YC
Ryan Petersen on Building Flexport, a Modern Freight Forwarder
@ Y Combinator
08/30/18
Takeaways
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Ryan Petersen
08/30/18
@ Y Combinator
Flexport is a freight forwarder that helps businesses ship cargo globally while using technology to provide visibility and control over their freight at lower prices.
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Ryan Petersen
08/30/18
@ Y Combinator
In the freight forwarding industry, products that are too heavy for a driver to lift are classified as freight, requiring a different network for transportation compared to parcel shipping.
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Ryan Petersen
08/30/18
@ Y Combinator
Flexport structures and organizes the unstructured data involved in freight forwarding, allowing all parties in the shipping process to access the information they need to perform their roles effectively.
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Ryan Petersen
08/30/18
@ Y Combinator
One of Flexport's major clients is Georgia-Pacific, the largest paper company in the world, and they also ship products for Sonos, helping around 2,000 merchants who sell on Amazon.
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Ryan Petersen
08/30/18
@ Y Combinator
I started selling electric scooters on eBay 15 years ago, and I was one of the first to sign up as a third-party seller on Amazon when they introduced that option.
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Ryan Petersen
08/30/18
@ Y Combinator
The margins for selling on Amazon were higher back then, but as more sellers entered the market, profits diminished due to increased competition.
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Ryan Petersen
08/30/18
@ Y Combinator
I lived in China for two years running a supply chain business, which helped me gain international experience and led me to business school.
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Ryan Petersen
08/30/18
@ Y Combinator
I graduated from business school with $140,000 in debt, which made me determined to find a way to succeed as an entrepreneur without being constrained by that debt.
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Ryan Petersen
08/30/18
@ Y Combinator
I recommend business school for those who can afford it, but graduating with significant debt can limit future opportunities and lead to poor life choices.
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Ryan Petersen
08/30/18
@ Y Combinator
I knew that if I could make my debt payments and cover my living expenses, I could afford to experiment with different business ideas until I found success.
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Ryan Petersen
08/30/18
@ Y Combinator
Flexport was granted a license by the US Department of Homeland Security on March 31, 2013, which allowed me to fully commit to the business after three years of waiting. I moved to California to start Flexport, and I think that was one of the best decisions I've made.
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Ryan Petersen
08/30/18
@ Y Combinator
The first customers for Flexport signed up through Google Adwords and SEO, even before we officially launched the service.
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Ryan Petersen
08/30/18
@ Y Combinator
Flexport emerged from my experience in the freight forwarding industry, where I felt the pain of information asymmetry and recognized the potential for software to improve the process.
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Ryan Petersen
08/30/18
@ Y Combinator
Flexport is a technology company that improves freight shipping, not just a freight forwarder.
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Ryan Petersen
08/30/18
@ Y Combinator
We can only hire the best talent in Silicon Valley, which is why Flexport was founded here.
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Ryan Petersen
08/30/18
@ Y Combinator
Our strategy for hiring talent involves looking for 'insecure overachievers'—people who are hungry, humble, and eager to prove themselves.
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Ryan Petersen
08/30/18
@ Y Combinator
I read a book every week, and one of my favorites is 'Origin of Wealth,' which discusses the evolution of biology and business.
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Ryan Petersen
08/30/18
@ Y Combinator
Culture is our biggest challenge as a company; good culture means having engaged team members who get more out of their job than they put in.
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Ryan Petersen
08/30/18
@ Y Combinator
Flexport achieved $200 million in revenue without a marketing team, which taught me the importance of hiring people better than myself in that area. Flexport primarily relies on outbound sales, with about 95% to 98% of its sales coming from actively reaching out to potential clients.
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Ryan Petersen
08/30/18
@ Y Combinator
To attract clients from legacy providers, we demonstrate that we can offer more visibility and control over their international freight at the same price point.
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Ryan Petersen
08/30/18
@ Y Combinator
Building trust with clients is crucial, especially since switching freight providers involves significant risk and compliance challenges.
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Ryan Petersen
08/30/18
@ Y Combinator
Entrepreneurial sales differ from regular sales; the goal is to get to 'yes' by understanding what conditions clients need to agree to work with you.
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Ryan Petersen
08/30/18
@ Y Combinator
It's essential to maintain discipline in what promises you make to clients, ensuring that you can deliver on those commitments.
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Ryan Petersen
08/30/18
@ Y Combinator
When developing products, it's important to gather feedback from potential clients to ensure that the features you build are genuinely needed.
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Ryan Petersen
08/30/18
@ Y Combinator
Flexport has grown rapidly, recently surpassing FedEx and Panalpina to become the 17th largest freight forwarder out of about 20,000 globally.
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Ryan Petersen
08/30/18
@ Y Combinator
It's important to address annoying problems in your life as potential business opportunities, as they often resonate with others facing similar issues.
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Ryan Petersen
08/30/18
@ Y Combinator
Don't wait for investors to give you permission to start a business; find ways to generate revenue independently and build credibility.
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Ryan Petersen
08/30/18
@ Y Combinator
Investors prefer to back entrepreneurs who are determined to succeed with or without their funding, as it reduces their risk.
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Ryan Petersen
08/30/18
@ Y Combinator
Success compounds over time; small wins can lead to significant opportunities, such as gaining investment or building a strong team.