David Bell:
0:37
If we can take our AI and have them scrub load boards and make calls and have a driver, have a have a driver, call in, driver manager that they can call in find out they're getting paid. Find out if their wire got done. Find out, you know, maybe money on their fuel car, everything drivers call, you know, drive. You know, I had a trucking company. I logistic trucking. We'd have drivers on hold, and they were last ones to get picked up on the call. It's like, whether they're just driving, well, they need help. They don't want to sit on hold for 1215, minutes waiting for the dispatcher or driver manager to pick up and find out if their wire is going out today so the wife can pay their bills. I mean, this, it's, it's super busy. So like, if you can just give driver you just have a driver management AI and driver interactive AI that to work with drivers like it's I think that just That step alone is big, because they just want information and they're and they're left on hold.
Blythe Brumleve:
1:30
Welcome into another episode of everything is logistics, a podcast for the thinkers in freight. I am your host, Blythe Milligan, and we are proudly presented by SPI Logistics, and we've got another incredible episode for y'all today, and we've got David Valley is the co founder and CEO of CloneOps, and we're gonna be talking about how logistics veterans can start implementing, or start thinking about implementing a i into their companies. And so David, I just wanted to say I just got done listening to the entire conversation between you and Andrew Silver on the freight pod. And it was such a great conversation, hearing all of those stories, especially from your earlier days. I think, for folks who, who may not know you know you used to sell like the the big gray cell phones inside of cars you used to, you know many or help install car stereos you started up or worked with LTL logistics company before you sold that, you started lean solutions. I mean, you've done so many incredible things in and around sales, in and around, just business and entrepreneurialship. And I'm curious as to why you wanted to now get back into the game and start up CloneOps.
Unknown:
2:37
Well, I mean, you know, like you said, again, everything is logistics. I think everything comes back to that, like, and it's my wheelhouse. It's where I, you know, I've spent my last 30 years and my network and at, you know, I had an opportunity where this AI craze seemed like it was going to take off. And I missed the.com because I was buried in logistics. I missed the Bitcoin because I was buried in logistics and lean, and so now I'm wasn't buried in anything anymore. I'm kind of just a useless advisor at Lane, you know, doing nothing while everybody else does the work. So I said, you know, let me make my let's let me go do something again. I was little bit, you know, bored, and I said, this is super interesting to me, and I think it's going to revolutionize logistics. And just like near shoring did, and I did it with near shoring, I thought it would be cool to maybe try to do it again and see if I could do it with AI. And I think that, I think AI is going to revel revolutionize logistics in a lot of other industries, especially high phone call, high volume, high email volume, high phone call volume, tasks and businesses. AI is a game changer. Now, I think it's
Blythe Brumleve:
3:41
one thing to be interested in AI, and you know, think of ways that you could start using it yourself and implementing it yourself, but I'm curious as to what that first aha moment was for you to say this could actually be a real business. I
Unknown:
3:56
mean, when I heard the voice. I heard a voice selling some online stuff and taking credit cards. And I basically, you know, I listened to it, and I was like, Wow, this sounds pretty much as good as, you know, anybody it's actually sounds better when you get when you talk to people, like, with thick accents and call centers, like, it's very frustrating and having to repeat. You know, I have a simple personal email and my initials, basically, and every time I give it to somebody over the phone, I gotta repeat it, like five times, and it's like, I'm, like, an AI just gets it immediately, like, you say it once it got it, has it. So I just thought that it's, it's going to really put a dent in some of the like the Indian the Philippines call centers, where where the accents are there, and it's more articulate. And then when you change to it, when you change it like, for like, different languages and and you, you know, we can convert to 16 different languages in the middle of a in the middle of a conversation. So I think that's really good for logistics too, because it's such a diverse group of of drivers and trucking companies and so many different languages when you're tracking a truck, if you can go from speaking English to speaking creole or polish or or Serbian or Russian or Mandarin Korean, like you could switch to those languages, I think you'll get a much better response from dispatchers and from and from drivers just it's you know, that they can communicate because I I speak a Little bit of Spanish, but somebody speaks to me in Spanish, it's a little bit intimidated. You don't know what they're saying. You don't want to act like you don't know what they're saying. And I just think it's, it's, there's so many cool features to it. I think it's going to get better and better and better and and it's going to be perfected. It's, it's one of those things that's not going to be a flash in the pan where it's big and then nobody talks about it like RPA. Or something like that. I think this is something that's here. It's not going anywhere. It's going to get better and better, and eventually, you know, eventually you're going to have an AI that just comes in, like, I don't know if you get in your car, I get in my car, and my iPhone tells me where I'm going. I'm like, How does it know where I'm going? It's because it has a pattern. I think what's going to happen is what we're building is an AI that every day you're coming, you're going to get on your computer and on our dashboard, and you're going to work and do it. And eventually it's going to do that work for you. It's going to come in, it's going to track your trucks, it's going to read your emails. It's basically, you're going to turn your AI on and wake it up, and it's going to do all this work for you. Why you watch it work, and then you're going to jump in and handle the stuff that needs to be handled. And I think that's where it's going to evolve to. And so it's, it's, that's why I got excited about it. It just, it's pretty cool.
Blythe Brumleve:
6:20
What stood out the most to me from from what you were just saying, because when I worked at a at a brokerage, we had one girl that could speak Russian, and anytime we had a driver call in, and, you know, Ukrainian or Russian, you know, any of those different dialects, we had to stop everything we were doing, Go get her, have her come and be that translator. And she was really like the go to and then we had to do that for, you know, Spanish speaking drivers as well. And and that, to me, just opens up, having the ability to be able to understand a driver that's calling in get them to the answer as quick as possible, I think, is one of the bigger selling advantages. And when we connected at at manifest, you mentioned that that one of your the bots that you are creating with clone ops, or one of the voice agents that you're creating, it will be able to help truckers as well, which I think is kind of lost in a lot of these discussions about brokers being able to use these different models. But on the trucker side of things, I thought that that was really interesting, and it resonated with my audience, with truckers having access to this technology too. Can you speak a little bit more on, maybe the the trucker side of things?
Unknown:
7:25
Yeah, I mean, I think, I think when you look at, like trucking companies, especially the small, the mid size, you know, somebody with five to 50 trucks, you know, they're one man bands, one woman bands. They're, they're doing everything themselves. They got, you know, a couple dispatchers, you know, I mean, one person can run 30 trucks. So you don't need, you know, you don't need five people in office to run 30 trucks. So I think that when you target those, if we can, if we can take our AI and have them scrub load boards and make calls and have a driver, have a have a driver call in, driver manager that they can call in, find out if they're getting paid. Find out if their wire got done. Find out, you know, they need money on their fuel car, everything. Drivers call, you know, drive. You know, I had a trucking company. I logistics trucking, and we have drivers on hold, and they were last ones to get picked up on the call. It's like, whether they're just driving, well, they need help. They don't want to sit on hold for 1215, minutes waiting for the dispatcher or driver manager to pick up and find out if their wires going out today so their wife can pay their bills. I mean, this, it's, it's critical to them, because they want to make sure the money's coming in and getting paid. But somebody's leaving them on hold because it's Friday and it's so busy they can't take the call. And if anybody knows freight on Thursdays and Friday Fridays, 60% of the freight probably moves on Fridays. So like, it's super busy. So like, if you can just give driver you can just have a driver management AI and and driver interactive AI that could work with drivers like, it's, I think that just That step alone is big, because they just want information, and they're and they're left on hold. And, you know, I think we talked about it manifest, like drivers during COVID were as as most important as doctors. And, you know, now they're nobody again. And it's just crazy how we don't have, like, you know, like, sense of how important truck drivers are, yeah,
Blythe Brumleve:
8:58
I think that they're definitely lost in a lot of the technology conversations, where they're almost like a victim of, you know, increasing privacy regulations and things like that. And now this feels like a tool that they could use and use to their advantage. Now, now back over to, you know, just sort of building out clone ops. I'm curious with your previous companies that you've built out, especially when it comes to lean solutions, you're building up to 1000s of employees. Do you think that that is the same approach you're taking with clone ops, or do you see it as more empowering one person to do maybe five to 10 different roles or jobs?
Unknown:
9:35
So I mean, when I was building and thinking about this, the last thing I wanted to think about is AI replacing the 10,000 people we have at lean. I'm still a shareholder, you know, companies, amazing company. It's, it's, you know, does great things for the for the people of Latin America, the employees. So last thing I want to do is do anything that, you know, eliminate those jobs or hurt those people, and over time, AI is probably going to put a den in people all over the world, here, everywhere. It's just going to do it. But what I want set out to build is a one to three year plan to make them way more productive. One of the biggest challenges we had at lean when I was starting Lean is comparing okay, if I'm paying somebody 50,000 here and I'm paying 30,000 the lien I need. I need, like, more than 20,000 of value, because otherwise it doesn't make sense. If I only get 5000 of value, it's not worth the aggravation of having somebody in Latin America. So we have to have like, a two to one or three to one valuation. So if somebody's making 50 and they're making 30, they have to do the 100% to 100% workflow. They can't do 50% of the. Work and pay them, you know, 60% of the salary. So that math was very tricky to understand. Hey, here's what you're going to get. So what my goal is is to take my AI, my dashboard, and clone ops and make every employee, including liens employees or any other call center, and make those employees two or three times more productive because they're already at a disadvantage anyway to be productive because they're in Latin America, Spanish is their first language, English is their second so like, if we can make them more productive than the Lean clients and any other clients that have any other near shore call centers, are going to make those people better. But what I'm finding out is people are happy with what Lean's doing. They're not trying to look for savings and AI implementation there. We've had so many conversations people like, when we start here, my biggest cost center is here in the US. Let's start here and see what we could do. Lean's working. I don't want to mess with that. And I'm like, Okay, let's start here, but eventually you're going to see that our dashboard is going to be very beneficial for your people at lean too, because they're mostly doing the lower back office functions and tracking, tracing and whatnot. So, but it's, it's definitely interesting. But my goal would be to to help if you're, if you have people at any any near shore, including lean, and you're trying to scale and hire 10 people, it takes time you have attrition, because now more than ever, like the attrition is is at as high and when I first started lean, we had almost zero attrition. And now people never quit. But now Latin America is very, very robust employment and jobs are it's very competitive there now to get people so you have attrition that has to replace if I can solve attrition and solve scaling first and then make them more productive, like elimination of jobs will come down the road. And even if you just eliminate your bottom 10% that you would anyway, because they're not, you know, they're not working well, the you know, I mean, there's, there's plenty there to happen before you just wipe all the jobs out.
Blythe Brumleve:
12:25
And so, as you are, you mentioned before we started recording that you're, you're on demo calls every single day, and, you know, multiple like back to backs. I'm curious as to what is one of the bigger misconceptions about implementing AI into a logistics company.
Unknown:
12:42
I think that's going to be super like, that's going to be too it's going to be easy. It's never easy. It seems like, oh, just hook up the phone and they call in and it's good. But anything with tech and integrations and API connections like, it's sophisticated, and it takes time and and I think that you have to understand that you're making a change in how you do things, and it's like turning a big ship. It doesn't just turn on a dime and you're headed in the right direction. It's a it's a strategy AI. AI is a strategy they should be deploying with a timeline. We have a short term, a midterm and long term strategy with AI. Let's how are we going to deploy it and make it effective and make it work? And what we're doing is we're finding the the easiest, low hanging fruit with the less lowest risk points, you know, like taking AP calls, you know, and responding to AP emails. Most, most brokers get tons of factor companies calling in trying to verify information, and tons of calls, where's my check? So if we can our AI can answer those emails, and then the people that actually call in Could, could be answered, instead of a person having to answer, say, your checks going on Friday, AI does. And then, with responding to emails that actually need, a call like, Hey, I've been emailing you. You're not giving me thing we have viewed on, on what we posted, getting on the home with them, and going through, Hey, okay, here's the remittance we said, here's what we show, here's what it is. And be able to work out, you know, why they're why they still have something on their AR and we don't have it on our AP. Is like doing those things, like takes a burden off the AP, where they could focus on getting AP handled and and, you know, and only doing like, escalations where there's issues or an AP. Now could focus on turning people onto quick pay. Instead of answering calls, sending emails, they can spend more time calling out and saying, Hey, let's get you on our quick pay program, because it's a money maker
Blythe Brumleve:
16:05
for a brokerage. So outside of, you know, maybe AP and AR. What are some other use cases that that you're, you're building right now for logistics companies, yeah,
Unknown:
16:15
I mean, those AP and AR are kind of secondary use case. Our primary use cases right now are our carrier sales are tracking and tracing, and we're building some sales AI, sales, sales agents as well. To focus on sales, because I think anything that can increase productivity and sales is, is going to be well received. And, you know, we're also working in other industries too. We're not just in logistics, where branched often several other industries. We have, I think, three, three or four pilots going in completely separate industries. So we're looking, I mean, AI is applicable over every industry that you have, high call volumes and and, you know, high email volumes.
Blythe Brumleve:
16:54
I think you mentioned in that conversation on the freight pod that the traditional sales model is is or the sales script is is dead. And I'm curious as to, because we talk a lot of like marketing and sales on this show, and I'm curious how, as to how you think that sales and marketing will evolve in logistics. Using AI, I
Unknown:
17:13
mean, it's, I mean, there's so, I mean, I remember, I've been out of logistics now probably seven, eight years, and I used to go visit a customer, and while I was in their office, they get five calls. Like, literally, one another call, another call, another call. And so, like, sometimes I joke, let me take the call, and I, you know, it'd be somebody from a big broker. And I just break, you know, bust their chops on why you're never getting the business. You know, you're going to get it, we're in Florida. You're going to give me a truck on Mother's Day weekend when I need it. You know, the produce to go to New York City. No, okay, then I don't need you can't do nothing for me. And they can't, because there's no barely, there's only a few people on the planet that give you a truck on a Friday, last minute, going to New York City, delivering on a Sunday, on Mother's Day weekend. It's just like, that's, that's like, the almost the most impossible thing to deliver. And so when people are in Florida, you know, that was a big thing. We use being in Florida is like, you know, we take care of year round, and we did. But so I think sales in general, like, when you have such a saturated market, you know, I talked about it with Lean, like we had a five year runway with Lean, with no competition, like zero, like from 14 to 19 before, you know, guys like rapido popped up, which was their their competitors. And they're good competitors. They're good guys. They have a good product. They're in Mexico and liens in Colombia and and so, you know, when there's 10 competitors now, and it's harder to sell. So the more competitors you have, the harder it is to sell. You have to change how you're selling and be different. And I think with AI, I think that some of the AI that you can use as an intro, because the bottom line is, if you have AI, you can do something more cost effective. You can get better pricing and be more efficient and and, and give more updates. And, you know, and just like when tracking came out with macro, point and and the other tracking devices. Customers want to know where their freight is at all times. So I just think sales is using AI, and sales people are intrigued by AI. And what we're working on is basically, you know, creating animations of ourselves as sales people to to basically somebody you can send out, Hey, if you want to see what we're about, click on my avatar and watch and have a conversation with me, like, and see how good our AI is. And then it'd be like me talking right now. And, hey, this is pretty interesting. I can use this. And, you know, getting them interested in actual AI, not the product you're selling, you know, I'm saying, if you can get them interested in something, and then back door in what you what you really want to sell them, then now you're getting their attention. Because people don't take calls anymore, right? You go write the voicemail. Send me. I mean, I get calls every now and then I'll answer it. It's a salesman. I believe in karma, so I don't want to be rude and just hang up on go. Alright, listen, I don't want to be rude. Let me give you my email and just send me an email and tell me what you're about, and if I'm interested, I'll get back to you. And those emails ultimately go right to spam or call back. And so it's like, you know, there's so many ways to get somebody off the phone right now. I remember, shoot. I remember when I was selling bacteria for septic tanks when I was, like, 16 years old, and the key was, just don't let them hang up. You know. Now people hang out. You know, they had the old phone, they had to get up and go like this. Now they just go. So it's much easier to hang up now. But, you know, at the end of the day, I think you have to innovate sales and be creative, right? I mean, marketing is one of the key components, is creativity and like, and I think our marketing team does an amazing job. Either, you know, they, they've built our website, I've gotten so many compliments on it, or, you know, just our marketing and so, like, I think that's a big part of it. And if you just innovate and be different, right? Like, you don't, can't be the same old thing. Like, especially in brokerages, there's, I mean, 1000s of brokers now all doing some similar they're picking up rate, moving it on with the third party. So, like, how are you different? Like, why should I use you? And you gotta, you know, they use you because they're interested in you, they like you, and they want to give you a chance. So if you can, if you can reach em on a conversational level, then, you know, you have a better chance to do business with them. And I think that's what sales is about. People do business with, people they like and they want to do business with.
Blythe Brumleve:
21:00
I kind of want to double click on the whole avatar, you know, being able to clone yourself, you know, at namesake of the company with clone ops, I have always wanted to have just a replica of myself that, you know, my customers and leads can talk to, maybe not my customers, but my leads can talk to that can screen them ahead of time. And I don't think that people are aware of how close this technology is. Where I, you know, a year ago, I was able to Synthesia, I think is, is one of the companies out there that you can record, you know, 30 seconds of a video, just like this, how we're talking, and then you can create new scripts for that virtual avatar of yourself, you know, it's, it's, it's still that particular tool is a little, you know, there was a little tweaking that they still needed to do. I don't think people realize how close this really is, to be able to talk to avatars like what you're mentioning.
Unknown:
21:51
Yeah. I mean, it is. And, you know, we have, we have our little interactive robot called Bad ask and it's book a demo, ask a question. It's cool little robot. And we're launching him soon. I think we're about ready to launch him, and it's going to be similar to what you're going to do with him. You're going to be able to go to our website or on your dashboard. You're going to be able to just open them and talk to them and ask them a question and say, Hey, how do I do that? What's this? How do I do that? As long as we fed him the information, the answer, he'll be able to answer in a conversational manner, versus having prompts. Just okay, well, here's the only answer you have for this, and you got to go through. It's basically interchangeable conversational AI that you you know, isn't just purely scripted. It's you know, it's at it's it's you know, it adds to it and adds character to it. So I think that that that's the start of launching that. And the next phase will be launching our sales reps having, you know, basically a similar avatar themselves and on their email wherever. So when they're on their LinkedIn, hey, if you want to hear what I do, click my AI and have a conversation with me. And people are just going to click it. Just say, what? That's weird. Let me click it and and then, now you got their attention. Now you got the lead. Now you say, now you now you don't call and sell anything. You call and say, Hey, what'd you think about my AI, what do you think about that? How'd you like it? Any criticism, anything? You like it? And you see at the point that at your your business anyway. And now you, now you get into them asking you what you do, versus trying to tell them. Because when you try to tell somebody what you're doing in sales, they're not interested. You know, when you when you're selling something, I understood when they want to buy. Something want to buy something, they listen.
Blythe Brumleve:
23:16
So what does, I guess the you mentioned earlier about, you know, your your your demoing with different companies, and you're very close to launching. So I'm curious, you know, with the companies that you're working with right now during sort of the testing phase, what does an onboarding plan look like? What if companies are thinking about using this these tools and this technology, what should they be getting ready right now to be prepared to have that conversation in a few months, or maybe even a year from now?
Unknown:
23:44
It's pretty easy. I mean, we have a share file where you upload a bunch of phone calls if you have recordings or documents, and it could be unstructured data, structured data doesn't matter. You upload whatever data you have, we run it through an AI model that models the prompts, and we come up with the perfect scripts and prompts. We load them into the dashboard, and, and, and you're good to go. You start testing it. You pick a few use you pick your use cases. Then you pick some you pick some, um, data that's managed. So this is exactly I know the data I'm putting in there. I know what it is. You test it, you load it up in a CSV. You know, an example. We have a, you know, we're testing a track and trace. So we load, we export, before we integrate, we export a CSV with 20 trucks that need to be tracked, the AI agent, like an example, we have an API to macro point. Macro point gives an exception. It says, Hey, we haven't just stopped pinging our AI will then trigger a call to that driver and troubleshoot, turning macro point back on, or turning, you know, the their tracking mechanism back on. And we also have a, what we call why you link. W i A where you at why you link, that if macro point turns off or your traditional tracking doesn't work, or that, it'll send you the why you link. And then when you don't click on it, it calls and says, Hey, we just sent you a link because your macro points off or your traditional tracking device isn't working. We really need to know where you are. Please go, click it. I'll hold and they'll find it. They'll click it and go, Okay, I see your locations fort, Lauderdale, Florida. Yep. Are you on time? Are you doing your your schedule to get there? Yep, no problem. Okay. And then they'll log all that information back into the CSV, so you have it, and then we integrate. Then we as we're doing that testing, getting it going, as we're working on getting the integrations, depending how easy you can integrate with the API, some TMSs are a little bit harder to integrate with than others, and because we're just starting right so we don't have, we don't have every TMS integrated across the board, easy and tune so we're we're building our integration plans as we go with TMS is so and then then it integrates, and then it's working. And then the best part about our dashboard is it's not just working off somewhere that you don't know what it's doing. You can see all of the work being done in our dashboard, voice to text. So you have transcripts, you have logs. You can take the live takeover if you see call, you have an active call screen where all the active calls are stacked like an Excel sheet. And then you could click a button and you could extract where you have individual calls. You could pull them over and drop them in a in an area where you could see the calls themselves happening individually. And then we have the LTO takeover button, live takeover, where if you want to get a call, you click it and jump right in and takes a call right over so you have to wait for it to be transferred, or a Slack message, or anything like that. And, and, you know, being able to do that and see what the AI is actually doing to manage it, I think, is important, because you don't want your AI off and who's in ag, with somebody and they're stuck in this AI, you know, jail that they can't get out of. And, you know, it's, I mean, that's what we don't want. So, you know, I think that's some of the things we worked into our dashboard that you know that people want. They want it. They want to know their AI is not just doing something. Have no idea what they're doing. They don't want to see it after the call ends. And then we also have scoring, where we have sentiment scores and tonality scores. So in the in the dashboard, where the calls are laid out like an Excel spreadsheet, like you have all these calls that are active and ongoing, and you can see the ones that have poor tonality, poor sentiment, that maybe the the voices are are louder than normal, so it judges that it brings them to the top of the queue that are on potentially unsuccessful calls, and those are the ones you could focus on. And click on and open up, and then go into and then by and then, inherently, the the reverse of that is, if you're doing sales, you want to see the calls that are successful. You can reverse it, filter it now you see the ones that are successful. And you can jump in, because if you have somebody that's interested, and they're on the line and they're talking to your AI, and they're like, curious, you can jump in and say, Hey, what do you think about the AI? Why don't we give you? Won't we get you on board and get you a real demo, get you a, you know, get you an account set up. So, like, if you're, if you're doing sales, so, you know, it the filters will allow you to do that. So that's some of the cool stuff that we built in, you know, and taking into account, like, how do we do more than just this voice and and back office AI, like, how do we, what are we delivering to customers after we do this, because that's who's going to win the day. How
Blythe Brumleve:
27:56
do you envision the, I guess the the people set up inside of a brokerage office? Is it everybody is using clone ops, or maybe it's a specific department dedicated to to AI, or maybe it's a lead in each department. How do you sort of envision that from a best case scenario, right? So
Unknown:
28:13
each each department has an admin manager that can see everything going on with all the agents, and then individuals have their own login where they have their agent. I envision, if you want an employee to be two or three times more productive than every single employee, should have a clone ops login. And because you're going to be like I said the beginning, you're going to be able to be able to come in eventually, hopefully within, you know, on our roadmap, you know, we're, you know, roughly 12 months away from somebody coming in, turning on their computer, their AI, goes to work and does everything they do on a daily basis. So the first day you come in, you'll do it, you'll deploy. A second day you'll do it. More by 30 days in, it's going to know everything you do during the day, and it's literally going to do it for you as it goes, as it does it. And then it's going to tell you, hey, you need to handle this, pick up this, you need to handle this, jump in on this. And it's basically going to just be a conductor that tells you the things you need to handle, like air traffic control. Everything's going good, but here's a issue. Let me jump on this issue and handle it, and then you're going to get infinite more work done, because you're just going to be handling issues and handling issues and handling crisis and putting out fires, versus emailing a truck to find out if you deliver it and being on hold waiting for you know, try calling somebody on a Monday try calling a carrier on a Monday morning and find out where your truck is. If you can't reach the driver, good luck. You know, I'm saying like you're on hold forever, like your customers on hold, and then some dispatcher lies to you and you can't prove it, so you still can't get your customer you know, because everybody knows, just because dispatcher says it doesn't mean it's real, so you can't take his word for it, because if you pass that information on to your customer, now you lied. If you lied to you, you lied to your customer. So it's very frustrating, like the workflow. So what'll happen now is you'll come in and AI will do all these functions that are normal every day, and then you'll be handling the fires, and you'll be handling the crisis, and you'll be handling the interventions and escalations. What about,
Blythe Brumleve:
29:59
what about, during some of your calls, I imagine that you've gotten, you know, a little bit of pushback, probably, you know, I don't want, you know, people, bots taking people's jobs, or, you know, bots talking to each other. How do you handle, what are some of those, I guess, pushbacks that you get, and then, how are you addressing them?
Unknown:
30:18
And we're not even, you know, and I'm not an advocate of taking jobs like, you know, I want to. I want to. I want to make people more productive. I want to save the company money if they have 100 people, and they would scale to 200 people this year because of growth, I want them to scale to 130 people and deploy AI to right size their business. Every company has to have a right size their business where you have so many people, so much technology, and that's what I want to do. I want to go in and have companies right size their business, to the right amount of human people, the right amount of AI and technology, and then just grow both all of them like that, because you're always going to need people just don't want to get rid of, get rid of the human touch like we're never going to do that because AI, the one thing it can't do is replicate the human touch. I mean, people are just people and and AI is just programmed. So, you know, people aren't looking to just displace people and get rid of them like that, but they are looking to improve margins, improve EBIT, improve value, improve productivity, and you're always doing that right. Like, as I said, I didn't have competition for Lean for five years, and all of a sudden now that leans got 20 competitors. Everybody wants to know how liens gonna do it cheaper and better. So we would compare when we would onboard a customer in 2016 they were paying people 60,000 here, and I think we were charging 18,000 back then. And be like, let's do it. And we could have charged them 25 they still would said, Let's do it. We could charge them 30. They still would have said, Let's do it. So at the end of the day now they're like, 30. That's way too much. Your competition is 220, like, so now we're getting beat backwards instead of not caring. So it's, it's, you know, it's going to happen in the same way, everybody is looking to deploy something that works, do it better. And now, how do you save me money, and how do I use it to, you know, to save and make my money begin. And that's what the evolution of almost all this stuff is. And,
Blythe Brumleve:
32:04
well, speaking of, you know, competition there, there are several different, you know, sort of the the AI voice, cloning, things like that, that have entered in. To the logistics market. How do you differentiate yourself from the rest of the pack? I
Unknown:
32:17
mean, there's a few, few differentiators, right? We have some competitors that have some good experience in logistics and good contacts and have histories of, you know, I was probably one of the first ones to come in that had a history of building a great company and using that history to roll into this. And now there's some others that have come in that have built incredible companies and billion dollar companies, and they're now, they're jumping into the space. There's, there's enough business to go around. It's, it's, and wouldn't you know, our goal isn't just to be in logistics. You know, there's, there's tons of opportunities from shippers and carriers and brokers and forwarders. And so there's a huge amount of of space here to conquer, and it it can withstand many, many, many, many competitors, in my opinion,
Blythe Brumleve:
33:05
yeah, it might. I just the wheel started turning. As soon as you you mentioned forwarders with your earlier comment on all of the different languages that, you know, there's a language barrier right now, but probably not, you know, in the in the near future, using these different tools.
Unknown:
33:19
Yeah, yeah. I mean, it's, you know. I mean, you got things coming from all over the world, in transit, and so it's, you know. And at Lane, we had, we opened a forwarder division, like 2016 and we have some of the biggest forwarders, you know, work with lean and have hundreds of employees. So, you know, we know that everybody's willing to adopt what how can we do it better? Because if you're in business and you don't do that, somebody else going to do it, and you you they have a competitive edge, like, if your cost goes down in any way, that means you could bring your price down, and now you're competing with prior everything really comes down to service and price and quality. So if you can break, if your quality is there and your service is there, then what's your price? And if you're equal in quality, equal in service, but you're higher in price, you're going to lose the business like it's just that simple. So you have to continue to evolve, to continue to keep your cost down, be more efficient, be more effective, and you gotta have service and quality. And you know, I mean, customers are everything, and I every business I build, and I listen to the to the podcast, finally got to listen to it with Andrew and his dad. And it's, you know, his dad's done incredible things. He's a legend. And, you know, I, you know, aspire to even be a quarter of the legend he is with what I do. And when you, when you think about like his whole thing was, we, we don't give loads back. We take care of the customer. And I've done that in every business. I mean, I've I've literally been loading trucks on Thanksgiving Day for my customers. I've been with customers in my warehouse, loading trucks out on Christmas like, I've done so many things on for my customers. There's nothing I won't do for them. And you know, used to be like, Oh, family comes first. Yeah, it does. But if you take care of your customer, customers, you're automatically taking care of your family. I'm doing this to take care of my family. Like, yeah, I'm missing Christmas morning, or I'm missing Thanksgiving, but I'm able to provide for them because I have customers. If I don't have customers, then you know that. So it just flows. So I always looked at I'm working hard, I'm working 68 hours a week. I'm doing anything I have to do for customers, because I'm taking care of my family and and that's where we are now. You know, I I've been successful, and I've had success, and it all comes back to anybody that knows me. Any customers knows me, there's nothing they won't do to make sure he gets the job done for you. Well, I'm
Blythe Brumleve:
35:24
curious as you you brought it up, if you were to start a brokerage today, how would you build out a brokerage?
Unknown:
35:32
Oh, I never, I would never get into brokerage. Never, ever, ever. Why would anybody want to do that? Open a brokerage today. It's insane competition. Like, it's, I mean, it's, it's just, it's just insane. How do you get business? Like, it's like these, there's not a shipper on the plate. You have shipper CRM now, and you have, like, the everybody knows has everybody. They got your home. They got traffic managers home number like you're they're getting pounded by 50 people a day wanting their business. How do you go get business like you have to do RFPs. And you're doing RFPs, you gotta have, I mean, imagine to open a brokerage now, you have to have credit, right? So to open a brokerage today, you're not getting millions of dollars of credit from anybody. So if you win an RFP, you're not getting credit from truckers like, and then you gotta go get do RFPs. You don't have pricing power because you don't have trucks. But, you know, saying, like, if I was going to do anything, I would open a trucking company today, and because I think Trucking is going to is still going to be robust for the next two or three years, because so many have gone out of business because of the last, you know, the last two years have been terrible, and I think all the COVID monies ran out, or wherever they got this money to survive, because truckers usually went out of business two months after they had no money. They didn't last 678, months. I don't know where they've gotten the money, or how they've done it, or what subsidies or government waste and fraud went on to give trucking companies all this money to survive, but it's pretty much come to the end, and they're going out of business every day, in droves. So if I was going to do anything, I would probably open a trucking company, start the trucking company, build that, and then spin off a logistics off of it after I was running, you know, 50 or 100 trucks, because it's just opening pure Logistics is, you know, or or I would go look for a big, a big shipper to partner with. I go find, you know, there's. Several people have opened their brokerage by saying, Hey, I'll tell you what I'll do. I'll make you 50% partner in my brokerage. Give me your business. You'll get a rebate every year and go find, go find a owner of a huge owner of a company that shipped millions of dollars afraid a year. And I would say, you want to be my partner. I mean, that's about all you can do, right? Because just pure selling for the businesses, I'm a salesman. I like closing, but it's like fishing, right? People say you like fishing. I'm like, take me a fish for bass, where I can catch a fish or or fish off a reef, or I can catch a fish every two minutes I'm in. I don't want to troll for five hours trying to catch a fish and end up with nothing. So same, same with sales. I want to have high closing rates and success. I don't want to close one. That's why real estate's so tough, right? Where they say, like, 80% of the realtors don't close a transaction in a year. Like, it's crazy. Numbers. Like, why would anybody want to be a realtor? Like, like, it's insane. Like, I want to close, I need to do a sale a day. Or, like, I'm depressed.
Blythe Brumleve:
38:06
Well, I am. Does bring up another curious question that I have? Like, if is there any logistics business that's been started maybe in the last like five years, that you've thought, Man, I that's a great idea. That's the future. Obviously, not a brokerage. But are there any other aspects, or maybe silos within logistics that you think still have good business opportunities outside?
Unknown:
38:28
I think, I think the, I think the digital brokerage was pretty cool. And I think that that was something like a, like, a marketplace like, you know, similar, you know, to some of the ones that are out there. I think convoy going out of business. I think they just over leverage themselves with funding and didn't do enough. And, and listen, Flexport just picked up the convoy model. I think they're going to do incredible things with that. Like we, you know, we were talking and, and I made sure they were introduced to lean, because I think lean has a ton of small brokerage, you know, with five people or less that could really use that leverage power to buy. So I think they're going to do great things with that convoy platform and, you know, and Flexport. I think it was brilliant of Ryan buying it and getting it at a huge discount and deploying it the way he did. And so, like, that's pretty cool. And, but I don't really know too many, and I thought I saw somebody launching LTL reefer. Reefer brokerage was cool. I actually like the flock freight model from that's, I think they're within five years old, right? They built an incredible company, and short period it's a billion dollar company. And so I like their model. I think anything that has to do with open source, allowing shippers, brokers, carriers, everybody, to go to a one place and and not have to have all these people in the middle making money for doing stuff is probably what everybody would like to get to. But it's so fragmented and and, you know, and large and scale of the players, it's not like catch up, where you have Hines and hunts, you know, it's like, or the railways, where you have like, five different railroads and you're stuck. So trucking just has so many, so many options, and so many people are willing to do it for nothing, or do it for a loss or loss leader business. So it's just, it's just hard to do it, and logistics and trucking, but there's some cool things that have come out in the last few years in logistics that you know are, I think, are going to be around and they're not going anywhere.
Blythe Brumleve:
40:12
What do you think holds a lot of logistics companies back when it comes to implementing new technology? Ai, solutions, things like that. As you're having a lot of these conversations, I imagine that there's some companies that just probably aren't a good fit, and they got to, you know, maybe clean up their own sort of house before they start shopping for a new one. What are you seeing in the market when it comes to technology and AI, yeah,
Unknown:
40:35
the biggest barriers are cost and bandwidth, right? Like, if they have an IT department, they're most, most likely buried and don't have time to do it. And if you're dealing most brokerages nowadays, they're under tremendous pressure to, you know, improve EBITDA, because it's been such a, you know, show for the last two years, on, on the economy and trucking. So last thing they want to do is, you know, if you're big and go to the board and say, We're gonna spend a million dollars in AI, and then, you know, they're like, You're nuts. We, you know you're not make, you need to make money. Like, so it's, it's always a battle. And what's, what's, what's always been curious to me, is, like, in logistics, is such a thin margin business like I think maybe average EBIT of margins might be seven to 11% and other businesses are 25% and 30% so it's such a small margin, if you like, take a brokerage that does 10 million, right? They're making they're lucky if they're making 700,000 and then they gotta pay themselves 150 and they gotta pay their account by time you do all it, and you go, Look, how much do I have left to invest into my business? And you hire one good salesperson. It's 150,000 so you hire five sales people. You know, in order to get sales grow, you have to have sales and marketing. So when you look at, how do we don't make enough money to have a full blown marketing team and a sales team and a sales manager and a CRO like, it's just there's not enough meat on the bone, like to really scale a business the right way, so you have to just lose a shit ton of money for two years. And that's been the model. That's been the model, right in the last 789, years this, everybody's jumped in. They've lost millions of dollars until they got market share, and then they scale it back and make it profitable. And, you know, that's. What a lot, that's what a lot of the bigger ones did in the last five years. So all the big brokers you have out there kind of followed that model, and, and, but most brokers are like opening up with, you know, on a shoestring and a shoestring budget, and, you know, doing it themselves. And I remember, when I opened my brokerage, I funded my brokerage was funded with payables. I owe people money, and I sprung them out 40 days. And that's how I, you know, because people paid me at 38 and that's how I grew my brokerage and, and everybody would say, Oh, you're good, you know, you're what you know, you how do you grow so fast? And I'm, like, because I was able to, you know, my payables grow fast. I can't, I can only, I'm always good as my payables, like, that's, that's my line of credit. Because, you know, you don't open up and get a line of credit from a brokerage. You know you factor, but you also have to, like, you have people like, try on pay now that help brokerages pay and get part of that quick pay there that that platform is amazing. And some of the other ones, the factor companies out there, like OTR, has a payment, payment process and for brokers now too. And so adopting that model has also been helpful for brokers to grow as well, because the ar, ar funding is, like, I think, the biggest, the biggest hurdle and brokerages is it's very difficult to get your AR funded. And if you do, it's just your margin. It's not your whole but back when I started brokerage, I got to use my whole payables to fund and people were more flexible back then. You know, if you paid, I did a lot of LTL, and the LTL carries gave you 6090, days to pay before they screen bloody murder. So they didn't, you know, they were used to it. So like I was able to grow and build because I was just able to manage my payables
Blythe Brumleve:
43:36
and so, yeah, obviously, with your wealth of knowledge and history and work ethic and inside of logistics, I'm curious as to, you know, the bootstrapped founders that are getting started this year or maybe next month, what advice would you give to them on building in sort of this down market that we're experiencing.
Unknown:
43:56
Wow, yeah, advice is tough, you know, it's, I mean, because so many different things work for different people, right? Like, you know, it's so people. People are their personality and their character, and that's and they do things the way they do it. I would just say, like, you know, understand your financial model very well, because I've seen so many people come build things that have no financial scale, scalability. Like, you know, even if you got to there, how much money you're going to make? Well, I don't know. Well, if you don't know that, that's that's like the gasoline that goes in the car to get you on on the road, to follow the map like you need to know. You need to understand your financial future and where you're going to go with it, and how much it's going to cost and how much you're going to making when you get there. And that was a cool thing I did about Lean. What when I when I launched lean and and launched it with Robert Cadena. I had my model, and I had somebody from the call center industry send it to me in Excel. So all I had to do was plug in one seat, 10 seat, 100 seats, 1000 seats, 10,000 seats, and it and it gave an enterprise value. And I thought it was wrong, because I plugged in 100 seats and 1000 seats, and I plugged in 10,000 seats, it had over a billion dollars of enterprise value. I'm like, what I could do 10,000 seats, like might take me five years. But like, if I get a customer today and a customer tomorrow, five seats, 10 seats, 50 seats, 100 seats, 200 seats, 500 seats, and everybody's growing 10, 10% I did the math. I'm like, I think I can get there in three to five years. And, and it was just incredible. And like, that was the driver. Like, that was what I believed in, that got us to 10,000 seats in a billion dollar value. Like, it's that. So if you don't have that, and that's what I did, similar here at clone ops, I did each talking minute, each customer, each user. And I feel like I can build another billion dollar company, because I think I can have 1000 active users with a billion talking minutes. And if I do that, I built a billion dollar company and like that. If you don't have that vision and that, like, that's, I think that for me, that was a start. Like, I said, Everybody's different, and everybody you know is going to have something different that they look at based on their personality and drive and energy. And people say, I got a lot of energy, but I don't know, I drink too much Celsius or Red Bull, but, but at the end of the day, I think that is the single most important, is the vision of where you're going to be. And I think vision is like critical for everything, everything I've ever believed in and really, truly believed, not just fake believed, if I've really believed it has come true for me. And so I've told everybody, just, just find that, make sure you can believe in it, and believe in it like and and if you put it on paper and you see it and it makes sense, then you believe in it. So like
Blythe Brumleve:
46:31
having the vision and the financial acumen to see the vision come to life. Alright, last we got a few more minutes left here. Anything that you feel is important to mention about clone ops that we haven't already talked about.
Unknown:
46:45
Oh, man, my brain's so fried. Worked this hard, and since dispensing trucks, um, listen, I just think we built a great team. I think we're up to 18 or 19 people now. We've we're adding some great industry people that you know are young and energetic and enthusiastic about what we're doing, and, and, and there's a lot of other great companies out there too. So like this, I just companies should, should do their diligence. Look. At everybody, and then pick the right company that's the best fit for you in every way and and we just like to get in there and have a spot to compete for that. And we're going to lose, we lose a lot of business. We're going to win a lot of business. And there's and the people that are getting into the business, I know them well and like them. They're very good friends of mine, and some of us have done things together, and I'm rooting for them too, and I'm just happy there's so much business out there and so much, so much room to grow and do, and we're all going to prosper and succeed. And if we could deliver, what if we can deliver half the vision we all have of what we could do in logistics with AI, it's going to, it's going to be amazing. Yeah,
Blythe Brumleve:
47:46
I think that's really well said, because there's a lot of, you know, sort of doom and gloom about the industry and just about the world in general, but there's, there's, to me, it's, it's, you're missing the forest for the trees, because there's opportunities everywhere. And if you have the vision and the financial acumen, as you just mentioned, then you can, you can find those opportunity spots and really be able to build something great in what this new information era that we find ourselves in. So So David, really appreciate your time here. I'll be sure to link to your, you know, LinkedIn, clone, ops, all that good stuff in the show notes. Any last party words for the audience?
Unknown:
48:21
No, listen, I think everybody should have a good outlook on the future. I think things are good, and we're, we're going to adapt to whatever comes our way, like we've been doing for 1000 years and and everybody's going to be fine. And AI is not gonna, not gonna change much other than the way we think about things and do things so like and I'm happy to be a part of it. So absolutely
Blythe Brumleve:
48:40
David, thank you so much. All right, thanks. That's your signal right there. I hope you enjoyed this episode of everything is logistics, a podcast for the thinkers in freight, telling the stories behind how your favorite stuff and people get from point A to B. Subscribe to the show. Sign up for our newsletter and follow our socials over at everything is logistics.com and in addition to the podcast, I also wanted to let you all know about another company I operate, and that's digital dispatch, where we help you build a better website. Now, a lot of the times, we hand this task of building a new website or refreshing a current one off to a co worker's child, a neighbor down the street or stranger around the world, where you probably spend more time explaining the freight industry than it takes to actually build the dang website. Well, that doesn't happen at Digital dispatch. We've been building online since 2009 but we're also early adopters of AI automation and other website tactics that help your company to be a central place, to pull in all of your social media posts, recruit new employees and give potential customers a glimpse into how you operate your business. Our new website builds start as low as$1,500 along with ongoing website management, maintenance and updates starting at $90 a month, plus some bonus freight marketing and sales content similar to what you hear on the podcast, you can watch a quick explainer video over on digital dispatch.io, just check out the pricing page once you arrive, and you can see How we can build your digital ecosystem on a strong foundation. Until then, I hope you enjoyed this episode. I'll see you all real soon and go jags. You.
