Flexport CEO resigns a year after joining logistics company
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1) Typical big-company guy fails to adapt to startup life. A year ago, Flexport's tech team was 400 people. That's minuscule compared to what Dave's used to at Amazon. He came in, insisted on a bunch of unnecessary hiring, bloated the tech team with deadwood, internal kingdoms and politics, and a "move slow and don't break anything" mentality. Founder got fed up and showed him the door, though presumably they were gracious enough to let him hit his 1-year cliff
2) Almost-CEO-of-Amazon tries to build the next Amazon. Makes a bunch of wildly risky investments into random moonshots, because he doesn't want to settle for a single-digit-billion company. Founder is initially taken in by bigshot's vision. But after 1 year of minimal progress and changing market conditions, founder tells CEO to get back to basics and focus on freight logistics. CEO decides that's not sexy enough for him. Waits for his 1-year cliff, then resigns
Exited to hear more wild theories from others.
3) Bored mega-millionaire wants a neat hobby to try for a year. His previous Amazon compensation for 2021 was $56 million[1], so it's not like he needs to try anymore, or make money basically ever again. 12 months later he's still bored. Maybe he quit to spend more time bathing in bathtubs full of hundred dollar bills.
1: https://fortune.com/2022/06/08/amazon-former-no-2-dave-clark...
Not dissimilar from the early Steve Jobs story at Apple.
And then realizes his competitors rely as much on grizzled logistics veterans and their corporate knowledge about customs brokerage and how to Get Shit Done and Get Shit From Point A to Point B as they do on a cool tech stack. And then goes "shit."
Don't get me wrong. From a tech perspective, a lot of Flexport's competitors could use a size-18 boot in the ass. But tech is an enabler for them, not the core business. So there's only so much willingness to fork out cash for what senior leaders see as a supporting function. I mean, if their 40-year-old COBOL backend still works, they DGAF that it's outdated. At least until it can't keep up with the modern side or it starts falling over when all the devs retire, which is a separate story.
And most of the people who know how to develop for them are about to retire. When was the last time you heard of a modern CS or IT degree program offering a COBOL elective?
And they're not easy to migrate, because you have 40+ years of business logic locked up in that legacy COBOL application, many of the developers of which are retired or flat-out dead. Did they document it perfectly? LOL! And oh, we're dealing with customs brokerage around the world and also potentially accounting info for a publicly-traded company, which means if you fuck up badly enough, people potentially go to jail.
(For those who think this is a joke: it's not only not a joke, it's one of the better ways to roboticise mainframe interactions.)
In my opinion, there is nothing about any of these processes that in aggregate be worse if they were automated, and no fundamental issue with automating them. Moving freight is about as complex as any other inter-business process in that the input is some signal (usually an email but potentially a phone call or a fax) and the output is also usually an email or a phone call. The internal logic to that process is not particularly complex either.
So there exists a massive opportunity to provide roughly the same service that existing forwarders do at a much lower cost basis. The requirement to do so is to aggressively automate operations. There's also an secondary opportunity to provide better quality of service (more transparency, more programmatic logic related to movement of goods) to customers (supply chain professionals at F500) but I think that's both harder to do and customers are less sure about how they might take advantage of that better service.
Quite frankly, I don't buy the argument that "grizzled logistics veterans" hold the secret sauce to make this work. I was told probably a dozen times that what I was doing was impossible to automate but when I dug into it, what we were trying to do was a bog-standard business process dressed up in domain-specific jargon and 'tradition' (e.g. we can't do it that way since we've always done it this way). I'm not saying that I'm some logistics savant and there's a vast amount of expertise I don't know. What I am claiming is that I've pulled back the curtain on logistics and the wizard is just a regular guy.
Source: Former Flexport employee
I agree, but land at a different conclusion.
I dabbled in logistics a bit at one startup and the thing I found true is that every warehouse and receiving dock did things a little different and sometimes that thing was computer software and other times it was a person with sticky notes all over the walls of their tiny office by the bay door who was on 2-3 phone calls at a time screaming at/being screamed at by people moving goods around the city/state/country/world.
Logistics has a ton of room to optimize and I’m sure we’ll continue to see billion dollar startups roll out every year solving some part of it, but in the day-to-day operations of supply chain, change is so incredibly hard. The middle layer of management always seemed so risk averse to making any changes that had the slightest risk of disrupting their existing workflow because if one day they goof something up it quickly spiraled down the chain.
Skip to 2 minute mark https://youtu.be/dXfFvdvi7Z0?feature=shared
But your description of what goes on at the branch level smacks of someone who has a CS degree and thinks that this means they can engineer the world. Dave Snowden of Cynefin fame has some choice words regarding software engineers who don't realize that human endeavors have what he calls "messy coherence," and think they can optimize the "messy" out of it, forgetting that they're dealing with humans.
There's a lot of ways Flexport could capitalize on the silliness of some of its competitors. But its competitors are also not staffed by idiots, and if it was so easy to automate everything, it would have been automated 20 years ago.
Designing these rules are not something that computers can handle particularly well (though Generative AI might change even that), but applying them consistently is something that computers do way better than humans (for the reasons that I mentioned in my previous comment). Yes, there will be exceptions. That's okay, we can also build in logic to handle exceptions.
The fundamental process flow we're trying to automate here is not self-driving cars. It's not cognition, perception, or reasoning. It's not even really complex decision making. The inputs (while not perfect) are actually pretty well quantized. People love to handwave and say that it's so hard and that it's naive to try and reduce it down to a computer program, but I've never had anyone compellingly explain __why_.
For what it's worth, this is not a minimization of the work done by my former colleagues and similar professionals. My colleagues were smart, hardworking, mission driven and gritty. It's just that the work that they did could be more effectively done by computers. That's all.
For what it's worth, I don't have a computer science degree. I studied one of those useless underwater basketweaving majors. That must explain the overall sense of confusion.
It seems to me that if it's so easy as you describe, and yet it hasn't been done, than maybe it's not so easy after all. Perhaps not impossible. Perhaps doable. But perhaps not that easy. People who work in the industry are not stupid. They don't want to do unnecessary busywork. What are they missing? And why has Flexport not taken the industry by storm if it's so easy to automate?
Why hasn’t anyone done it? What specific things have kept Flexport and everyone else from automating more things?
I think those are very interesting questions.
Short answer to all your questions: it is a much a people business as it is process, tools and physical goods business. Legacy systems. Global customs. Auditability. Existing operations. Global compatibility of documents.
Long answer: Your local university library probably has some shelves of books on the topic.
But I wonder if Flexport has achieved market saturation for the easy-to-automate work, and doesn’t yet have a compelling offering for companies with more complex logistics needs.
For those of us who have, it's a bit of a strange assumption to assume that if something can be automated well then it would have been done already. It's a bit like asking why Blockbuster didn't set up a streaming service. A lot of companies struggle with IT projects. They avoid them if possible. They outsource if not. If they do succeed, then they try not to touch the results more than necessary.
This approach leaves a lot of automation on the table. If you're able to repeatedly pull off complex software projects well, then you can just do it over and over and end up automating far more than other companies will even true.
> why has Flexport not taken the industry by storm if it's so easy to automate
Hasn't it? From Wikipedia, it "has annual revenues of more than $3.3 billion" and "In August 2018, Flexport was named the 8th fastest growing company in the United States". Now maybe they are doing an Uber here and selling below cost services, it's hard to say because they're private and keep raising big rounds so we don't know how profitable it is. But they're clearly not wanting for business.
As for why the the industry folks haven't done this already, that's an easier one. For the operations people themselves, you're asking them to automate themselves out of a job. The efficiency and the cost savings aren't coming from nowhere, they're coming from salary spending on man hours. And I'm not just saying this is a cynical, self-preserving sabotage - I suspect many professionals in the space don't know or don't value automation. It's not "busywork" to them, it's _the job_ and that work is the core value that they add, so why would they change it up?
Leadership at these companies are probably more incentivized to do this, but to your own earlier point, they don't have the experience in building a modern application. They don't have the talent pool and they're probably afraid of "rocking the boat" too much because they have a good business already.
As I said before, I don't think any of the folks working in this space are stupid or incompetent. But there's a good quote from Upton Sinclair that I think is relevant here: "It is difficult to get a man to understand something, when his salary depends on his not understanding it."
2. It hasn't been 100% automated because 100% automation is not the goal (or reasonable). "Most things are automated" is already a huge improvement anywhere. What do you think "it hasn't been done"? Are you assuming those overnight shipments are being done entirely by humans with pen and paper?
3. Companies that need this kind of shipment are huge. Huge companies are slow for obvious reasons to anyone that has worked in any enterprise. They don't change quickly. Sometimes they don't change at all and have all market inertia in their favor.
It seems to me you're not experienced with huge operations. It's fine and usually people assume it's way easier than it looks. I'm surprised you assume it's way harder and can't be done at all. Don't bet against software, we have decades of examples showing it wins in the end.
Do you still see room in the space? Would love to collaborate ( have an Eng background and affinity for sales)
What am I doing now? Seems like the same thing everyone else is - Working at BigCo for more money and less stress :). Not looking to change at the moment but urge folks to look into the space for sure. It's a lot of fun and very gratifying. Pure software is more boring in comparison.
Because I can name at least two times that's happened. The big guys' main concern is being able to keep a unified view of who's shipping what, where, and to whom worldwide. They don't own planes, ships or trucks, so their rep rests on stuff delivered on time to the right place and always knowing where it is.
- The 2000s stack, honestly doesn't exist anymore. And where it does, it does so for reasons no start-up can work around. this is the field of specialist consultants.
- Doing only one thing really good is not enough anymore in that field. not even close. And the bar for good is already so much higher than seem to appreciate.
Because I worked at Amazon, with DHL among others, and I can tell you that in some use cases, DHL has bettwr logistics software than Amazon does. And CargoWise is just a straight genious software suite to run everything from Customs over air, sea and land freight to warehousing. Guess who is using that, or something similar, in some form. Guessed, the majority of logistics companies.
No idea where this "incumbants bad, disruptive start-up so much better and easy" mentality comes from so. If you go into the field of logistics and supply chain with that attitude so, you will fail. And hard, and burn a ton of VC money while doing it. The only company that managed not to fail was Flexport, and even they fell short of theit lofty pitch goals.
Thaz being said, Dave Clark had, to my knowledge, not a lot to do with the "tech" part of Amazon, he always was an supply chain / logistics ops guy. And a good one at that. If anything, he treated it as a numbers driven thing, and definitely not a tech stack driven one. Part of the reason why he was good at his job at running ops.
I see & hear you. ;)
https://techcrunch.com/2022/06/03/dave-clark-the-longtime-he...
> Clark has been unapologetic about his cavalier style, once telling Bloomberg that he favored “lurking in the shadows of … warehouses and scoping out slackers he could fire” during his early years at Amazon.
"Some Flexport insiders say layoffs and an influx of former Amazon leaders are wrecking morale."[1]
'"These people do not have conversations — they make demands," one laid-off employee said. Unsatisfactory answers could be met with harsh feedback, sources said.
One laid-off Flexporter said an Amazon veteran told them, "I don't believe a word you're saying," during a presentation they said took months to prepare.
Clark was asked at Tuesday's conference whether his Amazon hires meant he wanted to change Flexport's culture.
"The only place I've really worked in my life is Amazon. And so I didn't get out much. And I worked in supply chain so most of the people I know are Amazon people," he said. "Turns out Amazon's pretty good at moving stuff around."'
See also, the Dave Clark effect at Amazon: "Amazon generally delivers later than competitors. That can be terrifying for some of its drivers"[2].
[1]https://www.businessinsider.com/flexport-layoffs-amazon-lead...
[2] https://www.cnn.com/2021/12/21/tech/amazon-delivery-night/in...
Hard pass.
Likewise, the degree to which Director+ jobs just hire based on current title at a competitor alone is bonkers. I’ve worked under people who are utterly clueless but managed to make VP at the place up the street. So they just get to be a VP at the next place.
- Luck landed them in a leadership spot on a project that was already successful or headed that way
- They didn't do anything to abruptly change that course
- They are skilled at managing up with the right words, phrases, actions
Then, they move up in the chain they are already in, where everything is very familiar. Goes well enough until they move outside that bubble.
I've watched these failsons get promoted to senior director/VP, leave before they were ever accountable for their bad decisions, and then bring all their cronies over to the new place at the same levels.
This sounds like what I would expect in the federal government or IBM. Not a fast growing startup changing the world.
I hope Ryan can change this part of the culture or they are dead.
After all one can describe a phd defense as “a presentation which took years to prepare.”
We're now in a multi year recovery process.
He was an absolute incompetent in every sense of the word and fired high quality workers the entire time until he himself was fired.
I never want to hear "rhythm of the business" again.
You just have to look at the About us / Management/ Leadership page on the company web site and correlate a few names, current positions and positions in former companies, to get it.
I can see it going super well if the new people brought in are liked and the culture from the older company is good. In our case, it was the opposite and tanked the team morale.
In my experience, the new top guy brings in his old lackeys because they complemented him, and made him look good, in the context of the top guy's previous company.
Hence they often turn out to be one dimensional, rather than rounded contributors - e.g great at bringing in projects on time even though everyone hates working with them, or great at technical due diligence/sniffing out skunk projects even though the new company's best work is in skunk projects.
I think you mean they complimented him. If they had complemented him, things would have gone well.
I was told “Hey they’re all from <big company>!” as if it was a positive.
I wondered “How is it everyone of these guys buddies worked there and big company didn’t keep them?”
Learned pretty fast why they left / the other company didn’t keep them… (they were all smoke and mirrors and no results).
For me, the worst casualty as various lackeys followed arrival (also ex-Amazon) was the choking out of candidness. Second worst was turning the company into a document factory.
Project managers can then point to these documents as promotion material and take credit for "leadership".
Obviously I'm being a bit harsh here and that in no way represents the average - but it is something I've seen too often.
The value of a doc writing culture is that writing things down encourages rigor and thoughtfulness. Docs can be widely distributed, and you can read it, think about it, and add comments. Exchanging ideas can be asynchronous rather than meeting oriented.
But also it can all get a bit carried away (because these artifacts become an important component to promotion).
I work at Google, which is a doc culture. But I worked most of my career at startups where we never wrote anything down. Overall, I prefer doc cultures. But yes, left to it’s own devices it can seem like you are working at a doc factory.
I know they've got their "leadership principles" kool-aid [1] at the interview stage, but I always assumed that a seriously profitable and hard-working company (which they seem to be) wouldn't waste time mincing words.
[1]: https://www.aboutamazon.com/about-us/leadership-principles
What was a very social confident team at peace with asking vulnerable questions turned into a team where people took care to avoid trouble. The cabal preceding reading-meetings with gibberish, and after reading time received feedback of tense silence.
It sounds like it just underscores the reality that, no matter what process a team uses, there's no substitute for psychological safety.
Having a general idea of how logistics work ( it's an huge complex and many times insane monster sometimes devourer of men ), something's was "off" with this whole Flexport signaling.
Not saying it's a time bomb or a WeWork because I don't have any information about that, but I always had the general feeling to stay away.
About the CEO thing, who knows.. CEO's are to blame but we tend to forget founders and "the board" are most of the times the biggest offenders. Their "visions" and key objectives many times lead to an absolute mad-house inside companies and ruined lives.
On the other hand, it could mean high turnover. Looking at their Glassdoor reviews and filtering out their HR-generated fakes, it paints a picture of both scenarios: https://www.glassdoor.com/Reviews/Flexport-Reviews-E1011163....
It's as if the efficacy of a business isn't completely positively correlated with the coolness of its tech stack. I work for one of their competitors, and I'd kill for their tech stack. But ultimately their business revolves around a bunch of professional logisticians and customs brokers being able to execute reliably and effectively, and all tech can do is enable this. I wonder if they realize this.
I have worked as a software engineer in Operations in Amazon for years, and this even if this is true, it is not all positive.
What it meant for us is that instead of developing a solution we developed small disconnected projects here and there, that all required slightly different maintenance, different technology to build, etc.
This was a problem technically but also personally as there was nothing meaty enough for a promotion, and most projects were incredibly boring "I want a dashboard to show metric X".
Hard reality to acknowledge by an industry that takes the term 'software is eating the world' at face value.
Mass layoffs and terrorizing employees, while being the fallguy for a terrible plan to "solve the last mile problem so it's profitable", which Amazon haven't been able to solve
I don't quite understand what you mean; were they forced to switch each time, was each company 'poaching' from the prior one, did a whole team get up and move twice, or did they get laid off twice?
Even in the letter he shared himself he said the founder didn't see eye to eye with him, he 100% got fired.
This is also the typical process at Amazon when directors and about are fired, they all "choose to leave to refocus on family".
https://www.wsj.com/articles/dave-clark-resigns-as-flexport-...
He himself confirmed he got fired (and it happened over Zoom, lol).
https://x.com/davehclark/status/1699574686848352532?s=46&t=B...
Still, will be interesting to see two terrible out of touch people tear each other apart in the name of populism.
Slight difference in expectations depending
The old maxim of “Hire slow, fire quickly” rarely hits the C-suite it seems. It’s almost refreshing seeing it. Of course he probably has a massive parachute to cushion his landing that the rank and file usually do not.
I have often thought about this throughout my career, both being in the reporting chain of said star, and once being that star. The fundamental thing is that a persons performance in a role is much less under their own control than even they often expect. So why is that? Especially in management roles?
People have a reputation that permeates the organization they lead. It will have plusses and minuses, fans and haters, but generally there is a tremendous amount of context about how they lead and how to interpret their actions. There is also a tremendous amount of history about their choices and how they have dealt with both good and bad outcomes from their choices.
Additionally, people who have been in an organization a "long time" (years) and especially if they have "grown up" through that organization, have a really solid network of other folks they can turn to who both know what they can do, and understand what they are asking.
When you change jobs there is a "honeymoon" period where what you do, or don't do, can always be ascribed to "they are new here." It is imperative that new leaders use this period to "course correct" to get to a point where they can effectively lead the new organization they are leading. This is the most important thing they need to do in their first 100 days. Even if you are dropped into a complete dumpster fire, understanding how to "wield" your organization is critical if you want to actually address the fires. On at least one occasion I watched a VP Eng parachute into an org and flame out horribly (even though they had the chops to get the job done) because they focused on "getting things back on track" before "getting to know the organization."
If you work for someone who is new and "previously experienced" (which is to say they got their experience somewhere else). Helping them learn the ins and outs of the organization will benefit both you and them. You because you won't be subjected to obviously stupid decisions which are only obvious if you know how the organization works, and the "new guy" (assuming they aren't a sociopath) will appreciate your efforts and look favorably on your future inputs.
I can’t recall hearing anything about him good or bad (This comment aside…).
* Amazon's policy of firing people on the spot for talking about unionizing.
* Their (former) policy of not operating anywhere where they would end up having to pay taxes
* Their policy of dropping prices through the floor as a negotiation tactic to get competitors to fold or get bought out
* Their policy of abandoning entire towns once they had already hired and fired everybody once
* Their policy of inventory co-mingling, and the deflection of blame to random merchants when they couldn't prove who had sent fakes.
* Their policy of always documenting anything that could even be remotely construed as a fireable offense, just in case he ever fired someone on the spot, as he commonly did.
Outside of official policies:
* The way he enforced a cult of personality, only hiring people who would constantly praise him, and fire people the moment they said anything that questioned his authority. He would even hold petty grudges against people that disagreed with him, using amazon's ridiculous non-competes to harass them after they left the company.
* The way he went to managers of pregnant women the moment they started to show, telling them to find any bullshit but legal means to fire them. (I actually overheard him say this, talking about one of my co-workers the moment she left the room).
* The way he bought a robotics company without any due diligence or even a product demo, forced adoption of the robots throughout his network, only to find out they had fundamental problems that prevented scaling to amazon's scale. Instead of writing off his shitty investment, he came in and micromanaged out every last person from the original company due to unrealistic and impossible demands.
* The way he unintentionally forced operations managers to completely change their operations every time he visited, so they wouldn't get fired for not listening to him, only to have to change it back the moment he left so they could actually be productive enough to not get fired.
* The way he would kick people out of elevators when he would get in, because he had to talk about "confidential stuff", and it couldn't wait til he got to his office. (First hand experience here, lol).
* BTW, he was never actually good at his job. For the entire time he was in charge of Amazon's retail business, they had progressively worse inventory turns, logistics costs, gross profit margins, returns on advertising, employee retention rates, etc. If you wanna see a hilarious accounting time lapse, you can literally take a zip file full of their public financial statements, skip to the parts about the Amazon retail business, and watch him waste trillions of dollars while constantly shifting blame to anything but himself.
In the words of a former US Army Major General (I went through first week training with him), when he quit after just 6 months on the job as a regional director: "Amazon is the most disfunctional organization I have ever seen, and I did my PhD on the Soviet military [1]. Also, that guy is a fucking psychopath."
[1] (the subtext of this joke was that the Soviet military was even more disfunctional than the US military, which he was always ranting about, but Amazon easily takes the cake)
Too many people forget the pissing in Coke bottles fiascos.
Also, people forget how bad workplace conditions can get, i.e., when Carnegie's Pinkerton snipers opened fire on Homestead union steel workers in the massacre of 1892.
The US middle-class had it best post-War when unions were strong between 1947 and 1965. Now, there is about an 1930's-level of unionization that is declining without any floor in sight.
Socialism in the US is a distant memory of its former self.
https://en.wikipedia.org/wiki/Seattle_General_Strike
The problem with asshole-led corporations is they, surprise, reward assholes. Civilized workplaces make a principled effort to kick out the assholes and find competent, productive people with normal-sized egos that can fit through the hangar doors.
> Also, that guy is a fucking psychopath.
Ahaha. Reminds me of the 6 Sigmas from "30 Rock". The 3 main organizational morale killing personality traits are bullying, depression, and low impact. And the problem is most organizations promote the opposite of each in reverse order, often forgiving bullying and harassment when there is $ignificant impact.
I heard him talk at a conference once and thought his insights were somewhat benign for someone in his position, but he didn't strike me as evil. Just uninteresting, I guess.
This sounds wild enough to be a Suits season arc!