Operators Ep 32: Alyson Welch (Twilio)

  
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Alyson Welch is the VP of Enterprise Sales at Twilio.  Prior to Twilio, Alyson was the Head of Sales at Zignal Labs, an early stage startup specializing in real time media intelligence, and also spent 15 year at Akamai Technologies.  She has been an advisor at First Round Capital and Bessemer Venture Partners.  She currently sits on the Board of Directors for Girls in Tech, and also founded Poppy, a financial wellness organization for women.

In this episode we discuss Alyson’s timing of joining Akamai a month before the dotcom bubble burst, starting and building a sales team from day one, and the evolution of onboarding at high growth startups. She also shares about why she prefers slightly more mature companies, how crucial it is to be passionate when in sales, and her decision to be an advisor to VC’s.

I hope you enjoy the show.

Full transcript available here.

Operators Ep 32 Transcript

Delian Asparouhov: 

Hi everyone. My name is Delian and I'm a principal at Founders Fund, a Venture Capital firm based in San Francisco. This is Operators where I interview non-VC, non-CEO, non-founder operators that make the startup world go round. 

Delian Asparouhov: 

Today. I'm interviewing Alyson Welch, VP of enterprise general business at Twilio. Prior to Twilio, Alyson was the head of sales at Zignal Labs in early stage startup specializing in real-time media intelligence, and also spent 15 years at Akamai technologies. She has been an advisor at First Round Capital and Bessemer Venture Partners. She currently sits on the board of directors for Girls in Tech and also founded Poppy, a financial wellness organization for women. I hope you enjoy the show. 

Delian Asparouhov: 

Cool. Well, Alyson, thank you so much for coming onto podcasts, [inaudible 00:00:59] story career. I typically like starting up these conversations by just reversing all the way back to the very beginning of people's careers. When you graduated and went off and joined Accenture as a management consultant for three and a half years, can you tell us a bit about just sort of what that decision was, why you went into there out of school and sort of what areas you specialized in while you were at Accenture? 

Alyson Welch: 

Sure. Yeah. Thanks for having me. This is great. And I so respect other guests that you've had on this podcast. So I feel flattered to be here and it's great to meet you. I joined it was [Anderson Consulting 00:01:37] at the time. So I'm [inaudible 00:01:39] myself Accenture. It was basically a time in undergrad where I was in a small university, liberal arts degree. I was an economics and French major in college and really didn't know what I wanted to do. I came from a family, educated family. Both my parents were in the medical field, but I certainly hadn't pursued a medical degree and wasn't on my way to med school. So, I found myself looking for that sort of continuation and education and not a formula, just job job. I'd always had jobs out of in high school and during college, but more in the services' industry. 

Alyson Welch: 

And I knew I wanted to get into corporate at some point. And the recruiters in our schools were coming in from the big five and they promoted the idea of go to the big five firms and you'll have the opportunity to essentially get what is the equivalent of an MBA. And whether that was true or not, that was an appealing message to me because I wanted to continue my career and have more of the business acumen available to me, but I really didn't know what I was going to do with it. I thought, oh, maybe I'll be on the partner track in these companies. I want to travel. This looks like a great way to do so and have a steady career, steady income. Financial security has always been really important to me for just being financially independent as a woman. And, I continues to meet today as I raise my family, et cetera. 

Alyson Welch: 

So I think, the Anderson Consulting and the other big five programs at the time were just really structured to give me someone who didn't have a lot of direction in terms of what I wanted to do, a bit of a path forward into corporate America. 

Delian Asparouhov: 

With some pretty, amazing timing, after about four years there, you decided to, a month and a half before [inaudible 00:03:34] join a tech company. I guess I'm curious, how did you end up deciding to join Akamai and what was it like going through the first 45 days when everything, I'm sure it felt like the world was collapsing. 

Alyson Welch: 

It was one of those things where I was living in San Francisco and of all of my peers and friends at Anderson consulting, we had what at the time was this really strange thing, which was an E-Trade account. And, we were basically day trading these stocks, [Reband 00:04:07], Oracle and [Siebel 00:04:09], these tech startups that we didn't know anything about, but we were hearing our friends getting into the internet and getting into what was the cloud, the early cloud migration at the time. And a friend of mine from Anderson pulled me in and said, "Hey, you should go check out this company, Akamai. It just went public and the stock is going crazy." I think it was trading at $300 a share. "Come over here and take a look." And so, I took a look and they really liked the people, Boston-based, which was appealing to me to be part of a company that wasn't necessarily headquartered in San Francisco, ironically in the Silicon valley. 

Alyson Welch: 

The Silicon valley wasn't at the time Sand Hill. It was becoming very venture-oriented, but it was still in the early phases of development, Google, Facebook, LinkedIn, et cetera, up and down the corridor. And so to me, what Akamai was set out to do in terms of democratizing access across the internet to enable companies to build their first websites and expose their brands in new ways was super disruptive, really hadn't been done before. People weren't building corporate websites. E-commerce wasn't there yet. So, I jumped into Akamai. I don't know if it was 45 days later, but I remember my strike price was $200 a share. And, didn't take that long for it to drastically drop. And so, it was a really incredible transition and awakening when I talk about the importance of financial security to have that big of a transition early in my career. I think has really actually been a good thing for me over time to understand the volatility in the technology markets and withstand some of those transitions that time. 

Delian Asparouhov: 

And I guess, I actually don't know Akamai sister at the time, but was there even massive team [inaudible 00:06:06] or how your role changed? You're just like a complete reset or was it sort of same job as expected, sorry that your options under water, but you'll get like a refresh sometime next year. 

Alyson Welch: 

Yeah. The leadership team was amazingly calm. So, I joined in January 2001 and the company history is pretty incredible. So, we actually lost our co-founder in 9/11 and he was on the United 11 flight first plane to go into the World Trade Center. And the rest of the leadership team was actually supposed to be on that plane with him. And for some reason, and I'll never know the real reason, but Paul Sagan, George Conrades, and a few others stayed back in Boston and we're not on that plane. And so, the company dynamic pivoted completely in that way. So not only were we faced with an economic downturn, but we were also faced with a major loss of an innovator and a leader. And so, [Tom Leighton 00:07:07], who is his co-founder and his partners at the e-team level really stepped up and took on extreme leadership, what I call extreme leadership. 

Alyson Welch: 

And so, they were able to really focus us. They were mature. They'd run businesses before. And I think, that really was an important factor in the dynamic of the company to get us through that time. But yeah, I mean, I went from working with clients to building out their solutions, to really working on the collections team and trying to find companies that were disappearing during the [.com 00:07:46] bust. And yet at the same time, holding up the team and the morale and being part of the DNA that was forming in terms of really believing in the technology mission that our founders had built and carrying it forward, it was a pretty interesting time. 

Delian Asparouhov: 

I'm going to say, yeah. Did it feel like there was a particular moment that sort of felt like the end of the dark period or the beginning of [inaudible 00:08:11] no longer discharge sort of recoup losses and restructure, but actually like, "Oh, we can survive through to the other side" where was it obviously you guys were going to the beginning where it's like, "We've got a real product. We got customers." A lot of the pets.coms of the world, they're going to die, but we can make it through it or, it was that sort of a potential risk factor. And then [inaudible 00:08:28]. 

Alyson Welch: 

That taught me that. That's a great question. That period taught me to look for companies in the future that had more of what I call the aspirin value than the vitamin. Twilio serves in that place today for me from a communications platform perspective. But, Akamai, take 9/11 as an example, we had lost our founder. We were reeling from that loss, and really unsure of the future. But at the same time, the news sites time, CNN, Yahoo, were all going down because the internet couldn't withstand the demand. And we were going in and sending up servers around the world and trying to help companies continue to get access to information, to help their employees communicate, et cetera. So, I really realized the value during that experience of what a must have technology looks like versus a nice to have and what really the requirements of value are in your technology stack as you're building a long-term viable company. 

Alyson Welch: 

And so for me, I took that with me in the future and sure there were some moments of exploring companies and career opportunities that may have seemed like, "Wow, this is super disruptive and different," but if I didn't pursue them, it was probably because I got back to the point of, I don't know if this will withstand a significant course correction, and I'll have to say, I mean, looking at where we are now, 2021, I made some mistakes in that decision with Google, and Facebook, and LinkedIn, and places that I wish I had spent time in my career. 

Delian Asparouhov: 

Yeah. I guess, shifting from consulting world into Akamai [inaudible 00:10:13] consulting, some level of sales been built into it. But imagine Akamai was [inaudible 00:10:18], much more direct. But, you talked through a little bit of just how that tradition went in terms of, obviously, a very different type of role. Were there things that were sort of, very easy early on, I'm sure. Making decks is sort of the same in consulting and sales, but closing deals relatively different. And then also, how did that relate to obviously selling aspirins a lot easier than selling a vitamin and how did that play into that process? 

Alyson Welch: 

Yeah. The consulting environment, at least the consulting environment that I lived through, I was in the process design consulting framework within, but now is Accenture. There was a real methodology and a real training ground. We went to a training center for three weeks and literally were taught how to speak, how to talk, how to discuss and gather requirements from the functional owners within the companies. We were staffed, go from that really structured process, an annual review banding process. You knew exactly where you were in line in terms of where your career was going to a startup to a 50 person. I think actually, Akamai was 200 people, 50 million in revenue when I got there. Huge difference. But I was also, I didn't know what to compare it to. I was 20, I don't know, some 20 year old plus, but I can't remember how old I was when I joined. 

Alyson Welch: 

And so, it was me learning quickly, taking the problem, solving the business consulting, discovery skills from what consulting had taught me and applying those into customer experiences and then really believing in the technology. I think, those two combined the fact that I had the training of the professionalism and the discovery and the polish of what a consulting environment can teach you combined with really believing in the message that we were taught. What we taught, what the product could actually deliver for our customers and the value that it could present really yielded a positive result. So, my advice to people who are looking at their careers is make sure you're passionate about the category that you're going into. If you're going to take a sales role in a quota in a startup, because if you're not passionate about it, if you don't think it's disruptive, it's really hard to wake up every day with a quote on you having to do that day in and day out. 

Delian Asparouhov: 

And so, yeah, speaking of day in, day out, you ended up [inaudible 00:12:56]. You stay at Akamai for over 14 years, I guess, can you talk through sort of what made it so attractive to stay for an extended period of time? You mentioned, there were plenty of opportunities that sort of sound like, came by your way. Was it sort of mentorship that you were having there? Was it the upside and opportunity? Was it the learnings? What really kept you around? 

Alyson Welch: 

Yeah, that's a great question. So I think that first thing was just the DNA and the culture of the company and the fact that they were so thoughtful to take care of all of us during a really treacherous time, 9/11, and the fallout of the .com bust. The other thing, though, that was really positive, that kept me going and that I didn't realize was such a value now, as I look back was the innovation. So, we were becoming a multi-product company quite quickly. And so, we had a number of offerings and they were able to create a number of different go-to market strategies for us, so that we were relevant and competitive, and we could really sell across a number of different categories within the business. So, multi-product was important. I had really strong mentorship. My leaders, I felt like they cared and they were invested in my career. 

Alyson Welch: 

And then, the upside from an earnings perspective, it was more than I had ever experienced just being able to. I was nervous about carrying a quota and having a variable compensation. And both my parents thought I was crazy that I was taking a pay cut in base to become a salesperson from a consulting compensation structure. And it ended up just being completely fruitful and a multiplier for me from a compensation perspective. So, it created some really financial economic value categories for me that I didn't have before, that I didn't have access to before. 

Delian Asparouhov: 

And you ended up being there while the company scaled from 50 million annualized all the way up to north of a billion. He dropped through maybe some of the sort of major projects, the sales side, you feel had the most impact or contributed the most to that growth that you think were integral to that scaling up. 

Alyson Welch: 

Yeah, absolutely. So I thought I already talked about multi-product and we went from a kind of a traditional content delivery platform to adding in innovation around, media and media streaming, global access, being able to support companies in multiple countries and delivering scale for them in minutes versus months, if they were to build out their own data center structures, et cetera. And then, we got into some really interesting acquisitions. So, through way of acquisition, we are able to diversify our portfolio and become a higher margin product portfolio in more of a software driven business. So, we weren't as reliant on the networks and the data center disrupt distribution to handle some of our scale and our revenue growth. And so, I learned through all of those things about scale, and I learned about agility, taking a lot of different roles, helping people come up to speed being part of hiring and pivoting. 

Alyson Welch: 

And I think that, the time I spent in consulting helped me with that because it reminded me when I was being staffed and sent off to different projects. I didn't really have an ability to choose. I was just kind of told where I was going. And, that was something that I think, I was much more agile in my ability to accept those changes in that growth than some of my peers. And then I think, we just, we had to look at the market and react and be responsive to our customers. And I think, we were really customer centric similar to, I always think about Amazon. Amazon always takes it back to what does the customer need? And I think, Akamai was, in an early way, approaching the market that way as well. 

Delian Asparouhov: 

[inaudible 00:16:54] at the beginning of Akamai, things vague, very unstructured and they're not being much of a process. Can you talk through, I guess, certain areas as it started to scale up how processes, I guess, got implemented. And I'm sure also with new product lines, you sort of restart the clock and there's zero process. And then eventually, you start to see them discover product market fit and figure out what that process is. Can you talk through, if you remember, an example or two of just what that sort of transition looked like from earlier stage, no process to eventually, very regimented, very clear quotas bands, stages of career progression from people that were joining? 

Alyson Welch: 

Yeah, no, absolutely. I mean, we used to bring, we didn't have enablement. The structure of bringing people into the business in a startup was very different than when we were at more of a turbo business, and we were able to fund and support more of a start group experience or university and really kind of give you a certification for being part of the company and structuring the onboarding experience so people could feel like here's what it's like to be at this company. And I think, a lot of hyper-growth companies go through that, certainly at Twilio, we're doing much of the same where my onboarding five years ago was much more fragmented and kind of on my own. I was the artist of my own onboarding. Whereas when you're in a bigger company, that's more established, you have a lot of support and various set pathways that you're directed to ensure that you're gaining as much information as possible. And ultimately, the business trying to slow down or, excuse me, accelerate the ramp time. Definitely not slow down. Accelerate is the key word there, the ramp time. 

Alyson Welch: 

And then, the other part ... I'm forgetting the second part of your question. Sorry. 

Delian Asparouhov: 

It was just like, especially with these new product lines, imagine what the core product is going to be processed, but, it sounds like part of the [inaudible 00:18:53] for consulting was sort of helping and being more agile or adaptable to sort of these new product lines. [inaudible 00:18:59] examples of whether it's through an acquisition or through natural product evolution where you help sort of take a new product line from zero to one, what that process was like? 

Alyson Welch: 

Yeah. So, one example at Akamai, and I think we do the same thing here in some ways at Twilio is, we bought a company. In this case at Akamai, we bought [Netley 00:19:18] which was a web acceleration security platform and bringing that company in. We didn't just suddenly bring the company in and say, "Okay, everyone's going to carry this in their bag." We deployed specific specialists and resources, and it was an executive assignment to be staffed in this team. It was a special kind of SWAT team that learned everything about this technology and where your specialists bringing the best, a better quality of experience to the customer about that specific product. So, I find that with new products, whether it be acquisition or beta pilots that you're running within the company about a new concept, bringing in specialist teams or smaller teams to help the core sales team and the core go to market team, come up to speed and really determined product market fit. 

Alyson Welch: 

You may even start in a specific targeted market, maybe a specific for a retail market. And I remember, that's what we did at Akamai. We had this one product that we were really assuming was going to be very successful in the e-commerce vertical. So, we just started a small tiger team and eventually it grew into its own business unit was the standalone kind of P and L. But yeah, I would say that's something I think is replicated pretty often within new product and entry in larger companies. 

Delian Asparouhov: 

And then, after obviously a very storied career at Akamai, you decided to leave. I'm curious, sort of what led to the decision to decide to leave and how did you end up sort of landing at Zignal Labs? How did that opportunity come about? 

Alyson Welch: 

Through a friend, and it was a great opportunity, but it was a big pivot. I went from a billion dollar plus company to a pre-revenue, zero to 10 million, never done that before. I never started in a place of running the entire sales organization or having the responsibility to set up and run the sales organization full stop with all the cross-functional resources and moving from a specific function. I had a large team at Akamai and a lot of revenue responsibility, but I didn't have the responsibility of revenue operations and enablement, and all of the dotted line functions that I kind of took for granted. I think, I encourage everyone to do this at some point in their career. And I really encourage you to pick a product line that you're passionate about. This is the time, if you're going to do a startup like that early stage, if you're not the founder, you better really want to be the founder. You have to think about it that way. I don't know if you agree with me there, but it's hard. 

Alyson Welch: 

It's like building a house from scratch that you don't know. You're not a contractor, a general contractor. And so, and your founders don't know either. So, we're all finding our way through the market together. So it was a big transition. But a friend of mine introduced me to the company, met the board, met the executive team, and I was really interested in this space. They were doing things with real time media, real-time data that I hadn't seen before and the visualization, it was early stage data visualization, real-time data visualization. And, I was super excited about what they were doing. And, what I learned too is how transferable some of their original customer stories were to the rest of the market. 

Alyson Welch: 

And, I stayed there. I was only there for two years. I found that over time, I missed the bigger company, the bigger platform. So, I did transition out of that opportunity and moved into Twilio, which was more of, I think it was about 500 person company when I joined. And going forward, I think when I do a startup at that stage again, I think I would, but I really enjoy sort of the more mature product market fit builds. I think that's where my value can really be added as a leader to a sales organization or a revenue operations team. 

Delian Asparouhov: 

Yeah. I guess maybe, what were some of the things that very clearly translated from Akamai, whereas like [Salesforce 00:23:26] implementation or customer discovery calls, just super easy to transfer to startup land versus what was the one or two things. It was like, having less resources or not having sales operations set up yet, or a whole SDR team, that'd be like, we're just much more difficult or more surprising in of a level of like building a house together without even knowing what the floor plan looks like. 

Alyson Welch: 

Yeah. I think that the thing that I didn't have going into that, that I really appreciate now was the sales operations, the importance of a strong sales operations partner. I'm not one who can set Salesforce app top down. I've never worked at Salesforce. So, depending on a CRM partner to help me structure and really see the data and understand what's going on with the customer, and the pipeline, and the revenue, because there was some revenue and there was some customer behavior. We had a lot of data insights from the platform. Being able to see that, and then start to decide what resources we should prioritize in terms of hiring. I took a bit of a gut on some of those decisions and in hindsight, it would've used a better indicator from data to help me determine, do we need more of an enterprise resource to cover this market, or is this more of should we really load up an SMB focused and should we work with partners and agencies to build the muscle here and the market awareness. 

Alyson Welch: 

So I think, that was something I took for granted and a larger company is a really strong sales operations partnership that was providing me with that data. But now, I'm much more independent and looking at data and I'm glad I had that experience because I think I've become stronger in that area. I still think sales operations is probably my most critical business partner, some cases. 

Delian Asparouhov: 

Yeah. Maybe on the flip side, it sounds like you learned there, picked up some skillsets at Zignal Labs that have now impacted your career since then. If you had a handful of things, you'd say you pulled from there that you've now implemented until your ever been, critical and sort of decisions or systems you've implemented there, what do you feel like you sort of brought from, let's say both Zignal but then also obviously from the past? 

Alyson Welch: 

Zignal, for me and Twilio, I applied the hiring. So, the most massive hiring pace I've ever hired through that startup time was Zignal versus Akamai. We were kind of steady growth at Akamai. And Zignal, we did a lot of certain hiring, which was helpful to me when I got to Twilio because we've been doing a ton of search hiring more so than anywhere I've been in my career. So, that just having to think through the velocity of the pipeline for recruitment and what it takes to get people up to speed and the ramp time and the levers that you can leverage to improve ramp time. That was really helpful from the startup experience over to Twilio. 

Delian Asparouhov: 

Was it mostly just like the scale of how many candidates we really need to pull in and the conversion rate of that or the sources, or how to set up those teams? What were the [crosstalk 00:26:34]? 

Alyson Welch: 

I think it was more, I mean, there was definitely that, but it was also the understanding the funnel and what the impact of a waterfall on ramp, understanding the profile to hire. So, we experimented quite a bit and you can't just pull people from one tech company to the other and assume that they're going to be happy and successful in the new category that they've selected. You need to figure out what is the real profile for this company, this culture, this product, and the customer that's going to resonate. And, it's just not one for one, and I learned that the hard way for sure. And a number of different hires over time. 

Delian Asparouhov: 

And then, I guess, from the world of Akamai where there things that given the type of company structure or scale, the fact that it was public, that really just directly also applied into Twilio that really helped accelerate your sort of speed up there. 

Alyson Welch: 

Yeah. No, absolutely, the global collaboration, structuring large enterprise agreements. When I arrived at Twilio, there wasn't really the concept of approaching an enterprise across the multiple product lines perspective. We were really kind of looking at it as a developer-led, product-led approach. You can self-service and the customers wanted to be able to buy in a different way. So, we had to build that muscle out, and I leveraged a lot of experience from Akamai to build out those enterprise agreements over time. 

Alyson Welch: 

There's a lot of takeaways and comparisons between Akamai and Twilio that I've enjoyed taking advantage of. I think, they're both engineering-led, very technical companies. So, building bridges with product and making sure that there were relationships and that customers had access and can see the roadmap and understand the future vision of the platform and the capabilities there in was something that was really important as well. 

Delian Asparouhov: 

And then one thing that's probably somewhat shared between both companies, but I feel like, especially at Twilio is it's different than let's say just standard enterprise SAS company, where there's a clear and fixed contract value. There's a significant amount of it that it's sort of usage-based. And I'm curious, how do you guys balance, trying to sort of accurately come up with a sort of quota for salespeople in terms of ACV or TCV when the contracts themselves don't necessarily fully come to fruition until utilization sometimes happens? And so sometimes, the company afterwards were over-utilized versus another one might take a really long time to activate, and you don't even really have that data until a year end. How do you guys actually think through sort of setting that? What's the strategy for setting quota in this type of usage based environment, as opposed to sort of fixed contracts where they're clearly understood at the very upfront? 

Alyson Welch: 

It's not a straightforward give everybody a million, five quota. There's certainly, we look at account propensity. We'd look at spend propensity based on data, and we make some assumptions based on historic behavior of the customer. But we also have this factor that is unique, I think, to our platform and will be unique in the product-led industry. And that is, not every company is going to sign commitment or contract, so you're not even going to know. So, the best sellers at Twilio have the ability to partner with our customers to develop a long-term forecast and they forecast. And if they're accurate with that forecast, they're rewarded. 

Alyson Welch: 

So, we have a sort of initial reward system, and then we have a realization reward system. So the more accurate, the more effective you are, the better your outcome from an earning perspective and really the better the outcome for the customer as well, because they're taking advantage of the unit economics that are accurate for their forecast versus having to earn them as they go. And I think, that's one of the benefits of product-led and how you can work with your customers to bring them to the best value. 

Delian Asparouhov: 

And I guess, in this world where things are sort of either product-led plus utilization-based, is it more likely, I guess, in the Twilio world for account executives that not only responsible for the close, but also the nurture given that you have to go in and get so deep into this forecasting. Do they end up pretty closely staying with that customer to sort of help with enablement? Or how do you guys think about that sort of sales versus enablement handoff, if it's not necessarily the same person? 

Alyson Welch: 

Yeah, we do. We do partner with, so we do have CSMs in customer success who managed top account relationships as well, and are responsible for net revenue retention in partnership with the account executive. But, the account executive is ultimately the primary point of contact, the quarterback for the customer relationship and responsible for that ultimate revenue attribution that they've demonstrated through forecasting and through contractual relationships that we've built through limits of liability, indemnification agreements, revenue commitments, et cetera. So, it's really a team sport at the top level. And then in some of the mid levels, we have more efficiency where we don't have dedicated customer success models. And the [AE 00:32:00] does carry the responsibility for nurturing the customer and ensuring that their launch and their onboarding is successful. And then, they have shared resources that they can pull from. So, we've developed products, launch products and customer support products that will include for those customers that they have a good experience, but ultimately it's AE who's enabling that experience. 

Delian Asparouhov: 

Yeah. I guess, across these different segments of the business, how do you guys actually handle, let's say, goals, prioritization, team structure differently between these various segments of the market? Do quota structures actually look quite different for the sort of different segments and how does it differ? 

Alyson Welch: 

Yeah. We have a ratio model just like, I think every company based on, I think, based on a lot of different factors, but total cost of sale always comes into it versus revenue. And so, we model our business that way. So, I run our enterprise business. My ratio model may be slightly different in ratio because of the accounts than propensity and the [inaudible 00:33:07] than someone in say a growth market. But, it's really interesting too. We have to be. Some of our growth customers are our largest revenue producers because they're building on our platform or the enterprises are adopting or migrating to, and the disruptor category can be a really large revenue segment for us. So, the quotas aren't necessarily stamped out by segment. We look at a number of different factors to come up with what those values are. 

Delian Asparouhov: 

Yeah. How does the account, obviously I want an enterprise where it's adoption sort of know that there's going to be a sort of value in customer success because there's such a wallet share that one can take over. And so, it warrants it, whereas disruptors obviously early on might even be self-serve on day one and all of a sudden you realize a year later they're actually one of your largest enterprise accounts. How did that type of handoff even happen when you have a customer that maybe has never spoken to anybody at Twilio, but all of a sudden there's a massive customer that probably warrants some level of caretaking? How does that [crosstalk 00:34:10]? 

Alyson Welch: 

[crosstalk 00:34:10] they have in the early days, [Jeff 00:34:13] didn't really want anyone to talk to customers because we provided such an awesome self-service experience for the developers and the documentation was developed so that you had access. You were a web developer, you knew what to do. You understood the language and this is where we are today. We actually hope that there has been customer engagement in those cycles, even if you are a self servicing, because it's still important to understand the intent. And that, the goal of the business and there's economics that they can take advantage of that if they are growing at that rapid rate, we'll both hooves them in the long run and help them achieve scale and revenue growth that they're anticipating as well. So, I think we're far more covered than we used to be. 

Alyson Welch: 

We always have work to do to ensure that our customers are getting the care and feeding that they need at the appropriate time. And we use data and signaling and certainly management to ensure that we're covering the market. But yeah, I'd say the difference is, a lot of the developer-oriented build mindset customers who don't necessarily want, they don't need the technical support or the guidance. They can read the docs. And they're very independent. In those cases, we respect that and we want them to feel like they have access and independence, but we still want to understand their business goals so that we can ensure that we're aligned to support them from an economic perspective. And that's always, sometimes, a difficult relationship to manage because they may not have time or interest to share those details [crosstalk 00:36:02] the dynamics we're still working through. 

Delian Asparouhov: 

And during your time at Twilio, you ended up actually deciding to join as an advisor to both First Round Capital and Bessemer. Can you describe a bit about sort of why you decided to take on that kind of nights and weekends project, but then also the benefit it provided from sort of having a broader perspective into the startup ecosystem and how that affected your work at Twilio? 

Alyson Welch: 

Yeah. I always like to learn. And I just think that, the closer you can be to early stage development, the better, because you'll learn something and hopefully I'm giving back too. So, it's kind of a selfish thing, but instead of going into a company full time and taking on the role, I'm committed to Twilio and I really enjoyed the business that I work in today, but I want to share my learning and vice versa. I want to hear what is being disrupted because I think that the career path of a sales leader and a revenue leader is just it's ripe for disruption. And there's always going to be more. And if you're not familiar with the emerging markets and some of the emerging strategies, you might get left behind. So, it's a little bit of paranoia. And it's also just interesting. 

Alyson Welch: 

My involvement has been an early stage founder. Discussions like, when is it right to hire a go to market or a head of sales? What should that head of sales look like? What kind of skills? And I give my honest opinion, they may or may not be right, but I've been kind of an advisor to people that in different stages of growth, usually in the fairly early stages. And I really enjoy that. 

Delian Asparouhov: 

And then, if you had to give a piece of advice to a fresh young, 20 plus year old, that's coming out of a three and a half years of consulting and looking to get into the world of startups, sales, mentor, et cetera, and eventually wants to be a VP at a public tech, SAS company, what do you feel is the best advice? I guess relative to of course, no longer the .com bus, but instead it's September 2021. What do you feel is sort of the best path or the best place to join? [crosstalk 00:38:11]. Yeah, exactly. You can start again, snap your fingers [crosstalk 00:38:14]. 

Alyson Welch: 

And if I can do it all again, I would have done an international assignment for sure. I probably would have definitely taken a role in sales, but I really love it when I see people moving around operationally and understanding the full function of a business. So, I've seen some of my colleagues do that and it really rounds out their perspective and it just going to make them stronger leaders. So, I can kind of tell who's going to be the next COO or CRO or evolving leader from the Twilio team, just based on some of the things that people have been willing to do and during their career who are earlier in their career here. And it's really cool. 

Alyson Welch: 

So, be willing to take, if you're curious, don't worry so much about the financial security. I leaned into that a little bit too much and was less, I didn't want to take a risk. And I think, the more you can get a well-rounded perspective on how the business runs, the more opportunity you will have and the more you'll bring to the business. And then, international is always a good idea. 

Delian Asparouhov: 

Makes a lot of sense. Well, yeah. Alyson, thanks so much for taking the time to come to the podcast. That was really enjoyable conversation. 

Alyson Welch: 

It was fun. Thanks for having me. Great to meet you. 

Delian Asparouhov: 

Thanks for listening everyone. If you'd like to support the podcast, please sign up for a paid [Subtext 00:39:40] subscription, which we use to pay for transcripts, mics and other improvements. If you have any comments or feedback on what kinds of questions I should ask, who should come on the show, or anything else, please do let me know. Have a great rest of your day. 

Operators Ep 31: Ben Braverman (Flexport)

  
0:00
-47:05

Ben Braverman is the Chief Customer Officer at Flexport. Prior to becoming the Chief Customer Officer, Ben was the Chief Revenue Officer at Flexport. He also worked at URX as the Head of Growth and at HeyZap as their Director of Sales.

In this episode we cover a wide range of topics including Ben’s decision to drop out of college and pursue Buddhism in India, meeting Flexport CEO Ryan Petersen at the dog park, and the ramping-up process Ben went through to learn the freight forwarding industry. We also discuss how the pandemic has affected business, the Suez Canal blockage, and at the end, Ben gets a chance to ask me his burning questions about manufacturing in space.

I hope you enjoy the show.

Full transcript available here.

Operators Ep 31 Transcript

Delian:

Hi, everyone. My name is Delian, and I'm a principal at Founders Fund, a venture capital firm based in San Francisco. This is Operators, where I interview non-VC, non-CEO, non-founder operators that make the startup world go round. Today, I'm interviewing Ben Braverman, Chief Customer Officer at Flexport. Prior to becoming the chief customer officer, Ben was the chief revenue officer at Flexport. He also worked at URX as the Head of Growth and at Heyzap as their director of sales. I hope you enjoy the show.

Delian:

Ben, so excited to have you on the podcast. Thanks so much for coming on.

Ben Braverman:

Yeah, man. I have followed you on Twitter for a long time. It's somewhat surreal to be here.

Delian:

Yeah, hopefully we can provide some entertainment. Excited. We chatted with one of the other Flexport C-suites, so it's going to be fun to hear about the story from a different perspective.

Ben Braverman:

Sanne Manders. One of my best friends. We have a plan to unite the empire. He has got a son almost exactly the same age as my older daughter, so every time our families are in the same city, we're just sort of like, "Why don't you guys go play together? Wouldn't that be fun."

Delian:

How is that working out so far?

Ben Braverman:

Honestly, they actually get along great. Mark this on the podcast, if 18 years from now Matteo Manders and Alexis Braverman are married, it's because of their fathers having machinations of real power condensation.

Delian:

I love that, I love that. With these types of interviews, I always like to dive all the way back in people's careers because I think it helps provide some context for the work that they're doing today. And so, on your LinkedIn at least, it says that you just did a single semester at Vassar but then ended up dropping out and going off to India to find enlightenment, and then came back to the U.S.

Delian:

That sounds fun. I dropped out but for a much more boring program where Peter just gave us 100K to work on startups, versus you went to India. Walk us through that.

Ben Braverman:

I tried to get Peter to give me that 100K but I'd already dropped out. A very nice lady who worked for him called me and was like, "Look. You seem like a really interesting young person, but you have to actually be in college to be eligible for this." So at any rate, I dropped out of Vassar because I just felt like one, $60 000 was a lot of money to pay to do whatever that was.

Ben Braverman:

It was fun. It was a fun place to be, but I was unsure that I was moving forward in the universe in any way, and I also at the same time felt this real draw towards Buddhism. I don't think I'm going to be immortal. I don't think the science is going to get there in my lifetime. Hopefully I'm wrong. But I don't think I'm going to be immortal. I don't think my family's going to be immortal. Impermanence seems to be the thing that we all have to grapple with. So I began really focusing on trying to escape from it.

Ben Braverman:

I've since made my peace with the fact that that just sort of is what it is. We're lucky to be in the game as long as we are, but that was what motivated it. It was the most sincere thing I've ever done. But I got there, and I was volunteering at Mother Teresa Center for the Destitute and Dying, and one day, one of the ladies who was working there as a nun, full-time, taking care of these people, said to me... She was like, "Look. It's nice you guys come here." She classified all as one group. She's like, "It's nice you guys come here, but we'd much rather have the money. Whatever you paid to get to India and get to this place, just give us that. You don't have any skills. You're not a doctor. You can't fix our sewage system. Just give us your American money. That's way more valuable."

Ben Braverman:

So I sort of left that with my tail between my legs, and I then went into the mountains of India and just tried to meditate my way to happiness. I was nine days into a solitary retreat where I just sort of lost my mind and ran down the hill screaming and then went home.

Ben Braverman:

I founded my first company not long after. It was not terribly successful, but it was enough that I would say I sort of bootstrapped my way into tech. I ended up meeting Jude and Immad through a platform called Higher Art. I think it was a YC company actually. And Jude and Immad, who if you don't know, they were the founders of a company called Heyzap. Now Immad is the founder of very well-known Mercury. Jude is the CEO of Golden. They're two of the world's most interesting humans.

Ben Braverman:

It was just sort of a gift that I got them as the first people I ever worked for in tech. I ended up through some combination of luck and discovering a skill, on my ninth day of working for them, I onboarded the biggest account in the history of Heyzap. I shouldn't say I. It was me and an engineer named Thomas Shaddox, who worked together to get this game online. But I realized, oh, I'm actually much better at sales than I am at seemingly anything else. I should just dribble down in this. I haven't really thought about it much since then. I've just sort of been sprinting in that direction since that day 10 or 11 years ago.

Delian:

Too funny. I'm curious. The company ended up getting acquired, and you went to URX, but it was more at birth, and so was it actually still mostly a sales role just titled as growth? What was the difference between that role, or how did that come about after the acquisition?

Ben Braverman:

I left Heyzap and joined URX shortly before they were acquired. I think the writing was on the wall, they were going to be acquired. It was an amazing business. I loved working for them so much. I actually probably at the time didn't value just how good they were, and just what a wonderful experience it was. Having worked for them, and now having gotten to work for Ryan, it's several lottery wins in a row. But at the time, I was just sort of, "I put my year in here." I think I materially changed the business for them, and I think they would probably agree with you.

Ben Braverman:

At the time, URX was thought to be the mobile version of Google, or at least it was a bet that maybe you had some chance of that outcome. I met them through one of Heyzap's investors, and joined very quickly. Actually, in the moment I was joining URX, I was already trying to convince Ryan to hire me at Flexport. I invested my life savings into Flexport.

Ben Braverman:

I met Ryan at the dog park. For people that don't know, Ryan is the CEO of Flexport. I met him at the dog park when we were much younger, and we sort of immediately became friends and started walking around the city talking about this new thing he was building. As part of me courting him trying to get him to hire me, I had invested every dollar I had in the business. I was basically working for free as his sounding board.

Ben Braverman:

Before I joined URX, I said, "Look, man. Can we just do this? Can I just come work for you?" He didn't actually have the licenses yet to be fully operational, so he said, "No, no. There's nothing to sell. It would actually be illegal for us to bring you on and for you to do the thing that you do." So I joined URX, and then at some point, Ryan got all the licenses, and it just became very obvious it was the moment to go all in.

Delian:

What gave you such strong conviction on it, because in your prior experiences, it's not like you knew a ton about let's say logistics or shipping or things like that. You were in the world of more, I would say, standard, traditional, middle of the road Silicon Valley stuff. Versus Flexport's pretty far off from that in some ways. What gave you such strong conviction in it?

Ben Braverman:

Most likely, the correct answer is just luck, but the story I'm telling myself is that... I was blown away by a couple things. One, Ryan had already had a company that was extremely profitable. Importgenius.com, he and his brother, David, founded and ran for a long time. When I met him... Silicon Valley circa 2012, it was still a very [inaudible 00:07:51] place. A lot of companies that today are these juggernauts were still really early. People were deriding them for losing money. It was just a different environment. At the same time, Ryan had this business that printed cash. [inaudible 00:08:01], that bought assets. And I just didn't see a lot of businesses like that, and so I was impressed by that.

Ben Braverman:

I was impressed by the fact that Ryan had walked away from this thing like he didn't care about it at all, despite it having made him personally very wealthy. I couldn't believe how bad the websites were of the businesses that he said we were going to go compete against. It wasn't that I didn't trust him, but I went on Google. What are the market caps of these companies? Is this guy telling me a fairytale? When I realized, "Oh, these are abandoned websites from 1997 and this company did nine billion in sales last year, and Ryan is telling me this is what he's going to build the rest of his life around," you don't have to be that smart to be like, "Okay, I'm going to bet on this."

Delian:

So I guess you got the licenses. A year or so later you ended up joining, and then basically immediately on day one, you got chief revenue officer in charge of selling, selling, selling. What was that like?

Ben Braverman:

I just put it on LinkedIn. He told me he was hiring me. This is back when Ryan was a new founder. Ryan has a belief in emergent systems. There's more interesting things that happen when you build a system and just see what properties arise than if you try to dictate centrally, "Oh, this should arise over there," or whatever.

Ben Braverman:

And Ryan used to let the company really be run in a pretty loose way. No longer the case. Now, we're an Amazon Docs culture. Everything's done with six page PR FAQs. But this was a long time ago. In the intervening 24 hours between when we finalized my title and he offered me the job, I just put CRO on LinkedIn. I started doing outbound as a CRO at Flexport. At that point it was like, "Well, the world know me now as a CRO."

Ben Braverman:

Luckily, we ended up delivering on the growth side. I probably wouldn't have kept CRO had we not grown.

Delian:

Walk me through what was the early sales? Was it mostly to basically... I assume you have two sides of the market in some ways, of the folks that are helping you, with [inaudible 00:10:05] logistics that you're partnering with, versus the actual... Whether e-commerce companies or folks that are looking for something to ship. What was the initial seating of it and where was most of your time focused? How did you even convince them to shift over such a critical part of their business to such a young startup?

Ben Braverman:

So again, so much luck. I happened to meet Parker Conrad... The very first meeting I took as CRO at Flexport was meeting Parker to learn about how Zenefits was growing so quickly. Parker just said, "Look, it's all list construction. If you want to control your destiny, you need to be methodical about list construction, and you need to go and actually go find these customers." He said, "Inbound is effectively a myth. We don't believe in it. We build lists. We attack those lists, and we generate enough pipeline to keep everybody well fed." And not even well fed. He basically... I want to break the system. I want every AE's calendar to be so full, the wheels fall off.

Ben Braverman:

Maybe now with 10 years more experience, he wouldn't say the last part, but the first part ended up being just the most wonderful advice I've ever gotten. We took the data set that Ryan had from ImportGenius, which is this enormous data set of all the goods coming in to the U.S ports. They're categorized by who imported them, who manufactured them, what port they came in. You couldn't ask for a better seed from which to grow your outbound strategy.

Ben Braverman:

So we took that data set, we started parsing it, and we focused on a few categories. We focused on one, the category where we actually had some inbound, which was Amazon sellers below a certain size that were big enough to do full containers. So we were like, "Okay. There's a segment of the market that's big enough to spend real money, but small enough that our competitors literally will just hang up on them if they called them." That was really where started to get well fed.

Ben Braverman:

The other thing that seemed to work really well was going through the Investor Network. There was sort of this boom of hardware companies circa 2013, 14, 15. I don't know that you could build the company the same way again because these companies aren't getting funded anymore, but at the time, those companies were all getting funded. All of them were launching with very expensive air freight. I air freighted in a bunch of Juiceros.

Ben Braverman:

We were one of the last companies to get paid before they wrapped it up. And ultimately, we benefited tremendously from that tailwind. Maybe I'm going to get a lot of flack for saying this. The big part of our outbound in the early days was built around impersonating leadership. Everybody does this, or at least everybody confident. Outbound is not something that you can mechanize in a way that a lot of people want to. If you give people these scripts and lists and just say, "Hey, you have to work in a certain way," your conversion rates are going to be terrible.

Ben Braverman:

But if you arm them with all the tools of a sophisticated modern nation state, and you say, "Look. You can email as an executive. You're going to get access to our LinkedIn so you can see exactly how all the leaders of the company are connected to the rest of the world. We're going to maintain this giant list of references. We're going to give you every possible tool so that you can get creative and outbound to these people in a way that doesn't feel like a robot is doing it."

Ben Braverman:

And part of that was impersonating Ryan and I, and we had Ryan P. and Ben B. @flexport.com. The moment they would generate a response, Ryan or I would tag in. We would lead the sales cycle. But for the first 18 months, when you are nothing burger company, it is just tremendously valuable to give everyone the power of a title without actually giving them the title. So yeah, impersonating leadership early days outbound, I can't recommend it enough.

Delian:

How did you think about building out beyond just you guys as the founders, early hires, building out that early STR, BDR, AET. That you sort of know okay, this is a very particular profile. We're going to go for fresh grads from ASU that are willing to work 12 hours a week. Or was there some level of experimentation of okay, let's try three or four different types of profiles for these different types of roles, and then eventually found ah, it turns out when somebody has this type of personality or this experience or this capability, then they're much more successful at something like Flexport versus other types of sales?

Ben Braverman:

What we found was, as in most things, there's a real power law distribution between the best people and the rest of the pack. As a result, it's really worth it to spend what feels like too much time building up as an organization. In the early days, one of the number one things that we got flack for was not hiring enough sellers quickly enough, but the reality is we were just being really methodical in who we onboarded. If you look at the early crew of Flexport, Justin Schafer is now VP Sales of a series B company. Taylor Oliver, VP of Customer Success at a series C stage company. Maryanna Kessel, VP Sales at DataGrail. There's just this enormous list of alums of people who came in as [inaudible 00:14:57] at Flexport, and are now VP sales at big, high performing organizations.

Ben Braverman:

And it's partially because Flexport was a good place to learn, but it's also because upfront, we held such a high bar. To Parker's point, if you jammed a great reps calendar full of eight meetings, that was way better than eight reps each having one meeting a day. The conversion rate of that person actually doesn't go down the busier they get, until they reach some extreme breaking point.

Ben Braverman:

We scaled to a lot of revenue with relatively few people.

Delian:

Maybe a two-fold question, which is one, before these people that you brought in, that you had a high bar, how did you filter, or what was the thing that you were looking for? And two, once you chose them, how did you actually get them onboarded to the world of shipping, logistics, freight, so that they could speak the right language to the customers?

Ben Braverman:

It's so funny. The answer to both of your questions is the same. We effectively hired for intellectual curiosity and energy. Because so much of the Flexport sale is... First of all, you have to learn this entire new industry. My first month at Flexport, there was a wonderful gentleman named Michael [inaudible 00:16:04], who's still with Flexport, walking me through, on a 30 foot long whiteboard, what a freight forwarder does.

Ben Braverman:

Here's every step. Here's every document. Here's every law. I literally did not know what they did, and I think that's true for the majority of the best sellers that we've hired over the years. And not everybody wants to go through that. Some people just want to come in. They're like, "Oh, we are an email marketing tool. We are sold to this stakeholder. They spend between this much and this much." Our sale, it's this long-term consumption sale where you might build one business unit or a second business unit over two or three years. It's just not at all a sales that if you're not curious about the customer, you're never going to get these deals done. You're never going to learn the industry.

Ben Braverman:

So by hiring people who had enough energy to take those eight meetings a day we were talking about, and the intellectual curiosity to actually be curious in all of those eight meetings, the problem sort of solved itself. Those people also were able to learn logistics.

Delian:

Let's say opposed to actually getting a customer excited about it, there's obviously... This isn't a marketing software automation tool where you can just hand it off to them and they can typically start using. You actually have to deliver on the promise. Get the goods. Communicate well. How did you guys both execute that and make sure that the customer's successful, and increase wallet share? But then also, how did you make sure to feed that information back to the sales team where it's like, "Hey. We're actually not ready for the Fortune 50s yet because we don't have the infrastructure set up.

Delian:

How did you balance getting the customers happy and then also starting to expand what types of customers you could keep happy?

Ben Braverman:

Yeah. I'm sure Sanne talked about this. Very early on, we zeroed in on this squad model where you paired up a seller and what was effectively a very operational account manager at the hip. They are jointly responsible for everything that customer experiences basically from the discovery call all the way to full share wallet, multiple years in. Those two people are end-to-end responsible. The seller, more responsible later in the relationship for things like asking for more business, confirming we're going to be renewed, whatever you want to call it. And then the operations manager ended up being this pretty large scale people manager where a squad probably can get up to 10, 12, even 15 people before we would split the cell and create a new squad.

Ben Braverman:

By pairing those people up, we really diminished the incentive to sell things that were going to break the business, because it wasn't just this esoteric, "Someone else is going to have to deal with this but I might still get my bonus." There was no chance... Not only was there no chance you were going to get your business, you were screwing over your best buddy who was... You and this person have been working together hand-in-hand on every one of these deals for the last year. If you throw something over the fence that ruins their life, it becomes much more personal than some, "Oh, I passed it to another anonymous team in a big organization."

Delian:

So there's clearly been a lot of changes at Flexport, whether it comes from the systemic way that Ryan manages the business to even the types of freight you guys are doing. I'm curious if there was a certain inflection point or a moment where you felt quite confident, where it was like, "Oh, this thing is going to work. There's still a lot of challenges ahead of us, but we've clearly tapped into something that's very unique."

Delian:

When did that feel like it really became clear, and what was that moment?

Ben Braverman:

They were all customer moments. Every time we were surprised when someone either told us how broken their world was when they were a really big, sophisticated buyer. Warby Parker was probably the most impactful sale in the history of the business. They helped us refine exactly what a direct-to-consumer high growth brand needed. This was when Warby Parker was the number one article in the New York Times for two years in a row. Everyone was talking about Warby.

Ben Braverman:

We got in them in 2015. They had become our biggest customer. They helped us refine the product. And they were happy. It all happened very quickly in the second year of us building the machine. Then it felt like, "Okay, if we can get them, which was this halo direct-to-consumer brand, we can get every direct-to-consumer brand." So that was a big moment.

Ben Braverman:

When Georgia-Pacific started paying us to be their overall management layer... The majority of Flexport customers, they pay Flexport to actually move goods from call it China to the U.S, or China to Europe, or wherever it may be. Georgia-Pacific that said to us, "Look. We are too big to buy our freight through Flexport." In their case, they're the second largest exporter from the United States. In some years, they may even be the largest. They're negotiating directly with the vessel owners. There's just no way that Flexport's going to mediate that transaction in a way that's helpful.

Ben Braverman:

However, they said to us, "Look. You've built by far the best-in-class platform. We audited everybody. Even though you don't even sell this today, we want the Flexport experience across all of our shipments, and we're willing to pay you a pretty significant premium to get it."

Ben Braverman:

When they told us that as this very sophisticated, very large scale business that was so much bigger than any company we'd served before... And they ended up onboarding something like 75 of their customer service reps to the platform. They all now do their work inside of Flexport. So that was sort of the second. The first moment was, "Oh, we can build this product that allows a direct-to-consumer brand to fully outsource their logistics to Flexport. That can be a pretty big company."

Ben Braverman:

The second moment was when we were like, "Oh, the biggest companies in the world believe they want all of their data inside of our platform. That's pretty interesting." Where we are today, even as the market's been in total chaos this year, we've been able to grow volumes by a dramatic amount, revenue by a truly insane amount. And that's probably where I was the wrongest.

Ben Braverman:

When we got to a billion in valuation, that round that Founders Fund led four years ago, I was like, "Oh my god. There's only a handful of billion dollar companies on Earth. How much bigger can this thing get?" And I was just dead wrong about that. It turns out if your market is big enough and your customers are happy... I was just bad at math. The compounding actually happens much more effectively than I realized.

Delian:

All of the compounding happens in the last 10%. The first 90% is actually very little of it.

Ben Braverman:

Yeah. Again, I'm bad at math and I'm just now figuring this out.

Delian:

Maybe walk me through a little bit... The pandemic obviously changed a lot of different businesses in a lot of ways, but obviously, in the world of supply chain, extremely disruptive and continues to be so. Can you walk through a little bit... Was there a sort of battle room at Flexport where it was like, "Oh my god"-

Ben Braverman:

Oh yeah.

Delian:

"We're operating in China. We have a little bit of a heads up view on this vis a vis other people, and we need to start adjusting." Even on an ongoing basis, obviously this stuff still hasn't really settled. What do you think the organization has done well in terms of on the fly, adapting to such a rapidly changing supply chain?

Ben Braverman:

Chronologically, Chinese New Year 2019... Sorry. 2020 rather. Coincided with us all globally learning about what SARS-COV2 is. It was happening exactly at the same time that China is shut down for Chinese New Year. Normally the factories were supposed to resume late February and they didn't. The entire global supply chain just stopped.

Ben Braverman:

Our sailings dropped by 40%. The number of containers we had leaving China dropped by 40%, and then ultimately, there was a few weeks where almost no containers left China. Those were horrifying weeks. Especially when you get to some level of scale, you pride yourself on being able to at least decently forecast your business. It is horrifying to just see the business freeze like we saw it freeze in February 2020.

Ben Braverman:

What happened then I think shocked all of us, which was we all were locked in our homes. The government did a stimulus that was unprecedented in its scale and swiftness of deployment. And people weren't allowed to spend it on anything other than physical goods. All of those physical goods are made in a few regions in Asia. All of those goods go on the same vessels across really two major ports in America, and the circulatory system was not able to expand quickly enough to support the deluge of goods that poured into the United States.

Ben Braverman:

February 2020, we thought it was the apocalypse. Over the next six months, really led by Ryan, Flexport's business pivoted very quickly into being almost exclusively PPE-focused. From March through June of 2020, I don't have the exact numbers but I think we moved something like half a billion pieces of PPE around the world. And it was both the focus of our .org arm and our commercial arm. It was the majority of the cargo moving in the world for that first six weeks of COVID.

Ben Braverman:

We were very quick to react there. Again, luck comes into play. We made what some people thought was a strategic blunder in 2018, 2019, which was we built an asset-based air strategy. Which means instead of moving air freight in the belly of passenger planes... So a lot of people don't know this. You can put about 40 tons of cargo underneath people's feet in a Triple 7 that's leaving Asia, or leaving anywhere for that matter.

Ben Braverman:

In the old world before COVID, with so many passenger flights going Asia to the U.S, literally 60 a day in some cases, it was really, really easy to run an air network that was based around that belly capacity. The network was so big. With 60 flights a day, there's always an under-utilized flight, which means if you're very active in the market procuring that space, you can buy well below actual cost. You can make lots of money as an air freight forwarder, and you can sell very competitively to your customer.

Ben Braverman:

We were historically at a disadvantage because we built our strategy around freighters. So freighters are dedicated 747s that have been gutted on the inside or the nose opens up, the tail opens up, and cargo's loaded in by forklift. That strategy is nice in some ways because it gives you a ton of control. It's in some ways a more predictable product. You can move bulkier things. You can move things that aren't allowed in the bellies of passenger planes. But per kilogram, it is a strategy that just costs more to operate.

Ben Braverman:

There's fewer of those opportunities to buy excess capacity in the market. There's fewer opportunities to create margin out of thin air. You're running a fixed network, and you have the additional downside risk of you're running this asset. Every single flight is 100 tons that you're going to fill up yourself or you're going to lose money on the flight.

Ben Braverman:

So pre-COVID, this strategy was something that we really did a lot of soul-searching about, where it was like, "Man. We thought we were optimizing for a quality product, but we might have priced ourselves out of the market." Fast forward to six months into COVID, it's clear that we're not going to get back to 60 flights a day from Asia for a very long time, at least not for another couple years.

Ben Braverman:

The freighter network that we had built up in partnership with, Atlas, has turned out to be the enormous gift to both Flexport and to our customers, where we've had a huge amount of space that was incredibly reliable at a time where the air market, on most weeks right now, your four or five X, the historical norm per kilogram on the air, this month on the ocean side... For a little bit of context on ocean freight, the port of Long Beach was seeing 50 or 60% more containers showing up in a day than they had ever seen before. The terminal just couldn't process it.

Ben Braverman:

Even today, there's not enough empty containers making it back to Asia fast enough. And the carriers are really in a tough position where they just don't have enough capacity to fill global demand. As a result, the prices in the market have gone up to 22, $24,000 a container. A couple years ago, it was more normal to see $2500 a container.

Ben Braverman:

So we're looking at 5X the norm on the air, 10X the norm on the ocean. And the net result for Flexport is incredibly positive from a gross margin realization perspective. With prices this high, you do make a bit more money per transaction. The problem is we are maxed out on capacity. The limit for our growth right now is purely can we get more space on vessels? Can we lease more aircraft? There's sort of unlimited demand because we've been able to move, in many cases, I think more quickly than some of the traditional folks to add new services.

Ben Braverman:

Even doing something as simple as when the prices have changed so dramatically, it's tough if you don't have a good inventory system to update your customer on what price you actually have to pay to get cargo moving. It may be from week to week that $18,000 dollars last week got a container loaded onto a vessel, and in realtime, the market has changed so much that same $18,000 rate no longer gets the container loaded.

Ben Braverman:

Obviously, if the customer knows this, they'll gladly pay $19,000. That extra thousand dollars is surely better than living up to your commitment to one of your customers. But if you don't actually know that, and you don't have the inventory system that says hey, we have this slot available on this carrier for $19,000, you can't solve that problem for that customer.

Ben Braverman:

You sort of put all this together. There's more demand right now than we can get capacity for. We've turned down hundreds of millions of dollars of bookings in the last few months. I'll put it to you that way.

Delian:

Maybe a two-fold question, which is one, do you feel like because Flexport has been such a software-driven freight forwarder obviously since day one, do you feel like you guys were just so well-suited for an environment that so volatile? Because obviously software's better at dealing with realtime pricing and adjustments and understanding this stuff.

Delian:

Then second question being as you've realized you had to turn down hundreds of millions in bookings, has there been a shift towards, "Okay, do we have to go even more full stack?" In terms of starting to lease more and more assets, and running more of it ourselves as opposed to having to book on other people's services.

Ben Braverman:

Wow. Look at the big brain on you. No wonder you're building factories in space. Full stack is exactly the direction that we have to go. We're still exceeding our growth goals. Thank the powers that be in the universe, God, whatever you believe in, we're still hitting all the goals. But it's terrifying to know that the limiter is an external variable.

Ben Braverman:

Unless we start building vessels, which is unlikely to happen anytime soon, there's a variable that is outside of our control that we cannot build or think or execute our way out of. We've got to develop relationships with these carriers, and, to your point, we've got to build more of a full stack for our customers.

Ben Braverman:

I think you're going to see a bunch of new stuff coming out over the next six months that gives customers more ways to stay on platform with Flexport, and allows to keep growing even if we can't get incrementally more and more space on these vessels.

Delian:

That's super exciting. Can you maybe talk to a little bit to how being a software-driven freight forwarder has allowed you to adapt in some of these scenarios vis a vis more traditional providers?

Ben Braverman:

Totally. The great example is the Trump tariffs. When Trump was announcing his tariffs, the world was shocked. Shocked not just because it was unprecedented in how aggressive they were getting, but there was no preamble. It was just, "Hey, we're doing this. It's effective immediately. Have fun." And for a lot of our customers the moment those tariffs were announced, it fundamentally changed the economics of the businesses they were in. If you're selling some durable consumer good at 25% change of your cost to bringing it in the U.S, it may be that every single one of your retail relationships has to be renegotiated. It may be that you should stop importing that product altogether, or at the very least, you need to be aware that the economics have changed.

Ben Braverman:

Because we have this realtime living product library of every single thing Flexport is moving at every second of every day, we could see in realtime, okay, here's all the tariffs that Trump just announced. Here's every Flexport customer that's affected. Here's the projected financial impact. Here are the customers that we think we can dispute it. And we were able to alert these people within 24 hours of the announcement. We were having the meetings that week with the customer on how we were going to deal with it. They were then able to go back to all the rest of their supply chain and say, "Hey, here's the decisions I made as the result of the tariffs."

Ben Braverman:

And it may sound crazy that having a searchable database is a big competitive advantage, but in our industry, it was amazing the gratitude our customers had when we were able to do that. Another example is when Hanjin collapsed. For those who aren't big shipping groupies, about six years ago, one of the big shipping lines when bankrupt. It was called Hanjin. All of this cargo was held hostage on the water as Hanjin negotiated with their creditors.

Ben Braverman:

And so for six months, people had all this cargo stuck in limbo. Really big companies didn't know which of their containers were on Hanjin ships and which weren't, therefore they didn't know which of their retail partners to update and say, "Hey, we're not going to deliver on time." It was chaos, and one, it showed our customers how important it was to know where your stuff was. If the universe is going to deliver a message to the market in the same year that Flexport's being founded, the message we wanted it to deliver was, "Hey guys. It's really important to know where your stuff is. You should have a platform that does that for you."

Ben Braverman:

You couldn't ask for something better from our perspective there. And again, the pricing in the market changed really quickly. I'm not sure if it's because we're a tech company, or it's because we're just playing a longer game. When the market changes, our competitors tend to want to profit take. They tend not to want to deal with the overhead of renegotiating with a carrier to try to get a customer loaded. There's all of these things that happen when the market is disjointed that either require more work, or may require you to sacrifice margin in the short-term, or at the very least, require you to act very quickly.

Ben Braverman:

All of these things are made easier by software. There's not one silver bullet that I could say, "Oh yeah. This is why we're winning." But across the last 10 years of turmoil, I think Flexport has been in a good position every single time in the market has done something crazy just because our team's on the platform together, we see what's happening in real time. We communicate it back to our customers. None of this stuff is... It's not rocket science. We are literally not doing anything nearly as complicated as what you're doing, but we're just serving our customers in a way that they're not used to being served in our industry.

Delian:

Speaking of turmoil, can you talk through the Suez Canal incident. If there was any interesting adaptations or issues that you guys had to deal with to work around that for some of your customers?

Ben Braverman:

The most interesting thing from my perspective... I was so impressed. Ryan got a children's book written and illustrated. He wrote it and one of our designers illustrated it within two weeks of that incident, and they went crazy for it in Egypt. It's the most popular children's book of 2021 in Egypt. So on a personal note, that's one of my favorite things that happened in the whole Suez debacle. But again, it was another example of if you were a Flexport customer during the Suez debacle... And it wasn't just that vessel impacted. It was all the vessels that then couldn't transit the Suez.

Ben Braverman:

If you weren't a Flexport customer, you were scrambling trying to figure how are we impacted, which products run which vessels, how long is this delay going to be, what's our lead time if we want to have new skews leave the factory. All of these things on our platform just let these folks dive into in realtime. If you didn't have Flexport, you had to do all this work. And in many cases, you had to get data from people that were hard to get data from.

Ben Braverman:

It was just another example of... Yeah, it was difficult. I'm sure the ops team would think I'm crazy for saying this because they were going through this living nightmare of trying to reroute all this cargo, but it was another example of chaos generally being good for Flexport.

Delian:

So right before the pandemic, you shifted your role. Maybe it just more in title than actual responsibilities, but at least on LinkedIn you have it shifting from being chief revenue-

Ben Braverman:

No, no. It was a real shift.

Delian:

... officer to customer. Yeah. Just walk me through that shift, six and a half years being at the company. How did that shift come about, and what was the change in focus?

Ben Braverman:

The gentleman who took over is named Will Urban. I love Will. I actually brought Will through Flexport as an advisor because as we were maturing, it became clear that the problems that we had... I was becoming a late stage CRO. I was studying DCR rows of tech companies, and I was realizing so many of Flexport's problems were not problems that the SAS companies can solve. Forecasting a SAS company is so different than forecasting our consumption business with so much price volatility, and there was sort of a limit to how much we could learn from the best-in-class SAS companies.

Ben Braverman:

And also, there was a limit to how much we needed to focus on growth, where the growth was happening pretty much with or without me at a certain point. Where the machine was just going to keep growing and the snowball's going to keep rolling down the hill, but the transactional excellence and really unifying the commercial org in a way that allowed operations and the customer to be served in a way that's end-to-end, and for the teams to be able to focus on transactional profitability, it was just really helpful to have someone come in... In Will's case, he ran the western United States' Expeditors, which is the most profitable per transaction freight forwarder. It was just really useful to have someone with that skill set who solved a lot of these problems before come in.

Ben Braverman:

It is pretty brutal from an ego perspective when your world changes to that degree, however it very much was the right thing for Flexport. I think Will's doing an amazing job, and if you look at the numbers, our transactional profitability's getting better. I right now am mostly focused on building a few new things on the side for Flexport, but that haven't launched yet. We've been running the Flexport fund, where we've actually very quietly done about 80 investments in the last six months.

Delian:

Yeah. Walk us through the Flexport Fund. It seems like a very interesting model. Is it a fully on balance sheet? How do you guys think about the types of things you invest in, because you guys have also invested in a variety of companies. I've been investigating [inaudible 00:37:57] having you guys as co-investors, so I would love to understand what's been the strategy, thesis behind that? Do you think more corporations at your guys' scale should be doing that to keep up a pulse on up and coming new innovation?

Delian:

I would love to understand it.

Ben Braverman:

When I look at the fund, it's one of those things where there is so many virtuous things happening in parallel that I'm surprised more companies don't do this, and I think in the long-term, more and more great companies that have more cash on the balance sheet than they can officially deploy into the core business, I think you're going to see more folks doing it. We're Flexport. We sit at the intersection of these ten thousand customers, or however many it is, that we've spent all this time cultivating this really close relationship with. We've got thousands of vendors around the world that we also spent all this time cultivating this very close relationship with.

Ben Braverman:

They're on this platform together. We ourselves are this enormous buyer of software and service from other tech companies. And if you put those three things together... And the fourth track is we've raised a significant amount of capital from people that we respect a whole heck of a lot, and so we see their deal flow. We see which of their deal flow is applicable either to our customers, to our vendors, or to Flexport corporate itself. If any of those three boxes are ticked... Or if it's just something that we're like, "Hey, we're going to learn a lot from this founder. We're going to learn a lot from this new business model someone is building."

Ben Braverman:

For all those reasons, we were able to put these small checks in, and they get accepted because Flexport's brand is good. We run this really operationally complex business. And the [inaudible 00:39:29] of the fund is that if we open our doors and say, "Look. If you want to talk to an executive who manages the two million accounts payables that we have to do every single month, and is in charge of automating that, I'll introduce you to them. If you want to talk to Jen, our chief impact officer, about how she views our org chart and if she's willing to put it in public, great, I'll connect you to her."

Ben Braverman:

There's all of these people in our company that I think are useful to these founders. Flexport in some cases is going to become a customer ourselves. And in some really special cases, particularly in the cases of companies that are selling adjacent logistics products to what we do, we're able to go, "Okay, look. Send us your customer profile. We'll come back with 25 that we think are a great fit and we'll go co-sell them together, and I'll drive revenue from our platform into your business."

Ben Braverman:

It just feels like this thing that's very low downside. We're deploying relatively small amounts of money, 100K checks. We're occasionally leading smaller rounds into companies that are founded by ex-Flexporters who are doing things that we think are really strategic. But for the most part, it's deploying small checks in a relatively large quantity, and we're keeping the option open to double or triple down on companies that are either going to build on top of the Flexport platform, or that are just sort of absolute winners.

Delian:

So I'm curious, there are many employees that will join an early stage company, and it experiences such rapid growth that they manage to not really scale up with the company, even for a year or two. Versus for sure, at some level of scale, you guys brought in somebody with this very particular domain expertise, but you still scaled with the company for a very extended period of time.

Delian:

What do you think you did well vis a vis let's say other peers and other companies in terms of being able to continue what you do. You scale yourself, adapt, get new skill sets. What is it having a set of ventures from other companies? You mentioned meeting with Parker Conrad in the first week of the role? What do you feel like set you up for success? Being at a company seven years in and still having a lot of impact at it.

Ben Braverman:

I think I was fortunate in that I was so outclassed by the opportunity on day one that I didn't have any delusion, that I was like, "Oh, I'm good. I can just show up and I'm going to nail it." I knew from day one, from the moment Ryan said yes and I felt that shudder of just oh my god, now I actually have to do this. I really felt the pressure and the weight of this is the biggest opportunity I've ever had in front of me. I need to give this everything.

Ben Braverman:

I think one of the other things that became clear pretty quickly is if you're working on a company, that that descriptor is true. That you're just like, "This is the biggest opportunity I'm ever going to work on." You have to subjugate everything that you feel to what the company needs.

Ben Braverman:

The more you can do that, and the more you can dependably, for the founder, that they can just trust that in any situation and any moment, you are always going to do the right thing for Flexport, almost with religious fervor. There is never a moment where you will ever go, "Oh, this is slightly better for me. Maybe it's a wash for Flexport. I'm going to do that." You can't ever even get close to that line. And if you operate that way, you end up just getting an enormous amount of trust in the organization, because the founder doesn't have that many people for whom they believe that to be true.

Ben Braverman:

That for me was sort of the foundation of how I was able to get enough leeway to rebuild myself every 12 months. The other part is I sold a lot. You cannot keep these jobs without selling a lot of stuff. It's sort of like Elon's thing. If you don't build stuff, there is no stuff. If you don't sell a lot of stuff, you're not going to lead sales. And I don't think anybody wants to work for a sales leader who has not sold a lot. I don't think I would be excited to work for a sales leader who couldn't go in and show me how to dance in a way that I don't know how to do myself.

Ben Braverman:

I think because I was consistently delivering on that, and because Ryan just trusted that in every moment, I was always going to air on the side of what is best for Flexport, I had a lot of then breathing room to get better at the things I wasn't as good at.

Delian:

Makes a ton of sense. Ben, it's been a really fascinating conversation, and truly appreciate you coming on to walk us through all this stuff. Some really great stories.

Ben Braverman:

Yeah, man. Thank you so much. While I have you on here, can you fell the world more about the space factories? In particular, is there enough raw materials in space to produce an amount of stuff that would be worth bringing back to Earth? Or are we making stuff in space just for consumption in space?

Delian:

So I'll give some one liner answers to that, which are Varda is explicitly working on space manufacturing for Earth. So we build stuff up there that we bring down here. The plan for that is it turns out there are a lot more buyers on Earth than there are in space. In terms of the raw materials, for now the supply chain looks like bringing the raw materials up with you on the rocket, and then fabricate them in the factory, and then bring them back down.

Delian:

So it's focused on this stuff that's viable and commercially pragmatic today. For sure over time, do we eventually sell stuff in space, and do we eventually get raw materials from space? Maybe, but the nearest term thing is bringing the raw materials from Earth, and also deliver the finished product back to customers on Earth since there's a lot more customers down here.

Ben Braverman:

Is this big upside that you don't have to overcome as much gravitational force? Or is the big upside that you can just pollute to whatever degree you want? Why are we going through all this trouble? I'm sorry. The only reason I'm so curious about this is Ryan and I were talking about this other day. I'm sort of on the side of let's make everything in space. Let's figure out how to harvest from up there, and let's make everything up there and we'll just drop it down where people need it.

Ben Braverman:

He was saying he thinks it's a little harder to accomplish than I'm realizing.

Delian:

Yeah. Unfortunately I don't think that's going to happen anytime soon. When Bezos talks about let's take all polluting industry and move it out to space, it's like, "Well..." Let's take cement pouring. If you take the cement up to space and then manufacture it up there and then you have to send it back down, turns out that's just more pollutive than just sticking with making the cement you have down here. So doesn't really make a ton of sense.

Delian:

There are certain materials though, in particular types of sensitive, high value materials, things like semiconductors and fiber optics on the materials side, or, onto the more biologics side, pharmaceuticals, organs, things like that. Where you need molecules to stay in very particular structures or formats. That's a lot easier to do when you don't have to deal with gravity because you manipulate them much more precisely.

Delian:

Whereas on Earth, there's lots of things that will cause it to erode, even if you have it inside a very protected chamber, if one part of the molecule or the protein or the crystal is hotter than the other, there's sedimentation conduction. The way that I would sometimes describe it is on Earth, you have the idiom of hot air rises. That doesn't happen in space because there's no up or down.

Delian:

If you have a candle that's on in the International Space Station, it just heats air around it and then very slowly diffuses that heat throughout the space station, rather than if I put a candle on Earth, all that heat goes up. So it turns out there's a lot of material science processes that are much better controlled, and you can make much higher quality products. And they're so high quality that people are willing to pay for the cost of having them sent to space and sent back down.

Ben Braverman:

I did this podcast just to ask you that question. Now we both got what we wanted out of this. Thanks man. I appreciate it.

Delian:

I'll make sure to include it in the recording. Okay. Thanks so much for coming on, Ben.

Delian:

Thanks for listening everyone. If you'd like to support the podcast, please sign up for a paid Substack subscription which we use to pay for transcripts, mics, and other improvements. If you have any comments or feedback on what kinds of questions I should ask, who should come on the show, or anything else, please you let me know. Have a great rest of your day.

Operators Ep 30: Denise Persson (Snowflake)

  
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-44:51

Denise Persson is the Chief Marketing Officer at Snowflake, where she’s been for the last five years. Prior to joining Snowflake, Denise served as CMO for Apigee, an API platform company that went public in 2015 and was acquired by Google in 2016.  She also built and led a global marketing organization at Genesys through their expansion and successful IPO.

In this episode I talk to Denise about the impact of marketing automation, the craft of sales, and her various expertise across marketing disciplines. She also shares job advice on saying yes to the opportunities that arise, and how not to over-engineer one’s career.

I hope you enjoy the show.

Full transcript available here.

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