Drew McElroy is the cofounder of Transfix which provides trucking brokerage services in the United States. The company has raised close to $130 million from top tier investors which include NEA, Lerer Hippeau, Founder Collective, Expansion Venture Capital, Corigin Ventures, Bowery Capital, Canvas Ventures, G Squared, Deep Fork Capital, Charge Ventures, and Thayer Street Partners to name a few.
In this episode you will learn:
- Embracing the unknown and roller coaster of a startup
- How to evaluate potential investors
- The future of the freight brokerage industry
- His top advice for new founders
- Desiring to become the dumbest person in every room you enter
- Why you need to hire more experts earlier
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Drew McElroy:
Drew McElroy is the co-founder of Transfix, the leading freight marketplace connecting shippers to a national network of reliable carriers. Fortune 500 companies such as Anheuser-Busch, Unilever, and Target rely on Transfix to handle their most important FTL freight needs.
With instant pricing tools, guaranteed capacity, data-driven insights, and reliable service, Transfix is changing the world of transportation one load at a time. Prior to founding Transfix in 2013, Drew McElroy was the President of Priority Distribution Inc. (PDI), a mid-market transportation management and third-party logistics provider (3PL).
Drew McElroy joined the company as Vice President of Business Development in May 2004. Drew McElroy previously served as the President of the New Jersey Roundtable of the Council of Supply Chain Management Professionals (CSCMP). Drew McElroy earned a Bachelor of Science in Management and International Business from the McDonough School of Business at Georgetown University.
Connect with Drew McElroy:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have an exciting founder. We have a founder in New York, and obviously, a founder that has been there, done it. He’s been building and scaling his business very, very nicely, and I think that we’re going to be learning a lot and a lot of stories as well fueled with adrenalin. So without further ado, let me welcome our guest today. Drew McElroy, welcome to the show.
Drew McElroy: Hello, Alejandro. Thank you very much for having me. It’s a pleasure to be here.
Alejandro: So originally born in Paterson, New Jersey, and I know that your parents were originally from New York. They moved to Paterson to try to get less crime and so forth, but I don’t think that was of much help. Tell us about this.
Drew McElroy: I guess it depends on how you define these things. That’s correct. I was born in Paterson, and I lived there with my family until I was 18 months old. Myself, my father, and my grandfather were going for a walk on our street, and we were robbed at gunpoint. So, that was very much the end of Paterson, as far as my mother was concerned. I’ve made it back here to living in New York now as an adult, but I grew up the New Jersey suburbs, which was a wonderful place to grow up. Maybe not quite as energetic as it is here in New York, but I’m not one to complain.
Alejandro: I can imagine. And then also, you were the first in the family to go to college. I’m sure that everyone was super proud of you.
Drew McElroy: Well, you know, it’s funny. I’ve managed to do a lot of silly things in my life, so you get the proudness of the parents, and then they’re like, “Did you really crash the car?” Then, they’re not so proud. So, you’ve got to have balance in life. Yeah, I was very fortunate. It’s something that I’ve taken forward as somebody who is at least looked at as a grownup. In my own mind, I’m still a kid. I think those people whose parents have sacrificed a great deal to give them a better life than they had, I genuinely believe that anyone who doesn’t take that honor with great respect is disrespecting themselves and their family and everything else. I’ve always been acutely aware of both how lucky I am and how much my parents sacrificed – chance favors the prepared mind. It’s luck, but it’s luck that was driven by the hard work of my parents. It’s my job to honor that and do the best I can, not only for myself and our continued family but for the world to be somebody that our family is proud of. I’m a very lucky person.
Alejandro: Of course, and in this case, entrepreneurship did run in the family. They kind of capture and employee #3 after graduating. Tell us about this.
Drew McElroy: Yeah. My poor mom is a relatively risk-averse person. Both my father and I are varying degrees of insane. So, yes. My dad came home one day in 1987 from a job as a VP of Sales, and said, “I’m going to quit and start a business.” My mother said, “Are you nuts?” And he said, “Yes, I am,” and he did it. He built a business that was so successful that ten years later, when he was the only employee, my mother called him from her job and said, “What are you doing?” He said, “I’m too busy.” So, she quit her job, and then it was the two of them, and they knocked down the wall in the guest bedroom, and that was the family business. Then I graduated from undergrad and decided that I should join the family business, and we should grow it. Of course, that made my dad’s eyes sparkle, and my mom rolled her eyes, and we launched that journey.
Alejandro: What kind of business was this?
Drew McElroy: It was very germane ultimately to what Transfix is, my current business would become, but this business was called a third-party logistics company. What that means is you provide effectively consultative logistic solutions for large retail, large CPG businesses, and ultimately, execute those things. But you do it without actually owning the assets. So it is highly complex, engineered, transportation solutions, which for anybody who’s not familiar with the business, that probably sounds incredibly boring, which is not an unreasonable charge, but nonetheless, that is what we do. It’s fundamentally critical to the businesses we serve. Many businesses are in the business of selling widgets, and in order to do that, you have to get widgets where they need to be, and that can be a fairly complex endeavor. That is ultimately where my personal domain expertise and my family, and now the two businesses that I’ve been involved with, that’s where we live.
Alejandro: What was it like working with your parents, especially your parents together, and you also working with them. What kind of conversations were there during dinnertime?
Drew McElroy: If I heard my parents say one more time, “This is the way we’ve always done it,” I was going to jump out of the window. To be blunt, I really couldn’t do it anymore. My parents are wonderful people like I’ve already articulated, and I am incredibly lucky, but to be their business partners and their son was a lot. And there was without question a generational difference in philosophy, whereas they prefer smoothness, I prefer upsetting the applecart. I’m not happy unless we’re continuing to move and improve things. I can understand if you’re at a different phase of life how that can be a real pain in the ass, which I’ve been called that many times. So it was that combination of experience, both realizing frankly just how [7:44] logistics and transportation on the supply chain were historically. Therefore, the opportunity that technology presented to drive significant value in several different vectors. It was that DCS and/or SWOT analysis that ultimately convinced me to make the jump from leaving the family business to starting Transfix.
Alejandro: Let’s talk about Transfix because I know that you started talking to smart people, and eventually, this led you to talk with a venture firm. How in the world did you start talking with a venture firm, especially given the traditional mindset and background from also working with your parents?
Drew McElroy: I’ll be honest with you, Alejandro, I screwed it up in so many different ways. If folks are listening to this, I can certainly give examples of how perseverance is a good thing, but maybe don’t follow the exact path I took because there’s a lot of pain in there that may not be best. The actual story is, I basically fully formulated the idea for what I wanted to do in 2012, and I could articulate it – frankly, if you listened to me then, you listen to me now – articulate the value creation thesis for the business. That actually hasn’t changed all that much. But whereas, I knew the supply chain cold. I did not know the first thing about raising capital or building a text stack or, frankly, even building a team. I had built a small team at my parents’ company, but nothing like the talent and expectations of a venture-backed startup. So, what do you do? Well, in my case, I jokingly refer to it as my real-world MBA. As we’ve mentioned, I live, and I’m from New York, but at the time, I went to San Francisco, and I spent the better part of 18 months sleeping on couches and doing people favors. I may be a bit of a pain in the ass, but I am occasionally likable as well, so I did everything I possibly could to befriend every smart person I could find within the startup ecosystem. Whether they be founders, investors, lawyers, or anything else, just to figure out what it was I was trying to do because I really didn’t have a plan. But, again, if you’re a relatively intelligent person, and you spend some time listening and thinking, you can figure those things out. The conclusion I came to was that I was not going to be able to get out of the starting gate on my own. I really and truly needed a technical co-founder to stand beside me and to build the business with me, which anybody who has tried to do that knows that recruiting such a partner with no leads can be a tricky thing. I got very lucky. There’s a guy by the name of Richard Kirby – Kirby, if you’re listening to this, you’re the man – who, at the time, was a partner at [Denrock 11:08]. He introduced me, at the time, to the person who, is to this day, my partner. His name is Jonathan Salama. He was an EIR at Denrock at the time coming off of startup #3, I think it was. Clearly, he and I were of different backgrounds. But bluntly speaking, as soon as we came together, we realized quickly that we thought we had all the skills we needed to make this happen.
Alejandro: Got it. What happened after because I know that for nine months, you guys were literally building the initial stack, and I understand that you were dealing with what always happens in a business like this, the chicken and the egg. I always say that I want to shoot the chicken and step on the egg. That’s [11:56] building marketplaces.
Drew McElroy: Yeah. It is tricky to get over that initial inertia, so what did we do? The first thing that we did was, we had to divide and conquer. At the time, we had nothing. We had no technology; we had no money; we had no customers, and neither he nor I personally had any money really either. So, it was without question the toughest professional time of my life. The plan was, “We need to build enough momentum and traction so that we can go out and raise a seed.” So, what does that mean? First, we needed MPB. If we don’t have a product, then we’re really not going to go anywhere. Bluntly speaking, I wasn’t going to be very helpful in writing the code for the MPB. That is clearly not my thrust. We made the decision – “Jonathan, you head down in the bunker and just build. We know what it is. We spent all the time together articulating the product roadmap and features and all that. Just make it happen.” My job, while he was doing that, was to do everything else, which really meant first demand, first supply, raise a friends-and-family round, incorporate the business, etc. In our particular case, again, going back to what I said earlier, I do not recommend anybody else to take this path, but it works for us. But then, again, in fairness, it was incredibly lucky. We decided to found the business. I danced a little jig because I had been after this for 12 months on my own, and now I’ve got a partner. So in my euphoria, I updated my LinkedIn profile just to say CEO and founder of Transfix. Now, if you looked at that, we didn’t have a website; we didn’t have a logo. You couldn’t find anything, but this is why it pays to be nice to people. Previously in my career, I had met a man by the name of Angelo Ventrone who I was connected with on LinkedIn. Angelo was the SVP of Global Logistics for Barnes and Noble. He must have gotten one of those little notifications that said, “Drew has started a new job.” Honestly, within 30 minutes of updating LinkedIn, my cellphone rings, and it’s him. Angelo is a wonderful, wonderful man who’s a friend to this day. But you have to understand that when you’re starting a company, you’re always on pins and needles because there’s so much risk, and you need so many different things to come together. Angelo was a 30-year logistics veteran who started his career on the dock in New Jersey. So, he’s pretty tough. I answered the phone, “Hello.” “Is this Drew?” “Yes.” “This is Angelo Ventrone.” Wow! “What can I do for you?” “LinkedIn says you’re starting a company. What is a transfix?” So, what do you do? The only choice is to pitch. When in doubt, pitch, and so I pitched. Angelo, I bust his chops about this years later, he was silent the whole time. So I’m just pitching, and all I hear on the other end of the phone is breathing. The words start coming faster and faster and faster, and he’s just breathing. Finally, I said to him, “Please, Angelo, for the love of God, please just say something.” I’ll never forget, and I know this is a PG-13 podcast, so I’ll try to keep the cursing to a minimum, but I’ll never forget. He goes, “Drew. This is ****** beautiful. Is this possible?” I was like, “Angelo, ******. It is completely possible. I’ve got this French partner of mine. He’s building the technology. He tells me it’s totally doable. We’re doing it.” I’ll never forget; it’s seared into my brain. He goes, “Okay. Sounds good to me. I’m in.” You’ve got to understand Alejandro, in the back of my mind, I was like, “Is this really happening right now?” My biggest fear was who’s going to be the first customer? That first fish, and here the fish is jumping out of the lake into the boat. So I said, “Okay. Yes, sir. Thank you very much.” I said, “Well, here it is August. We’re preparing for a January go-live. In the next couple of weeks, I’ll come to your office, and we’ll plan all that launch-route, and we’ll go live in January.” He goes, “January? What are you talking about? You got me all excited. No, no, no. We’re starting next week.” And I said, “Sir, we can’t start next week.” In my own mind, I’m not even incorporated yet – less, forget having the product. I don’t even have a license to do business. I said, “I can’t. I can’t start next week.” He said, “Well, I think you want to do business with me, so it’s probably a pretty good idea we start next week. You’ve always been a smart kid. I’m sure you’ll figure it out.” And he hung up on me.
Alejandro: Wow! And also, this triggered an investment. So what happened.
Drew McElroy: I was like, “You’ve got to be kidding,” and it did. That was like a magic bullet. You’re correct. I was in San Francisco, staying with a personal friend of mine who overheard this conversation, and he looked at me, and he was like, “Oh! It’s amazing news.” I looked at him, and I said, “I’m dead. I’m not going to be able to deliver on this in any way. I’m going to fail before I even get out of the gate.” And this actual person happens to be a medical doctor. I’m like, “Oh, man. I’m freaking out.” He said, “Okay. Calm down.” He carries one of those little old-school leather doctor house call satchels. He reaches, and he grabs it, and he starts to open it up, and I’m like, “I’m freaking out. I’m not having a heart attack. Give me a break.” He goes, “Oh, shut up.” He reaches in his doctor’s satchel, and he pulls out his personal checkbook. He looks at me, and he goes, “Okay. How much capital is it going to take you to get this off the ground the way you need to?” Honestly, Alejandro, at that point, my jaw is – I’m like, “Really?” But listen. I’m not stupid. I was like, “I think I need about 150k. And he goes, “Okay,” and he wrote me a check for 150k. Now, I have to explain. I didn’t even have a promissory note. I’m like, “Austin, what do you want me to do?” He goes, “You’re going to give me the note. Right? You’re not going to screw me.” I was like, “Of course now.” He was like, “Then what are we worried about. Take the check and do what you’ve got to do.”
Alejandro: Wow! Was the 150k just a number that you thought about, or you actually had planned for the 150k.
Drew McElroy: I mean, no, we had done some planning, as you do. Our preliminary model, like most of them, is ripe with holes, but we thought we needed about 100k to get to the point where we could raise a seed. So I just said 150k.
Alejandro: I love it!
Drew McElroy: You know, you’ve got to have a little padding. Right?
Alejandro: Of course.
Drew McElroy: The funniest part is, he writes the check, and he hands it to me, and I didn’t have the heart to tell him that I couldn’t even cash the check because I didn’t have a bank account. I didn’t have a company. But, nonetheless, you get scrappy. It’s amazing to think about it in retrospect, but we did it! We incorporated the business in a matter of 24 hours. We deposited the check, and come the following week, we started shipping with Barnes & Noble. What’s funny to me now – I don’t know if it was funny then; it’s funny now. We were faking it completely. We had no technology. The product vision, as we articulated, didn’t exist. So we were beginning to ramp the business in a way that was, bluntly speaking, no differentiated from our traditional competitors. But I’ve got to say, both Angelo and Barnes & Noble had our back. They knew that we didn’t have anything yet, but they wanted to partner with us early and provide feedback and help shepherd us. Now, eight years later, Barnes & Noble is still a customer. Angelo has since moved on to another company that is also a customer, and Angelo remains a dear friend. Years later, over beers, I said, “Why did you do that to me? That was totally unnecessary.” He kind of got that mischievous look in his eye that he gets, and he was like, “Well, I just really wanted to see if you could do it.” But he then did get serious and say, “Listen. You had revenue nine months before you thought you were going to. That was probably a good thing, wasn’t it?” In fairness to him, I think that revenue was one of my biggest lessons through this whole journey, of course, in which there are more lessons via scar tissue than I would like to admit. If you’re thinking of starting something, start it. Take the revenue. This whole iterating the product to perfection before you launch is just not a healthy path.
Drew McElroy: That worked out really well for us. We leveraged that Barnes & Noble relationship and some other small wins, and nine months after we launched, we were out raising a seed.
Alejandro: Before we go into the seed and into the fundraising cycles that you’ve experienced, and especially the expectations are going to be interesting, for the people that are listening to really get it, what ended up being the business model of Transfix?
Drew McElroy: Transfix, at its core, a two-sided B2B marketplace. The demand side for us is businesses, large businesses, but not always – that need to ship large quantities, meaning truckloads of goods, generally, 20,000-plus pounds. That is the demand; actual shipments that need to move from point A to point B. Then, on the other side of our marketplace, the supply side, we work with several hundred thousand independent truck drivers and small trucking companies, and ultimately act as the marketplace. There are, as you can perhaps imagine in your mind’s eye, there are similarities between our business for goods and with ridesharing for people. Of course, there are many differences, as well, amongst others that our business has spread, overall, 48 states and Canada, and generally, goods move at least 800 miles at a time. So, it’s a big marketplace. Historically, trucking is an incredibly inefficient business, so there’s tremendous waste in the way these mechanisms work historically, so why not layer technology in the form of mobile technology to the drivers and modern data science in the form of AI and ML, and create effectively better pricing and better mousetraps? Then, as we’ve expanded, we have layered on top of that additional software products that allow us to deepen the relationship and widen the mote with both sides of our market.
Alejandro: You were going to talk about the seed round, and I see that in total now, you guys have raised a little bit over 128 million. I want to ask you: What have been the expectations, and how have those changed over time from round-to-round that you’ve seen on investors?
Drew McElroy: I would say certainly as the rounds move forward, and the checks get bigger, the expectations become much more specific. In my view, if you’re raising a seed round, there are few boxes you have to check. If you’re raising a seed round, what do you really need? I believe that you need compelling founders; you need significant market pain; you need a really big space in which that pain exists, and you need an intellectually invigorating thesis as to how you can solve that pain and why you are uniquely qualified to do it. In my view, if you check those boxes, more times than not, you can probably raise some seed capital. I think that is the last time you get to get away with being hand-wavy and be like, “Oh, well, we can do this, and this, and this.” Because in my experience, once you start taking capital, the vast majority of the conversations become about quantitative results. “What have you done with my money,” which is a very reasonable question to ask. Yes, you have to, of course, be able to articulate vision and where you’re going. If you have a slight down-quarter or this or that hiccup, you bet that a compelling vision and narrative around how we’re going to deal with this current issue is obviously critical. But to me, once you get going, it’s 80% scoreboard, and the expectations for that scoreboard continue to get bigger as the company and the checks get bigger, and the investors become more sophisticated and more savvy. We, specifically, have been very fortunate to not only raise a significant amount of capital, as you mentioned, but we’ve been further fortunate to do so from what I consider to be some of the best investors in the world. To me, that’s another one of those things that I have learned very, very clearly from the beginning. I remember in the early days when we were trying to raise capital, which interesting, I think the seed round was actually the hardest round for us to raise, which is interesting. But nonetheless, as we’ve gotten further along like I say, the level of expectations get higher, but at the same time, your team around you is able to contribute more. So it is an ever-growing and certainly intense process, but if you do it properly, the value – that’s what I was going to say. The difference to me between a quality investor and a check – forget dumb money. Dumb money is bad, but there’s worse than dumb money. There’s mean money. There’s angry money, or there’s negative money. Those things can kill a business, so you have to be very, very careful in my estimation as you do these things to not put yourself in a bad place.
Alejandro: So in that regard, there’s something really interesting that you mentioned there: dumb money and mean money. How do you actually filter through the dumb money and the mean money so that you actually capture the money from actively-involved and aligned investors?
Drew McElroy: I don’t think there’s a real magic bullet for this. The trust is, unless you are some sort of blessed human – I’m sure it happens to some founders, and I just don’t know any of them. But the truth is, in almost all cases, this is hard. To build what it is you want to build, it’s hard, and it’s going to take longer than you think; it will take more capital than you think; it’s going to take more of your soul. So, you’d better know that you are getting into a relationship with someone that you can’t break up with unless you have a big pile of money where you can buy them out. You can’t break up with these people. Again, it’s going to take time. You’re going to be in the trenches for at least five years. I think of two things: 1) talk to all the references you can get. It’s not what they tell you. It’s what people who do business with them say about them. So that’s one. 2) This is actually a more general piece of advice for a variety of reasons when it comes to raising capital. You have to interview them as much as they’re interviewing you. I think that’s a good strategy anyway because if you look weak to a venture investor, they’re never going to write you a check anyway, so the comfort in your own skin to – and, of course, you have to do this tactfully. When I say interrogate, I mean that jokingly. You have to interview them, but you have to do it in a way that develops the relationship, but you have to ask questions. How do you run your business? What do you do when things go bad? It’s very easy to be an investor when valuations are big, and everybody is getting bought, and it’s been a nice run pre-COVID or pre-rework, or however you want to define this chilliness that we’ve all been feeling here for the last nine months. But that’s just a natural part of the business cycle. Someone described that as chilly, which it is. Another way to describe it is to say that in some ways, the power dynamic has started to shift back a little bit to the investor side. Now, that’s an aggregate, of course. Everything happens at the individual deal level, but when the times change, how do you, Mr. and Mrs. Investor, how do you respond? Those things, you never really know, I don’t believe, but the more you think you know and to the extent that you’re correct – I have heard horror stories. We have been very lucky in the current environment of COVID and everything else that’s happened. Ultimately, the pandemic is acting as a net tailwind for our business. Going back to what I said before, we’re very lucky.
Drew McElroy: Maybe things would be different if we were a dumpster fire, but we’re not. Our investors have been incredibly supportive and helpful. I know others that are dear friends who are also working with very notable investors who have had – I don’t know how to describe it other than various forms of torture deployed upon them.
Drew McElroy: It’s heartbreaking to me. So, yeah, it sure is important who you do business with.
Alejandro: 100%, Drew. For the folks that are listening to get an idea of how big Transfix is – anything you can tell us, maybe the number of employees or anything.
Drew McElroy: We have in the low 200s full-time employees here in New York. We are fortunate that those 200+ employees are doing – we’re doing hundreds of millions of dollars in revenue. We are moving tens of millions of pounds of goods through all 48 states every day. As I mentioned before, we do business with hundreds of thousands of trucking companies. I actually don’t know the recent count, but I think the last number I saw was something like 30+ of the Fortune 50 are our customers.
Alejandro: Very nice. How do you think the market is going to evolve over time because, obviously, a market like this is pretty big? Any thoughts on that?
Drew McElroy: Do you mean the logistics market?
Drew McElroy: Our view is that I mentioned before, historically, logistics is very much not tech-enabled. Everything is generally done as a one-off. I mentioned the ridesharing analogy. If you think of historically, the taxi dispatch office – smoke-filled and dispatchers screaming into the microphone and stuff like that. That’s in many ways what trucking looks like. So we come along, and we’re like, “Guys, stop doing all that. Download this mobile app. We know where you’re going to be, and we can help you get where you want to be from there in a much more seamless way. Amongst other things, I personally think the value of what I just articulated is pretty clear, but amongst other things, we create economies of scale because the value creation, the way we think about things, comes from driving utilization of a truck as an asset, meaning if you work with us, the same truck generates more revenue in a week than if you don’t work with us. So that is a critical value creation mechanism. Frankly, we’re already, in many ways, sort of blowing the encumbrance out of the water, but we’re just getting better because, as you can imagine, like any good supply chain, density creates better results. We can create better matches with more density of shipments and loads as we scale. Our traditional competitors because they do everything as a one-off, they actually have diseconomies and scale because they can’t get enough skilled people in a room. As that continues to play out, of course, there’s going to be lots of thrashing around and lots of competitive battling. But in our general view, this industry is called freight brokerage. Freight brokerage in the United States is about 120 billion dollars give or take.
Drew McElroy: There are about 1,500 companies that are freight brokerages. We view, in the next ten years, by the end of it, there will probably be 5 to 10 companies.
Alejandro: Wow. What a transformation on the market. That’s for sure.
Drew McElroy: I was fortunate enough that one of my mentors is Jeff Immelt, and he’s very much enjoying life these days. One of the things he’s doing is teaching a class at Stanford, and it’s basically like a case study class. He said, “We’d love to study you guys for the class. Of course, I was incredibly flattered, and I was like, “Why? To me, it’s trucking. It’s dirty and not sexy.” He’s like, “Well, that’s not what matters. It’s to your point the transformation in the narrative.” I think sometimes I’m so close to it that you fail to see it, but you’re absolutely right. In truth, it is very cool. I joke with people, but every day feels like a case study. I have no idea what’s going to happen. I have no idea what’s going to happen. I woke up last year, and now I’m competing with Uber. You woke up last week, and Amazon was like, “Oh, this seems interesting.” Then a very large company calls and wants to be – I mean, there is so much dynamism. It is often torturous, but it is an incredibly exciting place to be every day.
Alejandro: It definitely sounds exciting. Drew, one question that I always ask the guests that come on the show is, knowing what you know now, you’ve been at it for a while with Transfix. You had your fair amount of lessons learned along the way. If you could go back in time and maybe to that time when you were having beers with your co-founder and thinking about that venture that you guys were going to start – if you could go back in time and maybe sit at that table and give the two of you one piece of advice knowing what you know now, what would you say and why?
Drew McElroy: That’s a great question. I think because honestly, there are so many answers to what you just asked me. That’s the truth. I think about how naïve I was then, and that’s not to say that I’m not naïve now, but I have, without question, come a very, very long way. There are many things that I could advise previous versions of myself, but what would have the most leverage is the way I’m trying to think about your question. To me, I think I know the answer. One of the things we’re always talking about is how every person, at least you hope every person, but every good-talented person has a superpower. Success is often about structuring things so that you get everyone in a seat that takes the most advantage of their superpower. I had one of our investors say to me, and it was probably two years ago now, “You guys are doing a great job, but it’s always the Drew and Jonathan show.” I said, “What do you mean?” He said, “Well, whenever we have a board meeting or a strategic conversation, it’s you two. You guys are Transfix. To really be the business that you want to be, you’re going to need to build out your executive team.” Which I think if you have a partner that comes in any company’s scaling journey, but at least in the viewpoint of this investor, we started that process too late. What I’ve come to realize in the intervening 24 months is just how incredibly talented these people are. We have been so unbelievably fortunate to recruit a team that takes my breath away. I’ve always said, sort of jokingly, sort of serious, sort of philosophically, “I want to hire such that I’m the dumbest person in every room that I walk into.” Then, one day about six months ago, I was in a room with my partner, our head of data science, and three of our head engineers, and I started talking about things, and I had no idea what they were talking about. I was like, “It’s happened.” But that. The velocity increased, and the quality increased, and all that has come along with building a team of world-class operators. Man, I think about if we had only done that two years earlier. Now, in fairness, we may not have been able to. We may not have been able to recruit that level of talent. Frankly speaking, we probably didn’t have the truly requisite capital to do it. But I think that’s one of the differences between first-time founders and second-time founders is you can skip a lot of the mistakes and move them a little bit more quickly, perhaps, if for no other reason people are more willing to take a chance on you if you’ve got a track record. Every one of them, what I executive team can do and even me, I’m like, “Okay, cool. I get to hang out and help all you guys now. This is amazing.” The earlier you can start on that journey and effectively start multiplying yourself, or in a case of me, adding an exponent to yourself, I think that’s part of the fastest path to success.
Alejandro: That’s amazing. So, Drew, for the folks that are listening, what is the best way for them to reach out and say hi?
Drew McElroy: I’m fairly accessible, I like to think. My name is Drew McElroy, CEO. The company is Transfix. My email address is firstname.lastname@example.org. You can find I’m pretty much in all of the social channels, whether that be Facebook, Instagram, LinkedIn, or anything like that. I would certainly love to chat. I’m acutely aware that I would never have made it to where I am if it wasn’t for the help of countless wonderful people. So I try to do everything I can to bend over backward to help people who are where I was a couple of years ago. So if there’s anything I can do to help anybody listening or this story is inspirational, and anybody wants to chat further, please don’t hesitate to reach out to me.
Alejandro: Amazing. Well, Drew, thank you so much for being on the DealMakers show today.
Drew McElroy: Alejandro, it’s a pleasure. Thank you for having me. Stay safe out there, man.
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