Issue #14: Building In Public

Building in public can be fun and exhausting at the same time. It's almost a separate personality that you have to manage and produce. Let's talk a bit about building a company.

Every founder’s journey is different. It’s rare that you follow the exact same path as a fellow founder, and even more rare that you follow the same path you took the first time when it’s your second time around. You’ve seen it, you’ve made those mistakes, and you’re going to do your best to navigate around making those same mistakes. I try to apply these lessons I learned in two ways, for building Cargado and for advising the other startup founders I work with on a regular basis, either as an advisor or as an angel investor.

It’s valuable as a first-time founder to have someone to talk to that’s been through it all before. The fundraising, the hiring, firing, sales, go-to-market motion. I love talking about all those tactics with founders. I try hard to help them avoid the same mistakes that I made and, typically, they listen, albeit not always. One thing I realize I still need to get better at is saying “no” to people who ask for my time. I would love to give everyone advice or feedback but I owe it to my team and my investors to give them my full time and focus.

If I think back to a really challenging time at Forager, I remember the wavy take rate graph and questionable unit economics that we had. Our take rate (the percentage of the revenue we kept) went from positive to negative and back to positive from quarter to quarter. I thought, stubbornly, that we could take volume at all costs, losing money in the process, and grow the top line to power through a bad market. I was wildly wrong. We were failing at sustaining one of the key business levers, our unit economics, and it made it hard to sustain or grow our business.

We eventually corrected the ship but the price risk associated with our business model continued to present a challenge. When you don’t have scale and leverage with your carrier network, pumping thousands of loads per day through that network, it’s hard to grow as quickly as you might want to in a venture-backed world. We didn’t have that carrier leverage that a large logistics company has and so we realized it made more sense to join forces with someone like Arrive than it made to keep going at it on our own.

We were trying to build a tech company and a services business at the same time and, as I’ve talked about previously, we couldn’t do it. You have to pick one or the other. This time around, we get to pick the tech company path and build something enduring. There are so many unique problems that exist with cross-border freight that I’m excited to tackle with the products we’re building at Cargado. There will be something for everyone involved.

I heard feedback on FreightX from another entrepreneur about how most people building in public don’t share the bad moments as they occur. Sometimes, those bad things drag on and you don’t realize how bad it was until you come out the other side. Sometimes it involves a bad hire that you can’t exactly drag in public. I think back to my most frustrating moment so far with Cargado, it was once the funding was secured but I lacked a technical co-founder to partner with on building this vision. I met over a dozen outstanding candidates, but none of them were quite the right fit. Until I met Rylan, right as Convoy was on the brink of shutting down.

I wanted to just start building so badly. I had this vision in my head for what needed to be built. Thankfully, I was patient. I remember watching Rylan and the team spend the first two weeks planning out how they wanted to build the platform, making a lot of technical decisions ahead of time instead of on the fly. They’re moving so quickly now, in part because they had all worked together previously, and because they laid out their plans with intention before starting to code. The patience paid off.

Having the right team early can make a company great, while the wrong team can result in a mediocre outcome. Yes, the idea needs to be great, the problem needs to be massive, and there needs to be founder-market fit, but you need an incredible team as well. We’re six people strong now and everyone is passionate about solving these problems for brokers, carriers, shippers, customs brokers, and warehouses.

When I think back to Forager, we built the team differently. Early on, my focus was finding anyone who understood freight who was willing to jump in and work. You paid for experience and we paid for it royally, although it didn’t quite work out the way we wanted it to work out. A lot of our earliest hires cycled through and it took us a couple years to solidify our core as a team. That turnover and lack of a shared vision resulted in struggles to scale the business and see a substantial outcome.

Fast forward to February 2024. We’re coming up on five months of this journey and our first product launches soon. I’m itching to get a complete version of our product in the hands of our users. Over sixty companies have seen the designs for what we’re building and have expressed a serious desire to use it when it goes live.

I’m spending this week with the full Cargado team in Monterrey, Nuevo Leon, and we’re being joined by a few of our investors as well. We’ll be visiting with a couple brokers and carriers while also taking time as a team to work together, in person. As a distributed team, we don’t get that opportunity too often. One of our investors pushed me early on to establish a practice of getting the team together on a quarterly basis. Q4 was in Laredo, where the team had the opportunity to meet with several carriers, forwarders, and customs brokers and get live feedback on our initial designs, and Q1 2024 is taking place in Monterrey, Nuevo Leon, Mexico.

We go into these offsites with the intention of spending time as a team, accomplishing some key initiatives, and learning. This trip will allow the team a first hand look at how brokerages and carriers in Mexico operate and how they can benefit from the technology we’re building at Cargado. This is also an opportunity for our team to get a deeper cultural understanding of Mexico, at least what Monterrey represents. We’ll have a carajillo or two and chicharron de ribeye.

Why we’re building Cargado

I’ve spent the last seventeen years brokering freight, with the past decade focused on cross-border freight. While I don’t know everything about moving freight into and out of Mexico, I feel confident in my ability to dissect it and explain it for most people in the industry. I feel lucky to have realized a set of problems that exist related to the complexity of moving cross-border freight and am excited we’re building what we’re building at Cargado.

There are two customs brokers, two-to-three carriers, potentially a warehouse, pickup and delivery facilities, a border, two different languages and cultures involved in every single shipment. There are so many different communication streams and data points occurring on every single shipment, via WhatsApp, email, text, Slack and lots of spreadsheets.

With this whole nearshoring craze, there’s a rush by companies to establish their presence in Mexico. Whether it’s a manufacturer or retailer working to find the right real estate in Mexico, or a logistics provider working aggressively to establish a Mexico HQ and hire a strong Mexico leader, or trucking companies getting ready to ramp up as volume starts to increase. Everyone is sprinting to make Mexico a core focus of their strategy. Every board room is discussing nearshoring and how they plan to participate.

We’re sprinting to build products for all those people who are riding the nearshoring wave. We understand where things can go sideways with cross-border freight, and we understand how challenging and complicated the whole process can be. We’re excited to be building tools to help solve those problems, with the first one ready to launch in about a month.

We’ve opened up part of the product to carriers who service Mexico. We’ve also been walking brokers through the designs to share a preview of what we’re building. The feedback has been amazing so far. If you’re a carrier or broker involved in cross-border freight and want to grow your business while having a more streamlined experience, I would sign up for the waitlist and reach out at cargado.com.