Issue #43: Forager vs Cargado, what’s the difference?

On a very consistent basis, I regularly get asked about the main differences between Forager and Cargado.

The short answer? We have a better business model, different customer and ICP, a different team, I’m a different leader, and we’re taking a more focused approach to the problems we’re solving.

The Business Model

Forager was a freight brokerage. Add “digital” at the front because we had a team of engineers building technology, but we were a brokerage at the end of the day. We took on the price risk and we focused on convincing shippers to let us move their freight while convincing trucking companies to do it for cheaper. We had to deliver on price, service, quality, and so many other things had to go right in order to succeed. We simply tried to perfect too many things all at once, and we tried building tech to do it instead of having people do it.

For example, we had a customer who paid us $2400 per load to move freight from Monterrey NLE to Dallas TX. We paid a carrier $2100. We kept $300. For that $300, we had to make sure the pickup and delivery appointments were scheduled, we had to negotiate the $2100 rate with the carrier, we needed them to be on time for everything, we needed to talk to the customs brokers on each side of the border, and we needed to get everyone involved and on the same page or something would go wrong. All for $300. We had to do everything and it had to be perfect. Think about how many people it takes to do that well – that doesn’t bode well for your unit economics as a broker.

The Customer / ICP

At Forager, our target customer was any manufacturer or distributor who moved freight between Mexico and the United States or Canada. We sold them on being purpose-built for cross-border freight, the fact that we had a team of experts who could deliver outstanding service, and that we had a carrier network that enabled us to execute at a cheaper rate than our competition. We also sold them on the fact that we understood the cross-border process better than anyone. It boiled down to Price, Service, and Complexity.

The person we were calling on at these shippers usually held a very specific role – they were responsible for international transportation. With Cargado, our product helps more people at your given brokerage. First of all, we’re calling on logistics companies, not shippers. And we know that anyone at a logistics company who has had a customer ask about Mexico is likely going to take our phone call. It could be the owner, or a VP or Director or Customer Sales or Carrier Sales, or it could be the budding Mexico leader they recently hired. Anyone who has had a customer ask for Mexico help will jump at the opportunity to leverage our product.

It’s an easy button for expanding to Mexico, why wouldn’t you use it?

The Team

Let’s spend some time on the team.

When I started Forager, I did that with my two best friends. I wanted to partner with people that I could trust and people who could fill gaps that I had. What I found in Jordan and Jessie was two incredibly trustworthy people who were strong in finance and operations, respectively. While those skills are critical to building a business, if you want to build a tech company, you need someone who knows how to build technology!

When I started Cargado, my first thought was “I need someone incredibly strong at building software because, as much as I love tech, I’m no engineer.” I immediately went looking for a technical co-founder. My friends at GoodShip, Ryan Soskin and David Tsai, were both quick to suggest Rylan Hawkins as a potential co-founder. While I ended up meeting about a dozen potential candidates, it was clear early on that Rylan was the perfect person given his background as the builder and GM of two really unique products at Convoy, Convoy Go and Convoy for Brokers. He and I saw the industry and the potential for improvement in very similar ways and so we partnered up.

We hired people onto the team based on need – initially engineers, then supply, and, after trying to do a million things on my own, we added a Head of Operations and Head of GTM. Fast forward a year since founding the company and we’re approaching thirty people and have successfully moved away from founder-led sales. But, we only did that after I landed our first fifty customers (I know, I said 100 but it became untenable and we were going to fail on the service side). And of the last fifty customers, I’ve only been involved in three of those deals. The transition makes me feel great about where we are and that we have the right GTM leader building out that function.

Me

Yes, I’m part of the team but I write this blog so I figured I would write a section about myself. I’ve learned a lot as a leader. When things weren’t going great at Forager, my board pushed me to bring on an executive coach. I hired Molly Rudberg then and she helped me through some incredibly challenging times. She helped me think through how I communicated and showed up as a leader. One key takeaway from those conversations was about intentionality. You absolutely need to be intentional with your time, with what you say, and how you say it. (P.S.: Molly is still my exec coach and works with our leadership team now as well!)

I learned how to build consensus with the team the right way, how to recruit the right people, and how to bring investors along for the ride. I treated investors like they were adversarial, rather than working with them as a partner. I assumed they were only out for a dollar and didn’t care about helping our business. While there may have been a few investors that fit that description, most wanted to help us succeed and wanted to do so with advance warning. I kept it all to myself and that ultimately nearly killed us. Now, I treat our investors like partners and collaborate with the key ones on a regular basis as we all share a common goal of building something incredibly valuable.

I’ve also changed as a leader in how I communicate to the team, what my job is, and where I need to stick my hands (or keep them out in a lot of cases). You can read more about my thoughts on Founder Mode if you want. The CEO’s job ultimately boils down to three core tasks that can be summarized by MVP: Money, Vision, People. Your job is to make sure the company has enough money and allocates it properly, set the vision for the company, and make sure we recruit and develop the best people. That concept has still taken some getting used to by our team today, where everyone wants to know about or be involved in everything, but over time, things will fall into place.

A More Focused Approach

At Forager, we mapped out every aspect of moving a cross-border load and we had features on our roadmap that would solve that problem. One day, we would automate every one of those steps and we would win the industry. We would connect shippers and carriers directly and, voila, magic would happen! Loads would move frictionless, shippers would always be happy and carriers would get the rates they want.

Then I woke up. And I realized this industry is incapable of allowing something like that to happen. And it makes more sense to start with a more scalable customer base, logistics companies, and solve a single problem for them to start, which is coverage. As we’ve started to solve the coverage challenges, we’ve uncovered other related problems that we believe we can solve as well, through our products and our data. We have been hyper focused on helping brokers convert and cover their cross-border freight and will start working on additional solutions once we nail this first one. At Forager, we tried solving all the problems at the same time.

I just posted about this but, one of the biggest differences between Forager and Cargado is that, with Forager, we lived and died by the market. If the market tightened up, we saw more freight opportunities but it became harder to procure capacity. We lost money on more freight, or we made less money overall, and we were stressed out even more for less reward. At the beginning of every month, we were back at $0 again. With Cargado, we get to build on each month and continue to accumulate new subscriptions that help fuel our growth even more.