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The first one was tiny, it was Truro, T-R-U-R-O. There was a tiny high school there that I’ve where I spent my first semester in high school was called Interstate 35. So that was the first time and the talent true, I had one Philips Gas Station where we hung out and that it’s a population of less than 200.
Jay Clouse: 00:00:25
The startup investment landscape is changing and world class companies are being built outside of Silicon Valley. We find them talk with them and discuss the upside of investing in them. Welcome to upside.
Eric Hornung : 00:00:53
Hello. Hello. Hello and welcome to the upside podcast, the first podcast, any upside outside of Silicon Valley. I’m Eric Hornung and I’m accompanied by my co-host, Mr. Concert Series himself, Jay Clouse. Jay. How’s it going man?
Jay Clouse: 00:01:08
I see you’re admiring the, the new additions to my apartment wall here
Eric Hornung : 00:01:13
I am. The last time I was there you only had one poster up. Now there are five. If I’m counting correctly, that looks like five.
Jay Clouse: 00:01:21
That is correct. So for the listeners, something that I wanted to do with my co-working space here in Columbus, was get some music in there? I used to live in a house with several musicians. We used to do concerts in our living room. It was a blast, is one of my favorite things. I wanted more of that in my life and so I convinced the co-working space to let us put a concert series on. Went out, raised some sponsorship, helped book the bands, and we had five concerts over five months here in Columbus. We had different graphic artists and do a poster for every show. And so here on my wall has a trophy per se, is a poster from each of those shows and I’m very stoked about it. I’ve had this bare wall, one bare wall in my apartment for probably over a year actually the whole time I’ve been here, so over two years and now it’s beautiful.
Eric Hornung : 00:02:06
I love that. I love the idea of like bringing music to somewhere that is inherently creative. I never got to attend a Wyandotte session, which is what the name of the concert series of Jay’s old house was.
Jay Clouse: 00:02:19
I missed that actually, and you can still find it buried in the YouTube. If you search wind out sessions on YouTube, you can find some of the session recordings we did have local artists who just played a song for us and we did pretty high quality video. Shout out to Ian Hoyt on that. Really, really good stuff. I still listen to that was probably pretty frequently actually. Especially the Scott Baldwin won big fan of the Scott Baldwin wind session.
Eric Hornung : 00:02:40
That’s cool. Have you ever heard of the Gondola sessions and Aspen
Jay Clouse: 00:02:43
No. Tell me more.
Eric Hornung : 00:02:44
Actually don’t know if that’s what it exactly what it’s called, but was like the chair lift chair lift in Aspen, but they do it during the summer and they just kind of put an artist in there and they just go at it, acoustic up the chairlift. So they usually do. Two songs are. So one of them is Nahko bear who I’m a big fan of Nahko and medicine for the people shout out and it was just like incredible. But there they have a lot of really good artists in Aspen. I don’t know if the series is continued because I haven’t seen any new ones in a long time, but it was a very cool idea.
Jay Clouse: 00:03:14
Is it shot from like a Gondola behind it or like in front of it I guess you would say also traveling up the path?
Eric Hornung : 00:03:20
No, it’s, it’s in the Gondola, so gondolas are pretty big so it’s not like just a little thing but the camera is on one side and I’m guessing a production crew and then the people are playing on the other side of the Gondola and it’s just acoustic and raw and very cool.
Jay Clouse: 00:03:34
And it’s cool. I love the Internet. I love YouTube. I’m getting way more into the culture of YouTube and the niche communities that exist there. There was a member of unreal that really, really knows his YouTube stuff and he’s taught me a lot and it’s been fascinating to dig into that.
Eric Hornung : 00:03:49
Do you have a customized YouTube url yet?
Jay Clouse: 00:03:53
Eric Hornung : 00:03:54
Oh you did it. Congratulations.
Jay Clouse: 00:03:56
Eric Hornung : 00:03:57
slash c slash jayclouse. Got It.
Jay Clouse: 00:03:59
Yeah. I think c is just like the channel demarcation.
Eric Hornung : 00:04:02
Got It. Well enough about music and your tastes in music. My tastes in music. Let’s get into the guest today. Jay, who are we talking to today?
Jay Clouse: 00:04:10
Today we’re speaking with Bek Abdullayev. He is the founder and CEO of Super Dispatch. Super Dispatch is a platform that enables automotive logistics companies to eliminate paperwork, manage loads, drivers and billing all in one place. Founded in 2013 based in Kansas City, Missouri. We were tipped off to Super Dispatch by John Fein of Firebrand Ventures. They’ve gone through the Techstars sprint accelerator and they’ve received one and a half million dollars in funding to this point.
Eric Hornung : 00:04:39
And on my first glance at Super Dispatch, it feels like it’s in the vein of LawnGuru and SetScouter. Would you agree with that?
Jay Clouse: 00:04:49
Closer to LawnGuru than SetScouter I think. To me it seems like, and they have, they have 5,000 carriers using the platform, so to me their users are these carriers. These carriers have fleets of vehicles that go and help haul a or a. You might think of a if your car breaks down, you need a wrecker or you need to Holler these trucks come, they pick up your vehicle and they take it to the destination and so super dispatch from what I understand is a mobile application, a software platform that the hauler can quickly run some of the information he needs, which is usually done in paperwork, getting the VIN number off your vehicle, taking stock of any damage has done to the vehicle, getting information about the driver than hauling it to the destination where you meet the driver and the driver signs off on all of that. All that is now automated through the Super Dispatch app as opposed to paperwork that would go back to the carrier.
Eric Hornung : 00:05:43
Right. It’s kind of increasing operational efficiencies throughout the lifespan of one transaction for these carriers.
Jay Clouse: 00:05:50
I don’t think it’s like matchmaking for people who need the service. I think it’s much more just a back office tool for the carriers in their, their hollers.
Eric Hornung : 00:05:59
Okay, so I was a little bit off on that market place read on my end.
Jay Clouse: 00:06:03
But it’s something that I’ve just heard anecdotally is logistics space is huge. When people talk about automation taking jobs or about driverless vehicles being a huge threat, the first thing they go to is talking about the logistics industry, and this is a statistic I found interested to hear if you found a market size. The trucking industry as I found it as a $700 billion dollar industry.
Eric Hornung : 00:06:27
So I actually worked at a trucking company, they manufactured truck brakes. I worked for them in Cleveland, Ohio and it is amazing. Actually. Let me give a little insight into what I did there. I worked at our internal mergers and acquisitions department, so the idea was we look around the marketplace, figure out who we want to buy, raise that to the board, they put together the financing, all of that. So in my internship doing that, I created kind of this master database of all kinds of people who were in truck manufacturing and anything related to that. It is insane how many billion dollar companies there are in this space that you’ve never heard of. You’ve never heard of them? I’ve never heard of them. Like I was blown away by these companies that were in like Sheffield, Ohio, and just these random little places that we’re doing like a billion dollars because of the monstrosity that is the trucking and automobile space.
Jay Clouse: 00:07:22
Never heard of Sheffield, Ohio.
Eric Hornung : 00:07:24
It is west of Cleveland in Lorain County. There’s Sheffield, Sheffield Lake. It’s close to Elyria and Lorain. If you’ve heard of any of those.
Jay Clouse: 00:07:35
I was telling Eric off air this platform reminds me of a project that I’ve been pretty closely over the past couple of years. Friend and client of mine has a pool service company. He created software so that his pool service company could run more efficiently and get out of a paperwork world, realize that everyone else in that world was still using paperwork and is now killing it, selling it to those companies, and this is a very similar model to me, which is attractive. It’s a SAAS model supposedly from an article that I read back believes that he can save the trucking industry is $16.4B annually.
Eric Hornung : 00:08:10
So you have a little bit of insight from you said friend and client. I’m guessing that means you have insight into the upside, but you also have insight into some of the shadows. What are those in this general business model then specifically for dispatch from you?
Jay Clouse: 00:08:25
Mostly behavioral change because anything that’s still running on paper in 2018 has some deeply entrenched baggage and behavior from people who probably resist technology a little bit. Secondarily, usually people in this space are spending so much time doing it, even taking the time to learn a new technology that is software is a scary threatening thing and they don’t want to do it because their days are so full of doing the paperwork thing is kind of a weird catch 22, so it’s it’s about getting in of them and making them see the product and trust that it works. He the, the guy who was mentioning his best sales trick was doing full demo for them, giving them a free trial and once they are on it, it just started billing automatically after a period of a couple of months and it seems that Super Dispatch over the years has been catching some fire article I read in January of 2018 and the Startland News said revenue grew 10 times more in 2016 than in 2015 and in 2017 the revenues increased 300% from 2016 and Bek had a quote that said, that puts us, puts us at a huge milestone of crossing seven figures.
Eric Hornung : 00:09:32
That’s pretty cool. That’s a really interesting way to refer to revenue growth is. Yeah, it went 10 x, then 300 x, but that is a strange. Yes. Without any like underlying base assumption. You know, if it’s a thousand dollars, 10 x is $10,000 and 300x on that is $3 million or so. Is that what it was or I mean that would be crossing the seven figures. So I’m not really sure what that means from a actual numbers standpoint, but that’s probably the weirdest way. I’ve heard revenue referred to over like a multi year timeframe.
Jay Clouse: 00:10:04
Shout out to the Startland News.
Eric Hornung : 00:10:06
Yeah, shout out to Startland News. So we heard about from John Fein.
Jay Clouse: 00:10:10
Oh you’re right. He was talking about them as an aspect of their ecosystem. That was kind of like a self started media platform for startup companies.
Eric Hornung : 00:10:18
Yeah. And he said that they are kind of the premier guys to go to in Kansas City. So, nice fine Jay.
Jay Clouse: 00:10:25
That’s right. All right, well you ready to jump in and talk to Bek?
Eric Hornung : 00:10:27
Let’s do it
Jay Clouse: 00:10:32
Bek welcome to the show.
Bek Abdullayev: 00:10:33
Thank you Jay, happy to be here.
Eric Hornung : 00:10:35
So usually we like to start with the history of the founder, but I think this podcast, we got to kick it off with a visual for the listeners. We are all dressed in ethnic inspired clothing. Jay and I wearing clothes that are not inspired by our ethnicities, but you are wearing something pretty interesting. Cute. Elaborate, explain to the audience while you’re wearing.
Bek Abdullayev: 00:10:53
Yeah, absolutely. I’m wearing a supersized t-shirt underneath, but over the t-shirt, I’m wearing this a golden, embroidered heavy coat. It’s a traditional code from Uzbek culture. It’s called Travon, I believe it’s used at a wedding. It’s gifted to the groom at the wedding, that’s very ceremonial, shiny coat.
Jay Clouse: 00:11:14
So it. That was not from your wedding?
Bek Abdullayev: 00:11:16
No, it’s not, but the funny thing about about this coat is that I now have about six of them because every time we have guests from from Uzbekistan, they keep gifting as these coats and we keep accepting them kindly without, you know, we just put them in the pile of the other coats in the closet. There’s no practical use for these other than the wedding.
Jay Clouse: 00:11:36
That almost sounds to me as if like after the wedding I were to take off my wedding ring and then give it to somebody that I stayed at their home. I’m guessing it’s not like a direct corollary.
Bek Abdullayev: 00:11:46
No, it’s not. I think. I think it’s more of like a souvenir, like I think that it depends on the guests. So some, some people will bring small seniors or foods and snacks right, and so if someone wants to give you a bigger gift, I feel like this is that bigger gift.
Eric Hornung : 00:12:02
Jay used to do that when he used to bring small souvenirs to people, but it was a button that had his face on it.
Jay Clouse: 00:12:08
Still have a bag of these. We won’t go down that path
Eric Hornung : 00:12:11
Essentially yeah. Let’s turn this around before we get too much into Jay and his face buttons, but we do like to start with the history of the founder. I think it’s interesting that you are wearing something from Uzbek culture, but let’s kind of talk about the history of you and the history of Bek. Can you try to take us back?
Bek Abdullayev: 00:12:27
Yeah, absolutely. Originally I’m from Uzbekistan and at the time when I was born, it was Becca Stan was part of the Soviet Union, so until I was about nine or 10 years old. I grew up in the Soviet Union, you know, wanting to, uh, wanting to be, oh my God, it sounds terrible when I think about it that way before I say it. Aspiring to grow up to join the Communist Party and thrive in that society, you know, idolizing the heroes of the Soviet era when I was little in school and then one summer break I go to summer camp and then come back to school in September and then the country is independent and the Soviet Union split up in 1991 and then it was, it was a very confusing but also a very interesting time for the younger generation because all the history books started being rewritten and the, all the heroes changed to a bad guys in history books and all the bad guys that we’re told, bad guys started becoming good guys in the history books. So in the nineties Uzbekistan became independent so that’s where I’m originally from.
Jay Clouse: 00:13:28
That’s super fascinating and I kind of want to dig into that as a youngster growing up in this and now your literal history books are changing. How did you navigate that? Who did? Was it something where you talked to your parents? What was your path from there?
Bek Abdullayev: 00:13:42
I don’t think my parents or anyone had any clarity whatsoever. I believe it was a very interesting time so it individually for from your perspective as say 10 year old, 10, 10 to 15 that range you’re old enough to understand your surroundings and what’s happening, but you’re not quite mature enough to fully grasp the challenges that your country or your society are facing. But now looking back, I can clearly understand that all of the countries that split up from the Soviet Union have identified with communism and the Russian culture and you know the regime that was run from Moscow for nearly a century and all of a sudden the countries were scrambling to define their own identities, rewrite, write their own constitutions, change alphabets and language, and the entire libraries had to be rewritten. Not only history books, but also academics. Who are we? What’s our identity, how do we revive our identity that we haven’t embraced in over a century, and I think that’s a, that’s a monumental task for a team of people who are trying to reignite this new independent nation. So for us, I think it was just confusing a lot of. I think at first it was difficult because everyone was used to things being the same way and with change in government, the economy was struggling so it wasn’t, it wasn’t ideal. A lot of people struggled to make a living and adapt, especially the older generation had a really hard time adapting. And I think for us it had a minimal impact because at the time, at least for me at that age, you know, you are very sheltered from the outside world by your parents and your family. So the only exposure to that I had was just really learning things in school and adapting to good guys being bad guys and bad guys being good guys. And I think that was it. That was pretty much.
Eric Hornung : 00:15:30
The outside world obviously came to you or you came to it because you’re sitting in Kansas City right now. What happened after school? Did you go to college? Did you. How did you migrate away from Uzbekistan?
Bek Abdullayev: 00:17:10
The way I ended up in the US is a. I came here as an exchange student through State Department at the time, and I think this program is still active. The State Department was running a program called Flex future leaders exchange. Flex is the brainchild of Senator Bill Bradley. Bill Bradley was a basketball player, played an MBA and then a senator. I believe he ran for office in 2000 unsuccessfully, I mean for president. So Senator Bradley had this genius idea to go into all of the newly independent countries and start recruiting young and bright promising students at a very early age and to sponsor these students to come and spend a year and rural America, you know, and like his small town Iowa. And I think that’s as rural as it as it gets. And in his hypothesis these, these students will be exposed to the western culture and the Western values and the concepts of open society and you know, free open media and speech democracy. And once these students return to their home countries, the State Department would provide a platform through the local consulates for us to organize, become active, and hopefully instill some of the Western values into our society. And so in 1998 in the 90’s, US, you know, after the Soviet Union is split up, western culture started creeping in a lot more. So, you know, usually through a consumer products in the cigarettes, you know, Coca Cola and Hollywood movies and a lot of the popular runs. So the perception of the United States was formed through very popular Hollywood movies. So you can imagine like what I thought of the US in my teens, I wasn’t imagining a farm in Iowa. I was imagining imagining in New York City, Manhattan skyscrapers, you know, beautiful people, nice cars, everyone living in glamorous, glamorous life. And that led a lot of us to aspire to go to the US. So when we had this opportunity to compete for this opportunity to become an student, we worked really hard to try to win that scholarship. In the second year of attempting, which was my last year, I had only two chances. I was able to win one of those 50 spots that were available. And that’s, that’s how I first came to the US.
Eric Hornung : 00:18:02
What was the weirdest thing about rural Iowa city? You had to be a bit of a culture shock.
Bek Abdullayev: 00:18:08
Everything was big. There was no. There was no one on the streets, no public trans. So you have to, you have to know the context here. Not only have I never ever been to the US before, so I had no idea what to expect except for the Manhattan and the big urban cities. I come from densely populated city in the city that where I grew up, as, you know, one of the most densely populated cities in central Asia. So there’s people on the streets everywhere. There’s public trans and the culture shock and Iowa was, it was empty. There was, there was no one. There’s no one on the streets and everything was big. I think the first few things that stood out was the cars, the roads, everything was seemed huge and it was empty. I think the first week I couldn’t shake the feeling that I wasn’t a beginning of a scary horror movie. I felt all the scary movies that I’ve seen at that point. That’s how they start out. Small town tumbleweeds, you know, like a small high school.
Jay Clouse: 00:19:05
That’s wild. Can you, what was the name of the city that you grew up in in?
Bek Abdullayev: 00:19:10
Jay Clouse: 00:19:10
And what was the city in Iowa?
Bek Abdullayev: 00:19:12
The two cities. The first one was tiny. It was TRURO t r u r o and there’s a tiny high school there that I’ve, that where I spent my first semester, the high school was called Interstate 35. I don’t even remember the
Jay Clouse: 00:19:46
That’s wild. So this program that this senator setup to bring individuals from eastern countries to rural America, I wonder how Truro got selected as one of these cities.
Bek Abdullayev: 00:20:01
I don’t know. One of the things they used to tell us as they would discourage contact with anyone who’s Vaco Russian speaking to, they want to achieve complete assimilation and isolation from anything, any resources because in addition to culture shock, you experience a lot of homesickness and when you feeling homesick, it’s easy to kind of gravitate towards your own people and that I think they’ve seen those things happening. And when you do that, you have to tend to start hanging out and talking to them mostly. Whereas if you’re completely isolated, it’s a lot easier to assimilate and, you know, adapt.
Jay Clouse: 00:20:36
Who is the, they you’re speaking to that told you to operate this way?
Bek Abdullayev: 00:20:40
The secret people. It’s, these are um, so on, on the ground, these programs that are run by nonprofit organizations, a lot of volunteers, a lot of people, a lot of good kind hearted people that kind of empower this network that facilitates the
Jay Clouse: 00:21:10
I kind of want to transition into how you became or started identifying as an entrepreneur. Was that something that kind of threaded through all of this? I mean it said future leader, you know, you got one of those 50 spots. Was it because you were entrepreneurial , was it because you were just smart? How did, how did it come about that you wanted to get into an entrepreneurial kind of setting?
Bek Abdullayev: 00:21:31
I don’t think it was a decision looking back. I think it was destined to happen. It was, wasn’t, it was matter of time until I would realize who I truly am, that I am an entrepreneur and it took about 20 years since my first entrepreneurial venture to fully start feeling comfortable in my own skin and embracing the fact that I’m an entrepreneur at heart and looking back at how, how it all happened, I think. I think I’ve always been entrepreneurial as a kid. I, um, I ran convenience stores for my uncles. I had side hustles on side hustles on top of the stores that I ran and they’ve, my family enabled that. So I was exposed to entrepreneurship at a very early age. I was making money, I was producing these summer, you know, refreshing juice drinks when I was eight or nine and making money every summer. I had my own money at a very early age, which is good and a bad thing because, you know, there’s not a ton of responsibility at that time. So yeah, I think being exposed to entrepreneurship at a early age was, was helpful. Just to give you a couple examples, other than convenience stores. So in under John, my both parents are physicians, there are doctors and my mom used to work out of this very large clinic with maybe 800 employees and I discovered this. I was maybe in the third grade at the time I discovered this green lipstick that applies pink and that just, it was mind blowing for me at the time. So I and I, I also learned that because I was on this like convenience stores circuit at the time, no one else had that. So I started buying that lipstick and I marked it up, double the price and I started selling it to the doctors in my mind, my mom’s work. So for two months I got probably half of the half of the hospital or the clinic buying and using that green lipstick that applies pink because it was just a fascinating thing. I was also the first person I think in <>inaudible> to introduce access to instant. Like one our photography. And the way I did that was I inherited this camera from someone. I was into photography a lot but just as a hobby but one time this electronic camera. But they still had a film and I figured out I could make money by taking pictures of kids and kindergartens like functions so and I figured out that the local photographers were taking four to seven days to develop those photos and I could do that in 24 hours by traveling to a neighboring city and using their one, a one hour photo technology that they had at the time. So for a couple of years I did that and I became really popular until people started bringing in a one hour photo technology into the city. So yeah, it’s, I think it was, it was a natural progression into the entrepreneurship. It was all, it was always in my DNA. I can tell you more about how that transition into like entrepreneurial ventures when I started growing out. Do you want me to just keep going or you.
Jay Clouse: 00:24:20
Yeah, I’d love to hear more about that. And at some point I’d love to hear how you transitioned from Iowa to now Kansas City. I don’t know if that’s tied in or not.
Bek Abdullayev: 00:24:28
Yeah, absolutely. So after spending a year here as an exchange student, I went back to Uzbekistan and I moved to the capital and Tushcan. I was started attending university. I started becoming very active with the local community. I started working with organizations like Human Rights Watch, starts spreading independent media through interviews, but these initiatives were not very well received with the existing regime. That type of education I was seeking I was not going to get. And this is very common with a lot of our fellow alumni of this program. A lot of us, 80 or 90 percent of us ended up going abroad to study and for higher education. So a couple of years later I came back to the US looking for school and as I was just roaming around the country looking for universities, I landed at a small little liberal arts school just outside of Kansas City called Park University. I fell in love with the faculty and the people that I met there. And I started attending school in Kansas City, which ultimately brought me to Kansas City.
Eric Hornung : 00:25:23
And once you got to Kansas City, you graduated from Park, is that correct?
Bek Abdullayev: 00:25:27
Yes. The kids can sit either on 2000, one, 2002. I think I started park at 2003. I was at part for all of six years, I believe for a long time,
Eric Hornung : 00:25:39
A double victory lap,
Bek Abdullayev: 00:25:42
Yeah I kept getting. I think I got a degree in international business for her. And then I realized that there’s no such profession as international business person. You can’t apply for a job to be an international business person. So I went back and got a degree in marketing, which I felt more a lot more practical, which at this point I don’t use any one of those because along the way when I was at school, I kept going back to the entrepreneurial ventures, you know, my first or second year in school, I partnered with two guys and we opened the pizza shop. We ran a pizza shop. We brought a New York style pizza concept to Kansas City, which was very popular but extremely difficult to run and very time consuming. So a year and a half later we stopped. And then had two other businesses while this school and staffing and that was truly popular especially towards the end, you know, towards the end of my school year, towards the end of 2000 until the recession hit and all the jobs went away, at which point that business failed.
Jay Clouse: 00:26:35
Okay. So talk to me about how and when super dispatch became the next business you are working on.
Bek Abdullayev: 00:26:42
It was random. So after my last business and staffing and after losing everything I had on that business, I was. We were kind of struggling as a family. So when I was in school, I met a girl. We fell in love, then we got married and then we started building a family. And after my last business failed around 2008, 2009, we had to move back in with my mother in law. And when I was living with her, one of my cousins bought a truck and became a car hauler. Someone convinced him that you could make a lot of money while in school, while attending school. Then transporting cars, they can make a lot of money. So he went and borrowed some money, bought a truck, and the trailer started transporting cars and he knew that I was kind of looking for something to do at the time and he’s he reached out to me one day and said, hey, I’m doing this thing and I think there’s an opportunity to hear it because I can keep my truck full all the time and I’m invested into this and I need to figure out a way to make to make this work and to make more money. So he showed me how what he’s doing and it started kind of looking into the industry and I had discovered that a lot of the companies, a lot of the trucking companies that transport cars have a ton of excess capacity and the way they’re accessing business is, is not very efficient because they rely on these messaging boards and it’s very manual. So I figured out a way to keep their trucks full through securing, hyping loads and developing processes that gave them access to keeping their trucks full all the time. And two months after me collaborating with my cousin, he ended up tripling his revenue and then he went out and told everyone he was encountering, encountering on the road about the setup. So the next 90 days I had 12 other drivers like to
Eric Hornung : 00:28:53
For visual. Is this when I’m driving down the highway and I see a truck that almost looks like a skeleton that just has cars stacked all over it. Is that the type of car hauling you’re talking about?
Bek Abdullayev: 00:29:03
Yes, exactly. Yeah. That’s one of the segments of, you know, the car hauling. The long haul they go on those trucks, but they also go on the tow truck because they also go on rail. They also go and containers. They’re also sometimes driven by people locally to be transported, but long story short that that’s initially how I got into car hauling and that wasn’t super dispatched, but that was the beginning of how I got into this space. And then I was I was building that business for the first two years and we get up to about 70 employees. I waited about 40 clients at the time and the idea was to keep scaling that business and I became fascinated and obsessed with this problem so I was all in and I was trying to scale it as much as I can, but I kept running into this obstacle of not having deep understanding of, of, of the industry and the culture. I was always very good at selling our services over the phone for the first 5, 10 minutes. But I realized that as we moved up market to larger and larger clients, people wanted a relationship. People want to rapport and people wanted to get to know me and talk about the industry and the culture and I didn’t know the language, I didn’t know the terminology. I’ve, you know, I didn’t know anything about trucks and trailers and I was, I didn’t have any depth other than the services that we provide and I kind of, sometimes I would feel like a fraud because you know, I’m trying to sell a service to the business and they, they’re genuinely wanting to have a relationship with us, but beyond our service I have no idea what I’m talking about. It was, it was apparent to me that I was, yeah, I was out of touch though. I wanted to fix that and in order to fix that I wanted to go out and spend time on the road and I called some of the guys that we work with and I said, hey, I’d like to learn more about what happens on the road. I’d like to learn more about what your day to day’s life. So can I come along with you on some of your trips? So the next two months I spent on the road riding along with different truck drivers and I just be a copilot and I just be helping him pickups and drop-offs I would, you know, stay in motels just like they do, you know, stop at truck stops, eat not so great food, the whole nine yards.
Eric Hornung : 00:31:10
Did you have any of those gas station rolling hot dogs?
Bek Abdullayev: 00:31:13
Yeah. Everything, there’s pizza. Everything fried.
Eric Hornung : 00:31:16
I’ve been thinking a lot about those gas station rolling hot dogs lately because I think it would be interesting if they had a mileage tracker on them. Like how, how many miles is this hotdog rolled? Like I’m going to have to be that. Yeah. That like a pedometer for my, for a hot dog. That just rolls on a, like how far is that?
Bek Abdullayev: 00:31:32
Is it like a freshness indicator?
Eric Hornung : 00:31:36
Yeah, exactly. Like this hot hotdog is rolled for five miles. Don’t eat that shit.
Bek Abdullayev: 00:31:42
The optimal range where it tastes best, then it’s best.
Jay Clouse: 00:31:46
So you touched on this a little bit, but I’d actually love to hear a typical day in the life of one of these guys on the road. Can you walk me through what a day looks like?
Bek Abdullayev: 00:31:54
Yeah. Oh my God. These guys are wearing so many hats on the road. It’s hard. It’s really hard. Especially our haulers, they have to coordinate their own trip. So there’s a ton of planning to try to figure out where do I go, what do I pick up for to deliver. And then there’s art to loading a large car hauling trailer. There’s weight balancing. There’s a variety of dimensions of cars that have to fit a certain way. To this day, you know, technology and science hasn’t been able to automate that piece. It still relies on the on the human knowledge. So there’s a loading phase that origins and destinations, the drivers have to coordinate through phones. Their pickups and deliveries have to call people. They get incoming 30, 40 phone calls a day of people trying to figure out whether
Jay Clouse: 00:33:39
When these people are picking up and then dropping off these, these loads. Who are those parties in the arrangement? Are they picking it up from manufacturers and dropping off to dealerships? Are they picking up from dealerships and dropping off to individuals like who? Who are the two sides? That equation?
Bek Abdullayev: 00:33:53
All of the above. Really like if you look at the industry and the marketplace, like capacity on both sides, you know, the supply side or the trucking companies and towing companies and these terminals and rail and rail companies. These are the providers and the vendors and they serve manufacturers, you know, for gm, et cetera. And then they serve a wholesale auto auctions. We use cars, they sort of dealerships. They serve consumers, so all sorts of players. And the as a driver, yeah, you have, you have multiple stakeholders, you have you, you have your back office, this bachelors and the billing people. You have people at origin, you have people that destination you have to deal with, and then sometimes you have an entity that’s a separate client for that transaction that you have to deal with.
Eric Hornung : 00:34:37
You mentioned earlier that you were doing this whole dispatching service. You had 40 clients or you went out on the road for two months to learn more, but you said that wasn’t super dispatched, so what is super dispatch in your own words and what’s the change from you going out on the road to getting to super dispatch?
Bek Abdullayev: 00:34:57
The story of how Super Dispatch was born came from the trips that I took with the drivers. Initially my goal was to learn more about the industry and the culture and to better understand the daily operations of a trucking company that moves cars, but what I ended up stumbling on was a much larger problem. Being in that cabin with a driver. I realized that vehicle shipping was this huge decentralized network of vendors and suppliers and stakeholders and clients in the back office and this massive network of trucks and customers. There were moving thousands and thousands of vehicles and transactions a day and the way they were operating was they’re still relying on papers and films and fax machines to connect with one another and for this highly dynamic decentralized network of vehicles shippers, it felt like a very outdated way to operate and I. I started feeling the pain of the drivers when they started getting phone calls and trying to scramble for paperwork and it just seems like these guys would constantly miserable and sometimes we would get the chance to visit the back office of a some of these companies and you’d walk in and that have paperwork everywhere that I have everyone typing away manually entering data everywhere that has stacks and stacks of paperwork. Not only on the desks but the floors will be covered in addition to filing cabinet. It’s none of their systems talk to each other and the systems usually constituted a spreadsheet of some kind especially, and there’s a lot of manual data entry. There’s no visibility, lots of phone calls. It just seemed like a scene straight out of out of the sixties or the seventies way before technology was in meant that. I would encounter hardware like big machines that only have fold envelopes to send out payments and things like that. So in 2013, this is 2013 and the general technology world, iPhone has been around for seven or eight years at the time and then as consumers, we were accustomed to cloud technologies and you know, a lot of really cool stuff was happening but that was not touching. Transportation, transportation was not exposed to some of these very basic technological advancements that were commonplace at the time. So I saw that having a lot of critical data trapped on a piece of paper and on individual trucks around the country. It was a big problem and lack of visibility was causing major issues for these guys around payments, damages, visibility tracking and how they operate as a whole. So when, when I got back from my last trip at the end of the two months to Kansas City, I stumbled upon this workshop and I know Jay used to run startup weekends, right? That’s right. So have you guys heard of lean startup machine?
Jay Clouse: 00:37:38
I’ve heard of the lean startup method and haven’t necessarily heard of lean machine.
Bek Abdullayev: 00:37:56
So at least our machine is essentially, yes, it’s built around lean startup methodology just like startup weekend, except the emphasis. There’s heavy emphasis on not the idea or the solution, but emphasis on the problem you’re solving and they’re heavy on encouraging in customer discovery, in customer development. They’re talking to your customers to validate your idea or the problem. So I went to one of those workshops and I page the problem of trucking companies having a hard time to operate, being inefficient because they rely on paper. So over the next 48 hours we worked on this problem. And initially my idea was I thought the problem was paper. I thought, hey, paper papers the enemy here and then. And the problem is the inefficiency. But after talking to so many drivers and and, and fleets, what we realized was that paper wasn’t the problem. People was like the root of a problem, of a bigger problem. And the bigger problem was payments. Because everything was on paper people had a really hard time getting paid. Their payments were being delayed by 40 to 60 days because they weren’t able to initiate the billing process after they deliver a shipment. So we launched a landing page that basically said here’s an APP, it’s called Super Dispatch and will eliminate paperwork and help you get paid faster and it’s $30 a month. This is nonexistent product. It was just a landing page with the concept. So we started circulating that to people that we talked to and their networks and the emails they shared with us. And within 12 hours we had over $3,000 in real purchases. And we link that to, I think it was a PayPal account at the time. So people are buying the products. So we had over 100 purchases for a product that didn’t even exist yet. That was just an idea. And that was just a mind blowing experience for, for us, for the team of four that you know, that were on that team at that event. So we want that event. And then that following Monday, I called every single person, apologize for selling them a nonexistent product, refunded their money, and made a promise that six months later I’d come back and let them have it for free. And that was the catalyst for. That was the biggest catalyst for beginning of Super Dispatch.
Jay Clouse: 00:39:50
How did these 100 people respond to you calling them and saying, by the way, sorry, this didn’t exist.
Bek Abdullayev: 00:39:56
You know, surprisingly positively. Uh, Nolan was upset. Everyone was getting their money back and these conversations would usually, you know, we actually turned into like 20, 30 minute conversations and after I finished talking to everyone, I, I realize that generally these people are happy that there are entrepreneurs out there paying attention to the sector and are looking to solve the problems that can have a very positive impact on their day to day and their businesses.
Jay Clouse: 00:40:24
That’s awesome. Okay. So you, you return all their money, you say, I think there’s a business here. You had a team of four. That team of four from lean startup machine continue to be your team or did you go off on your own at that point to start building this thing?
Bek Abdullayev: 00:40:39
No, this is just a workshop we get together for a workshop. It was just a learning experience for that team. They all had their respective projects or companies. Super Dispatch became a mission for me. First obstacle was I had no idea how to build technology and I’ve always built and scaled retail or a service businesses and that’s what I knew really well. So I, you know, I was very comfortable building lifestyle businesses and growing them, but I knew nothing about high growth technology, but what really got me excited and motivated early on was seeing the possibility of scale through technology and how much impact it can have on a large number of people. So I had to go figure out and basically I had to go, I got to go find a technical, either co-founder or a technical partner, someone that understands technology. I was definitely the business mind behind the idea and I started networking. I network everywhere. I went to every single networking event and literally I’d walk up to anyone wearing a tee shirt and say, Hey, are you an engineer or you’re a developer, I have this idea, I want to do this. So eventually I stumbled upon, you know, an engineer that helped me develop an mvp a few months later. It wasn’t very good. We couldn’t make things work, but I kept looking and I finally got through one of the networking events. I was introduced to the person who’s now our CTO.
Jay Clouse: 00:42:00
That’s awesome. And even that is no small feat and I’d love to actually take a short jog here and talk about the Kansas City ecosystem and these events that you’re going to and what it felt like being an entrepreneur in that space and looking for technical co founders because here now we do have a lot of technical talent, but we have way too many guys walking around saying, are you an engineer? So I’d love to hear just a little bit deeper on that story. What you experienced in the Kansas city ecosystem.
Bek Abdullayev: 00:42:28
The community gives the city has been a big part of our story to British badge, has had a lot of success over the years of building a company in Kansas City and hopefully we are on track to be one of the breakout companies that comes out of Kansas City, which is amazing. But as many entrepreneurs understand, it’s not one visionary genius hacking away over the weekend and a college dorm room to building meaningful and exceptional companies takes not only a lot of work and effort, but it takes a large group of people. It literally does take a village not only on your respective team, but also you’re supporting network around you. And to be honest, I don’t know if we would have been where we are today if it wasn’t for the community in Kansas City. What I encountered the people when I get what kept going through these events and met people, everyone was so willing to contribute their tie and explain and teach and share experiences and open up their network to make connections. I learned probably 80% of what I needed to know at the time from the community and the resources they gave us. I got free scholarships to attend workshops, coffee meetings with highly influential, very successful entrepreneurs to uh, for guidance. And then this is around the time Kansas City also started developing resources for early stage entrepreneurs to develop proof of concept. So we were lucky to win a $25,000 grant from an organization called digital sandbox, no strings attached. That allowed us to develop an early technology. We were able to also win a competition called Launch KC that awards $50,000 to early stage companies to help grow and scale your companies. So I would say Kansas City that the community has been a big part of big part of the Super Dispatch story and where we are today, and this still happens today to this day, everyone is still helpful.
Eric Hornung : 00:44:27
You’ve been ingrained in Kansas City for five years. That was awesome insight into how Kansas City is treating early stage entrepreneurs. I’m curious and I will jump back into Super Dispatch in a second, but what could Kansas City do better?
Bek Abdullayev: 00:44:42
I think that some things that consider is that really well over the last five years has done a great job of initially celebrating entrepreneurship and venture creation, which was great and then after that funding was a challenge and Kansas City is doing an amazing job of creating funding opportunities, investment in developing an investment community right here in Kansas City. Exposing these types of deals to, you know, high net worth individuals and creating access access to money. So Kansas City is now an amazing place to start and grow an early stage business. Now, if you’re thinking in terms of creating truly breakout, exceptional accompanies coming out of Kansas City, now the next phase challenge for us is that, okay, so we’ve got this off the ground. We’re real businesses now, how do we make this 10 times 100 times bigger, Ken? This ecosystem support that type of growth of those types of companies. And I think, I think the answer is yes. Uh, I think what, what we need to keep doing as we need to keep pushing for the mindset of people to understand what these types of companies are and to allow, for example, in addition to funding, for example, as you’re growing talent is a big challenge. So the young talent coming out of schools and colleges, they, for them to have a mindset of fully understanding the types of opportunities that startups provide. Startup is not a risk where, you know, it’s not, you know, someone in the garage that wants to pay you and beer and hugs for your work. These are legitimate companies and big opportunities for you to build something exceptional and then I think we have to keep thinking bigger. I think it’s important that people that are bold risk takers and visionaries sharing their stories is very impactful and helpful. There are a lot of amazing companies being built in Kansas City and sometimes when founders tell their stories, it surprises people. They’ll say, oh, I know about this. I’ve heard about this, or I read about this, or I use this. I love this. I didn’t know this was in Kansas City. Then the more success we have with these companies, I think it kind of carries that momentum forward. We have. We got that snowball thing going and I just think we have to double down on that and just keep thinking big, keep attracting, keep telling our stories and then keep pushing. I think keep believing right. Early on, like I had, I had so many conversations where I was encouraged to leave and move to the coast. I was encouraged to go to San Francisco or Austin and the funds that wanted to invest in us early on. There was companies that wanted to buy us, they want us to move and become part of them, and the answer was no, it wasn’t necessary and this idea that can be done here is just false. So I think we just have to prove that through our actions show that breakout companies are being built and candy builds in the midwest and there’s some indexes now about how much money is being raised in Kansas City, which is a very positive indicator, but the TechStars accelerator has been president because the city for about four years and there is zero Kansas City companies in TechStars for the first two years and we were the first TechStars company from Kansas City to be accepted into that program since we went through the program in the last two years that are now over a dozen Kansas City startups that went through TechStars, 500 startups
Eric Hornung : 00:48:00
So I want Jay to ask some questions about the product and how Super Dispatch sits today. But first I wanted to touch on this idea of a big opportunity. So how big is the market for Super Dispatch? How big is this idea? Is it just car haulers? Is it beyond that?
Bek Abdullayev: 00:48:18
When we look at the market size, we first focused on the US market and vehicle is shipping market in the US alone is 12 billion in annual revenues as far as volume of transactions that are estimated, 80 million vehicle moves the year in the US and the participants in these transactions are so this market places the people on two sides or shippers and carriers. So what looking at this opportunity, we look at how every single vehicle is being moved, whether it’s coming off of an assembly line and being distributed in two dealerships or whether these are used vehicles being exchanged between dealers and auctions or individual consumers. And we look at the total number of transactions, the total number of moves, and that’s the biggest opportunity for us to try to digitize and streamline every single transaction. Every single vehicle. Shipping transaction. In the US.
Jay Clouse: 00:49:09
You said $80 million is at 80 million. Million vehicles that are moved or $80, million trips transactions.
Bek Abdullayev: 00:49:16
80 million moves. Yeah. Actually, we don’t know, there’s very limited data on on volume of shipments. There’s only one source for total revenues on overall trucking and vehicle shipping segment, so all the data that we do know the data that we do know to this day in the US market alone is that $12 million in revenue as a total amount of revenue on the the trucking companies are collecting, not including the any margins. That brokerage is, for example, make the middlemen in the space and then we know that this network moves about that they have about 80 million moves here and then capacity. Why is so far we’ve been able to identify that there are at least about 30,000 large trucks or assets that move cars. Big trucks you were referring to. We haven’t yet mapped out some of the other segments of the capacity. We still don’t know exactly how many towing trucks engage in vehicle moves will be able to identify that about 15 million of the 80 million new cars and about $65 million used cars. We know that at least five to 10 million of those new cars are likely to go initially go through a rail companies and then be distributed through trucks, but while we still don’t know is we don’t know how many towing companies to engage in vehicles shipping and how many cars are being moved by people. This is a segment called drive away where a lot of local moves are facilitated by people actually driving the cars from A to B.
Jay Clouse: 00:50:50
I heard you speak in one interview that most of these trucking companies are small businesses have somewhere close to 20 trucks. Was I hearing that right? Of these like 30,000 trucks, you know, that move cars, is that highly fragmented?
Bek Abdullayev: 00:51:06
Yes they are. So one asterisk 30,000 is, another thing that’s unknown right now is 30,000 are these big trucks. Then there are the smaller ones that can transport one, two, three cars. So these are small dually pickup trucks with a small trailer behind them. We have no way of tracking those. So we believe that there are additional units moving cars, but they’re not being tracked the same way. So we don’t know how many of those assets are out there, but when you, when you look at the market segmentation, it actually applies evenly to all the trucking verticals. So if you’ll look at the trucking industry overall, the entire industry is made up of small businesses and the general numbers are of 100 percent trucking capacity. 96% have 20 or less trucks, 90% of that of them have six or less and 3% are segment of what’s called owner operators. So usually just one truck.
Jay Clouse: 00:52:00
And to this point I think I saw on a different article, maybe it was a start land piece that you guys had worked with about 5,000 carriers to this point, which segment they fall into and to what you just laid out is that a lot of owner operators is a lot of these 20 truck companies.
Bek Abdullayev: 00:52:19
Yeah. If you look at the super dispatch network of carriers exclusively. We’re now. There are now about 7,000 total trucks on the road relying on super dispatch every day and about 2000 of those are owner operators for us. The remaining 5,000 trucks and belong to fleets and then the fleet is a very loosely used term for us internally is basically any company with two or more trucks, but when you break down our customer base is heavily owner operators and small to midsize businesses because of just the nature of how the market breaks down, but we go up anywhere from one truck to we have a client with 350 trucks, but there just aren’t that many companies with 350 trucks out there.
Jay Clouse: 00:53:03
I might’ve just missed this, but you talked to, you initially set up the landing page and you said $30 per month. Is that still the model? Is it a monthly subscription or is it a per transaction? How does that work for you guys now?
Bek Abdullayev: 00:53:14
Yeah, the basic SAAS model, it’s a subscription. We’ve experimented with pricing allowed will, can we continue to experiment with it? Currently we charge per truck that will measure the size of the company by the number of trucks they have, active trucks and we charged $50 per active truck, $50 per month, per month.
Eric Hornung : 00:53:35
What do they get for that $50 per month?
Bek Abdullayev: 00:53:39
The value proposition for the trucking company is, is not only to eliminate paperwork in the pasture, it’s evolved to be a one centralized system where a company can manage all their affairs. They can manage all their loads, all their drivers, all their tracking, all their documents, and all of their billing NPM. It’s all in one platform and for. For an individual owner operators, so one individual person on the road, the law, our mobile app is their entire back office and their back pocket every big a checkbox that they need to check his check within one mobile device. So for example, it’s completely paperless and digital. That allows them to generate electronic bill of ladings and allows them to conduct inspections of the vehicles that pickup and delivery collect digital signatures. It allows us driver to electronically share these documents with all the stakeholders in real time and the most popular feature in the mobile app as for the owner operators is the ability to invoice a load in real time. The moment it’s delivered so that the days and weeks of delays that they used to face, they no longer have to deal with because with the push of a button they can start invoicing and getting paid for the loads that they delivered in real time.
Jay Clouse: 00:54:50
What’s novel about that? At one point you said there was like chasing faxes when they push that button, does that send an email with the invoice to the destination that they can pay through some interface or how does that work from a product perspective?
Bek Abdullayev: 00:55:04
It accelerates the amount of time it takes to convert a delivery confirmation into an invoice. So normally you’d have a piece of paper with a signature on it and you’d have to generate an invoice and send that to the customer. I mean Super Dispatch, we know who the customer is, we know all the terms of the agreement, so at the moment is delivered electronically, generate the invoice and send it out. So something that would take for them, you know, three to five or seven days to initiate happens instantly when they delivered the load.
Eric Hornung : 00:55:33
So there are a lot of benefits on time savings. I’m curious, how much did the. So right now it’s $50 per truck, so over 12 months an owner operator is going to pay $600. How much did it cost an owner operator before Super Dispatched to do all of the same things that you just listed out as an estimate?
Bek Abdullayev: 00:55:52
We actually don’t charge owner operators. The owner operators get to use the app for free. We only monetize fleets. So last year, last summer we made a decision to introduce a premium model. At the time we were charging $15 for a loader operators and charging a different fee from the fleets. So we made a decision to allow owner operators to start using our app for free because the, these are just individuals that are trying to get off the ground and uh, we wanted to enable them to better tools and be more successful so that they grow and add more trucks at once you add you a second truck to your business, then we started monetizing. So you’ll look at looking at the stupidest fashion network, the 2000 owner operators that are using our platform, if they’re only using the mobile app, they’re not being charged for that service only when you start using the back office transportation management system and start adding trucks to it, which has a lot more value than we started monetizing it.
Eric Hornung : 00:56:48
So my same question kind of stands for fleets. Then how much does it cost to do all of the things that Super Dispatch does without using super dispatch in the traditional way, having a back office and everything.
Bek Abdullayev: 00:57:01
The last time we calculated they’re saving on average $8,200 by using super dispatch and what goes into that as the amount of time that it takes, the, the delays, the amount of time it takes to process each step in the lifecycle of the shipment, manually processed all that. So we take like average payrolls and the time savings into consideration. So Super Dispatch $600 a month is a cost of what annual cost of portrait and the companies that hey being 8,000, $200 per truck by using Super Dispatch versus not. So I guess you could say that to answer your question exactly, it’d be like $7,600.
Jay Clouse: 00:57:42
Have you gotten feedback from these owner operators that more of them are transcending from being a single truck owner operator into having more trucks because of the system?
Bek Abdullayev: 00:57:52
There’s no exact evidence of that. There’s anecdotal evidence that a lot of them started out with one truck and then as things progressed that as as I started landing landing more and more customers, people that are interested in growing and establishing business, they’ll start growing.
Jay Clouse: 00:58:06
I’m curious, any other anecdotal evidence from your customers? What they say? Obviously it seems like the time savings and being able to invoice quickly is the highest used feature. Is there anything else that they tell you that might be surprising about what they like about Super Dispatch?
Bek Abdullayev: 00:58:21
Yeah. So if you look at fleets, fleets have multiple stakeholders, so in the fleet you have, you have drivers that you also have dispatchers and accountants managing aspects of the back office and what people love about Super Dispatch when you read reviews or when they talked to us about how they’re using the product, they liked that everything is in one place. So there’s very minimal manual data entry. So they’re able to manage all the orders coming in and they don’t have to call their drivers as much. They don’t have to track those shipments. 30, 40 phone calls that we’re doing, they no longer have to do, they no longer have to print out the sheets or rate agreements. And the invoicing is also streamlined. So for example, the transportation management system talks to Quickbooks and streamlines that, that piece. So I think what it did for them is that when I first visited the offices, the office was very like operate in silos, you know, dispatching was a separate system, mechanical system, and there were connected through a manual data entry or human communication through paper. And we’ve, we’ve combined all of the dispatch functions and billing functions and compliance functions, and really at a high level, if you look at the core problems that were dispatches solved for them, there’s really four key events that happen in the shipping of a car. First thing that has to happen as the shipper and the carrier, you have to connect. So the customer is somebody needs to ship a car, whether it’s a direct shipper or a manufacturer of a broker, they need to find a trucking company. So that’s. That’s the first problem that we solved. Then there’s a big need for visibility, so you need to be able to see where everything is and how it’s progressing without having to have to track people down through her phone and text messages. Then the third key piece is proof of delivery, which we’ve completed, digitize they made in real time. This is that piece of paper that, with a signature that triggers payment. Imagine owner operator at it doesn’t have as big of a problem with this, but if you’re a fleet and moving thousands of cars a month, then you can have a serious problem with inability to build for those cars on time. So we’ve digitized both delivery and initiated payment, which is the last piece of that life cycle. So what Super Dispatch is done is that before support dispatch customers, we’re solving these four key problems through lots of manual and decentralized ways and multiple tools and Super Dispatch has brought all of those things into one platform and simplify the entire process.
Jay Clouse: 01:00:37
The start line piece I read, which was from January of this year mentioned you had 19 full time employees. Is that number still holding steady?
Bek Abdullayev: 01:00:44
I’m happy to share all of the KPI’s will be transparently. So that the team was the headcount where there were about 40 people now working out Super Dispatch, 12 of us are based in Kansas City. Those are mostly business units and then we have an engineering team of 26 people in Tashkent is Pakistan and then we have a few developers in eastern Europe also.
Eric Hornung : 01:01:05
So let’s dive into those KPI’s that Jay just mentioned. What KPI’s do you guys pay attention to most in your business?
Bek Abdullayev: 01:01:12
We obviously track revenue drive revenue growth. For us revenue is monthly recurring revenue. We track New Mrr monthly and we tried growth rate. We track expansion and contraction of revenue from the existing customer base and then we track turn, gross churn and net revenue churn outside of revenue. The KPI’s that we pay attention to have to do with growth, you know, marketing and sales, just number of leads coming in, deal sources, conversion rates on sales than on product side. The key KPI’s for product side, our number of number of vehicles being delivered. We track how many vehicles are we delivering each week, each month, each year, and whether that’s trending in the right direction that we’d like it to. We track the number of photos being taken by drivers on the road, all the cars. We tracked, number of invoices being generated at the total volume of transactions on the platform. And then we also pay a lot of attention to support and success KPI’s. You know, one of the reasons that the industry has really embraced super dispatch and became really popular in this space is people found the product to be simple. What they realized is that because we as a product driven company rooted in lean startup methodology would naturally be a lot of attention to customers. So early on people started seeing their feedback being directly implemented into the product. So there’s this now notion in the industry that we listened to what customers say and we know we bake it into the product. You know, it’s driven by them. It’s not just these crazy ideas we’re coming up with as a part of that. Customer support is very important for us. So we’re known for having exceptional customer support. So we track, we use Intercom for chat, we do, we have chat and phone support. So we track number of conversations coming in time to respond to a conversation. There’s a happy index, that’s a percentage. It’s like an NPS score. Yeah. And then we track like on chart and we track, you know, how long it takes for somebody, basically the lifetime value of a customer. And how long it takes for them to turn.
Eric Hornung : 01:03:12
So you guys have a lot of numbers that you track and that’s awesome. I think it would be beneficial to kind of just run through and maybe we do like a rapid fire kind of round here where we just get some of the numbers and then Jay and I can ask follow up questions based on those or we can dive down the rabbit hole. Who knows what’s going to happen here? What are you saying? All right, so revenue growth rate. What’s that look like?
Bek Abdullayev: 01:03:35
Month over month we’ve been averaging about six to eight percent month over month growth.
Eric Hornung : 01:03:39
Okay. What about churn?
Bek Abdullayev: 01:03:40
Churn? So for a long time we weren’t tracking net churn, so we’re tracking gross revenue churn and churn until this year was with fluctuate between three to four percent and then this year we’ve modified our KPI to start calculating net revenue churn. So to adjusted for the difference in expansion and contraction from existing customers. And currently we’re between 1.48 and 1.56 percent net revenue churn.
Eric Hornung : 01:04:10
Cool. How about your marketing conversion rates?
Bek Abdullayev: 01:04:13
Our marketing conversion rates aren’t very strong, mostly because we’ve done, we’ve had very limited marketing efforts of the KPI’s that I do know on the marketing funnels are to this day, 80 percent of our leads come through word of mouth and the most successful campaigns we’ve run in the past on marketing have been email campaigns and content, so I think I’ll email campaigns like compared to any other email campaigns I used to run. Super Dispatch actually gets better numbers, so I think we have about 21, 24 percent open rates on our email campaigns and then we’ll have 2 to 3 percent click through rates depending on content. So email campaign is a very effective channel, so we track that. Recently in August I started tracking. We finally started tracking number of campaigns. We used to not track that and then we’re also testing Facebook as a channel. I don’t have the exact data yet, but we’re beginning to try to test that channel but I don’t have KPI’s around it.
Eric Hornung : 01:05:11
Okay. On the product side, number of vehicles delivered,
Bek Abdullayev: 01:05:14
Do you also want to know like the Sales KPI’s, like the leads coming through or is that a separate question? Were you asking like overall growth KPI’s or just marketing?
Eric Hornung : 01:05:22
Bek Abdullayev: 01:05:23
Okay. So on conversion rates, I can tell you one thing that kind of helped us with growth early on was another KPI worth mentioning that doesn’t touch on revenues, but on conversion rates. When we saw early on that if we get somebody into a demo, there was a high likelihood and we started tracking that in 2016 and we started averaging about 70 percent conversion from demo to a customer and then this year on the conversion of the leads that are coming in into marketing. We’re also known now that about 60 percent of deals coming in and convert to prospects and then 30 percent of those deals end up becoming customers. So overall I think that’s about 20 percent average conversion rate that we’re getting from the inbound leads that are coming in, which is all that we have now.
Eric Hornung : 01:06:10
Cool. And you mentioned one KPI on the product side, that’s the amount of invoices and it’s kind of like a gross merchandise value KPI. Is that something you track?
Bek Abdullayev: 01:06:21
Yeah, I do. Right now actually the gross merchandise value is not identical to the invoices being sent out because some of the shipments pay on pickup or delivery and casual check. So some of the transactions maybe about a third of the transactions do not generate an invoice.
Eric Hornung : 01:06:38
Okay. So this invoice number is going to be a little bit less than your gross merchandise value, but what would that KPI look like?
Bek Abdullayev: 01:06:45
The invoice we are right now in the 20 to $25 million a month in gross amount of invoices being generated.
Eric Hornung : 01:06:51
And then you mentioned, well this’ll be the last one we touched on, but this idea of a happy index. Can you talk about that a little bit more and what? What’s that what’s that ranked on and then what’s your current score?
Bek Abdullayev: 01:07:02
We track that weekly now. Last week score is 96, so usually in the nineties, but it’s really not a good indicator. It’s not because it’s, it comes from a to call analytics and it measures people that actually react with a smiley, flat, neutral or angry face to your interaction and like it’s one week you’re going to have only like to build react and the other week have 20 people react. So the percentage number is not a good indicator. If you really want it to see how well we’re doing with customer support. We can look at the happy index over time. I think like maybe like, like a good indicator, but really our ability to respond to them. Like we tracked number of calls, we make a number of calls we miss. So real like when I want to know are we doing a good job and support and are people happy. I look at how long is it taking for us to respond to a conversation and in a chat setting and then how many calls are we missing? So we missed on average maybe 35, 30 percent of the calls that we, incoming calls that we get on support and sales. So we try to reduce those numbers, get back to them quicker and make sure that we’re not missing calls them with people people are calling us.
Eric Hornung : 01:08:10
What’s. What’s your goal on that 30 percent number of calls being where? Where do you want that to be?
Bek Abdullayev: 01:08:16
Jay Clouse: 01:08:20
I have a couple real quick questions that are getting away from KPI’s. So Eric, did you touch on all of that?
Eric Hornung : 01:08:24
I think we’re good.
Jay Clouse: 01:08:26
Amazing. One, you mentioned that you had a 26 engineers in Uzbekistan, which when I talked to teams who are hiring offshore technical talent, that’s not the first country they go to. Obviously you have a tie in there. Is that something that’s personal to you? Is that mission driven in any way?
Bek Abdullayev: 01:08:40
There are definitely key ingredients that make that formula work. Things become common for entrepreneurs to have a nightmare. Stories of interacting with freelancers or remote workers or Dev shops overseas. We actually we, we, we looked at some other companies who have successfully deployed remote teams and integrated them into the organizations and the common denominators usually are at the leadership level. People responsible for the technical teams, offshore teams usually speak the language and know the culture, which is the case which in our case, you know, we speak the language, we have an existing network in that country and we understand the culture, so establishing trust as a lot easier and then early on we started investing in creating sort of like this bridge between the teams so we spend a lot of time traveling back and forth and especially for the engineers over there. We spent two or three times a year we’d like them to come in, spend some time with the customers in Kansas City or in the US. We attend conferences and collaborate with the teams in Kansas City. So I’d say like having a cultural connection and knowing the language and being able to build trust. And then the third thing that we worked very hard at as it’s a Super Dispatch company legally, officially and culturalize. Whenever we think of us as a team, we don’t separate. We just look at this as the Kansas City team. This is the Tushcan team and this is a remote team and all the cultural aspects are manifests that our core values extend to both offices.
Jay Clouse: 01:10:13
This is awesome. Looking forward, is there anything holding you guys back or what’s holding you guys back and what does the future look like? Do you do expand past car hauling? I know that the logistics space in general is huge. I don’t know if this applies to a bigger, a bigger piece of the pie out there. I’m just curious what you’re looking at down the road.
Bek Abdullayev: 01:10:32
Yeah. There’s two potential opportunities for us that we’re excited about right now. We’re very focused on delivering a solution for the vehicle, shipping industry. We want Super Dispatch to become this complete end to end transportation solution for vehicle vehicles, shipping for all of the stakeholders, not just the trucking companies, but also the other side of that capacity. Other companies that are moving cars, not on trucks. Then we also want to make it easier for the shipping side, the brokerages and the shippers and manufacturers to be able to tap into the carrier capacity and streamline how cars get moved altogether to digitize this entire supply chain all in one platform. That’s a really exciting opportunity that we’re executing against and we’re very well positioned right now to deliver that to this industry. When we look beyond that Canada, that kind of organically happened. We’re now in Canada, we have a strong presence. There were also a leading transportation management service provider in Canada as well. That led us down the path of staying inside automotive logistics space, but expanding globally, so we started engaging with some incumbents and existing players in Europe and Asia and we’re we’re beginning to study their existing supply chain and distribution networks and how we might be able to help them digitize and tap into that. So one large opportunity that I can’t get quantified, but maybe if we have another catch up a year from now, I could have some numbers around market size and opportunity size around geographic expansion and this wouldn’t happen to late last year because we’re very focused on the US market right now. But another opportunity that kind of exciting and interesting, but I don’t know if it’s just a shiny object it opportunity or it’s a legitimate opportunity is expanding into other modes of rate. You know, cars aren’t the only things being moved on the road and we are amazing at handling specialized freight. So anything that doesn’t come in a box or a pallet, our platform is freight agnostic. It does a great job of managing other types of rate. But really I think it’s a balance of like what are we really good at? What do we want to stay focused that we now know that we can’t be everything to everyone, but whatever we decide to do, we really want to be the best at it. And right now it’s automotive logistics.
Eric Hornung : 01:12:44
One of our
Bek Abdullayev: 01:12:59
I’d be happy to engage with any cost existing or potential customers or any entrepreneurs or anyone who wants to talk to us or learn about us, superdispatchers.com is our website. There’s a chat icon, we get requests and inquiries through there all the time. I’m also happy to receive any emails at bek@super dispatch.com.
Jay Clouse: 01:13:19
Amazing. Thanks for being on the show Bek.
Bek Abdullayev: 01:13:21
Yeah, happy to be here and thanks for having me and keep building. I love I love what you guys are doing.
Jay Clouse: 01:13:29
Alright, Eric, we just spoke with Bek of Super Dispatch. Right now we’re going to get into one of our favorite parts of these episodes are deal memo. Talking about this opportunity. Talking about Bek as a founder, what stuck out to you, anywhere you want to start?
Eric Hornung : 01:13:43
Yeah, I think we should start with the founder. I think Bek was an incredibly interesting person. Definitely one of the most unique stories we’ve had on the podcast as far he was. He grew up idolizing communist leaders and wanting to be part of the Communist Party. Now he’s in the midst of what is perhaps the most capitalist thing in the world, which is starting a company, so I think that his story is incredible and he offers lot of insights from that story. What do you think?
Bek Abdullayev: 01:14:14
Yeah, I love this interview. I thought he was incredibly generous sharing a lot of his perspective and speaking about his background in in a level of depth that he didn’t have to. It is a very, very unique story which I love and I think is really fundamental to who he is and what kind of entrepreneur that he is. I love that he told a story of all of the things he had done, entrepreneurial up to this point from selling lipstick that applied a different color to figuring out kind of this one hour photo hustle going to different cities to starting at a New York style pizza shack. It just seemed that his mind works in such a way that he’s going to find opportunity in ways to solve problems or problems to solve and I really, really appreciate that. But his, his whole story going from Uzbekistan to America and being in Truro, Iowa going to a high school is named after a interstate bizarre, awesome story. And then back again to Kansas City to, uh, start the service company that became Super Dispatch. So yeah, I mean this is one of the interviews that I think I’ve enjoyed the most, which is a bold claim and I really believe in Bek as a founder given all that he shared with us
Eric Hornung : 01:15:33
Same. And I think it’s not just the story, but the way he thinks about these things. I love that. Even before he went through the, what was it called? Lean machine bootcamp. Lean startup machine, lean startup machine, boot camp, lean startup machine program. He kind of had that methodology kind of almost embodied into him where it was like, okay, there’s demand here, here’s a problem, let’s solve it and we’ll do it in an optimal way. So I really liked that. I think that it’s sometimes tough to teach people certain things if they don’t get it organically and Bek definitely gets it. I mean he was always starting lifestyle businesses, service style businesses and now he gets to apply that same kind of methodology to it tech business which scales, which is awesome from a capital allocation standpoint.
Jay Clouse: 01:16:18
Totally agree. Something that we’ve talked about on the show before is this statistic from CB insights that 42 percent of companies fail because of a lack of market need and it seems like everything he’s ever done has been born out of a genuine need that he found and I don’t want to understate how rare and important it is for somebody to take such a customer centric approach and go straight to customers and hear from them and talk to them so much. I mean, yeah, there’s a story of starting a landing page in selling $3,000 worth of orders for
Eric Hornung : 01:17:20
And not only just talked to them that really like dive into their life. He spent two months on the road to really understand this problem. He said, okay, look, I have this dispatching businesses doing great, but I want to spend two months on the road and really understand what the problem is.
Jay Clouse: 01:17:35
And it wasn’t because he was necessarily
missing or flailing around with the, with the problem the business is operating well, it was these people want to form a relationship. I am recognizing that I don’t have the context and the background that I need. I’m going to go get that. And just did that willingly. I love that.
Eric Hornung : 01:17:52
So I think it’s safe to say that we are sold on Bek as a founder, what do you think about the market size of this opportunity?
Jay Clouse: 01:17:58
The easy answer is to say $700 billion is a huge, huge market size and that’s certainly true. The segment he’s going after is less than $700 billion I’m sure. But in my mind it’s still a very, very big market. He’s focused on hollers right now, but he recognized that his software is sort of load agnostic and that he can serve the trucking industry from all different points of view and from all different angles. And I think that is something that he can grow into. So I think that the market size seemed rather large, pretty large. If you had a shadow there or something that I’m missing, let me know.
Eric Hornung : 01:18:39
I don’t. I think that it does seem like a large market size. I think that their model is unique in that we come across this problem all the time. Actually, Jay, let’s step back and just kind of thinking about this. Whenever people quote us market sizes, they always quote it in whatever the traditional market size is. Right?
Jay Clouse: 01:18:57
What do you mean?
Eric Hornung : 01:18:57
So if I said, okay, what’s the market size for followers? And it’s call it a million dollars. I know it’s not the actual number, but then my product comes in and does it cheaper? The actual market size for my product, say it’s 50 percent is now $500,000, not a million. And we see that all the time with founders saying, oh we come in at 33 percent discount or we come in at an 80 percent discount and our market size is $4,000,000,000 and I don’t know that that’s exactly the case. I think that’s why you and I like bottoms up analysis more than top down.
Jay Clouse: 01:19:29
Yeah. So he gave us some numbers here. He calculated that Super Dispatch saves all of their hollers. What was it, $7,500 a year on average
Eric Hornung : 01:19:39
I had 8,200.
Jay Clouse: 01:19:41
Yeah, he definitely mentioned 8,200 as saving them. But then it had a cost or maybe they cost was higher than that. It was $8,200. The bottom line either way. Yeah. So he was talking about the value of super dispatch being in cost savings versus any additional revenue. So did you do some math to figure out what his market size would be? Taking that in mind?
Eric Hornung : 01:20:02
Yeah. So my understanding is that they have a SAAS model which is $50 a month for on a per truck basis. That’s the basis of how they make money. They don’t charge owner operators and they do charge fleets. So my biggest question is how many trucks are in fleets across the United States? Do you know that number?
Jay Clouse: 01:20:23
I believe there are 30,000 large trucks that move cars. I had a 30,000 number, but I don’t have any more context behind that. I know that a fair percentage of them are owner operators, looks like 31 percent are owner operators, so approximately 10,000.
Eric Hornung : 01:20:43
So let’s say that there’s 20,000 trucks in the United States then move cars on a monthly basis. That means 20,000 times $50 that’s $1,000,000 per month. So you’re looking at $12,000,000 in potential revenue per month at the current price point, just for fleet. If they continue with their methodology of not charging owner operators and continue with the same price point, that seems low to me. It seems like I’m missing something
Jay Clouse: 01:21:14
It might be that my numbers are off.
Eric Hornung : 01:21:17
Yeah. In the interview Bek told us that there are about 30,000 large trucks and he mentioned that there was a asterisks on that number because they didn’t know how many smaller trucks there are, trucks that haul one or three cars. So if we take that number and then we look at some research done via ibis world. In the United States there are approximately 54,000 people employed in the auto slash vehicle shipping services industry. So somewhere in that 30 to 50,000 is probably the number of trucks out there.
Jay Clouse: 01:21:55
Eric Hornung : 01:21:55
Let’s call it 40,000. Just for our math here. The model that Bek has in place in the model that Super Dispatch has in place is that owner operators are free and fleets pay $50 per truck. Now you had a stat that said what percentage of the market is owner operators? What number was that?
Jay Clouse: 01:22:17
Thirty one percent.
Eric Hornung : 01:22:18
Okay. So 30 percent of our 40,000 is $12,000, which gives us $28,000 that would be applicable to fleets and billable at the $50 rate. Let’s just call that 30,000 to make things simple. That’s $1.5 million per month or $18 billion per year. That number seems a little small to me. Jay, what do you think?
Jay Clouse: 01:22:39
Yeah, that’s, that’s, that’s good math. So you’re saying that if he had 100 percent saturation in the trucks that are monetize and exist, Super Dispatch will be generating $18,000,000 per year on that line of business.
Eric Hornung : 01:22:55
Right? That’s my understanding based on the numbers that were provided to us.
Jay Clouse: 01:22:59
Got It. Yeah. That it seemed a little small and I think that math is fair. He mentioned right now that. Well he mentioned that one, they are playing with pricing, they have been playing with pricing, so $50 per month may increase over time. It may also be that he’s trying to move into this per transaction type model. You talked about there are 80 million vehicle moves in United States, which essentially the number of transactions in the United States per year on these types of vehicles, so I agree $18,000,000 per year is probably too small of an opportunity for a large fund to get excited about, but if the price is going to change or if he’s changing his model or if he’s branching into other groups within the trucking industry that aren’t just car haulers, I think there’s probably some upside there, but you’re right. If it was based solely on the current model at the current price point for the current market, it does seem a little small.
Eric Hornung : 01:23:56
That being said, I think that there is something that is really interesting about this. So he said they have 5,000 trucks that are in fleets right now, which means we just calculated 28,000 exists in fleets called 30,000 means he has a 17 percent market share right now. That’s pretty crazy. That’s probably the most saturation we’ve seen on the upside podcast.
Jay Clouse: 01:24:20
Yeah. And it’s only been a few years in business and I know that their revenue has grown very quickly over the last couple of years, which is a good sign and it makes sense, you know, I think that for this product and this type of user super dispatches really found product market fit and that’s why Bek can give us all kinds of metrics and KPI’s because they understand who the product is for what is doing for them and they can kind of drill down on what is working to get to them and what is not. So I think that’s really promising.
Eric Hornung : 01:24:58
And going to your point about, you know, potential maybe add on features or expanding. If you can get 80, 90 percent of this market, you essentially have a captive audience to launch whatever additional features you want and grow that potential revenue because you understand the industry holistically, so becoming ubiquitous throughout an industry definitely has its advantages for future pricing power as well.
Jay Clouse: 01:25:18
And you know what? I have a number here actually that he gave us that the vehicle shipping market in the US is $12,000,000,000. Something all of this is assuming all of these numbers that we’ve just given our United States numbers and he also mentioned that through no actual effort they are now in Canada, so mark his eyes internationally also expanded the pie a little bit, but we don’t have those numbers so it’s hard to make a ruling on those numbers, but I think is safe to say is that from this conversation, if we were looking at Super Dispatch as a, as an opportunity that we were interested in as investors, it was certainly spawn another conversation, but we’d probably drill down into some of these specifics. Is there anything that we didn’t get from the interview that you were looking for Eric?
Eric Hornung : 01:26:03
So following on a conversation that we had in a VC mashup episode with Ross Baird, which published in mid October, I think that going forward I want to do a better job of asking why your fundraising specifically to the founder or why might you be fundraising this opportunity. Seems like they’re doing great on paper. The financials seem good, the traction seems great. They have a good understanding of their KPI’s are continuing to develop their KPI’s that everything seems very healthy and I’m curious what additional money would be used for here and if selling a portion of the company is worth it or if grinding it out is just worth it and that’s something that I think we could do a better job of asking about in general to get a sense of where this business is going. I think I would have liked to get some feedback from a car hauler or a vehicle shipper. I know that Bek has gotten a ton of feedback and we took him at his word for it, but I didn’t really understand this industry coming in. As you can probably tell from the intro, I kind of misunderstood the idea as well. I think it would have been very helpful to go out and do a little research of my own and call a car hauler to understand this problem and this space a little bit more so it’s not something that we didn’t get from Bek so much as something that I think I could’ve done a better job of
Jay Clouse: 01:27:28
And something that I felt like I didn’t ask that we historically haven’t asked a whole lot that we probably should more questions about their team. He gave us some statistics about how many employees they have locally and how many engineers they have remotely in Uzbekistan and otherwise, and so he gave us a little bit about their headcount and the breakdown of that team. I would love to hear more about some of the specifics of the leadership team and their skill sets because if we’re looking at this as an opportunity, and this is something that came out of that episode with Ross. Really got this opportunity, we’re not just investing solely in the founder. We’re we’re looking at the team holistically, so moving forward with all of the founders she talked to, I think we could do a better job of talking about their, their entire team and what they bring to the table.
Eric Hornung : 01:28:18
Definitely. So Jay, as we look forward at the Super Dispatch opportunity, what are you looking for in the next 6 to 18 months from Bek and Super Dispatch?
Jay Clouse: 01:28:29
I think this is pretty straightforward and it’s likely what you’re going to say too. I’m looking to see are they continue to saturate that market that they’re already in? How much penetration do they have in the US car hauling market and second, are they on either branching into other verticals as well to moving internationally to expand the market size or three, experimenting with the pricing model to expand that market size as well.
Eric Hornung : 01:28:58
Yeah. Well, you know, you took three answers, so of course I was going to repeat one of them. I would say that my, the thing that I’m most curious about is their current price point and the reason for that is if they can exhibit some pricing power, it means that they have high enough saturation and there is a unique enough benefit to being on super dispatch that you know, there’s even the possibility that this becomes an industry standard in which case pricing power just soars. I think the price is going to dictate a lot going forward because there is a lot of room in that 80 to hundred dollars of cash savings to capture a little bit more of that consumer surplus and I think that that price and what we learned about that price over the next six to 18 months and see does it grow, does it stay the same? Why does it grow or stay?
Jay Clouse: 01:29:51
The same is going to tell us a lot. Yup. I’m with you. Awesome conversation, a lot of fun. Really interesting international history lesson we had here. So guys, we’d love to hear your thoughts. You can tweet at us at upsidefm. Let us know anything we missed, anything that you disagree with. Anything that came to mind for you, listen to this interview and comment on Breaker if you’d like, write on this episode, we’ll we’ll see your comment there and we can talk with you there. If you have a guest that you think would be good for our show, you can email us hello@upside data fm. Otherwise we’ll talk to you next week later.
Jay Clouse: 01:30:25
That’s all for this week. Thanks for listening. We’d love to hear your thoughts on today’s guest, so shoot us an email at firstname.lastname@example.org, or find us on twitter at upsidefm. We’ll be back here next week at the same time talking to another founder and our quest to find upside outside of Silicon Valley. If you or someone you know would make a good guest for our show, please email us or find us on twitter and let us know and if you love our show, please leave us a review on iTunes. That goes a long way in helping us spread the word and continue to help bring high quality guest to the show. Eric and I decided there were a couple things we wanted to share with you at the end of the podcast, and so here we go. Eric Hornung and Jay Clouse are the founding parties of the episode podcast. At the time of this recording, we do not own equity or other financial interest in the companies which appear on this show. All opinions expressed by podcast participants are solely their own opinion and do not reflect the opinions of Duff and Phelps LLC and its affiliates Unreal Collective LLC and its affiliates or any entity which employ us. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. We have not considered your specific financial situation nor provided any investment advice on the show. Thanks for listening and we’ll talk to you next week.
Super Dispatch is a platform that enables automotive logistics companies to eliminate paperwork, manage loads, drivers, and billing all in one place.
Super Dispatch was founded in 2013. An alum of the Techstars Sprint Accelerator, it is based in Kansas City, Missouri.