a given year. It was just really hard to find that, to build a scalable business there.

And it turned out that the need for our technology scaled much further than we thought it would. We assumed the enterprise and mid market companies that were spending 5, 10, 15 million a year on shipping, we assumed they were well served. It turned out they weren’t and probably 75% of our revenue now is from the mid market and up.

QUESTION: So you scaled back to scope?

Yeah, yeah. We actually had to. For a while, we stopped accepting inbound because we were getting so much inbound from these smaller companies. And it’s a bummer. Our mission is to make global trade easy for everybody. We actually believe that. There’s a lot of people at the company who got into it because they saw one graph that basically showed when companies are trading with each other, their likelihood of going to war goes to zero. There’s the amazing quip, “No two countries that each have a McDonald’s has ever gone to war with each other.” That’s true. So trade really does bring people together. We love the idea of helping small businesses, but yeah, we did have to start, we did have to set a slightly higher threshold, lest we drown.

Published on March 10, 2020

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