Flexport CEO: Two Questions Every Founder Needs to Ask

You said remote work is—can you help me fill in the statement here?

I say it's white-collar fraud. I have a 3-year-old and a 5-year-old. The idea that I could do any work at my house is a total fantasy. Come on. You're kidding.

Ryan, I cannot wait for this. Dude, we've done this a couple of times remotely, but I feel it's much more special in person. We're going to get to remote work, but remote interviews are not as good as in-person interviews, dude. Thank you for being here.

Yeah, it's great.

1. Fear of Losing vs Thrill of Winning

Dude, I want to start with what motivates you more. I'm finding this really interesting pattern. It's either the fear of losing or the thrill of winning. Which one is it for you?

Probably the fear of losing.

Why?

I don't want to be a loser.

But you never win enough, right? You've already won, and yet you still don't feel like you've won.

By any standard of what I set out to do when I started the company, I've won. My first and only financial model that I made for myself for the business got to 1 million in revenue. We did over 2 billion last year.

I hate Excel models. I'm terrible at it. When I open up Excel, it says, "Sign in or register," and I'm just like, "I'll leave it for someone else."

I'm not very organized.

Are you not?

No. I feel like making a good model requires you to organize your stuff.

Today's rule is that we're going to play a game. You've done shows before. Every single question that I ask has to be a question that no one else has asked before.

Okay?

If I ask a question that someone has asked before, you have to tell me, and I will donate $100 to a charity.

Oh, wow.

Do I get to pick the charity? What are we going to do?

Sure. What's your charity?

My mom's got MS. I do give it to an MS charity. But that's the deal.

Okay.

So, these questions could be either weird or interesting.

Do I still answer the question?

No, I don't answer. I just go, "$100."

No, you just go, "Bang, bang."

Great. But if you lie, you pay $1,000.

Oh.

So, if it's a hard question—

I get out of any question just by paying $1,000.

Actually, it's not a bad start, Harry. You should have rethought your rules.

2. Why VCs Are Herd Animals

The first one I wanted to ask is: when we were chatting before, you said something about the nature of VC jobs and why, inevitably, the way VC jobs work means they end up as herd animals. Why did you think that was something interesting we should discuss?

Your show is called 20VC, so what's a hot take on venture capital? The nature of the job is simply that it's such a good job. It pays really well. If you were listing the attributes of a job for someone who likes to have a job, what would they be? It pays really well.

You basically don't have a boss once you're a partner, or at some level of seniority. You have no boss, it pays well, and you don't have to be anywhere on any given day. It's not a fixed schedule, and it's very hard to measure if you're good or not on any reasonable time frame. So, you can't get fired.

Pretty good attributes of a job. And security.

Yeah, that's fees for 10 years.

Not only can you not get fired, but, dude, I run a media company and you run a company. Revenues can go down. They're not certain. Fund fees are legally structured.

Yeah, yeah. So, if you're a partner—if you run the fund, that's one thing—but if you're a partner that doesn't own the fund, you could get fired. So, you don't have infinite job security. Your whole thing has to be, "How do I avoid getting fired?"

You can do this in reverse, or invert the problem, and ask, "How would you get fired as a VC?" Scandal, sure—avoid that. You can't allow everyone else who works at your firm to think you're dumb or doing bad things, like doing stupid deals.

They don't know. They can be bad deals, or they could be great deals. You could be doing great deals, but if people think they're bad deals, you might lose your job. Therefore, you need to get consensus, right? You're also going to channel-check all your deals. You're going to check with your competitors.

There's a lot of collusion in VC. VCs are constantly talking to each other, in part because they need to make sure that they don't step out on the edge and do something that their own partners are going to think is dumb. I have a feeling that most VCs actually collude more with competitors than with their own partners because they need to spot-check their deal and make sure it's good before bringing it to the other partners, to make sure they're not seen as being dumb. So, that's where you get the herd behavior.

I love Keith Rabois, who says that he likes to sense-check his deals with friends, and if they don't think that his deal is stupid or crazy, he's not doing his job.

Oh, yeah. Okay, good. I think Founders Fund—and Keith was at Founders Fund for a while—are among the few funds that avoid this type of behavior somehow. Or some people are just born with a contrarian bone.

3. Does Open Source AI Threaten the Frontier Labs?

Do you think you can only do stupid or crazy shit because you have money now? Personally, I don't have that much money.

But you don't need money.

No, I have enough. I have enough.

When you're paying rent and school fees, it's like, "Oh, God."

4. Living on $250/Month in China

Fingers crossed. I think richer investors make better investors. Sequoia are focused on upside maximization: How big could this be? They are not fearful of LPs coming back for their next fund. They're not fearful of deployment speed compressing. They elongate. They just invest in what they think can be mega companies.

When I started as an entrepreneur, everybody was becoming an entrepreneur, but I started doing companies in the early 2000s, even the late '90s, with my older brother. At that time, it was less mainstream to start a company, and we weren't in Silicon Valley. We didn't call ourselves a tech startup. We didn't raise venture. We were just hustling to make money.

One of my tricks was that I moved to China when I was 25 years old for this company. My rent was $120 a month for a 2-bedroom apartment in a nice part of a second-tier city. It was a nice apartment, and I knew that actually gave me a lot of permission to be an entrepreneur and to do crazy stuff because I knew I could live off of it. If I could make $500 a month, I could survive, and I knew I could always make $500 a month.

I could do a startup. I could take risks because, at worst, I lived in a nice apartment in a nice town. I had a good quality of life. My total opex was $250 a month, so it gave me permission to take some risk. But it's the opposite. I'd have to be relatively rich, right?

What's your number?

What's that mean?

What's your number? Basically, what's the number that you had in your head of, "Once I have this, I'll be happy"?

For me, it was always $20 million, with the rationale that if you have 5% interest, you make $1 million a year for doing nothing. A million bucks a year is more than enough for anyone who's adjusted—not mentally.

Well, this is how you know money is amazing, because the more you have, the more you want. You can never satiate the human desire.

Not in that, because I don't.

No, of course you want more, but I only buy trainers. I would much rather have more convenience than more money.

Yeah, I mean, I haven't been that motivated by money. I'm more into power. I want to do big things.

That's really interesting. There was a question that my girlfriend asked me the other day, and she said, "If you lost 90% of your money, how much of your self-worth and self-esteem would you lose, in percent?"

Maybe you're more adjusted than me. I said, "I'll go down 90%."

No, I did. Mine is that my work is directly correlated to the financial outputs that you have. Candidly, if you're a general in the army, your success in your profession does not correlate to your financial statement. At the end of the day, I'm a venture capitalist. The clue is in the name.

If you're good, you make bank. If you're not, you don't.

Yeah, but you have to forget the past and the future. The future's not written, so you can go make it.

If Flexport had raised today, what do you think you'd raise at?

I don't know. I really don't know. I think this year we're going to get to basically break even. We're on run rate to do about $450 million of revenue—net revenue. Breaking news here: I haven't shared that, but $450 million of net revenue.

What's your growth rate?

Last year was $350 million.

$350 million.

No, $350 million last year. So what is that? $100 million, about almost 30%.

So you're doing 30%? You said $450 million.

Yeah. And I think we'll do $600 million. The goal is to keep going 30% every year for 10 years.

I think the big question for most startups is that you have 2 things that you have to ask. Actually, I got this from Paul Graham, where he said there are 2 questions for every startup. If you see a hockey-stick growth curve, there are 2 questions you need to ask: Are they doing some kind of hack that's unsustainable and going to stop working, number 1? And number 2, is the market big enough for it to keep going?

If the answer is, no, there's no hack—this is genuine growth—and, 2, the market is really big, then the thing will just keep going, right? I think Flexport's like that. There's no hack; it's actually a grind. We've got salespeople out there in the field calling on businesses and going around the world, and the market's enormous. We're still less than 1%.

When you extrapolate that out, you said $450 million to $600 million, and then you can be at $750 million. Do you worry about the constraining exit landscape? When you look at IPOs today, dude, unless you're mega-scale, you don't want to go out. With the greatest of respect, strategic buyers are less present than ever before.

Then you've got buyout firms, which are running for the hills because the Medallias, the Coupas, and the Anaplans of the world are all, bluntly, looking pretty precarious right now. Do you think that's a concern that should be felt or not?

5. What Founders Get Wrong About the VC Mindset

I don't think about it at all for Flexport. The word “exit” implies that I'm going to stop working at the company, that I'm exiting, so I don't think of it in those terms.

Do you want to take the company public?

Yeah. Yeah, we intend to go public. I don't know what the valuation is or should be or will be. It's sort of like, well, if we can just keep growing, you just draw the math out.

But when do you think you should go public, then?

I'd like to be nicely profitable, making a few hundred million of EBITDA, then we'll go public. So it could happen in a couple of years. It should—the way that things are going right now, we should be able to get there.

Maybe it's not—I don't know what it will be worth, and the market kind of sets that at the end of the day. If it's undervalued, okay. As long as you're generating a lot of cash, then if you're really undervalued, you just buy your own shares back, and maybe that's a good thing.

Do you think you should underprice on IPO day so you have the pop, or should you price to perfection?

People focus so much on this. I don't understand it. Of course you're going to focus on your price and whatever, but there's this concept of an IPO window that investment bankers and founders talk about. I was like, “Oh, the window's closed. You can't go public,” because the price won't be there or something.

But you're like, “Well, what if you went public and then your price went down? Is that better?” I mean, it's the same thing, isn't it? I don't quite understand that dynamic.

I think you just run—I'm an operator—run a good business, make it super profitable, have it grow, and don't compare yourself too much to Anthropic or these AI companies that are worth $15 billion, when there are companies getting to our revenue in 18 months. You're like, I think envy is a very bad—is it one of the 7 deadly sins? You certainly should avoid it.

Do you worry about the concentration of value in a few companies when you look at 8 companies making up 85% of year-to-date gains in the stock markets, and then you look at Anthropic and OpenAI? Do you worry about that concentration of value in a smaller and smaller number of names?

As long as I'm allowed to use OpenAI and Anthropic, I don't mind at all. They deserve it. These things are just incredible, miraculous products. What I worry about is that they cut us off and then we can't use them anymore.

If I can't use OpenAI, we're all going to go back to being the idiots we were 2 years ago. I need this stuff. We're so dependent on it, both personally, and we've put it into so many of our processes.

It's a ton of business logic, a lot of rules, because every enterprise we serve—we're an enterprise logistics company. We help businesses manage their cargo shipping around the world. Every business is unique and has its own process: “We need this data in this format moved into this ERP system,” or, “We want you to notify us.”

Some companies want to be notified 10 days in advance of their container arriving at their warehouse, and some 7, and they really care about that. They spend so much money that you have to do what they say.

A lot of our tech is this big rules engine, and you get all these if-then-type statements, and it becomes very unwieldy. At the end of the day, it can't really keep up, and you end up with people managing some of this business logic. The agents can just do it.

And RPA couldn't do that before? For people who don't know, robotic process automation—I thought that was kind of the promise of RPA that was meant to be fulfilled.

It does a lot, and we've gone a long way with that. But agents can go all the way. We think we can automate the full end-to-end.

And this is—you’re building your own?

We're using OpenAI and Anthropic. We're going to increasingly use open-source models to save money, but also because we don't today have a budget constraint on our Anthropic contract.

Did you see that article the other day? It was like, “We spent half a billion dollars.” Are you kidding me?

We do not have a budget. We don't have a budget on our contract. Yet last Thursday I woke up—it was a few days before the end of the month—and it said, “Your organization has reached your limit for the month.”

It's not true. Something went wrong on their side, but I had this shock, this moment of, “Oh, man, what if they just decide one day to cut us off and say no?” I actually think this is a realistic scenario.

Was the expense much more?

It's not that much money for us. It's not.

No. How much is it?

I think we're spending probably $5 million a year or something. It's ramping pretty fast, though. It's doubled in the last few months.

We released a show with Brendan Foody at Mercor, and he said he spends more on Anthropic—or no, he spends more on OpenAI, whichever one.

I said $5 million a year, right? Yeah, not a model year.

No, he spends more on models and compute than he does on salaries, by far. I thought that was really interesting.

We're not even close to that, but there's a world where that becomes—I mean, it has to at some point. It's very interesting.

It has to for the valuations to be justified. So right now, likely Benioff said that he spends $300 million a year on Anthropic for his team, which works out to 3.8% of developer salaries. For the kind of trillion-dollar valuations to be justified, you need to be in the 18% to 20% range. So we still need to see quite a movement.

Yeah, I mean, we do see ourselves automating a ton of the work and taking it away. You have to, right? Even at $5 million, I better save $5 million a year in labor costs or make my product way better, which we are finding ways to make the product way better. But there comes a point of diminishing returns.

$20 million a year on Anthropic in 5 years?

Yeah, yeah, probably. I mean, I don't know about Anthropic, but on LLMs.

6. Every Great CEO Hates HR

It's possible that the price comes way down—deflation—and it's also possible that we move a lot of workflows onto open-source models. If it's good enough, and the open-source one that's basically free can automate it, then I don't know. There's diminishing returns to frontier labs, and there's diminishing returns also to just doing it.

Once I've automated all the work, I don't want to keep spending the money. If I have the agents work, I should probably stop. I'll keep spending money on code and things that improve our product and the surface area that our customers interact with, but once they're automated—I mean, we're pretty manual, and we have a lot of manual processes—once they're automated, I should stop spending the money on Anthropic.

I was a terrible interviewer. I interrupted you. You said there was a realistic scenario that—

Yeah. There's a realistic scenario that they decide the compute they have is more valuable for training superintelligence than it is for letting customers use it, and they stop—just cut us off—and say no. We all just come back to being idiots at that point.

Do you not think governments need to step in?

Maybe. Yeah.

7. Is AI Productivity a Myth? The Manual Labor Reality of Logistics

Do you not think, actually, though, that you're extrapolating it a bit far, given the fact that I can't even do [inaudible] clips on AI right now?

This is my point.

Not yet.

No, you're seeing Uber and Microsoft come out saying, “Yeah, the productivity gains are kind of questionable.” I think that's probably true in those businesses.

Our business has just tons of manual operations with humans, like forwarding email. We call it freight forwarding. I often say it should be called freight email forwarding. It's people passing PDFs around and moving data between enterprise systems, and there's a huge amount of human labor. I think most of the economy looks like that, not like Uber, which is a highly automated business.

Although, I don't know why they have tens of thousands—30,000 employees—because it's pretty automated, right? I don't quite get that.

You said the team is 2,000.

Almost.

Almost 2,000. In 4 years' time, how big is the team then?

8. Codex vs Claude vs Gemini

It might be about the same. We're hiring a lot of salespeople and expanding a lot into new markets, but I think you're going to see a shift from people who today do the kind of manual operations I was describing earlier. The work style is going to change, and if people are not able to make that shift, then we're going to have to rebalance into much more customer-facing account management and sales. I think that's the future.

Do you not think the future is super contributors? I don't see people talking about this enough. likely Zeb Evans from ClickUp said this in his post, which we chatted about before. He essentially said he was cutting people so he could pay the super contributors 10 times more.

You don't need more salespeople. You need more [inaudible] amazing salespeople who leverage AI—outbound AI tools, inbound AI tools, pipeline tools, forecasting tools—to be the next great sales leader that leverages AI.

I certainly want as many of those people as you can get. There's just a lot of mass that you want out there in the field.

Think about our business. We're a global trade platform for global trade. Every business on the planet needs to ship something somewhere. There's a lot of boots on the ground that you want to interface with those companies out there. There's a limit to how many relationships a human can have, and I think you can probably use AI and other techniques to double that ratio or something. But there's some limit to how many relationships you can maintain. It's a relationships game at the end of the day in sales, and so I'm somewhat skeptical.

Yeah, this is an interesting question, though. Yelp has 3,600 salespeople calling on restaurants. It's actually a pretty good business. I think they haven't grown that much, but they print cash. And 3,600 salespeople—if Yelp can have 3,600 salespeople, I feel like we should have—

I interviewed the founder of Invisible, which is another data provider, and he said that you can't do enterprise without a fully fledged FDE model. Do you think that's true when working with some of the biggest companies?

No, it's not true. You can do it without that, but your business is better if you can get that level of integration. The freight industry was the original FDEs; they just weren't engineers.

One of the big tech companies that runs like a hyperscaler, let's call it, has one of our direct competitors with 130 full-time employees who work at that company, have badges, show up to work every day, and run their logistics for them. We cannot crack the door at that place. I won't say their name, but we cannot get our foot in the door because all the decision-making is done by our competitor.

I think it's an insanely great competitive advantage and positioning to have. I'm jealous. I don't know where you find them, but they're not software engineers. These are just logistics people. If you can get that same thing and deeply embed yourself into the process workflow of a company, it's so valuable. It's not easy to do. It's not easy to find, in the FDE model, good FDEs who know what to do, show up and do a good job every day, stay in the job, and don't have turnover.

You also have the question of whether truly great engineers want to be FDEs. It's not often as close to the pure art of solving engineering problems that great engineers want to do.

It's challenging. Yeah. Actually, speaking of that, it's quite common in our industry to have these forward-deployed people. They're not engineers, like I said; they're forward-deployed logisticians or something. They're on-site.

We just had this huge customer win, one of our biggest ever. I was like, “Wow, this is great.” But I had heard that our competitor had one of these forward-deployed logisticians and ran their RFP and their process for choosing a freight forwarder, and they always chose themselves. I'd heard about it and was like, “Wow, this is idiotic. Why do they do this?”

It's a great business. [laughs] Totally. Today, I'm going to choose me.

And we won. I was like, “Wow, what happened?” I found out the competitor had been acquired by another one of our competitors. They did a huge layoff and fired the person. She got hired by the company, and then they chose us to [snorts] get back at them.

Wow. Wow.

Never underestimate corporate incompetence.

What's your largest customer? Not the name—the size.

They spend about $150 million a year, the biggest one. We don't have too many like that, but we have probably a dozen that spend over $50 million, and then a long tail.

Wow.

Yeah. Logistics is expensive. It's 11% of GDP, so people spend. These don't have to be that big of a company.

That's the thing I often have to educate investors on: logistics is a much bigger market than software. If, for example, a typical medium-sized company spends, call it, 5% of its revenue on logistics—companies that sell physical goods spend about 5% of their revenue on logistics—they're not spending 5% on any software. Maybe at scale, our price point is similar to what you would spend on Oracle or something for a comparably sized company, but actually less.

But then you would say that we're not seeing the productivity gains in logistics that we're seeing in software creation, because if we were, you'd be seeing revenue scaling in logistics like you've seen with likely Cognition or Cursor.

You see costs come down, at least. I don't know that you're going to see huge revenue scaling from this. By the way, our competitors, like us and others that are scaling and serving data center companies, are seeing that part of the business grow like crazy. There's all this physical infrastructure, and the data centers have to be built.

The data center economy is [inaudible] wild.

It's wild. Yeah.

But when we go back to the teams themselves, I am intrigued. You said about the use of Anthropic. Have you always used Anthropic, or has that been a switch?

We've switched back and forth. We're using Codex, too. In fact, Codex won us over. Sam stole my heart 2 months ago when he said, “You can have 2 months free.” That was like 30 days ago, so we switched everything to Codex.

So you switched everything to Codex.

The engineers can choose both.

What do the engineers choose?

They choose—I think they're still more habit-formed on Claude, but they use Codex. We're Cursor users. We use everything.

9. Would You Invest in OpenAI or Anthropic?

As an enterprise, we've used Gemini more because we're Google Doc-centric, so it's really nice how baked in it is, along with NotebookLM and these things. But all of our employees have Claude access as well.

You're able to invest in OpenAI or Anthropic. OpenAI is, whatever, $900 billion, and Anthropic is $1 trillion, so there's a slight difference in price.

Yeah.

But you can only invest in one. Which one do you invest in?

I can only invest in one? Why? Why can't I invest in both?

Because I'm forcing you to choose. It would be easy if you could choose both at the same price. Let's do the same price.

Yeah, same price. I think I'm going with Anthropic.

You invest in Anthropic?

Yeah.

Well done.

No, but not early.

What price did you do it at?

No, it's—I forget, 600 or something. It had already run away.

So, I'm not going to make much money off that.

Doing it at 600 is not bad.

It wasn't very long ago. I just recently—

How much did you do?

My finances are private, but not that much. I don't have that much money.

Do you worry about open source as a threat to Anthropic?

Yeah. I don't know, dude. If you think about what you just said earlier, a lot of the usage from frontier models can be moved over time, for more mundane tasks, to open-source models.

Which we both agreed on. That massively narrows the market for the core providers.

Yeah. If we only use them for the most frontier, advanced tasks, and everything else we can just push to open source or older models, the core business is much smaller than you think.

No, but your question was, do I worry about that? I don't care. Anthropic can go to zero. I don't care. I didn't put an amount of money into it that matters for me.

On a personal basis, if AI and intelligence become really cheap, that's much better for the world.

The majority of open-source models are Chinese.

Not really. I don't know how they work or how they can stay competitive on some level. But if they're open source, they're open source. Who cares where they're from? We can use them.

Well, because you're essentially feeding data back to the CCP. That would be the fear from likely Keith Rabois and others: that CCP-funded open-source models are powering the majority of early-stage Silicon Valley companies, and that this is essentially giving China a window into Silicon Valley.

Yeah, it's pretty interesting. I don't personally spend a lot on it. I don't lose sleep over it.

Do you lose sleep over China?

Not really. I think I've lived—I lived in China for a few years, and I speak Chinese passably, not really well, but I could have a conversation. I feel like I know China better than most. It's not a high bar.

On some level, I think that China and the U.S. have a huge amount of mutual dependence that's underplayed. I think the interests are much more aligned than people give them credit for.

There's so much saber-rattling and so many people trying to sound—I don't know if they're trying to sound smart or tough or something—but they're casually throwing around war between China and the United States without realizing that such a thing would be a nuclear war and you'd all be dead. I think the odds of that happening are pretty low.

I don't really believe that these countries are going to suddenly start shooting nukes at each other. And yet, if you have a war between these 2 powers, that's what it would be.

I loved it when Trump landed in China and they played “Y.M.C.A.”

Oh, they did.

Yeah. There's this video of Trump, and you can see he's kind of like a little child at a party, desperate to dance but not allowed to.

Bad protocol.

Yeah. It's just brilliant: “Y.M.C.A.” playing in the background. Remember when Obama went there? They didn't roll out the red carpet. They didn't bring up the stairs to Air Force One. Air Force One has its own stairs, but they're not very good. They're sort of awkward. You had to climb out the bottom of it.

Oh, wow.

Yeah, you can look it up.

I did not know that.

Yeah.

When I think about China, I sadly these days think about a mutual friend of ours, Keith Rabois, given his very open concerns around China. And it goes to something you said to me before, which was, going back to venture and fundraising, how you kind of fluffed or fucked up 2 funding rounds. Very humble of you, and how Founders Fund bailed you out of them.

I don't actually know this story.

They're both different stories.

God, it'd be rather embarrassing if you made the same mistake twice.

Yeah, exactly.

The first time—and they're both my fault. At least the first one was definitely my fault. It was our Flexport Series B round, and we were a hot company. A VC came in and tried to preempt our round and offered us what, for our scale and where we were, were great terms.

I think at that time it was like $50 million on a $500 million valuation or something. This was in 2015, I want to say 2016. It was pretty early in our journey. We were founded in 2013, so the terms were good.

I was very happy with the terms, and yet the VC wasn't that famous or well-known. They're a good firm. I'm not going to say their name; I don't need to be starting fights.

But I decided—and this is where I screwed up—I could get the same or better terms from a better-known investor. This was on a Thursday, and I spent Friday and the weekend hustling, trying to pitch a whole bunch of investors.

I was being preempted, so I had no data room or deck or anything that you would need to do a fundraise. I think the word must have got back to this investor because he ghosted me. I basically never talked to him again. He definitely didn't show up with an actual term sheet.

Now I'm in the midst of a fundraise where I've set this artificially high price. I wasn't fundraising, but you can't turn off the fundraise. We didn't need money then, but we were going to need it within a year, so it was just this very awkward position.

10. The Founders Fund Story: Peter Thiel's $3M Bet

Founders Fund was our investor at that time. They led the Series A, so I should have gone—first mistake—I should have just called Founders Fund on day 1 and said, “Hey, I want to raise. Will you do this round?” But I thought I was hot.

Eventually, I called Founders Fund and told them, “Here's what I screwed up. I tried to raise money and failed.”

What did they say?

The best offer I got from the process I ran afterward was a $275 million valuation instead of $500 million. I went to Founders Fund and told them everything: “Here's how I screwed this up. The best offer I got was $275 million, but the firm wants board control. So, if you'll just do it without taking control of the board, you guys can have it.”

Peter offered $300 million instead of $275 million, which wasn't as good as my $500 million, but he didn't need to do that. I told him he could have it at $275 million, and he offered $300 million.

What's been your biggest lesson from working with Peter? They've invested several times in you.

Yeah, they have. Founders Fund led our Series B, participated in the Series C or D, and led our Series E.

How much of the company do they have?

I'd have to go look at the latest cap table. Probably almost 15% or something, maybe 12%. There's been some dilution.

Okay. Any big lessons from Peter?

Just amazing how far in the future he's able to look and be right. The number of predictions he's made, well out there, that have been right, just kind of blow your mind. That's not unique insight for me, but that's one of the things that amazes me.

Actually, one of the things I love personally about Peter is that I feel like most people I talk to talk too slowly, and Peter does not. When Peter and I talk to each other, I think we talk 2 times faster than when we talk to other people. There's never a moment where he doesn't understand what I'm trying to say.

I care a lot about word-to-value ratio. You know, the people who take a very long time to say quite a simple message, and you're like, “For fuck's sake, just—”

Yeah.

“Just say the fucking thing.”

Drives me crazy.

Yeah, I'm with you. Should you always take the highest price when fundraising?

No, maybe. It depends.

That was the worst. I hate fluff where people don't get to it. Should you? Maybe.

I'm trying to think. Over the years, I would always just take the highest price.

Brian [likely Chesky] says, “Don't ever take the highest price.”

“Don't ever”? I disagree with that. It could be quite uncorrelated. The best brand-name investor can pay more than the second-best sometimes. It's hard to advise. It's very hard to give generic fundraising advice. I think it's very dangerous. If a founder asked me for advice, I'm like, “You know your situation much better than I do.” So you have to be careful with that.

No, I disagree totally, actually, and with the greatest of respect, I actually think there is generic advice which you should listen to.

Sure.

Tier 1s are worth it. Take a discount.

Yeah.

They will help you get the next round, unwaveringly.

Yeah, that's the next thing I was going to say. With that caveat, the fact that we're a Founders Fund company has made so many other investors want to invest in Flexport.

You consistently underestimate how team members think about VCs and the importance of VCs to joining a company. There are a lot of great operators where you're like, “Well, they wouldn't be—I'm not—I don't mean this rudely—dumb or naive enough to just join a company because of a VC.”

They do just join a company because of a VC. They'll go, “Oh, it's a Sequoia-backed company. Oh, it's a Founders Fund-backed company.”

It must be hard.

Yeah. Well, employees have the hardest time because they only get to pick one at a time, right? One company.

I don't know. In Silicon Valley right now, I think you hop around a lot. That's why I said one at a time. They need that signal.

Do you find that hard? The hopping that seems so prevalent today, more than ever? It seems like there's a lack of loyalty.

For sure. We basically moved away from San Francisco as a result. Our team in San Francisco is maybe 4% of the company, even though that's where we were founded and where I'm based.

Because of cost and loyalty, retention of good people has always been really hard. And acquisition, respectfully, you're fighting against OpenAI, Anthropic, and some of the hottest companies on the planet. As great a business as you are, you're not as sexy.

Yeah. Our customers aren't there, so I don't need a big sales team in San Francisco. We need to be everywhere, not just in San Francisco.

I think we maybe overdid it, though. 6 years ago, 5 years ago, I had 100 people in San Francisco. Right now, we're down to about 75. Actually, I'm looking around and thinking, "My leadership team is too distributed. I want more talent in San Francisco." So, I'm probably going to start pushing more of our employees, like, "Hey, you should come move back to San Francisco." I just got our CFO to move to San Francisco. It's made the business much better.

Leadership team distributed. You said remote work is what? Can you help me fill in the statement here?

Well, I said it's white-collar fraud. I have a 3-year-old and a 5-year-old. The idea that I could do any work at my house is a total fantasy. Come on. You're kidding.

I have a bigger house than most employees do. I actually do have a private office I can close the door on. It doesn't matter. There's no work getting done in that house when the children are around. The kids come home at—when does school end? 3 p.m.? Your workday needs to keep going.

So, I'm highly against it, but we're 5 days a week in the office as the baseline assumption at our company. I made the mistake during COVID of going remote and letting it stay remote for way too long, so I think our culture suffered as a result.

Was it difficult to bring it back in?

Difficult for the people who don't work here anymore.

A lot of founders are sitting in the seat today going, "Man, I want to bring it back. I want in-person. I know the value of in-person, but I don't want a revolt when I say, 'I'm sorry.'" What advice would you have to them?

Yeah, you've got to do what you want to do. I think all the bad things that have happened at Flexport were when I didn't do what I wanted to do. You don't want to ever be afraid of your employees, first of all. The employees don't want that either. They want a leader who's going to go in the direction that they believe in. Even if they disagree, they want to follow a good leader.

If they opt out, that's fine. They can opt out. There's a lot of good jobs.

I think also the idea that working from home is going to benefit highly paid employees is a total fantasy. Work from home done correctly should mean hiring the world's greatest geniuses. There should be a labor arbitrage here, where you're finding really, really smart people who make a lot less money because of the way that our economy is structured, where some countries just have lower purchasing power.

Sure.

You can hire people like—my brother has an assistant who has an off-the-charts IQ in the Philippines and makes $500 a month or something. I don't know what he's paying the person now, but that's who's going to benefit from a work-from-home environment. It's not the guy who's making $250,000 a year, lives in Jackson Hole, and wants to go skiing for 4 hours a day.

There's too much of that. Also, look, your podcast is better if we're in person.

Sure. I'm way better.

It's the exact same with every meeting that you have. I struggle, and we struggle, because we're still—even if we're in the office—distributed. We have 40 offices. We need to be in every country. So, I struggle personally, and my team all knows this, with paying attention in video meetings.

I don't actually really do Zooms anymore because I just find that the quality of interaction is so low, and I'm so disengaged.

I know. It's bad. It's bad. And yet, it's the nature of our business. So, I do want more of our talent to come back to San Francisco.

I need to find—Google has this new product. I haven't used it yet, but they built this, I think HP is marketing it for them, called the HP Dimension.

Oh, it's like the holodeck.

Oh, the holograms.

People who've used it said it's amazing.

I quite like the sound of this.

But they're like $250,000 each, and then you need one—

You can afford it.

No, but I need one in every office.

Well, how many offices do you have?

40 and growing.

Oh, yeah. You can't afford it.

It gets a little crazy, right? That's a lot. We need to have an office in every country on Earth, and then that's only one person at a time.

11. Why You Should Never Hire a Traditional CMO

I do want to go back to something you said before that we should touch on: why you should never hire execs. I think it was that you should never hire execs. Was it most startup founders?

Most startup founders? Yes.

I consistently see this. I saw it the other day with a founder at a really fast-growing company, and they hired the CMO from one of these big-logoed companies. I go to the CMO's Twitter. They don't have Twitter. A CMO doesn't have Twitter. It's the most enterprise CMO ever, and I'm just like—

Marketing is the hardest thing to hire for, too. Marketing and HR.

Well, pause. Why are marketing and HR the hardest to hire for?

In enterprise marketing, the moment something works, it stops working because your competitors will copy it. So, it's all about creativity and originality. How do you get creativity and originality in B2B enterprise marketing?

If you are creative, you probably kind of become a founder if you can do good storytelling and creative ideation in the marketing storytelling angle. So, when you find a good marketer in B2B, you really want to lock them in and get it right. That's been a hard one to hire for.

Also, to do successful B2B marketing and stand out, it's one thing to say, "I just make good sales decks for the team." Okay, fine, that's some baseline stuff, but you're not going to differentiate or bend the curve on a company's success. You have to be doing kind of crazy stuff.

Most crazy ideas are bad ideas, so you want to do crazy things that happen to also be good ideas. It's like being an investor: you want to do crazy things that happen to also be good ideas. It's that narrow intersection.

Which also—don't denigrate enterprise brand, which is even harder.

Yes. As an employee, it's so hard to take that risk because you're thinking, "I don't know. If I do something crazy and it blows up, I get fired. Why take the risk?"

It's very, very hard to find a marketer who's not part of the founding team. If you're a founder and you're not the one coming up with these crazy ideas and trying things, you have to protect the team and let the leaders there know, "I want you to experiment, because if it's not crazy, it won't work." Or it has to be very expensive, and most startups can't afford that.

The big benefit that a big brand has is they can just do really expensive stuff. Expensive is a feature in enterprise marketing because you wouldn't spend a lot of money promoting something if it wasn't good. So, it must be good.

What's the most expensive thing you've done marketing-wise?

We don't have money to spend on marketing just to waste.

But you've never spent, like, $1 million on big logos and big brand?

No, I mean, $1 million? Sure. We do a conference that costs maybe a little bit more than that—a customer conference.

Do you find them effective?

Yeah, for sure. Events work all day. By the way, you don't have to be that crazy to do events. B2B marketing is events marketing to some extent, and that's plain vanilla.

You don't need an exec. You don't need to go hire a CMO to run events. Conferences are kind of hard to pull off, but normal events—like, "Hey, host a dinner"—you don't need marketing at all. Just have your sales guy call the people and give them a budget for it.

I was prepping for a show with Adam from AppLovin, and he's like, "Oh, I fucking hate HR, and every great CEO hates HR." Being the complete dick that I am, I thought I'd front-run his show and take "Every great CEO hates HR" and tweet it myself.

Oh my God, I got killed by everyone for this tweet, which was essentially Adam's words, which I agree with, and I think he's right. Credit to Adam—he's amazing.

Do you agree every great CEO hates HR?

You probably go through these phases, right? I think the thing that you cannot have is HR being like union representatives of your employees. They're not. They're there to represent the company and, therefore, the CEO.

If you don't have that as a CEO—a trusted HR leader—and you feel like the HR leader is more on the side of the employees than on the side of the company, then there's a problem. There have been periods in my company's history, and in the industry in general, where you didn't have the right HR leadership that wasn't focused on the business outcome.

The employees are the company, and the company is the employees. Everything else is a fiction. We're just a fake brand name here with a bunch of people who are building the company or serving the customer.

The word HR is kind of wrong, because humans are not a resource that you can mine and take out of the earth. You have to give back to the employees and have a two-way relationship.

They're not. But agents are resources that you mine, and agents will, in large part, replace humans. The really interesting job function that could be created is agent resources.

True.

12. The SaaS Apocalypse: Has Flexport Replaced Salesforce?

That is a good idea, honestly. It's like 996 is being replaced by 007, which is midnight to midday, 7 days a week. That's your new agent timeline.

Do you buy the SaaS apocalypse? What I mean by that is, you said earlier that you've built agents for a lot of workflows. Have you ripped and replaced Salesforce, Coupa, you name it, and built your own SaaS tools?

Some. Not those names in particular, but, yeah. I think the negotiation that we're going to have with Salesforce is going to be a lot different than the last one, because selling SaaS to tech companies is going to be a tough business. We can build stuff ourselves.

Salesforce is great, although most of our people don't like Salesforce.

How much do you spend on Salesforce a year?

A few million.

Yeah, it's expensive. It's on the list of candidates. Fred Turner at Curative—I don't know if you know this guy. Fascinating guy. I loved him. He built a health insurance business in San Francisco. A wild story. He sold $5 billion of COVID test kits during COVID.

Then, obviously, COVID was no longer such a problem. Now he's pivoted into a health insurance business that does north of $1 billion in revenue. Amazing guy. They spend $600,000 a year on Salesforce, and he replaced it with an in-built tool that took 3 weeks.

Yeah, yeah, yeah. I suspect that we'll be replacing a lot of these things. I think a lot of what will happen is you'll just shake them down.

I don't know about Salesforce. Salesforce's acquisition of Slack is also going to turn out to be a great acquisition, because Slack is pretty sticky. Nobody wants to replace it or build their own Slack.

I could see a situation where you go, “Hey, we're cutting Salesforce,” and they just raise the rates on Slack.

I don't know. We actually incubated a company that is—

A Slack competitor.

Yeah. It's a direct Slack competitor built for AI, and it's actually predicated on an idea from Alex Rampell at Andreessen. He says you want to be in markets that are greenfield bingo, which essentially are markets where there's a huge amount of net-new customers created every single year.

In other words, you don't want to exist in markets where there are static market entrants. Our market is every new startup that's ever created. If you're creating a company, do you want to go onto Slack and Salesforce, or do you want to have an amazing AI-first messenger?

That makes sense.

Yeah, you definitely want to be in big markets too. Coming back to our earlier thing about SaaS, I think there are going to be a lot of categories where, for example, there are one or two pieces of software that we fully replace and kill every few weeks.

But there's going to be a big category where you take one of the things I'm having our procurement team do: make the PowerPoint case study of one of the SaaS tools that we did replace, how we did it, and how long it took. Then just go down the list of all the other SaaS vendors that we have and say, “Hey, look, this is what we did. The vendor didn't reduce our rates, so I need you to reduce your contract rates, or else I'm just going to have to vibe and replace you guys.”

Question 1: What is that reduction, do you think?

I think you get 20% out of almost everybody.

Okay.

We'll see that. We'll see.

No, no, I think that's very fair, actually. Do you worry about maintenance?

That's why I don't want to have to do it for a lot. In some cases it might be a bluff. I couldn't do it for all of them, and I don't want to dedicate that much of our engineering resources to replacing SaaS.

I want to replace expensive labor, and I want to build our product and make it way better. I want to focus on our core business with our engineering talent.

Do you worry about security?

Yeah. I'm constantly paranoid. Almost all of our competitors have had major hacks in logistics. It's been a major target area for cyber, and there have been a lot of ransoms.

13. Ryan's Best Angel Bets: Rippling, Bitcoin & Missing Cruise

I'm not going into personal finances, but I didn't know before we walked in the park about your angel investing. If you're comfortable sharing, what have been some of the best angel checks?

I've done really well as an angel investor. I used to do a ton of it in the early days of Flexport.

I started this company called ImportGenius.com that throws off a lot of cash. It's a nicely profitable business. I actually started as an angel investor while I was in Y Combinator, because I realized I had inside access.

Was it really obvious who was great? And did your beliefs on who was great turn out to be correct?

It wasn't obvious who was great. It was obvious who was terrible, though. I think if you could eliminate the bottom half, you're doing pretty well inside of a YC batch.

What were the bottom half doing that the top half weren't?

You just talk to the people and say, “This person?” They didn't see me as an investor, so I was their peer and could get the real story.

I invested inside my own batch. I invested in 13 of the 50 companies or something like that, and there were a few good outcomes there. Algolia—I was an investor in that, but I missed Cruise. Cruise was in my batch.

Did you get out of Algolia?

Yeah, I did. I sold my shares in Algolia a while ago.

Well done. Fantastic.

I made money on that one.

You missed Cruise?

Yeah, and I'm friends with Kyle. I don't know. It was just too crazy. He was throwing this camera setup on the roof of his Honda Civic—or no, I forget what car he had, Acura or something. I was like, “This is not legit.”

It's not legit.

The crazier the thing, the more I'm like, “I need to do that,” because if I don't get it, I'm probably missing something.

Maybe. What are your best angel investments?

Well, actually, early Bitcoin. I sold that. Don't kidnap me—I don't have any Bitcoin anymore. But I made money on Bitcoin.

I was the first investor in Rippling. I put a big check into that and did really well.

Are you revengeful?

Yeah. No, I'm personally not. But I think investing in founders who are pissed at somebody and want to get back at them—like Rippling. Dario, I never met him before, but, yeah, I don't know if he was wrong.

Rippling.

Yeah.

Parker. Parker—likely Parker Conrad at Zenefits—they fired him.

I never got that vibe when I met him.

Yeah. Rippling.

I think, actually, I have a great thesis around founders who have been wronged. Second-time founders who feel like they were wronged the first time around would be a great investment thesis. Revenge and patriotism is a great investment thesis.

Revenge and patriotism is a fantastic one. Do you have a chip on your shoulder?

Not really.

Yeah. There are a few people who I should be way more upset with who have wronged me, but I totally blacked them out and don't care. I don't know why. It might be better for—

What was the single best investor meeting that you had where they didn't invest?

Oh, none of them. I mean, those are—

None of them.

There was never an investor meeting where I thought, “I don't know, it was with—I'm just making up—Alfred Lin, and he was super insightful and smiled on the future of the industry, me, and my business, and I was like, ‘God.’ And it was a shame you didn't get—” No, I've never had one of those.

Really?

I had a lot that seemed like they went well, and then they never invested. The number of investors who ghosted me, by the way, after the pitch—the vast majority, I would say. I pitched them, it seemed great, and then I just never heard from them again.

This is where I'm also in the no-bullshit camp. I just say, “I'm really sorry if we invested early. I just didn't believe that you were good enough.”

I’m not going to bullshit you and say that the market’s not good enough or big enough. It’s all crap.

But, by the way, if you’re giving any reason, you’re pretty unique. Most people just say it.

No, but, you know, it’s kind of rude and personal, but I’d rather just be honest. I just didn’t think you told a very compelling story, and you were a bit dry.

No, I mean, do you mind? But at least then you can take away, “Okay, tell a more compelling story.”

Yeah, fair, which is always the case, right? Paul Graham said his advice to founders was always, “You should hear the no, but ignore the why,” because the odds of them telling the truth multiplied by the odds of them being correct are so low that there’s very little signal in what investors tell you about no. You should definitely hear the no, though. They pass.

By the way, especially when they’re multi-stage funds, there’s absolutely no reason for them to ever kill optionality. I want you to think that I’m amazing because, in case you do inflect, I want you to come back. I wonder how many founders out there secretly hate you because you tell them something they didn’t want to hear. It’s probably nonzero.

Honestly, a lot. But I also think that they’re not the best founders.

Yeah. Yeah. Who cares?

But I think if I actually said to you, “Dude, I actually liked you. I just didn’t think you told a very interesting story about the future of logistics that excited me,” I think you’ll probably go, “I need to get better at telling stories.”

By the way, my overall experience with VCs has been incredibly positive, including those who’ve passed and become friends and people that I hang out with. There’s no ill will at all. But I’ve had way more negative experiences than positive—not to say there weren’t positive experiences. I think you said earlier that you enjoy pitching investors, and I like pitching, but I don’t like hearing no or getting ghosted or whatever.

Have you ever had a terrible one where they fell asleep?

No. I’ve had a customer fall asleep on me, never an investor.

Literally fell asleep, though? I’m like, “Oh—” What did you do? Did you wake them up?

What did I do? It was 7 or 8 years ago. The guy just fell asleep. They’re now a customer—we ended up winning them over. It was a sales pitch, and they weren’t a customer; I was a prospect.

I’m terrified of what the competitor must have done.

No, the worst one—I’ve only walked out of 1 investor meeting. Not in a huff. I left my partner there, my co-founder, the president of Flexport. He stayed behind, and I said I had to take a phone call, and I just never came back.

Why?

They kept telling me that the market size was too small, and it was the third pitch. After the first 2, I thought we’d overcome this. We’d found a BCG market-sizing report and shared it with them. It was the third pitch, and I thought we were going to move to a term sheet. Instead, they had brought their own report that showed the market size for Flexport was only $6 billion.

My partner had the best line. He was like, “Oh, so it’s smaller than the market for USB cables?” It became obvious to me that these weren’t the right investors. I said, “I don’t think in BCG reports. It wasn’t me who got the BCG report; someone else did.”

Just look at every object for the rest of your day. I want you to look around at everything that you see and ask yourself, “How did it get here?” That’s our market size.

I always say to founders, if you need to educate an investor on the market, they’re not the right investor for you.

It’s tricky when you’re doing something very unique and different, as in our case.

Do you think any of your investors bet on you because of the market? I don’t think they did. I think they probably bet on you.

Maybe. Yeah, they mostly bet on me. They had never invested in this market before, that’s for sure. Do you know how I met Peter? Sam [likely Altman] introduced me to Peter. Sam was one of our earliest investors, and he introduced me to Peter to get advice.

It was a classic thing because everyone loves his book, right? Zero to One is such a great book. When Sam introduced me, I had read that book. That book has 6 or 7—I can’t remember. I think there are 6 questions to decide whether you’ll change the world, like whether this is an incredible startup, that you should ask.

14. Peter Thiel's Zero to One Test: How Flexport Beat the Monopoly Rule

On 5 of the 6 questions, I felt like Flexport knocked it out of the park—the best possible answer. But 1 of them was, “Is it a small market?” His whole thesis was that you should have a market that’s small enough that you can be a monopolist.

When I went to the whiteboard with him and hung out with him, I said, “Well, I want to know: should I make this a small market? I can make this a small market and be like, ‘Oh, we’re going to dominate logistics for hardware companies in Silicon Valley,’ or something, but it’s kind of fake. The market’s actually really big.”

He stopped me and said, “Look, don’t be too dogmatic. It’s okay to have a big market, you know?” A few weeks later, he emailed asking if he could invest.

My biggest mistake is when I focused on the market at all. All of my biggest mistakes investing have actually not been about losing money. They’ve been turning down great companies because I thought I was smarter than the market.

Oh, man. How many angel investments have you done?

I did so many. The vast majority didn’t do well.

Like 200?

Yeah, something like that.

Wow. Do you track them?

I have a Google Sheet. I didn’t for a long time, but at some point I had to clean it up when I was getting married and going through the exercise of doing a will.

Was that because you were doing, like, a will?

Yeah, exactly. Eventually, you want to clean this up. It’s much better if you track it from the beginning.

I would say it’s a super-power-law world. This is an interesting thing for founders to understand: once you see the world from the perspective of the angel investor, you realize that we really don’t care. Even a 3x—if you take my spreadsheet and this investment made 3x the money, the founder is very proud, like, “Hey, I made you 3x your money.” But if I remove that and make it zero, it has zero impact on the bottom line of the fund—zero relative impact on the IRR—because I have a couple that are 1,000x or 500x, so they completely dominate everything else.

You don’t care about the ones that failed. When I write a check as an angel investor, I just mark it to zero. I don’t care. I just assume that it’s a zero, and that way I don’t worry if it fails.

What do you think founders don’t know about the VC mindset that they should know? I think that’s really valuable because I also see—and this actually does pain me—which is a really noble founder mindset: “I’m going to give 5 to 10 more years of my life to grind out a 1.5x.”

I’m just like, “Don’t.” I don’t mean that callously or flippantly. I’m not being flippant with VC LP money, but just your time and my time.

Yeah. Yeah. I don’t even want the investor updates. It’s fine, dude.

Yeah. It’s okay. A 0.6x return is better.

Yeah. I mean, if it’s your life’s mission and your calling, then great. Never give up.

To, like, investors?

Yeah. There’s that. There’s what I was saying earlier about how much they are a circular rumor mill. When I was doing one of the rounds of funding, I was pitching this investor, and I think I was on the third meeting.

I’m not one of these people who says, “Oh, you never talk to associates.” Maybe I should be, but I think it’s kind of a loser way to live your life. I never had this attitude that you shouldn’t ever talk to the junior people, mostly because I’m not a dick, but also because I just assume that those people will someday become partners and remember that I was cool.

15. The VC Rumor Mill: How Associates Trade Gossip on Founders

I was on the third meeting with this fund, and I was still talking to the not-so-junior person, but I wasn’t at the final decision-maker yet. So I told the guy, “Hey, I’ve decided to go in a different direction here. We’re not—this isn’t going to work out.”

Within an hour, I got phone calls from 3 other funds. I hadn’t picked a different investor. I was just trying to let this guy off the hook. Within an hour, all the funds that I was still talking to called me, like, “Hey, what happened? I heard you picked a lead.”

The amount of rumor-milling and collusion that happens in VC—founders have no idea. It’s crazy. It can work against you, or you can use it to your advantage. You’re looking for an outlier who will value you more than everybody else.

That collusion does not work to your advantage unless they're all hyping you up and saying, “Dude, this is the best company ever.” This is so not in my interest at all. But that's why I always say to founders: don't test the market. Don't dip your toe in with 1 or 2 meetings, because the associate WhatsApp groups are so pernicious. If you meet me and I don't think you're great, I promise you they put you in the weekly roundup, which they send out because they're exchanging currency.

Oh, yeah.

They need to give to get.

Yeah, exactly.

And so I'm putting you in my weekly update, where I said, “Ryan's only at $1 million, not growing that fast, not a compelling Series A round.”

And these are within a firm, or are these cross-firm?

These are cross-firm.

That's crazy.

Yeah, it's easy. That's what I was getting at before, because, again, we're all associates, and we're all in the “I need to bring deals to the firm” business. They all send weekly roundups of who they've met and seen.

That's crazy that they're sharing that externally.

Oh, fuck, yeah.

Their firms probably don't know, right?

No. But remember, they're more in business with that class than they are with that firm.

Well, they're trying to get ahead within the firm by showing that they don't bring dumb deals, because they've referenced it. “My competition is not the other associate at X firm; it's the other associates in my firm.” And so, if I can get out ahead, it's like the F1 drivers, huh?

Which is why the perniciousness is actually very real, because then the others go, “Oh, well, Ryan's only at $1 million. They're not interesting either. Don't need to meet him.”

Yeah, I see that.

16. Why Founders Should Never Share Their Metrics

Well, I also think founders should basically never share their metrics, which I've done on the show, so I don't care anymore. But you should never share your metrics. You're kind of past that. I don't need to raise any money ever again. But you should never share your metrics, because what you want to do when you pitch a VC is cherry-pick whatever metric looks the best and pitch that as the important metric for your firm. Once you've shared a metric, you're now committed to that being the metric. Who knows? Maybe you couldn't make that one go up, hockey-stick style, but now you're committed.

I remember likely Mathilde Collin—I think it was Mathilde, from Front, a French founder and YC partner now, I believe. Awesome woman. She always told me, “You want to raise when you're really confident, because confidence emanates.”

Oh, yeah.

When were you least confident raising?

Oh, God. When you're losing a lot of money. Flexport—we've been on the hero's journey, right? If anything that's straight up and to the right, by the way, is pretty boring. Not as an investment—great, it's wonderful—but as a human story, it's pretty hard to see any company.

I've tried to think about this before. Snap was pretty up and to the right continuously. I mean, post-IPO, it's been up and down, but it was pretty continuously linear, up and to the right. Not many others have been.

Yeah, but I don't even mean as an investor. As an investment, of course, you want things to just go up to the right and never come down. But as a story of what's compelling to the human, Snap's story will be infinitely more compelling if they figure it out and start growing and going hockey-stick again than it would be if it never stopped and it was hockey-stick. You'd be like, “Wow, what happened here?” The human brain loves the story.

Sure. The social media posts, the absolute bangers, are zero to hero: “I started in my bedroom with no dollars, and now I'm sitting here.” Even zero to hero is not good enough. You want to go zero to hero, then take a fall and come back. So we need to cancel you, and then the comeback.

It's a little different in enterprise because you have competitors. In our case, if we have a negative news story, literally no one will read it, and we don't have scandals like such and such. I once had a Bloomberg article about us where we lost a package for a customer—one single parcel.

I remember this. It was one parcel.

It was quite a scandal.

And it was a newspaper. I mean, Bloomberg's out of print.

But it was the front-page lead of the story: Flexport used DoorDash to do the delivery—one parcel. By the way, the story did not mention we delivered 40 million parcels successfully, but we lost one, and we gave her a full refund before the story ever came out. That became a scandal of sorts. Nobody would care. Nobody would read it, except we have competitors, and the competitors will take your bad news and send it to your customers and stuff. So it actually can hurt in enterprise. It can hurt your business—negative news stories—even though it's not the story itself. It's like your competitors are kind of lowlife, looking for dirt.

One in 40 million.

So, I mean, we probably lost more than one, but the story was about one.

You dick.

Actually, it's an interesting story that we use DoorDash for logistics. People don't think about that, but DoorDash has a bit of a problem there because DoorDash's quality is better than others, or it's as good as FedEx or UPS. But when you use FedEx and the package doesn't get delivered, people are like, “It happens. It's FedEx.” When you use DoorDash and it doesn't get delivered, they're like, “Why did you use DoorDash? What's wrong with your company? DoorDash is for food delivery.” There's something they have to overcome, because their quality is actually fine.

I think Tony Robbins said this once, but it's like how fast appreciation turns into expectation is extraordinary. Before, you're like, “Hey, we didn't expect to have Wi-Fi on the flight,” but now we've got Starlink and you're like, “Wow, that's amazing.” Then you come to expect Starlink.

And then the downside is so bad.

Yeah. What used to be a massive appreciation, now you're like, “I fucking expect this.”

Yeah.

Which entrepreneur do you most want to have dinner with that you haven't had dinner with?

Never meet your heroes. I've met most of the great founders.

Do you believe in “never meet your heroes”?

Yeah, they—

I don't buy that analogy. I've met some of mine, and they are heroic.

Yeah.

Maybe I'm still idealistic.

It depends. I don't think you want to meet people who are at your level or see you as a peer and want to actually engage in a dialogue with you, because if you're meeting somebody and they're unhappy to be at dinner with you, they don't care about you, and they don't ask you questions or learn from you—

You know what I found? The more amazing the people, the more interested they are. I've been fortunate enough to have a sit-down with Charlie Munger.

Yeah.

He was so curious.

Oh, really? Yeah.

Yeah. One of my dearest mentors would never want to be named on here, but he's one of the founding fathers of one of the greatest firms today.

He's so curious.

Yeah, yeah. Some of them are like this, and some aren't. I find it somewhat uncorrelated.

Certainly, they were like that on the way up. Some people get to the top and then stop being curious, and then their returns or their impact after that will probably slow down. That's my theory.

Final 2 for you. They are more personal, but I hope it's okay for me to ask. It's general wisdom for me moving forward. When you think about winning, but also winning at marriage, any tips on how to continuously have a great marriage? You've been through some rocky patches in terms of the business. How do you sustain a marriage through fucking hard ups and downs?

Yeah, well, it's a picking game, I guess, and you only get one bet right, so make sure you get the right one. My wife, when I met her, was a journalist at Bloomberg, and I still couldn't kill that Bloomberg story, even though these were her peers that she worked with for years. It was crazy even then.

It was a very risky move.

I know. Yeah.

Fuck, I don't talk to journalists.

It was a bit risky. In fact, one of my investors at Founders Fund told me, “Dude, you need to either marry this woman or break up with her, but you cannot be dating her.” He's right. Great advice.

So I married her. Then she had to quit, in part because of me, because she got assigned to cover SoftBank, who's my investor, and I was like, “No, can't do it. Sorry.” She knew that it was not a good fit.

What has it been like having SoftBank there?

17. Pitching Masayoshi Son: $1B in an Hour & Calling Foxconn Live

I love Masa.

How did you pitch Masa?

Yeah, yeah, of course.

How was it?

I love him. He's just big, larger than life.

Was it in person?

Yeah, yeah. I think definitely in person. I'm trying to remember if I also met him first on video. No, it was in person.

Can you just take me to this? I love Masa.

I love gambling. I just love the guy.

How was this? Where was it?

I can't say I love him that much interpersonally. We're not friends or anything, but I'm just a big fan of Masa.

Where did you meet? How did it go?

The first time I met him would have been at his house in Woodside, California, which is very nice, let's say. You can look up the Zestimate. You're like, “Oh, this is going to be fun”—the Zillow estimate.

How long was the meeting?

Probably actually pretty short. Maybe 1 hour or so.

Okay.

Considering the size of the check, I thought it was a surprisingly short meeting. He has this painting of Napoleon behind him, and I didn't end up finding one. I was trying to buy a painting of the Duke of Wellington to send to him, who of course defeated Napoleon, as a troll, but I never found a good one that was worthy of the prank.

He’s very bold. He pushed us to go, “Hey, you know, be cheaper than everybody, because we raised $1 billion from them.”

It’s a bold move as well.

Yeah, it’s risky. After he invested, I was going to send him that as a gift. He was like, “Whatever the price of freight is, you just be 10% cheaper than everybody. And then if someone matches you, you just be 10% cheaper than that,” which is a terrible strategy. I did not do that. We would have burned so much money, but he was very aggressive. He just wanted to push us to go big.

I like the mentality, though. I mean, it’s different to most investors.

Yeah, and he’s very connected, too. He was able, during the meeting, to call Foxconn, get him on the phone, and be like, “Hey, what do you think of this thing?”

What? In the meeting?

Yeah. Live. He had his guy next to him call them—I think it was on WhatsApp, but I forgot.

This must be the weirdest thing, like due diligence in process.

“What do you think?”

And you’re like, “Oh, fuck. Do I give it a thumbs-up or thumbs-down? You do not want to fuck up.” You must have been nervous.

I was—I don’t remember. I don’t get nervous on that kind of thing.

When have you been most nervous during your time at Flexport?

I get nervous when I have to give a talk publicly and it’s very time-bound, because I’m kind of long-winded and I can’t memorize anything. I don’t prepare; I usually just speak off the cuff. I’m basically a good public speaker, but I can’t memorize anything.

The most nervous I ever was was the Y Combinator pitch, because I only had 2 minutes, and in 2 minutes you need to—

I find live TV the most nerve-racking because you have 5 to 7 minutes, and they’re like, “So, Ryan, let’s join you for: Is Trump wrong on…?” And you’re like, “No, no intros, no ins,” and they don’t want to help you out. They just want the 7 minutes. I’ll go get you.

I’ve gotten pretty good at TV, I think.

Do you think founder brand matters?

Yeah, I do. As measured by when I tell my sales team I’m going to do less of it, they always push me to go do more press. They say that it helps them get deals and close deals and stuff, but it’s one of these things.

I think it was Steve Martin who said that he went on The Tonight Show, he went on every late-night show that would have him, and then he would go around West Hollywood, walk around Hollywood, and nobody would recognize him. This was in the early days. You couldn’t tell if it was having an impact. Then, after 5 years of that, he was the most famous comedian in America. Everybody knew him; he couldn’t go anywhere, but he couldn’t pinpoint it to any one thing.

I only learned that recently. That wasn’t driving me to try to do more press or anything, but generally I think being famous has helped Flexport a lot. We’re way more famous than we should be, given that we’re the 10th-largest freight company.

I couldn’t name any other.

Yeah, exactly. I mean, you could—XPO. Maersk is a famous company.

I know Maersk. They’re a monster.

They’re big. They’re a lot bigger than us. I think Flexport is more likely to be cited in the press on a story about supply chain than they are, despite them being much bigger.

Final one, then we’ll do a quick fire. You mentioned 2 kids, 5 and a 3-year-old. Any big lessons on parenting? I love kids. It’s really important that I’m a good dad. If you were to sit me down—imagine I’m your younger bro. Dude, you should know this.

You need to have a great wife who’s a great mom, and then you have to have a good partnership. The kids will be pretty natural. You’ve had millions of years of evolution. It’ll be great—great to finally care about someone besides yourself.

Very natural. I do.

It’s like a chemical rush of true love. That is something you can’t get anywhere else.

Does it change perspectives?

For sure. But I get a lot of meaning from my work—truly. I genuinely love what I do. It’s a real mission for me. My life’s work is building Flexport.

A lot of people don’t have that. I was always confused because most people I meet don’t have a sense of purpose about their work like I do. I’m like, “How do these people function? I don’t know. How do you get through life?” You notice, as soon as you have kids, I get more purpose from that than I could from Flexport. The vast majority of human beings should get their purpose from their family, from their life.

I feel incredibly lucky. I watched The Social Network and saw Peter Thiel invest in Facebook, and that’s how I found out about venture capital, really, when I was 13 and lived in London. Venture capital is not a thing.

I’ve only ever wanted to be a VC. This is my whole life, and I always feel terribly sorry for people, especially young people, who don’t know what they want to do with their life.

Yeah. They should just have kids, and then it’ll be solved. That problem will be solved.

You should not, because if you get purpose from your work, then you can have the opposite problem of, like, “Oh, like—”

You’ve still got to be a great dad. It’s not worth, you know—

18. Quick-Fire Round

I want to do a quick fire because I could talk to you all day. What have you changed your mind on most in the last 12 months?

For the last decade, I didn’t want to compete on price. I wanted to be the premium-value provider in logistics and thought it would be bad to compete on price. Now I’m pretty convinced that we need to be the low-cost leader and just go so hard at lowering our costs that, if you’re cheaper, you just take all the market.

I think I was maybe lying to myself because it was too hard to automate the work and too hard to become the low-cost provider. We’re smaller than some of the big peers, so they buy freight cheaper than us and stuff. I think I was lying to myself, and it’s like, no, you need to be the cost leader. We have to figure out everything we can to be the cost leader.

Who do you not have on your board that you’d most like to have on your board? Magic wand.

I don’t think our Flexport board needs anybody. The board is mostly there to represent the interests of our investors and make sure we’re doing a good job.

Okay. But whose wise counsel would you like to have?

You want to join the board? Is that what you’re angling for?

Listen, I think I’d add a lot to the board personally, but it needs to be your decision ultimately.

I’m just glad that my board doesn’t screw with us. My board has been very supportive of me in particular. I don’t really want a more active board. They’re not super active in the business. They’re not telling us what to do. They don’t help that much, but they don’t ever hurt.

I would much rather have that than a really helpful board. I don’t think there’s a risk of the board firing me. Someone who’s really smart and thinks they’re smarter than me might fire me.

Penultimate one. What sports team do you not sponsor that you would most like to sponsor? Magic wand.

I would really love to sponsor this football club in Hamburg called St. Pauli.

Why?

They’re the 2nd team in Hamburg. My great-grandfather was a sailor from Hamburg, first of all, so I’ve got a personal history there. I don’t know if that team was around back then, but the 1st team is owned by Klaus-Michael Kühne, who’s the owner of our direct competitor, Kuehne+Nagel.

I just love the idea that we would take the 2nd team and beat him, and he would be like, “Ah, those kids, these damn kids, here they come again.” It’s more of a troll than anything else. Their logo is a pirate. They’re kind of a leftist, communist-oriented club. I think they would kind of hate us if we tried to buy…

Yeah, maybe. Maybe. I didn't know that, because they wouldn't be that expensive.

Totally. Also, sports is a tough business.

I don't want to own any teams. Final one: What has to happen in 2026 for you to consider it a successful year?

We've got to hit our numbers. We've got to grow like crazy. And then this automation via AI—we've got about, well, probably 100 core workflows that are costly, and we're building AI agents for them right now. Five of them are live and working and saving us money, and 95 are under development.

I need at least 80% of those to come to life and actually have the impact. Otherwise, we're just spending money and not getting much back for the AI.

Dude, it's been so great to have you in person. Thank you so much for doing this on a Sunday, of all times. I really appreciate it, dude. It's really special to meet you in person properly.

Yeah, it's great to be here.