I'm sure there's some juicy details behind the curtains, but people are too professional to air it publicly. Here's some fun but baseless theories:
1) Typical big-company guy fails to adapt to startup life. A year ago, Flexport's tech team was 400 people. That's minuscule compared to what Dave's used to at Amazon. He came in, insisted on a bunch of unnecessary hiring, bloated the tech team with deadwood, internal kingdoms and politics, and a "move slow and don't break anything" mentality. Founder got fed up and showed him the door, though presumably they were gracious enough to let him hit his 1-year cliff
2) Almost-CEO-of-Amazon tries to build the next Amazon. Makes a bunch of wildly risky investments into random moonshots, because he doesn't want to settle for a single-digit-billion company. Founder is initially taken in by bigshot's vision. But after 1 year of minimal progress and changing market conditions, founder tells CEO to get back to basics and focus on freight logistics. CEO decides that's not sexy enough for him. Waits for his 1-year cliff, then resigns
3) Amazon grad takes hold of a freight forwarder, and then realizes freight forwarding is not a tech company, nor is it just warehousing and distribution.
And then realizes his competitors rely as much on grizzled logistics veterans and their corporate knowledge about customs brokerage and how to Get Shit Done and Get Shit From Point A to Point B as they do on a cool tech stack. And then goes "shit."
Don't get me wrong. From a tech perspective, a lot of Flexport's competitors could use a size-18 boot in the ass. But tech is an enabler for them, not the core business. So there's only so much willingness to fork out cash for what senior leaders see as a supporting function. I mean, if their 40-year-old COBOL backend still works, they DGAF that it's outdated. At least until it can't keep up with the modern side or it starts falling over when all the devs retire, which is a separate story.
This is a very nice sentiment but the truth is that the established forwarders operate in a way that is could be greatly optimized. Established forwarders (and Flexport) have teams of people that "move" shipments by applying an SOP (basically a written algorithm for advancing the shipment to signals that come in from a variety of sources (an origin factory various carriers like truckers, airlines and shipping lines, governments, etc). Paying people to do this work is expensive, and the people, while very good, go home at night, take vacations, make mistakes and are generally human. The technology that enables this process at legacy forwarders is as you say archaic, but it is archaic in _design_ as well as execution. It assumes that human beings will be sitting behind a keyboard pushing buttons and making phone calls based on what it says.
In my opinion, there is nothing about any of these processes that in aggregate be worse if they were automated, and no fundamental issue with automating them. Moving freight is about as complex as any other inter-business process in that the input is some signal (usually an email but potentially a phone call or a fax) and the output is also usually an email or a phone call. The internal logic to that process is not particularly complex either.
So there exists a massive opportunity to provide roughly the same service that existing forwarders do at a much lower cost basis. The requirement to do so is to aggressively automate operations. There's also an secondary opportunity to provide better quality of service (more transparency, more programmatic logic related to movement of goods) to customers (supply chain professionals at F500) but I think that's both harder to do and customers are less sure about how they might take advantage of that better service.
Quite frankly, I don't buy the argument that "grizzled logistics veterans" hold the secret sauce to make this work. I was told probably a dozen times that what I was doing was impossible to automate but when I dug into it, what we were trying to do was a bog-standard business process dressed up in domain-specific jargon and 'tradition' (e.g. we can't do it that way since we've always done it this way). I'm not saying that I'm some logistics savant and there's a vast amount of expertise I don't know. What I am claiming is that I've pulled back the curtain on logistics and the wizard is just a regular guy.
How much do you know about zje logistics software ised by, e.g., DHL and the like?
Because I worked at Amazon, with DHL among others, and I can tell you that in some use cases, DHL has bettwr logistics software than Amazon does. And CargoWise is just a straight genious software suite to run everything from Customs over air, sea and land freight to warehousing. Guess who is using that, or something similar, in some form. Guessed, the majority of logistics companies.
No idea where this "incumbants bad, disruptive start-up so much better and easy" mentality comes from so. If you go into the field of logistics and supply chain with that attitude so, you will fail. And hard, and burn a ton of VC money while doing it. The only company that managed not to fail was Flexport, and even they fell short of theit lofty pitch goals.
Thaz being said, Dave Clark had, to my knowledge, not a lot to do with the "tech" part of Amazon, he always was an supply chain / logistics ops guy. And a good one at that. If anything, he treated it as a numbers driven thing, and definitely not a tech stack driven one. Part of the reason why he was good at his job at running ops.
Unsatisfied with their IBM mainframe which had a 99.99% uptime (seriously how much missed opportunity cost is that hour of downtime per year!) with a kubernetes microservice application where each of the 1000 components had an extremely impressive 99.999% uptime.
3) Bored mega-millionaire wants a neat hobby to try for a year. His previous Amazon compensation for 2021 was $56 million[1], so it's not like he needs to try anymore, or make money basically ever again. 12 months later he's still bored. Maybe he quit to spend more time bathing in bathtubs full of hundred dollar bills.
IME you don't make $56 million by being the type of person who is looking for a neat hobby to try for a year. It's not about the money for these types. If it was they would've retired long ago, before they became top lieutenants.
The story I told myself while reading this article: "Wartime founder thought he wanted to retire, brings in solid peacetime CEO. Founder decides peacetime isn't best for company, and comes back to turn it back into a startup."
Not dissimilar from the early Steve Jobs story at Apple.
> Clark has been unapologetic about his cavalier style, once telling Bloomberg that he favored “lurking in the shadows of … warehouses and scoping out slackers he could fire” during his early years at Amazon.
"Some Flexport insiders say layoffs and an influx of former Amazon leaders are wrecking morale."[1]
'"These people do not have conversations — they make demands," one laid-off employee said. Unsatisfactory answers could be met with harsh feedback, sources said.
One laid-off Flexporter said an Amazon veteran told them, "I don't believe a word you're saying," during a presentation they said took months to prepare.
Clark was asked at Tuesday's conference whether his Amazon hires meant he wanted to change Flexport's culture.
"The only place I've really worked in my life is Amazon. And so I didn't get out much. And I worked in supply chain so most of the people I know are Amazon people," he said. "Turns out Amazon's pretty good at moving stuff around."'
See also, the Dave Clark effect at Amazon:
"Amazon generally delivers later than competitors. That can be terrifying for some of its drivers"[2].
I don't like to look askance at alumni of particular employers, but I have had one too many a poor experience from ex-Amazon hired into leadership roles. The above matches my experience.
For me, the worst casualty as various lackeys followed arrival (also ex-Amazon) was the choking out of candidness. Second worst was turning the company into a document factory.
You have me at “document factory “. Writing a doc is good to convey your intentions. Revising a doc for the fucking 20 times because of unsettled sentences, paragraphs are a waste of time.
Do you mind saying more about "the choking out of candidness"?
I know they've got their "leadership principles" kool-aid [1] at the interview stage, but I always assumed that a seriously profitable and hard-working company (which they seem to be) wouldn't waste time mincing words.
So many people in leadership at top companies just won the start-up lottery as a junior employee and had the internal drive to get promo at all costs to gradually get to the top. As soon as they leave the bubble it’s clear how few real skills they possess.
Likewise, the degree to which Director+ jobs just hire based on current title at a competitor alone is bonkers. I’ve worked under people who are utterly clueless but managed to make VP at the place up the street. So they just get to be a VP at the next place.
I've experienced something similar at Peloton where a C-level kept bringing former reports at Uber for key roles and started to push out the existing employees. It's business at the end of the day but I do think there's a graceful way of bringing people in from former companies.
Same thing at my company, only it was a former Microsoft employee who brought along all his buddies. They screwed up a bunch of stuff because they didn't understand our market or customers, and then all slowly got let go before having to contend with the full consequences of their bad decisions.
One division where I work brought in a bunch of ex-Cisco folks. It’s odd but for some reason, they did really well here, even though Cisco is quite different than FAANG.
Why? If they were futzing with the wording of a powerpoint for months that is indeed bad. If they worked hard on getting answers to questions nobody else can answer that can be reasonable.
After all one can describe a phd defense as “a presentation which took years to prepare.”
Isn't Flexport the company that was on HN's top page pretty much every week for like 2-3 years? Always hiring?
Having a general idea of how logistics work ( it's an huge complex and many times insane monster sometimes devourer of men ), something's was "off" with this whole Flexport signaling.
Not saying it's a time bomb or a WeWork because I don't have any information about that, but I always had the general feeling to stay away.
About the CEO thing, who knows.. CEO's are to blame but we tend to forget founders and "the board" are most of the times the biggest offenders. Their "visions" and key objectives many times lead to an absolute mad-house inside companies and ruined lives.
The thing to keep in mind is that they have competitors still eating their lunch while running 40+ year-old COBOL backends which have their IS departments tearing their hair out regularly.
It's as if the efficacy of a business isn't completely positively correlated with the coolness of its tech stack. I work for one of their competitors, and I'd kill for their tech stack. But ultimately their business revolves around a bunch of professional logisticians and customs brokers being able to execute reliably and effectively, and all tech can do is enable this. I wonder if they realize this.
Ocean freight is only one piece of the puzzle. A big one, but air is generally more lucrative. Ocean moves lots of mundane everyday predictable crap. Air moves crap that has to be there RIGHT NOW.
I interviewed with them in 2018 and at least at the time (much much smaller company of course) everyone there was very focused on the tech being an enabler for the logistics people. Their claim at the time was that all of the projects they pitched as possible work were driven by feedback from the front line people. Maybe that wasn’t true then, or maybe it’s changed, or maybe it’s still true but it’s not enough?
The problem IMO is scaling the logistics side of the house. No one cares how cool your tech is unless/until you can move shit from Point A to Point B at scale, and handle the same big problems as, an Expeditors, UPS Global Logistics, DHL, Kuehne + Nagel, or DSV Panalpina.
> Their claim at the time was that all of the projects they pitched as possible work were driven by feedback from the front line people.
I have worked as a software engineer in Operations in Amazon for years, and this even if this is true, it is not all positive.
What it meant for us is that instead of developing a solution we developed small disconnected projects here and there, that all required slightly different maintenance, different technology to build, etc.
This was a problem technically but also personally as there was nothing meaty enough for a promotion, and most projects were incredibly boring "I want a dashboard to show metric X".
Mass layoffs and terrorizing employees, while being the fallguy for a terrible plan to "solve the last mile problem so it's profitable", which Amazon haven't been able to solve
>"It’s been a real roller coaster for them. Hopefully it settles down a bit."
I don't quite understand what you mean; were they forced to switch each time, was each company 'poaching' from the prior one, did a whole team get up and move twice, or did they get laid off twice?
Logistics, freight forwarding, global shipping is as removed from the latest innovation in IT as you can imagine. I worked for a client with a fairly modern stack but we hit major problems when it came to integration with the IT stack of a global shipping incumbent. It's even worse than the banking systems. That world still runs on paper, faxes and REST APIs are generally not used there, because they are too new. XML is all the rage because it lets them stuff Word documents into CDATA. FTP is cool too. It's extremely difficult to make a dent in that world, unless we are talking about dents to the sids of the shipping container ships hitting some rock.
The highest valuation for a freight forwarder is 0.96x revenue last I checked. (K&N) Just not a very exciting business from a late stage/public investor standpoint. Lots of ways to make money in the space but not a straightforward path to IPO.
Readit News
1) Typical big-company guy fails to adapt to startup life. A year ago, Flexport's tech team was 400 people. That's minuscule compared to what Dave's used to at Amazon. He came in, insisted on a bunch of unnecessary hiring, bloated the tech team with deadwood, internal kingdoms and politics, and a "move slow and don't break anything" mentality. Founder got fed up and showed him the door, though presumably they were gracious enough to let him hit his 1-year cliff
2) Almost-CEO-of-Amazon tries to build the next Amazon. Makes a bunch of wildly risky investments into random moonshots, because he doesn't want to settle for a single-digit-billion company. Founder is initially taken in by bigshot's vision. But after 1 year of minimal progress and changing market conditions, founder tells CEO to get back to basics and focus on freight logistics. CEO decides that's not sexy enough for him. Waits for his 1-year cliff, then resigns
Exited to hear more wild theories from others.
And then realizes his competitors rely as much on grizzled logistics veterans and their corporate knowledge about customs brokerage and how to Get Shit Done and Get Shit From Point A to Point B as they do on a cool tech stack. And then goes "shit."
Don't get me wrong. From a tech perspective, a lot of Flexport's competitors could use a size-18 boot in the ass. But tech is an enabler for them, not the core business. So there's only so much willingness to fork out cash for what senior leaders see as a supporting function. I mean, if their 40-year-old COBOL backend still works, they DGAF that it's outdated. At least until it can't keep up with the modern side or it starts falling over when all the devs retire, which is a separate story.
In my opinion, there is nothing about any of these processes that in aggregate be worse if they were automated, and no fundamental issue with automating them. Moving freight is about as complex as any other inter-business process in that the input is some signal (usually an email but potentially a phone call or a fax) and the output is also usually an email or a phone call. The internal logic to that process is not particularly complex either.
So there exists a massive opportunity to provide roughly the same service that existing forwarders do at a much lower cost basis. The requirement to do so is to aggressively automate operations. There's also an secondary opportunity to provide better quality of service (more transparency, more programmatic logic related to movement of goods) to customers (supply chain professionals at F500) but I think that's both harder to do and customers are less sure about how they might take advantage of that better service.
Quite frankly, I don't buy the argument that "grizzled logistics veterans" hold the secret sauce to make this work. I was told probably a dozen times that what I was doing was impossible to automate but when I dug into it, what we were trying to do was a bog-standard business process dressed up in domain-specific jargon and 'tradition' (e.g. we can't do it that way since we've always done it this way). I'm not saying that I'm some logistics savant and there's a vast amount of expertise I don't know. What I am claiming is that I've pulled back the curtain on logistics and the wizard is just a regular guy.
Source: Former Flexport employee
Because I worked at Amazon, with DHL among others, and I can tell you that in some use cases, DHL has bettwr logistics software than Amazon does. And CargoWise is just a straight genious software suite to run everything from Customs over air, sea and land freight to warehousing. Guess who is using that, or something similar, in some form. Guessed, the majority of logistics companies.
No idea where this "incumbants bad, disruptive start-up so much better and easy" mentality comes from so. If you go into the field of logistics and supply chain with that attitude so, you will fail. And hard, and burn a ton of VC money while doing it. The only company that managed not to fail was Flexport, and even they fell short of theit lofty pitch goals.
Thaz being said, Dave Clark had, to my knowledge, not a lot to do with the "tech" part of Amazon, he always was an supply chain / logistics ops guy. And a good one at that. If anything, he treated it as a numbers driven thing, and definitely not a tech stack driven one. Part of the reason why he was good at his job at running ops.
3) Bored mega-millionaire wants a neat hobby to try for a year. His previous Amazon compensation for 2021 was $56 million[1], so it's not like he needs to try anymore, or make money basically ever again. 12 months later he's still bored. Maybe he quit to spend more time bathing in bathtubs full of hundred dollar bills.
1: https://fortune.com/2022/06/08/amazon-former-no-2-dave-clark...
Not dissimilar from the early Steve Jobs story at Apple.
Deleted Comment
https://techcrunch.com/2022/06/03/dave-clark-the-longtime-he...
> Clark has been unapologetic about his cavalier style, once telling Bloomberg that he favored “lurking in the shadows of … warehouses and scoping out slackers he could fire” during his early years at Amazon.
Deleted Comment
I see & hear you. ;)
"Some Flexport insiders say layoffs and an influx of former Amazon leaders are wrecking morale."[1]
'"These people do not have conversations — they make demands," one laid-off employee said. Unsatisfactory answers could be met with harsh feedback, sources said.
One laid-off Flexporter said an Amazon veteran told them, "I don't believe a word you're saying," during a presentation they said took months to prepare.
Clark was asked at Tuesday's conference whether his Amazon hires meant he wanted to change Flexport's culture.
"The only place I've really worked in my life is Amazon. And so I didn't get out much. And I worked in supply chain so most of the people I know are Amazon people," he said. "Turns out Amazon's pretty good at moving stuff around."'
See also, the Dave Clark effect at Amazon: "Amazon generally delivers later than competitors. That can be terrifying for some of its drivers"[2].
[1]https://www.businessinsider.com/flexport-layoffs-amazon-lead...
[2] https://www.cnn.com/2021/12/21/tech/amazon-delivery-night/in...
For me, the worst casualty as various lackeys followed arrival (also ex-Amazon) was the choking out of candidness. Second worst was turning the company into a document factory.
I know they've got their "leadership principles" kool-aid [1] at the interview stage, but I always assumed that a seriously profitable and hard-working company (which they seem to be) wouldn't waste time mincing words.
[1]: https://www.aboutamazon.com/about-us/leadership-principles
Hard pass.
Likewise, the degree to which Director+ jobs just hire based on current title at a competitor alone is bonkers. I’ve worked under people who are utterly clueless but managed to make VP at the place up the street. So they just get to be a VP at the next place.
We're now in a multi year recovery process.
I was told “Hey they’re all from <big company>!” as if it was a positive.
I wondered “How is it everyone of these guys buddies worked there and big company didn’t keep them?”
Learned pretty fast why they left / the other company didn’t keep them… (they were all smoke and mirrors and no results).
This sounds like what I would expect in the federal government or IBM. Not a fast growing startup changing the world.
I hope Ryan can change this part of the culture or they are dead.
After all one can describe a phd defense as “a presentation which took years to prepare.”
Having a general idea of how logistics work ( it's an huge complex and many times insane monster sometimes devourer of men ), something's was "off" with this whole Flexport signaling.
Not saying it's a time bomb or a WeWork because I don't have any information about that, but I always had the general feeling to stay away.
About the CEO thing, who knows.. CEO's are to blame but we tend to forget founders and "the board" are most of the times the biggest offenders. Their "visions" and key objectives many times lead to an absolute mad-house inside companies and ruined lives.
On the other hand, it could mean high turnover. Looking at their Glassdoor reviews and filtering out their HR-generated fakes, it paints a picture of both scenarios: https://www.glassdoor.com/Reviews/Flexport-Reviews-E1011163....
It's as if the efficacy of a business isn't completely positively correlated with the coolness of its tech stack. I work for one of their competitors, and I'd kill for their tech stack. But ultimately their business revolves around a bunch of professional logisticians and customs brokers being able to execute reliably and effectively, and all tech can do is enable this. I wonder if they realize this.
I have worked as a software engineer in Operations in Amazon for years, and this even if this is true, it is not all positive.
What it meant for us is that instead of developing a solution we developed small disconnected projects here and there, that all required slightly different maintenance, different technology to build, etc.
This was a problem technically but also personally as there was nothing meaty enough for a promotion, and most projects were incredibly boring "I want a dashboard to show metric X".
Hard reality to acknowledge by an industry that takes the term 'software is eating the world' at face value.
Mass layoffs and terrorizing employees, while being the fallguy for a terrible plan to "solve the last mile problem so it's profitable", which Amazon haven't been able to solve
I don't quite understand what you mean; were they forced to switch each time, was each company 'poaching' from the prior one, did a whole team get up and move twice, or did they get laid off twice?
https://finbox.com/SWX:KNIN/models/revenue-multiples/