SPEAKER_00: you said it so well before it's just a real estate business yeah you don't have to there's nothing

SPEAKER_02: special about it but what actually is special about we work was adam newman the thing that's special about we work is the brand yes he is their advantage exactly like richard branson he stole

SPEAKER_06: richard branson's playbook this week in startups is brought to you by northwest registered agent

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SPEAKER_09: startup some quick news up top producer nick is here what's in the news producer nick all right

SPEAKER_02: all right so we have some adam newman news yeah this is very near and dear to my heart this is

SPEAKER_00: why i'm on today because this is my guy this is my guy yeah i love adam newman i do i and this is not like a bit i sincerely love him i think he built an amazing company i think he's a great entrepreneur i think he deserves a second chance call me crazy here we go i'm calling you crazy

SPEAKER_15: the i saw him at the fii conference by the way he was in riyadh uh running around at parties and

SPEAKER_17: whatever talking to folks yeah so yeah he's like six five in person right he's a giant hard to miss

SPEAKER_18: he's uh yeah feels like six three or four it looks like a point guard in the nba yeah so he stirred up

SPEAKER_00: some craziness on x because some comments that he made about weworks bankruptcy uh went viral and everybody's talking about him coming back now so before we get to that let's just cue up what happened originally so we work filed for bankruptcy earlier this week their recent performance was really bad q2 revenue 844 million dollars up only four percent year over year and via reuters

SPEAKER_02: weworks lease costs made up 74 percent of its revenue in q2 its net loss was 397 million dollars and at the end of q2 they only had 680 million dollars in total available liquidity and only 205 million dollars of cash on hand shares were down 98 percent year to date when they went bankrupt to a market cap of 68 million dollars and their spack valuation was 9 billion so that overall that was a 99.3 percent decline out public yes which was they agreed upon in 2021 and then they de-spacked at some

SPEAKER_23: point last year makes sense they have these leases that just don't make sense they signed very expensive leases at the top of the market using the vision funds money and here we go so i guess the question is when you go into bankruptcy who gets to keep the equity there are those leaseholders

SPEAKER_25: going to have a claim on them and i wonder how all of this works out and who winds up owning wework

SPEAKER_02: so right now softbank owns 70 of the company and they admitted that we work needs to restructure its leases if it wants to survive and if it doesn't it's going to go out of business so what happened was we work as part of its bankruptcy filing listed 15 billion dollars in assets and 18.7 billion dollars of liabilities as of june 30th so basically they need to wipe out 3 billion dollars of debt on its balance sheet and here's how they plan on doing that they're going to immediately reject 69 leases they're immediately starting renegotiations with 400 landlords they have 777 total locations across 39 countries to about 230 in the u.s and then they're going to convert or attempt to convert about 3 billion dollars of their debt into equity with softbank retaining an

SPEAKER_27: ownership stake yeah because softbank when they gave the last bit of money it was probably senior

SPEAKER_23: debt as a loan as opposed to them buying shares in the company so they do you want to explain how that

SPEAKER_25: works sure so you could invest in a company and buy shares right um then you can also give a loan to a company when you give a loan to a company that would be uh called senior debt right and there's like a debt stack and so equity comes below debt if a company runs you know goes bankrupt the debt holders basically can foreclose on the company and this depends on how things are written etc so while softbank may have invested money for equity previously i think what happened was in these last rounds they gave them debt knowing hey this thing could all come apart in which case we would be the senior secured provider of debt and then the leases would come after them so i think that's what's happening here is softbank set it up so if we work were to go bankrupt which they probably anticipated they took that massive risk with the debt they take that massive risk and then they get to take over the company essentially when that converts but there's a bankruptcy judge who makes sure that all of this occurs and the people who are in line to get money get paid and so who's most senior probably we work

SPEAKER_02: yeah yeah i'm sorry probably something you're right right right we work put out a statement they said 92 of the company's lenders had agreed to convert their secure debt into equity and we work will continue operating its non-us and canada locations as normal but it's restructuring a bunch of leases i guess

SPEAKER_00: the most expensive ones were in the us and canada yeah so here's where it gets a little crazy of course we just mentioned adam newman put out this statement jason i'll let you read it well i thought

SPEAKER_25: this was great and and the way he released this i guess is he didn't go through the press he just i guess sent out a press release with you know a little bit of a raw press release let's just say it has been challenging for me to watch from the sidelines since 2019 as we work has failed to take advantage of a product that is more relevant today than ever before it's a bit of a run-on sentence there's some grammar issues there uh which leads me to believe that he actually wrote it that he actually wrote it yeah so like if you were to just look at it it's a run-on sentence it should be two separate sentences you know uh or at least some commas going on there you restructure it newman's statement continued uh quote i believe that with the right strategy and team a reorganization will enable we work to emerge successfully again not a well-written sentence a little bit kludgy so this would be i think him saber rattling that maybe he wants to come in and play some role into this because he's saying hey i have the right strategy i have the right team so the bankruptcy judge or to softbank when this thing goes private do you think masayoshi-san wants to bring him back or merge it with his new company that would be the ultimate crazy is after their incredible breakup you know if what if newman comes back and says i want to own the we work brand i've got this other flow thing going i've got money from andresen i can get some money from the middle east region and i have my own money and maybe he cuts a deal with masa to come back and that would be unprecedented and crazy except steve jobs did it board fired him and he came back so this is you know and everybody here in silicon valley has the this archetype of the steve jobs comeback in mind and so adam newman has been running the steve jobs playbook he left he started a competing adjacent company with flow

SPEAKER_19: it's a real estate company it's not dissimilar residential not commercial right residential not

SPEAKER_25: commercial but it's residential for nomads who are workers so it's work from home so how is that different you know you're still working in a space it's just you're working and living and remember we work had started we live so is it different it's exactly the same vision just starting with residential working backwards to work as opposed to starting with work and working backwards to residential so i would argue it's the same thing it's space that's hip for young people and you try to make a margin on the space uh by buying low making it well designed and selling it for a higher price and parties are

SPEAKER_12: actually accepted and not frowned upon because you're you're not at work you're at your residential space

SPEAKER_25: absolutely if you're at work you know in the era of buttoned up work and keeping things professional the beer was always an issue right they had beer kegs that was always

SPEAKER_50: triggering tequila shots and everybody put and handing out tequila always a recipe for disaster

SPEAKER_25: at work these people are getting drunk summer camp people you know maybe having too much fun you

SPEAKER_50: know treating it like burning man uh so yeah by the way i know someone who worked at we work now in

SPEAKER_00: like the 2017 2018 era and he said was it's a woman and she said it was the most fun time she's like i

SPEAKER_53: will never enjoy working at any place ever as much as i enjoy working at we work she was awesome you know

SPEAKER_25: there you you can have a lot of fun at work it's just at work you can build up liabilities by having

SPEAKER_02: too much fun and and this is where like professionalism really matters so it's funny too talking to her like she is almost like an adam newman acolyte she loves him she's like he was the best he treated us so well

SPEAKER_19: how do you think uber people feel about travis i was just gonna make that same comparison yeah and

SPEAKER_25: listen if dara goes for another five years buys back 20 of uber stock hits you know 250 billion dollar valuation and cloud kitchens becomes worth a hundred billion which is on the track to do i would

SPEAKER_58: guess and then all of a sudden those become one company and travis comes back return of the king

SPEAKER_23: style i like it i like it i always like the the redemption story i'm with you our friend eric newcomer did some digging around uh newman i think in his newsletter what did he have to say

SPEAKER_00: yeah so he spoke to a couple of um anonymous sources uh one person who he called a source familiar

SPEAKER_02: with the matter told him that real people with real money asked adam newman if he was interested in getting involved in a group that's going to participate in the restructuring a former we work executive that he talked to again anonymous said quote he texted him this i think adam newman comes in and buys the company he's well capitalized and given that the board is now almost exclusively restructuring specialists they will take care of all the big problems getting out of leases making the company significantly smaller across the board establishing a sustainable

SPEAKER_62: business model etc yeah and you bring in the hype man yeah yeah and then he was also told that

SPEAKER_02: newman's non-compete with we work just ended in october that's uh interesting information i always

SPEAKER_25: discount former executives there are you know hundreds of former executives at we work who knows what they know uh but you know speculation is fun it makes total sense who else wants to run the business right that's the issue you need somebody who wants to run the business and then who better to run the business than the former founder and who's going to make it more exciting uh you know elon always says like fate loves irony like the most entertaining outcome is the most likely and most probable this is the most entertaining outcome so as a yeah you know uh media sphere right blogs social media we kind of steer towards the most entertaining outcome unconsciously right and this is like a really interesting theory of media okay trump's crazy you know larger than life he's the most entertaining and then people all of a sudden you know despite what happened on the insurrection or whatever you you know

David Friedberg: trump it's like the whole country is like steering towards oh but it's more entertaining when he does

SPEAKER_25: stuff yeah and it can be very dangerous driven i think it's like some primordial uh thing where you know when there's an accident on the highway we all look at it and slow down yeah makes no logical sense to slow down and look at an accident you're not going to see anything you haven't seen before just a bunch of wrecked cars right you've seen it a thousand times it's terrible but everybody slows down to see it we can't not look at the train wreck yeah and so this is like a train wreck this is like shakespeare it's drama so we as humans are drawn to the drama conflict equals drama drama equals engagement so here you have it massive conflict massive attention and then it steers towards that outcome because all the energy starts going towards that outcome just like elon buying twitter right it was like this major controversy this conflict conflict conflict and then all of a sudden he

SPEAKER_58: owns twitter boom and then since he's owned it right all this conflict going on and this drama and

SPEAKER_23: you know uh it starts growing and you know uh becomes super important again i also feel like this

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SPEAKER_00: i feel like in this whole last like year or so of the entire crypto industry coming down and like the goodfellas theme song with doh kwan and sbf yeah i i feel like cut to that adam newman unfairly kind of gets grouped in with those people and maybe he did do some things on the margins that were not great

SPEAKER_02: right buying the buildings with his own money leasing them out to we work owning the the trademark and leasing it out for a couple million dollars a year for like personal those are that's angle

SPEAKER_80: shooting yeah that's not crime so an angle shooting is you're not breaking the rules of

SPEAKER_25: poker you're just trying to find a little angle on the person right so an example of angle shooting in poker and people look at angle shooting as like a little smarmy um so owning the ip and then selling it back it's a little angle shot right obviously or owning the building and then leasing it back is it against the law or not no but it's an angle shot so in poker if you're like start talking to the person like hey you want to chop the pot you know we're both all in before i turn my cards if you want to split it yes or no and so that's an angle shot right i'm trying to get information from you then you say okay i'll split it and you say okay well it's not binding or you just yeah are trying to get information from a person you know and you take some angle shot another angle shot might be this guy did this in a poker tour and over over again he would throw out um like three chips you know three thousand dollars and he would say uh all in and then what what is it the three thousand dollars or is it the all-in and it turns out the all-in is what matters not the thing so you can kind of make a mistake on purpose yeah in order to like bait people into a hand that's angle shooting so he was a he's a bit of an angle shooter but he's not theranos he built a real business he is an incredible marketer and he knows how to throw a hell of a party and people young people like to party now you could disagree with it but that was actually richard branson's brand was to be a little kitschy to be a little cheeky to be a little sexy i mean the name of the brand virgin was meant to elicit

SPEAKER_15: a response from people about virginity and you know sex and everything so you know i think to and to a much lesser extent adam newman has that richard branson showmanship in him right i just think

SPEAKER_02: he gets roped in unfairly like i don't think anything that he really did and he also built a

SPEAKER_00: huge business and the another thing i see getting thrown around all the time is like oh he cashed out you know 700 million dollars at the peak yeah he wasn't selling those shares to retail investors he wasn't dumping them on anyone no no this wasn't this wasn't purchased this wasn't like yeah you

SPEAKER_15: know uh some crypto bag being sent to you know or some nft draw from a celebrity no this maybe sold it

SPEAKER_25: to softbank you know these are the most sophisticated investor arguably in the world now you may disagree with his betting style but to say he's not amongst the most sophisticated in the world in the history

SPEAKER_23: of investing it would be crazy he's one of the he was the richest man on the planet for a while he's a

SPEAKER_25: sophisticated person so 100 agree with you congratulations to adam newman for still being in the mix let's just all keep in mind it's not a technology business a real estate business it has very slim margins it's never going to be some 100 billion dollar company it's going to be a couple billion dollar company with a 10 margin it's never going to be some great epic company but it might be a fun company just like virgin you know uh air or virgin atlantic you know was a fun company you know virgin airlines may be a terrible business but it was a fun business and it you know was motivating for him to do it it's just not a tech business that's where i think people get

SPEAKER_96: them so you're in on the comeback you're in on the return of the whole all in hell yeah 100 excited newman this weekend startups is team newman baby totally totally you know what it's more

SPEAKER_25: entertaining for us i mean it's fantastic what if he makes it work you know the thing he did was he bought really crummy office space c-level office space jazzed it up convinced people to come to the tenderloin or some terrible area in you know that's a little bit dangerous on the fringe and uh did the arbitrage he's just got to get back to that by the lowest possible real estate which by the way you're going to be able to do right now and so it's a good time a great time for him to come in it's very similar to the time he started was it called green desk the original yes it was green desk good memory

SPEAKER_78: yeah it's just like it was originally like for people who uh it was like environmentally branded originally and they had some place in like williamsburg some little building in williamsburg

SPEAKER_25: and he sold the green desk to that real estate person and then left to do we work i remember like the whole that that was an angle shot right he's just like let's just sell this back to this

SPEAKER_107: guy and then we'll start a new brand and make it even bigger so congrats to adam newman uh it's super entertaining it doesn't really have much to do with tech but great he should go buy all these uh crummy

SPEAKER_108: buildings in san francisco or these great buildings in san francisco that have no leases and are selling

SPEAKER_25: 25 cents on the dollar like if somebody gave him i'm not kidding here like 10 billion dollars to go buy real estate and figure it out after he would probably be one of the best stewards of capital if you put some controls in place like an actual board yeah that's what the 2.0 should be whoever enables him this time around should just have proper governance don't let him run amok and then have some good people around him to make sure he doesn't you know go for like we'll scale this sign any lease and we'll figure it out later we'll figure it out later is not a plan a plan is a plan that's always i think the lesson of the zerp environment like you gotta be very careful if you can thread that needle people say oh travis and you know uber were you know subsidizing vcs were subsidizing the rides whatever they had a plan trust me it was a plan and there was a plan in china and there was a plan for the us and the plan in china was always let's go for the gold if we get the silver we stay if not

SPEAKER_23: we sell and we own some percentage of dd that was the strategy you know travis explained that strategy to me because i said hey this we're losing a lot of money in china what's going on it's like we're gonna go for the gold but if we don't get it we'll go for silver which is owning part a large part a meaningful part of that company dd and that's exactly what happened and it worked out great so

SPEAKER_15: i think you just have to have a really good plan here i don't think we work had a good plan last

SPEAKER_25: time around too much money to a mercurial guy with no controls with no controls this time give them the money but have there be an investment committee that he has to bring each deal to and the investment committee says yes or no that would be what i would do i give him a 10 billion dollar facility he can buy as much real estate as he wants um he just has to it has to pass the

SPEAKER_09: sniff test with this board and that board you know makes him jump through a couple of hoops

SPEAKER_23: to to get approval to buy those things as opposed to him just going bonkers and starting a school

SPEAKER_25: remember that he started school he got the wave machine he started investing in surfers like no bueno there that's same thing that happened with sbf right um there was no controls no board and he just

SPEAKER_23: bought whatever he wanted invested in bought politicians bought celebrities invested in tech companies invested in crypto projects he didn't care it's just like that was from that was designed

SPEAKER_00: from the start he was that was he sbf was machiavellian to me he was like ends justify the means and the end is like saving the world so i can do whatever i want basically the question is like sbf is like um

SPEAKER_25: a poor man's like uh lex luther on that side right of the like legion of doom okay but is adam newman

SPEAKER_69: part of the legion of doom no what or is he like an anti-hero who's just difficult to get along with

SPEAKER_58: in the justice league you know like is he like an x-men who's kind of like deadpool he's like

SPEAKER_53: the last thing you'd ever say about adam newman is that he's difficult to get along with i think

SPEAKER_25: that is his one that he's amazing or good is he part of justice league or legion of doom or is he an independent contractor i think he kind of falls in that independent gunslinger boba fett area

SPEAKER_00: you know what i would say about empire or the rebellion business you said it so well before it's just a real estate business yeah you don't have to there's nothing special about it but what actually is special about we work was adam newman the thing that's special about we work is the brand

SPEAKER_05: yes he is their advantage exactly like richard branson he stole richard branson's playbook

Chamath Palihapitiya: you you make it a party you make it sexy and make it fun you make it a little out of control a little

SPEAKER_136: dangerous shots whatever virgin you you go it's on a virgin flight you know maybe the flight attendants

SPEAKER_25: male and female are a little more attractive and maybe they're having drinks with the customers like i've been to necker island a couple times not to flex i was invited um but one a couple times for birthday parties or whatever and i can tell you they recruit the staff at necker island based on like how much fun they are and they're partying you know doing shots having a great time dancing they're they're into it you know it's it's like whatever the branson comparison is a good one

SPEAKER_58: i like that it's it's really solid i think yeah uh so congratulations shout out to adam newman come on the pod anytime all right all right and what's what we got in the back half of the show josh kohler from driver doc up next great awesome so up next uh more of these founder interviews so we'll get a little news in the show a little interviews in the show classic twist episode enjoy everybody see you

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SPEAKER_25: with confidence at lemon dot io slash hire all right everybody i just had john from motive on a few days ago uh and today we've got another founder building in an old slow uh incumbent industry you know those industries that really need technologies in this case we're talking about trucking josh kolar is the ceo and co-founder of driver doc this is an all-in-one digital management platform for trucking companies basically here's the problem 97 of trucking companies they got fewer than 20 trucks this is a fragmented market and these smaller companies they they rely on paper let's be honest facts manual processes so what does driver doc do well they provide tools for the invoicing the document management and all

SPEAKER_152: that kind of stuff josh welcome to the program thank you so much jason thank you for having me i appreciate

SPEAKER_25: it uh okay so you're in nebraska we've got a lot of uh friends in nebraska and you came up with this idea to help trucking companies get more efficient in this fragmented market uh explain to everybody

SPEAKER_18: and and by the way we're excited to be investors in the company we love these boring businesses uh

SPEAKER_25: that really need technology they're laggards in some cases but they're important businesses and that means if they are laggards man uh the distance between when they're getting off fax and paper and using smartphones and ai that's a big jump right it's like they're skipping three steps uh so tell

SPEAKER_108: us how did you come up with the idea for the company what does it do how's it going it came out of uh

SPEAKER_157: necessity for my background and experience in the industry itself i've got 15 plus years of experience at some of the largest transportation providers uh ups union pacific and warner enterprises and so these are top tier transportation companies and so getting to see a lot of the pain points um first-hand experience and then building around some of these companies to solve some of these pain points gave me an understanding that truly this industry like you said is lagging and it's just just unsiloed you think about like what i got to see with ups very close system all the way from the drivers and their truck having digital communication think used to sign for packages yeah now the amazon experience right has changed the game it's now a photo in your house and so it's that core concept of when i was at union pacific and warner we're still engaging with drivers we're still relying upon paper and we didn't have the amazon experience and that's what this industry wanted so i took a a leap of faith and said hey i've got the expertise i've got um a network that i believe can help me achieve this and so in 2019 left the corporate industry space and decided to start to research and design essentially the starting

SPEAKER_161: point to do bill of laden digitization for this space to recap there you're working in the industry you got a lot of insights you got a lot of frustration you decide you're going to become

SPEAKER_25: a founder yes now when you become a founder you look for an opportunity uh to build a product that delights users and either saves them time saves them money yes or makes them laugh and entertains them i always tell people those are the three categories people forget that last one now i don't think bills of laden uh are going to make people laugh or cry necessarily i'm sure they might at moments um but really this is about saving time and saving money correct yeah to kind of give you the concepts

SPEAKER_155: there of payment terms right if you start with the payment terms in the space and the industry

SPEAKER_157: are anywhere from 45 60 days and so this bill of laden document yes it tells you what's being put into like a trailer or container but in most instances that was the support that the freight actually got delivered and because that wasn't being done digitally was being exchanged by hand was causing anywhere from seven to ten days delay in getting paid so you think about yeah 30 45 you know 60 day terms go ahead and throw another seven to ten days on that and that's that's a huge issue so that's the

SPEAKER_25: first piece you built was the ability to take a smartphone out take a picture of a bill of laden

SPEAKER_89: digitize it and and turn it into you know essentially a a smart contract or a smart document

SPEAKER_157: or if i'm correct yeah yes and so that's what really took us to the point of you had to have a way to digitize it we had to have a way to go back now and show it to some of the larger transportation providers and some of the larger shippers that use case that you just described really became paramount over the last six to ten months for us to go show to the likes of a warner to go show to the likes of union pacific and show them that we know their pain point but also give them a tangible tool that can be used for them but also seen as something they can provide to their customers

SPEAKER_169: we gave them a tool that they could see themselves and grow bigger into it how do you

SPEAKER_25: get into these trucking companies and make money because it's super fragmented and then you're introducing some new technology how do you get in there and get them to adopt this or is it just bottoms up you tell people like hey this app's out there for free go ahead and use it it's solved it's a tool that's available for i could see the both ways of doing and you can just put the tool out there and say hey there's a free tool out there and then you know oh if you want to play multiplayer mode or you want to have the pro features then upgrade so yeah what's your go-to-market strategy

SPEAKER_157: here and how's that going we really looked at it as it's a tool for the driver another part of the entry point was every one of those documents today even if there was a scanning app was all going back to someone's disaggregated email inbox and so part of this was offering a portal into the back office of the company which created organization and then truly the api integration capability to take the document and put it directly upstream for them to use it next into their core systems there are some

SPEAKER_15: i guess legacy apps that manage all of their stuff so you're just helping with that first step of

SPEAKER_25: getting off of paper yeah correct and then do you eventually target those legacy apps and try to replace those how do you think about hey i'm a startup with a limited amount of resources yes you know i can charge for this app or this processes but i i suppose it's probably 10 of the process there's another 80 or 90 to go how much is what you're currently doing and then tell us about the big vision

SPEAKER_177: here and how this becomes you know 100 million in revenue you nailed it it's 10 percent is what we're

SPEAKER_157: saying is it's light ocr capabilities it's light integration capabilities to take that document and put it upstream the next part of this is truly we think of like the next 20 30 percent is getting accounts most receivable uh automation billing automation as we start to think about what they do with that document and that process upstream so instead of people doing i look at my t like my system of record and i look at this document it's bringing both of that together and automating that person process today

SPEAKER_75: okay okay we're back with another segment of pitch it to jcal brought to you by the fine folks at dot tech domains dot tech domains is giving twist listeners the chance to show off their startups on this week in startups so go to startups.tech slash jason to apply it's only one rule you need to have a top tech domain name to get featured this week we have a great pitch from netai.tech netai.tech is building an ai powered analytics platform that'll help mobile providers analyze the traffic data on their networks people in the industry call this deep traffic analytics basically netai.tech serves mobile providers in two ways it helps them increase capital efficiency and better monetize 5g revenue streams and it optimizes their infrastructure so they can provide faster and more cost-effective services makes a ton of sense and you got billions of 5g devices coming online over the next decade or so so here's your call to action if you're interested in getting featured on this week in startups like netai.tech which just featured go to startups.tech slash jason and apply today that's startups.tech slash jason and fill out the form to apply and make sure you get a dot tech domain name it's a beautiful domain name it makes you look serious feels like you got a great

SPEAKER_25: domain name so when you see what openai is doing with uh multimodal hey you can take a picture you can get text as an output you can give text get a picture all this different stuff yes and you know you built this before that was available now all this is available so how much faster can this be done with ai right now and uh what what do you do just throw away the existing code base and just say you know what we're going to start over with ai and just do this by hitting some language models how do you think about the introduction of ai and multimodal to all this ai is a great thing so i think for us

SPEAKER_157: i don't think we have to necessarily throw everything away because there's business inherent business logic that the ai doesn't know and can't know yet and so i think it helps us accelerate the innovation and instead of like focusing on some of those things that are like rudimentary and should just happen we can focus on what i'm calling the other truly 40 to 50 of the platform which is increasing it instead of just that transportation company getting value you've got a shipper that is producing the bill of lading document and they actually want it digitized so instead of yeah like the paper being handed to the driver and the driver scanning we are going to focus on increased adoption and participation from the shipper so that the data becomes digital into the core process so that's where i see it's like ai is just going to be our best friend to help replace where our focus has had to been and now it's truly pivoting from that thought of just one company but getting all parties involved

SPEAKER_89: and now there's some standards around bills of laden i know like there are some organizations that want to standardize all this stuff kind of like you do an open source or an html or rss so where is the industry at standardization and publishing standards in the same way you know really simple syndication opml podcast syndication you know html recipes all of this semantic web stuff exists yes but my understanding is in the uh industry you're in it's kind of nascent yes so think of it as

SPEAKER_157: like you've already we've already said this industry is very lagging and disheveled and fragmented um think of like industry adoption right and that part of a lift for that thought and so truly when i went out out of the corporate world in 2019 um i started partnering with um freight waves and bitta which is blockchain and transport alliance to help facilitate and think about how those bill of laden standards would come about the reality is you throw a pandemic in there and everything else everybody essentially kind of switched where they were focusing speed ahead a couple years two three four years and we're seeing three industry standard boards and and groups of bodies come out which is driving this use case of electronic bill of lading that's a heavy lift right i mean that's what is that a billion dollars to try and you know force an industry to stop uh to adopt a standard like that no they're they're coming out of necessity because these companies because of the pandemic so part of our lift has actually been taking off us and so part of our we're calling it our bill of lading chain of custody model we've now have this essentially what we're going to say is going to change the game and allow all parties to really see all the events around a digital document we're going back to now those standards groups and we're getting them to essentially certify us so tell me about

SPEAKER_25: people tracking what's in freight i know like there's a big trend put your air tags in your luggage you know we all do that as consumers uh some people are doing that they ship something that's important they'll throw an air tag in it or a tile before that the people who are shipping stuff using some sort of standard to track the location of it how does the industry look at that i remember one of the airlines was like you cannot they tried to ban air tags and they realized how dumb that was it's like banning air pods or something like it's it's going to be built into everything so it's kind of ridiculous and it actually works for everybody if you know where your luggage is it's one less question you have to ask and less customer support you have to do so i'm curious

SPEAKER_89: has live tracking of packages kind of been incorporated into this yet or it's not there yet

SPEAKER_157: yes it has so that was our two core value proposition was the digitization of the freight documents the bill of lighting and shipment visibility we started with visibility around the sense of a driver and being having the app whether it's on a cell phone or a tablet in their

SPEAKER_200: physical truck yeah you know where they are so that's great but there's six packages in the back

SPEAKER_25: from six different senders and they all get dropped off maybe one of them gets knocked off falls off the truck back of a truck anything can happen you never know so how do you get that real-time visibility i guess are there beacons that people make or yes yeah so that's a sensor play and so

SPEAKER_157: that's what we're learning as we're expanding the thoughts of the platform is you have the transportation companies that truly move the physical goods you have then shippers that are actually putting in that technology whether it's a sensor or um fr ids or those types of things that are being put on the package level and that's where as we think about going back to the platform and adding that other participation we're expanding our eta not just from the physical driver but it to

SPEAKER_23: include it to the physical uh goods itself yeah it seems like a great idea so you're now um building the business you're building it in nebraska yes talk to me a little bit about building a startup

SPEAKER_25: in the heartland of america yeah what's it like because obviously the cost of living there is a tenth or

SPEAKER_18: a third of living in new york manhattan or san francisco i'm sure an apartment probably 500 or a thousand bucks i take it yeah one bedroom in nebraska yeah quality of life is absurdly high

SPEAKER_25: so is it an advantage a disadvantage what's the pros and cons for people out there listening wondering where to put their startup where to live and grow their family that's a great question i think of it

SPEAKER_157: is i don't think all startups are equal and i think as you think about um placement right it really is industry determinant and i think why nebraska like as i went to launch it made sense is there's roughly 8 000 transportation companies just in nebraska alone oh wow yeah yeah and um as we think about there's a class one railroad union pacific and uh class with top top 10 top 20 uh trucking transportation company warner enterprises here and then down the line you've got several others that follow suit as a top 40 or top 50 transportation trucking company as well and so with companies like that here in the backyard not only was it a beneficial point to start to give us people to help us think through some of the initial software but also to give us essentially a platform being in the

SPEAKER_210: the middle of the country um we can get to most anywhere um in a couple hours flight yeah what's

SPEAKER_23: the impact of uber uh and what they're doing in freight and then amazon and what they're doing in

SPEAKER_177: freight i wonder if those are having some dramatic impact yet my experience includes running brokerage

SPEAKER_157: departments um at both union pacific and warner enterprises and as i thought about very uniquely what my business model would be with software and not a traditional brokerage model that's what was interesting about like like you said uber freight is they went in on we want to be the people that have the load board more towards spot freight like transactional business freight which that's about 20 percent of the market depending upon the current economy and so i wanted to support and build software for the 80 percent and there's much more traditional standard contract business in transportation and so i saw that as a better play if you look at what they've had to do to even show some financial benefit and outlook with the acquisition of like trans place and uh 3pl kind of 4pl like that they're having to pivot in a way that i think they weren't necessarily maybe wanting to and to get to a a financially stability capability in this industry what happened with convoy oh yeah that's good that's good yeah same deal they came out as one of the first digital brokers and so if you look at that um the brokerage model is you might get 20 margins until you don't and we're in a high inflation um economy and rates are very low and have been remained low and so as you look at that business um truly the margin got squeezed out basically they got squeezed they got exposed and they didn't have enough runway

SPEAKER_23: yeah it was mismanaged obviously they were going for growth they didn't they raised over a billion

SPEAKER_120: dollars but they obviously didn't manage it well so it's bad cash management but you're saying it's a being a broker's uh not a great business to be in and here's why is i look i love the butterfly effect

SPEAKER_157: and i look at other areas of transportation over the last 30 years so if you think of the airline industry and the railroad industry yeah hundreds of those companies and then after deregulation and after what you call standards and autonomy into those spaces now there's six right in each kind of category and so that's my play and that's why the bill of lady why it's very important is there's data that's highly sought after right now by autonomous trucks um manufacturing companies that we're talking with and if you think about like the government use case of some of these things if you're going to send

SPEAKER_178: a truck down the road and someday it's not going to have a driver the dot wants to know what's in it and

SPEAKER_25: how much it weighs and all right because the driver was responsible for those things previously there was a human who had some culpability that like there wasn't i don't know something god forbid a bomb on the truck exactly they had they got the truck it was locked there was some sort of tag and then they would untag the lock so there was some sort of human being you could say hey what's going on you were supposed to be responsible for this package from point a to point b now it's nobody's responsible exactly super dark all right listen continued success thanks for letting us invest in the company we're super excited to see where you take it just focus on those customers you delight them save them time save them money everything will work out and uh yeah keep listening to your customers make sure you do those listening labs and everything this is and then product velocity right if you do those two things i find things tend to work out really well for startups talk to those customers get them on a zoom get them on a phone call or from a 25 gift card for starbucks whatever their jam is and listen deeply look for other product opportunities and then of course you know that product velocity has got to be there so make sure you got a team that moves fast and is committed to shipping product fast and if you think it's going fast see if you can go faster yeah all right i love that continued success josh everybody check out driverdoc.io driverdoc.io yeah i'm going to try to introduce you to the companies i'm investing in y'all want to know what i'm investing in what i'm interested in man you know these boring legacy businesses you get in there you advance them they really appreciate it they'll play pay a pretty penny for that automation and then with ai happening i think this you know sas plus services plus ai is going to be just an extraordinary network effect and you got a really good shot here at making some noise so congratulations josh and the team at driver doc.io and we'll see you all next time on this week in startups