00:00:00
00:00:01
The Discipline to Do One Thing Well with Gregg Borgeson
56 Plays3 months ago
In this episode, Gregg Borgeson, CEO of Ex Works Inc., joins Host Brian Glick, CEO of Chain.io, to discuss:
- The challenges forwarders face managing hundreds of trucking companies
- Building trust and relationships in the supply chain industry
- Balancing product development with customer needs
- How Ex Works helps air and sea forwarders work with trucking companies
- Streamlining forwarding processes with technology
Gregg Borgeson learned the forwarding business from the ground up, answering phones at Emery Air Freight, serving as an executive at BAX and running Hellmann in North America. He then entered the technology side of the business, co-founding QuoteShip.com, which he later sold to Logistics.com. Gregg founded Ex Works in 2004.Save your seat for our upcoming webinar.
Transcript
00:00:04
Speaker
Welcome to Supply Chain Connections. I'm Brian Glick, founder and CEO of Chain.io. On this episode, we're going to speak with Greg Borgeson, who is the founder and CEO at Xworks. Xworks is a company that does one thing well. They work with freight forwarders to help optimize the first and last mile activities of working with truckers here in the US. They've been in business quite a while and have quietly built a very strong following in the industry. So very excited to chat with Greg about building a company up over a longer period of time in a bootstrap fashion and comparing that to um other approaches that he'd seen in his career, as well as kind of the discipline it takes to do one thing well. So hope you enjoy the episode.
00:00:58
Speaker
Greg, welcome to the show. and Thank you, Brian. So why don't we just start off with a little bit of background. Tell me a little bit about how you got into the industry. How I got into the industry. Well, I was graduated from ah from college and was determined to be a journalist and spent about two months looking for a paper that was looking for a totally non-qualified journalist, didn't find it. And my parents told me I had another month to pay my rent and otherwise I had to come home. So i found a job at the airport working for mary air freight answering phones that's where it started so i'm assuming sometime in the intervening years you had an opportunity to maybe do something else what kept you in this business you know i i was uh
00:01:45
Speaker
not interested in business at all but found that i really liked it enjoyed it and never really straight i did customer service for a year i did the export documentation for a couple of years i did sales for a couple of years and then i got started running managing international departments and then ended up running a company when i was 32 so your company so what. that jump That's something i actually spend a lot of time talking to my team about from doing the work to becoming management.
00:02:16
Speaker
A lot of people I've encountered in my career when they're doing the work, oh, I want to be management. And then they learn that management is actually a skill that's different from the right what was that, What was that transition like for you? And like, why manage people? That's a good question. It just sort of happened. I mean, doing the work was well, I mean, more fun. There was more camaraderie and parties and you know beer involved in the the working part of it. And I really enjoyed every, actually every minute of of operations and so forth. Yeah, the management side is maybe more intellectually challenging and bigger consequences to your bad decisions and your good decisions. and So I can say I enjoyed both, but I just kind of found myself in management of a very small and and struggling and company and had to make some tough decisions, closing offices, that kind of thing. But it was rewarding, you know, but rewarding, but in ah and a totally different way.
00:03:13
Speaker
so um so ah along that journey then, you know, kind of kind of take me forward a little bit more. So you um just, what was the next step? Yeah. So like I said, you know, I had worked for Burlington Air Express, you know, those formative years sales and starting in management. And I had decided I wanted to get away from my mentor, so fantastic man, Kurt Carlson. And I didn't need him anymore, so I went and went to a smaller a company and ended up being president of that company. And then about five years later, Kurt came to me with the opportunity to help start Helmand in the US.
00:03:55
Speaker
So after showing my independence, my mentor decided that it sounded pretty good to get back into business with him again. So we ah in 1988, we started Hellman in the US from scratch, which was really exciting to be able to start a forwarder with some financial backing from an established company overseas and hire people all over the country and and build something with you know through our own connections to to various people we've worked with over the years. Add my next stuff was helping the phone home and so people obviously the rate at which people change jobs is faster now than it was twenty years ago or thirty years ago or forty years ago right we don't just look at the math rate the average duration that somebody's in a job now is two years or so at least when i read it online you left
00:04:45
Speaker
a relationship and then you ended up back with the same person. What advice would you have for people on how to leave gracefully? ah First of all, you should always leave gracefully. Burning bridges is absolutely the wrong thing to do in this industry. you know I think you have to do it with respect and with fairness to the people that have backed you and your in your current company. If you had any success in your current company it's been because people leaving you and supported you along the way and the wrong thing to do even if there are some people that you're not happy with ignore them and do the right thing you know for the company that you're leaving give them enough notice and and for the people that are going to be harmed by your exit which is usually your boss.
00:05:29
Speaker
Give them even as some additional notice if you possibly can so that they can manage your departure as gracefully as possible for them not for you but for them and sometimes that means staying a little longer than you'd like to in the company you're about to leave but it's the right thing to do and i think in the long term it'll it'll serve you well in your career. Wonderful thing about this industry is it's the size that you can always track somebody down if you're hiring somebody it takes one or two phone calls given their background to be able to talk to somebody who knows them and work with them before. ah So it's your success moving forward in this industry whether it's on the forwarding side or the technology side is gonna really have to do with whether people believe in you long term and they will check you out and they can check you out so.
00:06:20
Speaker
The worst thing you can do is to leave in a half and maybe find it maybe satisfying in some cases to do, but it's not going to help you in your career. So my advice is always leave as graciously as you can. I think one of the things that's been eye opening to me, I spent about the first almost 15 years of my career in one company and that had gone through some acquisitions. And when you only have been in that one company, You don't realize the dynamics of those kind of networks of how people talk to each other. And and but I'd say the last say decade, especially since I started to change, just really opened my eyes to, you know, exactly what you said, like how quickly if I meet someone, I can identify some way to learn about them.
00:07:06
Speaker
that they're not aware of, right? That's just, you know, oh, you know, this person, and this person knows this person. And, you know, it's usually not more than one degree of separation. Exactly. And that's the wonderful thing about this business for people who handle themselves. Well, you know, you can almost always check somebody out before you you hire them and you're not flying blind as an employer. yeah And that, of course, depends on your building, trusting relationships with people that you can call at different companies. The whole industry is really built on trust. and Helping each other out and being able to be credible with people in your company people with the carriers people in it t if you got that credibility you can learn just about anything you need to about anybody else in the industry. So some point you decided hey i'm gonna get out of the free business and into the software business still around the free business but yeah yeah why.
00:08:00
Speaker
ah Well the year was 1999 and i was at that time I was running Helmand in North America and I was at a cocktail party with and a neighbor came up to me and told me he had just, in 1999 for those of you who weren't in business at that time, it was a wild time where people were getting unbelievably rich on the internet. And money was flowing like never had before. And he had just taken a company public, just done an IPO and said he was looking for his next venture. And I told him, well, I got some ideas about making freight auction. So we got together the next day and he said, Oh, you liked the idea. Let's do a business plan. So we spent a couple of Saturdays doing a business plan. And he said, okay, we'll go quit your job and let's get this thing going. And I said, I can't just quit my job when I'm running.
00:08:50
Speaker
It's a really good size company, and and I can't just go with this idea. it would be you know We need to get some money in the bank. So he said, okay, how much do you think we need? I said, oh, I don't know, four or five million. He said, okay, I'll call you when I got it. And like a week later, he calls me. He said, okay, we've got six million elders in the bank. And it was that time it was that easy. And so I resigned. And we started this internet company called Quoteship dot.com. Got a patent on our design for the auction and started hiring people. And in six months, we had about 50 people, including some very high ranking IT people, because I know nothing about IT. t I'm a a pure operations type guy.
00:09:36
Speaker
And then he came to me and said, this whole internet thing is going to it bubble. It's going to explode. We got to sell this thing. So what do you mean? We just hired 50 people, you know, and he had raised a lot of money, but he knew what he was doing. He was a former Goldman Sachs partner. I was like totally out of my depth in terms of the financial people I was suddenly working with. So we ah sold the company to a company called logistics dot.com, which then became part of Manhattan associates. And it, like so many internet startups at the time, actually went kind of nowhere. So that was my first move it into into software. But then a few years later, decided to start Xworks. And we did that in a much more down to earth kind of bootstrapped kind of way in partnership with the tech company, but ah running independently and without venture capitalists, without investment bankers and so forth. And we just kind of built it step by step since then.
00:10:34
Speaker
Tell us a little bit about what Xworks does. Okay. So Xworks, you know, when I was running forwarding companies, let me go back to that. I was, you know, particularly at Hellman, we, one time we trying to figure out why it took so much labor to handle every shipment. So we took, you know, like total number of hours of people and operations divided by the number of shipments. And it was a couple of hours per shipment of, you know, of labor. And we had computer systems at that time and so forth, but it still was lots of labor. So we did sort of a time study to see where are people actually spending their time. Are they, is it all talking to customers? Is it working with the airlines and the shipping lines? What we found out is that people in operations spent much more time dealing with first and last mile, the trucking pickup and delivery and all the other things involved with trucking than they did working with the airlines or the shipping lines or even with the customers.
00:11:28
Speaker
and number one labor. cost had to do with how do forwarders deal with all these hundreds of different trucking companies they have to work with. So that was in my mind and so we built Xworks as a company that would be focused on trying to help air and sea freight forwarders deal more effectively with the hundreds and hundreds and hundreds of trucking companies that they work with in the US and that was really the goal and still is the goal of the company. So we started with two very large
00:12:00
Speaker
for clients, one was Panopina and the other was DHL through connections that I had at both of those companies. And for 10 years, that was really about all we did were those two big companies who had very demanding requirements. So we built our system really around those two clients for about 10 years and have built it out sort of into a full TMS. And since then we've brought in many other major freight forwarders, but 10 years of focusing on them and then 10 years of building around them. It's funny, these things take a lot longer than they seem at the beginning, don't they? It takes a lot longer, especially when you have no capital. When you' when you're bootstrafing, it's a slow process. So the big dot-com idea, right? You've got this idea of like, it sounds a bit like you're going to change the way people do business, right? Oh, we're going to change the world. We're going to change the world, right? And even today, right? There's a lot of companies, you know,
00:12:54
Speaker
you know like i think of like the initial iteration of uber free right now we're gonna change the dynamics or you know our company like fredo's who is pushing for you know a marketplace model or companies that are looking at you know tokenizing containers are all of these different things that are fundamental changes and then there's companies like x works and to some effect like chain where what we're doing is is much more. Incremental. yeah We're not saying change the way the industry works. and Let's make the industry work better. Exactly. is that like
00:13:28
Speaker
more satisfying or less so like, how do you get your head around this? Like, why aren't we doing the cool stuff? It's turned out to be more satisfying because it worked. I mean, the cool stuff sounded great. And we were going to change the way everybody negotiated pricing and all looked great on paper. It made a lot of sense. It didn't work. And yeah, similar to chain. We got focused on a very narrow niche, an important niche, but a narrow niche, something that we knew and understood. And that has been far more satisfying because you're not selling a broad concept, you're selling a specific answer to a real problem. And people, our clients understood and the real problem in a way that they had to reach to understand the big concept that I had back in 1990. That scared people. What we do is very concentrated and we're yet to talk to
00:14:26
Speaker
the forwarder client who doesn't understand and the problem. We don't have to spend time explaining the problem. They, you know, you can put a couple of bullet points and they're nodding their heads and then we can show them how we can and certainly reduce the problem and create efficiencies and create transportation cost savings through easy to understand in a solution. So around the same time you were starting Xworks, I was working at a software company and we had two customers that I would say were likely let's say 85 to 90% of revenue. And so when those customers called, you picked up the phone, right? And when those customers told you they wanted the button blue instead of yellow, you made the button blue instead of yellow, right? you did You did what you were told to some effect. How have you managed to balance that with building a product?
00:15:20
Speaker
it's It's a tough balance. And a big part of it is if you get the design right in the beginning, there's not a lot of those kind of changes you have to make for other customers going forward. So I mean, the system like we use for our original, well, one of our clients got acquired by another one, but for original clients, is the system you know very much the sold to the others the original clients know they have the power to essentially make you jump when they say they say jump and that's slightly different relationship with clients but we've been able to for the most part in our it guys might disagree with me here but for the most part. make
00:15:59
Speaker
system They still complain about any of the, if this forwarder do this and otherwise do this, stuff that they have to code in that certainly exists and probably will always exist to some extent, but we're trying to minimize that. I mean, the good thing is we're not trying to sell to different types of clients. We don't sell to shippers and cons and ease, you know, exporters and importers. We don't sell to truck brokers. We sell to forwarders who are all Pretty much doing the same kind of functionality and dealing with the same kind of vendors. I think that's been one of our good decisions is to not chase every related opportunity that comes along because when you do that you're gonna have more demand to make the system work like this way for this guy and this way for the other guy, ah so we try to avoid that. I think we've made the transition to to be to having a system that is fundamentally effective ah for all of our clients.
00:16:55
Speaker
We recently had Michael Rents from Gnosis on and they were much younger company than you are, but he was making the same point, right? Of just being disciplined and focused and knowing who your customer is, is really just the key, right? Do not, just because somebody's willingness to give you money is not the only criteria to be a customer. It could be a good way to put it. That's exactly right. And we have discouraged certain companies that we didn't feel had the right mindset to make the transition to work with us. It's the old crossing the chasm concept of of going from those initial early adopters to the market as a whole. is a The chasm is real. and And you do have to take a different approach as the company matures. So how do you keep your team interested in what's now a very mature product?
00:17:46
Speaker
How do you keep your tech team, your your product team here? How do you keep everybody interested in what is a mature product when there's a tendency to always want to go play with shiny new things? Well, we've been lucky. Our team is small and they've all been with us a long time. Like our support team, I think all of them have been here at least 10 or 11 years. That's a small but very effective team. Our IT team is also small. Honestly, I think the fact that our company is modest size, that we all know each other, that many of us have worked together for many years or years in the past.
00:18:20
Speaker
makes a big difference. I think the fact that I have very little understanding of technical matters is probably a good thing because our CIO, who's worked with his guys for many years, ah is able to run an effective tech shop with minimal interference. I hope he feels that way from my side. Certainly not on the technical side because I have no concept of of what advice to give him on anything technical. And I think that allows you know are very talented tech people and they are very talented to avoid the temptation of taking an opportunity to go with a shiny new thing because there is freedom to work effectively and without somebody looking over their shoulder but the challenges that are there for our company. I think one of the other secret advantages of a small team
00:19:07
Speaker
is everyone has to live with the consequences of their behaviors too. that's true right So if you go add the shiny new thing, you're the one supporting it, right? You're the one who has to live with that. Whereas I think in bigger companies sometimes, oh, I'm going to put this thing out there and then someone else is going to deal with it. So it doesn't matter whether I like, you can almost act like a consultant. so Yeah, there's the pluses and minuses of accountability that come with being in a very small company. And and a lot of that is a satisfaction of seeing the customers react, relate, and use the things that you build very quickly. And you know everybody wants their work to matter. And in a small company, you can you know you relate, you talk to the customers directly, you see how they react to what you've built, you can you can feel the
00:19:56
Speaker
the dissatisfaction or the dissatisfaction if you don't get it right. And that's ultimately very rewarding too ah to most people. What's the thing that gets you the most excited nowadays? What's got you optimistic? Well, that's got me optimistic. You know, I think we're at sort of a turning point as a company from being something new and different that a few forwarders use to something that more and more forwarders are realizing that we're out there, that there's a better way to do it. Most of our new business comes not from us knocking on doors because we don't have a sales force. It comes from someone who works for a forwarder who uses Xworks, going to work for a forwarder that doesn't use Xworks.
00:20:38
Speaker
I'm saying to their management you know how come we're still you know emailing those lady having to data enter invoices and and so forth and so we. We're getting called more and more we have more and more trucking companies major trucking companies that serve the industry that are telling their their clients for clients you know you are looking to xworks is more efficient because it's better for the truckers as well as for the ah for the photos. So we're sort of excited about this, maybe the very early stages of a bandwagon effect. It's what everybody's looking for in the software business, where you become something where people say, why aren't we using, uh, something where people say, why aren't we using that? You know, I said, everybody else seems to be heading in that direction and ultimately being to the fear of missing out is the the ultimate goal. yes So we're we're not there yet, but we think we're approaching that. and starting to approach that kind of recognition in the market. it is It is very rewarding when people bring you in who have worked with you before. Yeah, absolutely. It's very validating to see that. I know that on the and because when I used to be in the customs brokerage side, right that was essentially our sales model was
00:21:58
Speaker
Wait till somebody retires and then get somebody from another one of our customers to go into that and bring us in three years later. It was not the fastest sales process, but it is very rewarding when somebody actually like raises their hand and says, I want to work with you again. It is an early in the call you talked about how people change jobs now on average every two years that's from our perspective that's a good thing because it has more xworks experience users spreading out to other companies spreading the word and also it's a positive because when it comes to implement xworks which is a big change for a company.
00:22:35
Speaker
You have multiple people, usually in the new company, who have experience with it. It can be the super users from the beginning, as well as the cheerleaders during the sales process. So I guess this is actually most software companies, but like how much of what you guys do is implementing software? And how much of it is getting companies to change their business processes and being the change agent to get them to use the software? It's about half and a half, and particularly because you know our Our business model is connecting the forwarder where we integrate with our IT system. and Chain is the partner we use to do that. that of Let me just jump in and say that's been a huge help to us the last couple of years is having you guys do that integration piece. but The other half is connecting to whatever their trucker network is, which is typically 200, 300, 400, 500 different trucking companies, many of which are low tech and no tech.
00:23:30
Speaker
We have really two things going on when they implement. One is the internal issues within the forwarder in terms of getting their people trained and comfortable with a new way of doing things in a new system and perhaps breaking some personal relationships they may have had with truckers that they're used to calling on every little little thing. And the second part is getting all their trucking vendors to use a new system. Now, fortunately, at this point, when a new forwarder comes in about probably 85% of their transactions are with truckers that already use Xworks and know us. So that process is much simpler than it was 10 years ago. But it's changing processes both on the trucker side and on the on the forwarder side. And that first month or two can be painful, not all, on each area. We got a very skilled support team that's now very experienced in in doing this. and we And we think the pain is
00:24:28
Speaker
is minimal compared to what it was in the very beginning for our clients and for the truckers. What's something that you would love to fix in this industry if you weren't busy doing this, but something else that drives you nuts? I wasn't doing this. On the operational side, I think on the ocean freight side, finding a really efficient way to do street turns for ocean containers. It would be environmentally a great thing, would be cost wise a great thing for clients, forwarders, for the tracking companies. It's really been a difficult thing for anyone to put together. So it's really worked like clockwork. There's huge potential savings in finding a better way to orchestrate the movement of empty containers around the US. That's the first thing that comes to mind.
00:25:19
Speaker
We'll wrap up now, but, um, how can people get in touch with you guys now that everyone is beating the path to your door? let' Make that a little easier for us. There's still room at the door for sure. So, you know, we're exworks.com. My email is right on the website. Yeah. We're there for, for orders who want to find a better way to work with their tracking vendors. And we do it in the United States and we've done it for nine or 10 major forwarders and also some smaller forwarders. We're happy to work with regional forwarders as well as as well as global guys. and yeah Find our website, give us a call. We're happy to show you exactly how it works. In about 40 minutes, you can understand exactly what we do and how it works. I just have to say, and as we wrap up here, that' just it's so
00:26:09
Speaker
nice to work with companies that do a thing well and can deliver on that, right? And aren't trying to do everything all the time. I know it's kind of the theme of the chat, but, uh, I do want to say just like makes me feel good. I totally agree with you. And also companies that, that understand exactly what they're doing, where we don't have, this is what we enjoy about change is that we don't have to explain anything to your guys. You know, they know the systems that we're working with. They understand the industry as our guys do. And it makes everything happen much faster and without the tension, without the delays. So we like to think of ourselves that way, we think you that way, and we have other partners that we put in the same category. Well, I'm happy to end on a chain island commercial. so oh right um So anyway, Greg, it's ah again been a pleasure chatting and thanks so much for coming on. Oh, thank you, Brian.
00:27:06
Speaker
Well, huge thanks to Greg for, uh, it was a really great conversation, as you can tell, kind of kindred spirits in the industry. We'll have the link to Xworks and the show notes as well as, um, we have some really interesting webinars coming up over the course of the summer. I know conference season slows down a little bit for those of us who travel a lot. So we've got a recap out there on some recent conferences that we've attended. as well as some customer profiles and some really interesting conversations that we're going to be having with shippers and and technology providers and and LSPs and really honing in on how everyone can bring value to each other. We'll have some links in the notes again for that stuff and make sure to always keep an eye on the blog and looking forward to us speaking to you next time. I'm Brian Glick, founder and CEO at Chainio.