From San Francisco, Sanne Manders built the logistics service provider Flexport within eight years into a company with a turnover of 3.3 billion dollars (2021) and 3,700 employees. Together with co-founder Ryan Petersen, he raised $ 2.2 billion in growth money. Last year, hundreds of companies shipped $ 19 billion worth of goods using Flexport.
A big challenge when your business scales so fast is maintaining a culture of flexibility and customer obsession, says Manders when MT / Sprout talks to him at the European headquarters in Amsterdam. ‘You can look at a technology company in two ways hyperscalation reviews. Half the population thinks it is chaos and experiences it as drink from the fire hose. The other half sees it as a challenge that comes with growth. ‘
‘That’s also what I’m aware of when it comes to recruitment. Does anyone like chaos? The consequence of going fast is that things always break down and need to be fixed. ‘ Manders likes to fall back on a familiar motto from Amazon founder Jeff Bezos. ‘It always is day one†
Flexport therefore seems to be thriving in the logistical chaos that arose as a result of the corona pandemic. The company acts as a knowledge lighthouse in turbulent times. Some of the mountain of data it collects is shared in the form of indicators such as Logistics pressure matrix and Post Covid indicator†
How big is the crisis in the logistics world at the moment?
Manders: ‘It’s still pretty serious. It can all be traced back to changes in consumer behavior over the past two years. At first, they spent their money on restaurants and gyms, but due to the corona pandemic, they were suddenly at home. This led to a huge influx of products from Asia, and the system was not designed for that. The ports were not big enough, there were not enough ships and trucks. We are still not through that. ‘
Before the corona pandemic, for example, it took 45 days to get a container from Shanghai to Los Angeles, Manders calculates. It now takes on average twice as long.
The worst crisis seems to be over: “Consumer demand is now falling again and people are sitting on the terrace again so they spend their money differently. The pressure on goods decreases and shifts back to services. ‘
‘But there are still plenty of disruptors. Stacking things up in Shanghai and releasing them again will lead to a traffic jam in Rotterdam in three weeks. For example, there are several such minor shock waves. We also get the high season, Christmas. Then the shops must be full ‘.
Is the logistical disruption a curse or a blessing for Flexport?
‘It’s annoying to our customers. Logistics has become more expensive and less reliable. A customer wants options, reliability and a lower price. For us, the following applies: The more complexity, the more value we add, and the more customers need us. ‘
The reason we win new customers is that they have one single window on their supply chain. Eight years ago, we still had to explain that digitization is important, it is no longer necessary. The increase in complexity is not only due to the current problems, it is initially a megatrend. You used to buy your products in Shenzhen, put them in a department store in Venlo and drive them from there to Europe. It’s about a line.
Today you buy not only from Shenzhen but also from Vietnam, Malaysia and Indonesia. There is a huge diversification. For example, increased labor costs in China and Trump tariffs in the United States. But a lot has also changed in terms of sales. A customer who orders something today wants to receive it tomorrow or the day after tomorrow, and not in a week. E-commerce has made the timelines much shorter. As a result, you need to have products close to your customer in all countries. ‘
What were the main drivers of growth at Flexport?
“A few things were important. Number one is that we have our vision – ours Nordstjernen – has never changed. The framework in us Series A tires is still exactly the same. ‘
“Number two is a customer obsession. Everyone with us knows: the customer comes first. If you know how to create that culture, customers will feel it. And they will nominate you for other customers.”
‘The third aspect is a culture of agility and velocity† As a management team, we are always concerned with how we can go faster. I want to go much faster. ‘
What stops you?
‘Sometimes things are complex. We now have 3,700 people, so if something changes, you must also inform 3,700 people. In addition, it is a super complex business. On all continents, with all modes of transport and with teams and customers all over the world. Those things all depend on each other. ‘
You are still COO, but the company has changed completely. How do you grow with it?
Laughs: ‘I’m totally incompetent. I have already given a lot away. Previously I have also done sales and finance e.g. The role has shrunk. Now that’s all commercial product is. What do we bring to market? And everything you need to buy for it and how to operate it. ‘
‘It’s a matter of continuing to learn and gain skills on board. Not copies of yourself, but people who are better at the areas you need them for.
Also read: With these 10 steps, you put together a top team
Flexport does one every few years reset from the company. What is the idea behind it?
‘One of the important things in one high speed culture is that at some point it just isn’t good enough anymore. Once you have learned so much, you can change what you have. Or you say, let go of what we are starting over. To replatforming is very common in Silicon Valley. Every five years, you rebuild the entire platform.
You can hold things to it, but that does not make it more beautiful
It’s different from how traditional companies do it. They have something that they started 40 years ago and they keep repeating it. We started eight years ago and we are now in iteration three. You can stick things to it, but that does not make it more beautiful.
How difficult is such a one resetwhen to keep all sorts of other things in the air at the same time?
‘Well, life is tough† But if you do not, you will become slower and slower. is page load times go up, for example, your data integrity deteriorates. ‘
There are countless players challenging Flexport, such as the Dutch Shypple. How much space is there?
‘Each country has “Flexport of”. This is how they often pitch. But let’s be clear, this is a huge industry, $ 2 trillion. We are now the largest on the main trade connection of the world, Trans-Pacific. There we have a market share of 3 percent. But worldwide we only have 0.3 per cent. ‘
“We can grow 300 times bigger before we become a monopolist. And on top of that, global trade is growing by a few percent every year, so the cake is getting bigger. I do not think this one either the winner takes everythingmarket. Number one (DSWed.) only has a market share of 3 percent. ‘
Flexport also launched a non-profit branch, Flexport.org, which NGOs like Unicef can rely on. The last collection raised 75 million. Money used, for example, to transport medical equipment to Ukraine.
The goal of Flexport.org is also to make transportation sustainable, says Manders. ‘In the end, it’s a dirty one, carbon-heavy industry. One of the things that inspired me in this area was how Peter Bakker did it at TNT. You can do all sorts of things for the world, he said, but the best thing you can do is use your own core competencies. Then you get most of it bang for the buck†
“Now a recession is just around the corner. I wonder how many people will still invest in sustainability. In any case, we’re rubbing it in: every transport and invoice indicates how much CO2 you’ve emitted. ‘
A profile we wrote about you earlier stated that you encourage entrepreneurs to tackle major issues in particular. Why do you think this is important?
»The simple problems are solved or they are not interesting. I’m in an angel collective in Holland, the Operators Exchange. We see a lot of good things there, but I also see a lot of things that are not ambitious. Someone who wants to be an entrepreneur and who is thinking, let me come up with something. It’s not going to work. You have to be completely passionate about the problem, and it has to be difficult to solve. “
Also read: Robert Gaal on the investment group Operator Exchange
If you compare it to the US, do you get a more suitable offer there?
‘I think people in the Netherlands think quite small, yes. I do not invest in small things. I would rather do something that is really big and that has a big risk. Where it zero or one is.’
You settled in the technology mecca of Silicon Valley. Is Holland now just as good a springboard?
“Access to the capital market was easier in the US eight years ago. It still is, but many large funds have begun to operate globally. In addition, it has become increasingly easier to start a startup. Because more and more platforms are coming to, for example, HR cases and CRM systems.You no longer have to invent it all and you can focus more on what you want to excel at.
This is the time of chaff and wheat
Over the next six to 12 months, things can get a lot more difficult everywhere. The world of finance has completely changed in recent weeks. From public tech companies to private appraisals. This is the time of chaff and wheat. There will be many companies that can not get new financing because they do not have a product market that fits. And that could continue until now because there was one shot went into financing. ‘
Is the cold wind a reason why Flexport is putting the exhibition plans on hold for the time being?
‘I do not think. A company that goes public because the stock market is at its peak is not doing itself any favors. For the stock market is heading down again. I think it is better to go to the stock market when it is low, because then you have a longer rise up. But if you were to ask me if it’s time to publish now? probably not†
In the end, you can not time the market. Above all, you need to be ready as a company. You need your finances measurements pick you up compliance and have processes in order. ‘
Do you ever think of an exit?
‘What is an output? I see (an IPO, ed.) also as a moment of refinancing. Now that it is private investors who are in it, then the public investors will be. It does not change the company. Everything is added in terms of rules and quarterly figures.
But now I do. Last night was ours board meeting† It may be different than reporting publicly, but in the end it is accountability. ‘
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