20VC: Flexport's Ryan Petersen: Reflections on Leadership from 13 Years Leading Flexport, Why Velocity not Speed is Most Important in Company Building, How Money Creates Inefficiencies in Scaling, The Future of Trade with China & Why Remote Work is so Cha

21:45So I basically read those books. I read one of his books and then someone else every and I alternate back and forth So I read the whole series like four or five times and the reason I like him is that what he does is is as synthesis It's a type of history where you study all all aspects not just military or political but art culture Science religion manners morals fashion everything that we know about about a civilization as an interconnected web and I think it's actually really interesting way to think about companies because we are very cross -functional. If you're only focused on product or engineering or sales or one aspect of a company, you're really going to miss the collective whole of how these things that are connect.

22:24It's not so much about the history, it's about the way of writing history that I find really relevant for companies. You can, when you write your, for example, your annual plans of what is the team going to build, sometimes you have to duplicate, you have to write the same thing twice, but I want to see what is the finance team doing and what is the sales team doing after these actually interlink and is the tech team building the right product and support both of those things and vice versa, right? Are they selling the product that the tech teams building? It takes extra work to go through and make sure all this stuff in their links, but it's quite contrary by the way to an Amazon mindset, but in the Amazon world, you sort of like have a business unit that just goes hard and doesn't have to pay attention to all the other business units.

23:02And I actually far prefer the cross -border collaboration and teams coming together on reading each other's plans and making the plans really transparent to as many people as possible. Because if you don't have that synthesis, then how are you going to know that you're especially in our business where it's an end to end logistics offering? It's very difficult to do that in a world where people are just thinking about one leg of a shipment or one department in a company. What's been the biggest lessons for you and where those interlinkages braid, where the cross functions don't work? You know, in our business it's an end to end offering.

23:33The way that Flexport works is companies come on to our platform. They place orders to their factories, their Flexport, buying purchase orders, buying goods. Those factories become users. The average importer of goods is onboarding 18 factories. And then those factories become users. They place bookings. They say, okay, the cargo is ready on this day. We send a truck out there and across 100 over 100 countries. Then the truck pick it up, export, clear it out of that country, put it on a ship. So we've got to have contracts all the ocean carriers and airlines across the world, clear it through customs, truck picks it up at the airport or the port.

24:05The delivers are directly to the customer. Sometimes we'll bring it to a warehouse, unload the container, put it on a drive -in, on a regular truck, deliver it, bring it to another warehouse, we then deconsolidate it and ship it to customer stores or in the retail store. So it's an incredible amount of complexity, as you can imagine. So if you try to run this where each leg is just only thinking about themselves and isolation, you're very likely to screw something up. a mistake, a change in China at the origin or in Vietnam and a delay there, I've got to replant everything downstream because the truck now has to be rescheduled a week later, three weeks later.

24:40Yeah, silos are incredibly dangerous in logistics and yet there's no possible orchard that could solve this. People who work in simpler businesses, they try to solve these problems with an orch design that says, okay, everybody, these people report to me, But only this one person can have everybody in that network that I subscribe reporting to them and then they become a bottleneck So you have to build a company Amazon's on a good job with the API memo Bezos is kind of solve this with it everybody should communicate with APIs if we don't have any meetings That's correct we need to develop in that direction But in the meantime before you have everything being API of everything every team talking everybody by APIs You just have to sit down and collaborate you have to reach out as plans You have to line up make sure that the handoffs are seamless that each team because we're organized it's each of those legs as a team, but they got to pay attention to what's upstream and downstream of them.

25:29Ryan, how many direct reports do you have? Right now I have 15. Is that not too many? For our business, it's the best way. I've had this view of six. Much better to have more and get more collaboration, but I don't have about 15 person meeting unless I just need to tell everybody something. We don't make decisions with all 15 people in the room. We grab four or five, six people for whatever the topic is that we need and we'll go deep. and that's just those six people who report to me, but some usually layer down from the technology or someone from the front line to understand the issue and that's where we can make decisions in small groups like that, not with all 15 people.

26:03To be here making those decisions in small groups, culture is so important for it that people feel able to talk to you that they're not scared to, that they can discuss the hardest things. I've been bad actually at culture building, but being young I kind of always thought friendship was the way to build companies, which is the worst thing ever, obviously. Well, have been your biggest mistakes on culture. Yeah, I think trying to be popular is a big mistake. You have to do what's right, not what's popular in the company. Sometimes you do things that are unpopular. But if it's the right thing to do, you gotta do it.

26:31I think the best thing to do on a culture, like the goal of a culture is to drive velocity. We were talking about velocity before. Speed in the right direction. You gotta have a great mission. To do that, you gotta have a great mission of purpose. Why are we here? You know, FlexWords mission is to make global commerce so easy that we'll be more of it. Like, I think that's inspiring. Like, let's increase GDP for the world. Let's help people create opportunity and get richer. Logistics as you're kind of a backstage pass of the world economy. What's happening in all the world's companies? How are they run?

26:56Help them with their problems. So having a sense of purpose, so you actually know we're all grown in the same direction. Absolutely crucial for a good culture. It's like sounds cleach, but you can't do enough of it. Two is you got to have trust, which means people doing what they say, not talking crap behind each other's back, putting the issues on the table, a culture where you're not going to get scorched because you criticize somebody. For example, one thing I do for this is we have an open channel in our Slack instance where anybody can ask the leadership team a question And I mean I praise people who ask hard questions who criticize us I mean, I think that's also I prefer courageous people and I think that builds trust What's been the hardest question?

27:34Oh, we got we get questions a lot of questions about you know We laid people off so you obviously gonna get a lot of tough questions when you do something like that around benefits and salaries and you think of this thing or we really reduce the size of this team. Does that mean you don't value this team? Things like that are tough questions. But I respect that courage. Imagine being a junior person in the company, not been around very long, and challenging this global CEO publicly in front of everybody. That's awesome. Like that's courageous. So much better. There's this anonymous social network that's like the terrible, all the cowards go there and just talk trash.

28:07You're obviously a coward. If you're allowed to talk in public and ask the open question, where you're too cowardly to do it and you post on the anonymous social networks. I think that builds trust. I think having things like that where you can just answer questions. I'm not afraid of any question. I don't always have the best answer. Well, I'm not afraid of it. I live in public and be authentic the only way I know how to do it. So a sense of purpose, a sense of trust using intuition is really important for culture. It can't be all data. Data is overrated in my opinion. Data is valuable, but data is too slow and often it's inaccurate.

28:37and most humans are not actually using data the way they pretend to use data. Most people know what they want to do and then they use data to justify what they were going to do anyways. And you can always find some data to back up your case if you're certain. I respect it. I think people who have good judgment can make decisions move fast. Data is also very slow. It takes a long time to get the data you want and you often need to move faster than that. And data has one major drawback, which is that all data comes from the same place, which is the past. If the future looks different from the past, your data is completely useless.

29:10But you gotta have high judgment people interpreting data saying, this is actually right. I mean, a number of times I've been showing some data and been like, but what about this? I'm like, instantly I can debunk reports on data. Using intuition is key. A culture of learning is really key. Honoring mistakes, not scorching people who make a mistake and constantly trying to learn and get better. These are like all really important aspects to building a high velocity culture where people can build trust and go fast and execute on that mission. A lot of what you just said is predicates on actually having the right people on board as well.

29:41What are some of the biggest hiring lessons you have that you wish you'd known when you started or in the early years? I just don't hire outside people. I'd rather much, I don't hire senior executives. Look, that's not a like a rule. We've hired a lot of great senior executives at Flexport over the years and a lot of them are doing amazing work for us. But it's so much higher risk and promoting from within and so much better get to know people You get to really get bought in that they believe deeply in your mission They feel credibility and respect and stretch people and promote people from within I think I didn't do enough of that over the years I think in blind pursuit of growth and hitting our goals and being global and taking over the world and bringing our vision to life You need help and you turn externally instead of going hey, I'm actually got amazing people at Flex World Like the key job of leadership is identifying talent within your company.

30:31Externally, yes, but like it's so much better if you can get internal folks and promote them. The problem is like companies are in a hurry, you know, and we want to achieve things really fast and it's kind of a shortcut to go higher, see your people from outside. How do you know when a stretch is a stretch too fall? I mean, it is a tragedy because when that happens, the people tend to leave the company. And I think a great culture should be able to go, hey, you know what, like if you could really do this the right way. We haven't figured this out, but I would love to. It's like, hey, we should have some didn't work out.

31:00Let's bring them back to a role that matters. But he goes in compensation and other factors being what they are. It tends to be when you stretch people too far. They leave the company in that stance because we've lost a lot of great talent. And if I just think about all the great people of left, right, sport over the years, if they were still here, we'd be like 10 times better company. If you're out there, come back. We'd love to have you. My honest, refraction on people management is like being CEOs to worst thing ever because Because great people, you're pumped, and you're probably leaving because they're so good.

31:27Average people, you pump, and you worry that they're not good enough. And bad people, you're pumped, and you worry that you should have got rid of them last week. Do you agree with that? It's an incredible job being a CEO of a company. But it's not an easy job, and it's not necessarily fun. I mean, people look from the outside and think like, oh, I'll be an entrepreneur, I'll be the CEO. And like, it's really tough, man. I mean, it is not an easy thing to do for the reasons that you said and many other. I don't kind of want to be employable. I don't want to work for somebody else. I want to go build stop play.

31:55You said they're about kind of the mirage of entrepreneurship. What's the biggest misconception people have of Flaxport today versus what it is really? You know, Flaxport's been in the news a while lately. We had a CEO transition. The demand for scandal and drama is way higher than the supply in this world. And the media has been really sensationalizing some stuff. I mean, there was a story about Flaxport that I will not point people to, because I don't want to give it any attention. but it was a whole article, Flashboard delivered 33 million packages to consumers homes. That's what we're on track to do this year.

32:29And one package got lost in this mainstream media publication of an entire story where the first four paragraphs are about a lady whose package got lost. I feel bad for her. I'm sorry, we lost the package. We genuinely, we screwed that up. We reimbursed her in full. But like one out of 33 million, I mean, this is people trying to sensationalize and stir up drama. Or like that same article, clean that one of our biggest customers was really unhappy with us. But literally the customer went on the record telling them that it's not true. We were very happy with FlexPoor. And they didn't publish that.

33:00They wrote that we have sources saying that they're not happy, but like the source of the company told you that that's not true. So the media wants to drive these narratives about FlexPoor as if we're a mess or something. When in fact, if you come out of the dust, our culture is stronger than it's ever been. We're really well financed. We have almost a billion dollars in cash. We're going to be profitable next year. But like if you read an article about FlexWord today, you're going to be like, oh, this company's in a difficult position or something. So I don't know. It's a part of why I want to come on podcast and tell the story directly.

33:30So you said it earlier. You said you can use data for whatever your end is. And so if there's any data that suggests it's not in mind with your story, well, that didn't get that data. Exactly. Exactly. In other words, the media has been good to FlexWord over the years. I'm not like if you've created up the media. but at the current moment, people are liking to tell the sensation and that's what drives clicks or whatever metric they're looking for. But over the years, the media has been good does and like been part of our success and to get the story out and to track customers and talent. And so I think we'll get back there.

33:57We just got to go do a good job. Speaking of kind of like in the media, the world is a more nerve -wracking place than ever in many ways. I spoke to Brian Singaman before this and he said there's nothing he loves more than talking to you about bluntly the state of the world and how you see kind of macrogeopolitics today. And I'd love to ask, when you think about kind of geopolitical macro, how do you think about the future for trade with China? Well, China is a very unique manufacturing capability that you can't replace easily. The United States government is doing their best with imposing tariffs on imports coming from China.

34:28And companies with simple products like Think Apparel, etc. are moving that away from China. One to avoid the duty, but the Chinese economy's done so well that their labor prices have gone way up. You know, the average hourly wage in Mexico is now cheaper than in and join official. And that's great for China, right? Like good for them. Like they're making more money as a population. So China's no longer the cheapest manufacturing site in the world, but it's the best manufacturing. Like they're the highest quality, highest competency in manufacturing. So if you're doing electronics, you're doing anything sophisticated, not anything, but a lot of the really sophisticated forms of manufacturing, China's the best place to buy things.

35:00So I don't think that's gonna go away. I think people will always be shifting away from higher labor costs to cheaper labor costs. And tariffs, they're gonna do what they can to optimize against tariffs. I think in general, it's where at an interesting moment, right now, where globalization is in question, of like whether or not we're going to continue to do trade globally, or what we just produce everything domestically, or they're going to be more boundaries, more nationalism, more maybe regional trade. We're at a moment in time where that looks like a big interesting debate, but I would point to the long talking about history that global trade has grown 4 % annually since the Mongol invasions in around 1200 AD.

35:374 % doesn't sound like much, but when you put 4 % on a 800 -year curve, it's a phenomenal hockey stick like Silicon Valley's never seen. And I would predict that that'll continue because it's innate in the human species. Specialization and trade is like one of the main things that separates us from the animal kingdom. Adam Smith wrote this, I've never seen a dog trade a bone with another dog. We see animals exhibiting all kinds of other behaviors, language and tool use and other stuff, but trade is not something that they do. And trade is fundamentally with building block of civilization. It allows specialization, it allows gains, it allows wealth creation.

36:11So humans want to trade with each other. Now governments will try to stop things. It will be special interests that may want to block trade. But left to their own devices, humans will trade more and more and more. And so I would predict that that's what's gonna happen because we always find a way. They will trade more and more and more. I'm just really intrigued. Do you think that will be globalized trade or nationalized trade? I think it will be globalized trade. I think first of all, the ship is an incredibly efficient way of moving things around the world. Far more efficient than any other, you know, land -based transport.

36:40I've had this blog post that I want to write about how Fiji water is the most environmentally friendly water. It gets criticized all the time because Ocean Freight is so carbon neutral that by getting it and shipping it from Fiji to the west coast of the United States, it mits way less carbon than running a truck from the Rocky Mountains to the west coast. And Ocean Freight is cheap, it's reliable. The fact that you can ship a TV across the world for a few dollars. It's just a remarkable feat of engineering and human ingenuity. Now war is a big risk. I have no way to understand the risk of war and what that can do to trade civilization.

37:13And therefore trade depends on peace. We take it for granted. We've lived in this great period of peace for most of our lives, at least in the United States and the Western world. The wars that have existed have been largely removed from us in the daily impact, thankfully. But if that changes, yeah, of course, trade is at risk. And So there's a lot of black swans that can happen, but even more is that, you know, World War II seemed like the most catastrophic thing that could ever happen. And if you look at the graph of GDP or trade, you'd barely notice the blip. To what extent is planning even valuable in your business when you have COVID, when you have Ukraine that just throw the world into chaos?

37:48Yeah, well, I think it was Eisenhower said that the plans are useless, but the exercise of doing planning is incredibly valuable. To think strategically to take a moment back and step back and think about what you're doing, and why you're doing it. That's a very valuable exercise, but you have to be very adaptable when the world changes. And yeah, probably that's a strength that a weakness of mine I'm very good at changing direction, probably change direction to Italy also. And so having some from view of where you're going is really important. Question, would you be long China? China have so many problems from population decline, manufacturing decline, reversion away from urbanization.

38:21Would you be long China or short? China has a few advantages that we don't have. China believes in China. Chinese people believe in China. Apple Americans hate America. I think that's a huge advantage to have as a civilization to believe that you're part of something that's bigger than yourself and trying to support your country. You know, we like that these days in America. And that's a huge advantage to have. They're incredibly industrious people. They're working, they are hungry, they want success. They work six days a week. A lot of people don't realize that I live in China for two years. They work Saturdays, we don't work Saturdays.

38:50Most Chinese people work six days a week. How much more productive you be working at extra 20%. You know their industry is, their hard work in their intelligence, they have a lot going for them. Their leadership is incredibly smart. They have some demographic challenges that are beyond my scope to understand because, you know, people are like, oh, there's the population's declining. China's not the worst in this by any means. There's Western countries, Italy, Korea, other countries that are declining faster. But I always think like, but isn't it better if you have fewer people to share the resources?

39:15I don't know. I don't know how to think about that. They selfway more people than we do in the United States. So I'm not like a macro investor by any means. I always, I did study a lot of economics. I always found macro economics to be impossible. where I think people who pretend they understand it are probably wrong. I lived in China for a few years. I have immense respect for Chinese culture and Chinese people, Chinese food. There's a lot to love about China. Do interest rates hit double digits, do you think? Some people suggest we're just at the start. Some people suggest they want to go higher.

39:40Where do you sit? I'm not the right guy to ask about interest rates. I don't know, man. If they do, the United States government's going to be a lot of trouble. We can't pay our debt if it's 10 % interest. They have to keep printing money. And then you have an inflationary cycle, which then makes interest rates go even higher. So it seems pretty ugly. Okay, before we move into a quick five, we know I asked something about you do have direct experience and you will be able to lend some wisdom. Parenting, you are a CEO of a, you know, a thousand plus, how many people work at Flattestport now? 25 hundred.

40:0825 hundred. Can you tell me how do you still be a great father and be CEO of a 2500 person company? What do you know now that you wish you'd known when you had kids? Well, love is the, you know, when most important values. I love my children so much that I want to get home and make sure I get time to spend time with them before bedtime and hang out with them every night and see them in the morning too. So I've got a three year old and a one year old, especially my older daughter. My one year old, I was like, you know, she hasn't started learning how to talk her anything yet, but my three year old is like just a little ball of energy.

40:39So I love playing with her and I make time for that. And then I work more in the evenings after she goes to bed and I get up early and work and that's fine. I mean, I work as hard now as I ever worked in my life. Did having kids change you? Yeah, of course. It's yeah, it's like a chemical wash that flows over your whole body filling you with love and respect for the universe and like understanding Also a great way to understand your own parents your relationship with them like remember like all the stuff that they went through that I'd never even thought about but as I go through it, I'm like oh my goodness I had to deal with this like I must have been a little brat like flashbacks You know like oh my god.

41:12I remember reading curious George as a kid and now I'm reading it to my daughter a lot of flashbacks and a lot of like thinking back from my reflecting on my own childhood that's really really profound. You know you have CEO hat, you have father hat, you have husband hat. The husband hat as well you got to keep up. How do you retain romance and retain prioritization of relationship when you're managing 2500 people, reading curious George, holding one year old? Well I have the greatest wife in the world. My wife is the kind of staff of my life. She's been an incredible advisor for me on all And by the way, I was criticizing the media before, but my wife's the former reporters.

41:49I'm like, well, in tune with Ademedia Works, and she's a great, like, communications director, helping me, you know, understand how to behave. So my wife and I, like, were super in tune with each other. I was building Flexport well before I met her, and she's always known that Flexport's my baby and that, you know, the serious priority for me, and that I'm very fortunate to find a woman who knew that and signed up for it and once they helped me in every way. And I never take her for granted. Final one, Roy Deuquickfire. You're a very secure deed. You're just very kind of content and happy in yourself.

42:21What's your biggest insecurity in leadership today? Oh, no, I do feel very secure. You know, part of it is I mentioned I lived in China for a few years. I was super broke, making no money, and I was living really well. I was like the best couple of years of my life at that time. I made a real sense of adventure and phone. This was 17 or 18 years ago. And I realized I don't need a lot to succeed and be happy like I was like I made $17 ,000 when you're and it was like one of the best years of my life And I was trying to make money by the way I wasn't like oh, I don't need that was like trying to make money and and I didn't make a lot of money But I was very happy and I ate well when I had friends and it's a lot of me to take risk in my career And I've started multiple successful companies not just Flexport but import genius room .com I started a lot of businesses invested in you know over a hundred companies and done really well as an investor No matter what happens, I'll be fine because I can be poor and happy.

43:10It's not about making money and so it's like gives me a sense of security that I'll be fine. My wife's not going to leave me if we lose money. We'll do it together. It'll be fine. Does money make you happy? Well, money can solve problems and problems can make you unhappy. So yeah, money can definitely contribute to happiness if it can make problems go away. It's very funny because humans are mimetic. We copy each other. We want more. And so you have to be very careful of who your role models are and who you imitate. and be careful not to hang out with people who have way more money than you because you'll aspire to do things that you can't afford.

43:39Spend money on stuff that won't actually make you happy. And so picking your role models, I think it's one of the most... And just your friends who you hang out with, one of the most important things in life. Money alone in devilish. If that's all your after, definitely a recipe for misery. That sounds cliche, but it's true. But if you know what you want in life, money will definitely help you get there faster, help you solve problems and overcome obstacles and things like this. You mentioned your success investing, I spoke to Chad before, and he asked why do you love investing in rebels or people with messy paths where something's gone wrong in previous companies?

44:12Why do you love that? I think revenge is a really powerful motivator. You want people to motivate and driven, and if someone feels like they've been wrong, there's a couple of benefits. One, they're going to be incredibly driven to go have a comeback story. Two, they're probably going to get passed over by other investors. That's what you need. You need a contrary and opinion. And you have to be sure that they didn't have a moral ethical failing. Or if they did, it was something that minor that can be forgiven. Broke some rule or something, but like there were innocent people were not harmed. And then in that case, if you can get really comfortable with that and they're really talented, and other people aren't willing to invest in them, then that's like a perfect storm for finding a great founder.

44:50And to Paul Kukonat. I got a list of people that I backed that match that for a while. and the park was one of them. Yeah, I think Parker was wrongly scapegoated and run out of town at Zettifitz. And he proved it by going to build Ripling into a business that's much bigger and better than the Zettifitz ever was in the exact same space. I'm sure that the investors who did that regret it. And that's fine, Parker. It doesn't care per se. He just wants to go execute. Has engine investing changed how you are as a CEO? It helped me a lot to understand that the VC world now works. It probably helped me with some of our fundraising, having a little bit of perspective being on the other side of the table, understanding the game more, having, you make friends with other investors and can learn more about the VC world and how to navigate it.

45:32But I think NetNet, no, I don't know if it has because it's also taken up time. I haven't spent a lot of time on it, but it's inevitably going to take up some time. And I do it not because it's going to help me have fun. I actually had a Quentin Mage of Asia last thing a while ago, basically. I'll do it a little bit here in Europe to friend the mind or something. But the reality is, anytime spent away from FlexPort is probably negative for FlexPort. I mean, I spent all my time on FlexPort if I want to make FlexPort more successful. But, hey, life is not all about money or one thing. Like, I enjoy it.

45:59I like learning. I like making friends with other founders. I benefit from those relationships in ways that are hard to predict. And certainly, 10 years ago, 12 years ago, when I started Angel, I'd say, I don't know, who knew? Well, what I was doing, I'm just trying to get out of here and have fun. Who knows what VCs are doing, not them? I'm just kidding. We have VCs. I'm going to do a quick fire round with you. So I want to start with a question. What concerns you most in the world today? When you look at the landscape, what concerns you? War, violence, mob violence, the scapegoating of innocent people, and civilians being caught up in the consequences, yeah, violence.

46:36Has managing teams got harder with the rise of woke society? Yeah, definitely. I think managing teams is always hard. Feeling with people who are not focused on the company's mission and have their own missions that are separate from a company's mission is incredibly frustrating because there's a million organizations in this world, one for every possible topic that you want to drive, finding people at Flexport who are focused on anything other than making Flexport successful at work, really really frustrating. I don't care what you want to focus on outside of work at all, what your politics are, what your cause is.

47:10I think that's awesome people should have passion to do stuff, but like that's not what Flexport's all about. At the company during the day, like let's just talk about our problems are hard enough. We got to make global commerce easy. We got a ship cargo in every corner of the world like this is hard enough We can't solve other people's challenges outside of that remote work versus work in office. What are your thoughts that? I think remote work is very very difficult to achieve a build a company culture I think individuals can succeed. I'm incredibly productive working in my house with there's no distraction I'm incredibly productive individual contributor But great things get achieved by teams and teams don't really form over video conference teams form when you get together And you collaborate and you have dialogue and like you capture emotion and body language and Contacts and you jam and you stay up late and it's not constrained by the 30 minutes of our video call Like and that just doesn't happen on remote work I'm always one of your core things learning and when you and me do a presentation together and we leave and get a coffee afterwards I said, dude, I didn't like the way that you presented that.

48:13And I think we could have done it differently in this way. And it's fine to need you a bit, man. Like I want people to come in and work with us in person. Now there's certain people for exceptions and people who are outstanding track records of performing at home and individual contributor jobs. I've told this team over and over again, if you want to succeed, if I actually get ahead, you should come to the office. But even just last week, you know, I do a weekly town hall, whatever office I'm in, I share with all my mind and then take questions from the team. And after this, how does that just hang out?

48:39I had a guy come up to me last week and just tell me, hey, we have this opportunity to get $2 million extra profit and just do these three things differently. And I was like, who would be told about this? He's like, nobody, I'm like, if we weren't in the office together, it was $2 million right here. Let's go. And there's countless things like this. And just like getting people in the office so that information can flow freely and solve problems. By the way, I think remote work can really work. But it's not going to be people making $250 ,000 a year hanging out in Jackson Hole. It's going to be geniuses in the developing world making you know who all of a sudden there's an arbitrage You can find incredibly smart people all over the planet and pay them one under it They're one tenth whatever GDP is I mean that look at the GDP in the Philippines or something and there's tons of geniuses over there And so you could build a great company of remote work But it's not going to be the people who are advocating for remote work inside these companies in the United States like if I'm remote I'm not going to pay someone 250k in San Francisco to be remote I'll go find someone in a cheap location.

49:36So I don't think the people who are advocating the strongest remote work actually know what they're advocating for because they're gonna end up in the world without a job because they're now competing globally with geniuses all over the developing world. What if you changed your mind on in the last 12 months? One of the things I changed my mind about, you know, I had this idea of go after these business units that could work in isolation and run really fast. I think that works for a lot of companies, but as I was describing, that doesn't work in place for it. We have to be in end and we have to deal with a little bit more process.

50:03Process is probably the closest we have to a good word for bureaucracy. There's a healthy amount of that that like actually a lot of their true bureaucracy and companies comes from a lack of process when people can't get anything done And they don't know how it works But putting in a little bit of process and putting in more of an end -to -end view making people write the same thing twice in two different teams Planning documents making people spend a little bit more time in a meeting to understand another team's objectives and not have this envision that like oh we can just run really fast and ignore everybody around us That just doesn't really work in our industry Penultimate one favorite Walnut General Emperor.

50:38Why? Depth in Napoleon is a very interesting mind first of all you know one like 38 battles or something 38 and one I forget his record. He's pretty great general roast through the ranks came up from the grassroots incredibly well -read as well Like you know that Egyptology is basically creative because Napoleon wanted to invade Egypt to cut off the British Empire is accessed in India and while he was very proud of all these scientists and like you know that's where we got the Rosetta Stone and the understanding of the the coupling of the higher group they said then he wrote the law code and the Polionic code which is basically the law of the land in half of Europe today all the way till now.

51:14There's a great book called The Mind of Napoleon which is out of print it's like $200 on eBay and it's just full of all of this is his quotes and he has a quote on every subject. It halves of them will appall you in the modern world but I find those to be the most fun. And half of them are just like men it's guys as an actual genius. It has a nice index in the back seat. You can look up any subject and see what Napoleon thought. Final one for you, Ryan. It's 2023 now. Soon to be 2024. Where are you in 2033? You still see a flight sport and where's flight sport then? Definitely still see a flex board.

51:42Hopefully, you know, the rest of my life can stay in the seat, health willing. I love this job. I never wanted to leave the job. I just thought David would do a better job than me. And so I'm thrilled to be back and, you know, executing. 233 is hard to predict with what's happening with AI and everything else in the world. You know, I don't really believe in predicting that far out, but definitely want to stay at the CEO of Flexport. And I do believe Global Trade is here to stay. And I think actually what we're seeing is that Flexport is incredibly well positioned to use AI to implement it because we've structured all the data at Global Trade.

52:14We're basically in incumbent. We're the third largest provider of international forwarding services in the United States. So we have incumbent level of data, but we have the technology stack and the team that can actually go and implement. One of the things we've done is break a shipment. When you ship a container from door to door, we broke it into these discrete tasks, like a work item that get completed. And we're finding out that once you chunk it down into something that's simple, that AI can complete the tasks. And so we're almost every couple of weeks, we're implementing something that used to take hours or days and take getting it down to minutes.

52:45I think we'll actually see that AI's going to be a huge beneficiary of that. But labor in the forwarding layer of global trade is 10 % of the cost of shipping things internationally. Not the labor of the people driving the cars, the trucks, and the ships and the planes, but the labor of the coordination layer of handing off the documents. I often joke it should be, instead of freight forwarding, it should be freight email forwarding. And so labor and net forwarding layer is 10 % of the cost of shipping things. And we're seeing that AI can just do tons of these tasks. And it doesn't mean that you'll have less people working at Flexport, by the way, because if you're really successful in automating things You're gonna need more people you're gonna have more salespeople more engineers You're gonna take over the world and employ even more people and that's a real fallacy I mean that would be like arguing that the invention of the plow is gonna eliminate jobs And we should all just still be using sticks to dig a holes to put seeds in their earth and grow our own food Like and that's an argument is all the time in its silly like AI is gonna create way more jobs than it destroys But if you make everything 10 % cheaper, we can have a world of abundance.

53:47That's where I like to see us in 2033 Ryan, I've loved doing this. Thank you for my wide -ranging conversation from parenting to the future of trade and China in between You are a star and I've loved doing this my pleasure. Thanks for having me. I'll talk to you soon I Want to say huge thank you to Ryan for being such a fantastic guest there If you want to see the full episode on video you can check it out on YouTube by searching for 2020 VC, that's 20 VC on YouTube. But before we leave you today, did you know that every 20 VC episode you listen to is recorded with Riverside. Riverside is insanely good.

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