May 6, 2020

#89 A Big Bet on an Ex-Trucker

by The Pitch

For years, Pierre Laguerre worked as a truck driver. During those years he saw one of the biggest inefficiencies in the industry up-close: getting available drivers matched with trucks ready to get on the road. Barely a year after launch, his business, Fleeting, is growing fast. But he’ll have to convince the investors he has the technological savvy to make the company grow even faster. And he’ll need to tackle another problem: how to adapt to an industry transformed by COVID-19.

Today’s investors are Maia Bittner, Elizabeth Yin, Sheel Mohnot, and Charles Hudson.

Transcript


Trucking was one of the first industries in the US to be upended by the COVID-19 pandemic. And today’s founder, Pierre Laguerre, has a trucking startup. His business has also been upended. But maybe not in the way you’d expect.  


Before we get to that, Pierre made his pitch to our investors back in December 2019. His goal: to transform the trucking industry, an industry worth almost 800 billion dollars.


He wants to use technology to solve one of the most basic problem about trucking, which is: How do you match the right drivers with the right cargo at the right time?


He knows a truckload about being a trucker. But to get the money he needs, he’ll have to convince the investors he has the business chops and technical savvy to pull it off.


From Gimlet, this is The Pitch. I’m Josh Muccio.


Let’s meet the investors.

I’m Maia Bittner

Maia built two financial tech companies, and sold them both. Now she’s out scouting startups for Sequoia, one of the biggest VC firms in Silicon Valley.

I’m Elizabeth Yin

Elizabeth is a managing partner at Hustle Fund. And so far she’s invested $30M in over 250 startups. One example, a company called Nerdwallet.

I’m Sheel Mohnot


Sheel has sold 3 startups for over $50 million dollars. Now he’s an angel investor, with a stake in several companies worth billions today.


I’m Charles Hudson


Charles started Precursor Ventures, where he’s invested $50 million in over 170 startups to date.


The pitch for Fleeting is coming up in just a moment.


BREAK


Pierre: Good morning ladies and gentlemen. My name is Pierre Laguerre, the founder and CEO of Fleeting. And I wanna start with an interesting story. I’ve been in the transportation space for the past 16 years as a Class A truck driver. And I remember vividly my daughter asking, Daddy, are you gonna be home for Christmas? I could not look in that little girl’s eyes, knowing that I was not going to make it. That’s a huge problem in transportation logistics. Hundreds of thousands of drivers are being affected by this problem still to this day. For trucking companies, 45% of their assets are being unutilized and they’re spending between 15k and 20k directly or indirectly to hire a truck driver. We decided to solve this problem through technology by connecting truck drivers to trucking companies for on demand, scheduled and temporary transportation needs.

 

What Pierre is pointing out is that companies have a lot of trucks just sitting around empty. For a couple reasons. One, drivers can’t drive them 24 hours a day — they aren’t robots, yet. And legally they’re not allowed to drive for more than like 11 hours at a time. 

And there’s also a huge amount of driver turnover.  

Using Pierre’s platform, a trucking company can find and schedule licensed drivers to fill whatever shifts they need covered.


Pierre:  we give trucking companies the ability to find a vetted truck driver on demand to operate their trucks around the clock. In five years, Fleeting can be a $5 billion company with the right execution. Since we launched in January, we are seeing some nice growth. We are doing about 82k in monthly recurring revenue with a 32% month over month growth. We are raising 1.5 million dollars to make this opportunity as large as it deserves to be. And give truck drivers a way of life, and also help trucking companies keep their trucks moving, so that end consumers can constantly receive their packages. Thank you.

Elizabeth: So, walk me through the user experience. What does this look like? 

Pierre: Yes. So pretty much our drivers download the app. Once they download it we run a pretty much a standard trucking application on the driver. We do a background check. We make sure that their MVR is good. The MVR is motor vehicle record, their driving behavior. And we also do a pre-screen ah drug test before we give them full activation on the, on our platform. 

Elizabeth: Okay.

Pierre: So once we pretty much vet the driver, the driver now let us know his schedule, what days he's available, what days he would like to work. And we actually let the algorithm match that driver to that specific company.

Elizabeth: Got it.

Maia: And why are drivers preferring this to traditional trucking companies?

Pierre: So how it is now, when a driver work for a trucking company, he works for that company for either six days a week, 14 hours per day for the entire life of his career. Now if that driver want a week off, he's still running the risk of being terminated from his employer. For example, if he has a sick child and he keep calling out, he runs the risk of losing his job. Through our platform, the driver pretty much set his own schedule. He work on his term. If he needs two weeks off, he doesn't have to explain anything to us. He can take the two weeks and just come back to work when he's ready to work. 

Charles: And for most of the drivers is this supplementary work or is this like a true sort of new way to work like you’re just letting go of whatever full time.

Pierre:  Yes it is a new way to work we speak to the drivers all the time and we understand their problem and the biggest pain that they’re having is being able to take days off to do the things that they want to do with their loved one. And also, majority of these drivers are spending 200 nights on the road away from their family. So that’s the new model, because now these drivers know they don’t have to be on the road for 30 days to make great income. So now they can work on their term with the company of their choice and have more flexibility.

Elizabeth: And in terms of the pay, how does your pay on an hourly basis compare to what a truck driver could get like as an employee?

Pierre: So a starting rate for truck drivers is about 18 dollars per hour, and this is one of the largest carriers, UPS, that’s their starting rate. So with ours, we charge our customers $43 per hour. We pay our drivers $27 per hour, and Fleeting keeps a 38% margin. 


This ex-trucker seems to have all the answers on what the trucking industry is like for a driver. But - his product is also trying to make things easier for his customers - the companies that own the trucks.


Maia: So I get why drivers like working with you. From the customer’s perspective, is working with you a better experience? Or are they just desperate for more, more labor, and will get it from wherever?

Pierre: Yes. So trucking companies are pretty much desperate for drivers. They cannot keep drivers. Companies are spending 15k to hire a driver and then come to find out that driver quit in 30 days. So what it is is that truck drivers are full time drivers and part time applicants. So that means although they have a fulltime job they’re still looking for another job somewhere else. So that gives us the ability to kind of say hey, under one platform, you don’t have to keep constantly switching jobs. You can now, under one platform, you can work for multiple companies. Now, we do have a, a total base of about 500 drivers downloaded our platform. But not all of em are active. And the reason for that is we have to spend money to do the background check and the vetting. So we're giving access little by little. Every time we onboard a new customer in a new area, then we give about 10 drivers access. 


So Fleeting is doing well keeping up with its customers’ demands right now, but, when you think about scaling - there’s a lot to the back end here. The platform needs to interface with databases to vet drivers, manage quickly shifting schedules on both sides, and set up a system to get the drivers paid.


It’s pretty clear Pierre’s got a handle on the drivers but can he build the technology to support his ambitious vision?


He doesn’t have a tech background. But maybe he doesn’t have to. 


Sheel: Can you talk about your team members and how long you been working together? 

Pierre: We have a well-rounded team. I myself, the CEO, our CTO is the former CTO of a company named AirWatch that got acquired by VMware for over a billion dollars. Our head of sales is Benny, also had two successful exits. My team love my personal story because they say, hey, look, this guy doesn’t take no for an answer. He doesn't quit. I built two trucking companies in this space before to 4 million dollars in revenue. And I got hurt and lost everything. So I think that really helped out when it comes to recruiting our team, our talent.

Elizabeth: Mhmm

Maia: I don’t really know this industry, but I know it’s really, really big. I think kind of everyone else knows it’s really big too. I feel like I see trucking startups all the time. Cos, right, in, in, sort of like different formats. Um... I don’t know. I worry that this space is really competitive. 

Pierre: Yes, it is very competitive, but also very fragmented, right. The largest company in this space that's a digital freight, which is C. H. Robinson, about 17 billion dollars in annual revenue and they only have 3% of the market share. So that means there's a huge opportunity. And if I say that we gonna be the only player in that space, I'll be lying. We'll be fooling ourselves. 

Sheel: Haha.

Maia: Yeah, yeah.

Pierre: The minute we get big, there’s gonna be other companies that’s gonna do, that’ll try to do this. But for our defense is the fact that our true, we truly understand the drivers’ nature. We understand the drivers’ world. We understand their language. And I think we’ll be able to build the best company that we can actually get the drivers attracted to our side.

Elizabeth: So I guess there's the looming question that all VCs like. In the next few years, like with autonomous trucks and all, how do you think about that world? I know it's a ways away, but how do you think about where this company goes in that world?

Pierre: Yes. Um. Actually, in order for autonomous to really take the full effect, our entire infrastructure would have to change. Number one. But however, I do see autonomous working early on for long distance load. And how that work is, they're doing that through a platooning system where they will have one driver and then they will five trucks following that one driver.

Elizabeth: Right. Yep.

Pierre: So what that does is if there’s a load coming from California, that needs to be delivered in Jersey, the five trucks is not going to make it to New York City and drive by itself, right. So that means when the trucks get into New Jersey, they're gonna need five drivers standing at that meeting point to get in the truck to do the final mile delivery.

Elizabeth: Yep.

Pierre: So Fleeting will be at the intersection to be that company that provide all the drivers for all the autonomous loads. So autonomous does not pretty much affect our business, it doesn’t affect, it complement our business. Because trucking companies all will be looking to hire a lot of part-time drivers to drive these trucks off the ramps to their final destination.

Elizabeth: Interesting. 

Charles: So tell me more about your plans with the money. 

Pierre: So, the plan for the money is pretty much, ah, we want to do some more driver acquisition. Some customer acquisition. So we want to be able to kind of do a lot of recruiting. We always want to have more drivers.

Sheel: Yep.

Pierre: Than trucking companies.

Sheel: For sure.

Pierre: So we wanna blow up on the, ah, on the marketing aspect. But also product. Right now, we do have a MVP. It’s not the best yet, but we still working on it. 

Elizabeth: Got it.

Sheel: Cool. Pierre, man, you know, when you walked in here you said, like, you gave your experiences as a truck driver. I was prepared for you to like not be what I'm looking for in a technology CEO. But you've had amazing answers to all the questions we've asked. I've learned from you. You've clearly built this really strong team around you of folks who have built technology companies before. So clearly, people are attracted to you, and that's one of the most important things I look for. And you're clearly like a hustler. You're gonna make this thing work, which I love. Um, for me, I'm invested in a company that is probably too adjacent to what you're doing. it's a stealth company, so I can't talk too much about it. But part of what they do is an income guarantee for truck drivers. So they pay you and then they kind of manage your life. So there's a lot of similarities between what the two companies are doing. So for that reason I'm gonna pass. But wish you so much success. 

Pierre: Thank you.

Charles: So I have an investment in a trucking navigation company that I'm sitting here listening, I'm like it's either very complementary or like very competitive. And I can't sort that out. And um, I really liked your answer on autonomous. And If I didn’t have a conflict, I would absolutely commit to working with you. So for me, this has to be a pass, until I can make sure that there isn’t too much ah adjacency.

Pierre: Thank you. I really appreciate that. Thank you.

Elizabeth: Pierre, can you tell us a little bit more about your round? Do you have terms on this round? Any, any details that you can provide.

Pierre: No, right now, at the moment, we don't have a term. But we are in due diligence with a firm called Story Ventures. 

Sheel: Yeah. Jake.

Pierre: Yes. So we, we in due diligence with them. And he also connected me with another firm called Schematic Ventures.

Charles: Oh yeah.

Pierre: Yeah. So um... But also, we was recently invited to raise on SeedInvest and Republic. So what we're doing is we are going to take 250k from Republic. And the reason for that is, we want to give truck drivers a early opportunity to invest…

Elizabeth: Oh that’s neat.

Sheel: That’s smart.

Pierre: ...in our company. 

Pierre: So we gonna do 250,000 on, on, Republic. And we still keeping our heads down and speaking to a lot of investors. But as of right now, no we don’t have any commitment as far as the term sheet.


Pierre is doing something unique with his fundraise. He’s using Republic - an equity crowdfunding platform, which gives people who make less than a quarter of a million dollars a year a chance to invest. That means truck drivers, for example, could have a stake in Fleeting, by investing small amounts that could be as low as ten dollars.

But he really needs the big investor money, too. 


Elizabeth: just a little bit about our, our fund, Hustle Fund. So we're, we're very open to, you know, investing without a lead or whatever. We're a small fund, though, so we would be writing like a 25k check. Given where you are, like, certainly could propose something, um, and I think frankly speaking like, you know, we also tend to prefer earlier valuations, um what are your thoughts on that? 

Pierre: As far as the valuation, um, the last money that we raised, we've raised at a 5.5 million valuation. And we thinking about doing this 1.5 raise, we want to do it at a 7.5 million valuation, but we more than happy to hear the investors that wants to lead it and where do they see company's fit. So our numbers are not final.

Elizabeth: And the last money that you took in at this 5.5, was that on a note or a safe or what was the format?

Pierre: Yes, yes. That’s on a safe note. 

Elizabeth: Mhm. Mhm. Got it. Um. Well, I mean, if you would have me, I would be in for 25k on that same safe. 

Pierre: Okay. Thank you. I appreciate it. Thank you. 


Did you hear Elizabeth just ask - “If you would have me”? She's asking to get in at a lower valuation, by investing in his previous round. 


Okay, so Elizabeth wants to invest $25k, Charles and Sheel are out on technicalities. What about Maia? 


Maia: I really like you as a founder. Like, I love your background, I love that you've lived this problem, and it sounds like you've also built and then had a company kind of crash before. And I actually really like kind of second time founders who have been through this. Unfortunately, I'm gonna pass.  Ah, the industry is just, it's very big, it's very complicated, it's very competitive. I don't understand it enough to make a big bet on any one player. However, if I could write like a thousand dollar check into your Republic campaign I would be really excited if we could work something like that out. 

Pierre: Yes. Please. I really appreciate it. Thank you.

Maia: Cool

Pierre: Thank you. 

Pierre: Thank you. I appreciate it. I really appreciate it. Thank you guys for your time.

Elizabeth: Thanks Pierre.

Charles: It was a pleasure meeting you, man.

Sheel: Yeah, really nicely meeting you.

Maia: He, he is such a strong founder. I really like him. 

Charles: I wish we could have more like him.

Elizabeth: Yep.

Sheel: The autonomous thing, you know, I, it's interesting, I'm... I think I earlier would have been more worried about it. And I'm kind of less concerned about it.

Charles: I'm less concerned about it.

Maya: And his answer, frankly, was perfect. 

Sheel: Yeah, his answer was great. 


Well, that pitch went well. 

But since the pitch, ~a lot~ has happened. How things went with Elizabeth, and what happened to Pierre’s business when COVID-19 hit. After this.


BREAK 


Josh: Pierre can you tell us just for fun? What do you have for breakfast? 

Pierre: Breakfast. All I had is a bunch of phone calls. I haven't eaten anything yet. And a cup of coffee.  

Josh: That's that's a good morning right there. 


We caught up with Pierre in April. And the first thing I wanted to know was — what happened with Elizabeth and that 25k she promised to invest?


Pierre: Man, she moves so fast. And it was just the easiest process that we've had with an investor. It was like, you know, she understood the problem. It was, OK, cool, no problem, I’m in. Man like within a week we had that money wired into the account.

Josh: Wow. Well, you must have said something that really resonated with her, because on December 20th, Elizabeth writes this tweet, actually, it’s a tweet storm. And she says, I've backed hundreds of amazing founders over the past few years. But I just did a deal this past week in a founder's company whose story really took the cake. This particular founder immigrated to the US at 15, lived in the projects in New York City, worked his way through college, dropped out to make money and saved up enough to build his own trucking company. So, she’s talking about you obviously, she says you got into an accident and you lost everything… And then you start a window washing company, you save up to start another trucking company - and basically, she walks through your whole zig-zagging path to becoming a tech entrepreneur. She makes you seem like a rock star! I mean, like, you’ve been through so much. 

Pierre: Yes. So much.

Josh: What happened after she tweeted that?

Pierre: The tweet was crazy, my D.M.’s was crazy. A lot of new founders as well wanted to connect conditional like, hey man, thanks for your story. Given a stretch to motivate me, like I think that was very helpful. A lot of investors as well came in to say, hey, look, great story. You know, I definitely love to work with you. Some of them came in and invest. They really bought in a good amount of traffic of people that was really interested. 

Josh: How how much money came from that tweet?

Pierre: From that tweet. So I'll say probably another maybe maybe 80, 90 K came from her. Her tweet alone.

Josh: So you get 25k from Elizabeth. She tweets, you get another eighty to ninety thousand from the tweet of other investors.

Pierre: Yeah.  Pretty much. Yeah.


Things were going really well for Pierre at this point, his business grew from 82k in monthly revenue in December, to 146k by January 2020. And with the business churning out all that cash, Pierre decided he didn't need to raise as much money from investors.


Pierre: I said let’s focus on the sales and you let's go back and tell all of our investors like, hey, look, we only raising 500k and we raising it at a ten million dollar valuation, are you in? And the investors was in and pretty much that process was another very quick process with Elizabeth. She move very fast with it. Introduced us to the rest of the team, they did their diligence and about. 

Josh: Wait Elizabeth put in more money? 

Pierre: Yes. The second round she put 100k.

Josh: So she put in one 125k within a span of two months?

Pierre: Yes.

Josh: She made a big bet on you. 

Pierre: Yes. 

Josh: She doesn't do that with very many founders. 

Pierre: Well, I'm honored.

 

I wanted to know what happened exactly, that caused Elizabeth to make such a big bet on Pierre. So I called her up.


Elizabeth: I've talked with tons of founders and of all the ones I've talked with, I would say that Pierre's personal story was top three most inspirational. Pierre has an amazing story of grit. I think that's really what stuck out like. I can't remember what he said about the business itself.  

Josh: The fact that you don't even remember anything about the business feels backwards in many ways to the way most deals are evaluated, at least from what I've seen on our show and I've seen a lot of pitches on our show. Why is the back story? Why does that matter in someone's ability to build a business? 

Elizabeth: Even the successful businesses you read about, like there's usually a lot of problems. Like most businesses are always on the verge of failing many times. Yeah. And so what you need during those times, are founders who will just not give up and most people would give up. It doesn't really make any sense to keep going. And so you want to get some sort of signal around. Is the person I'm talking to someone whom I think would do that. 

Josh: So you, you normally invest 25 K in a company. That's your standard check size.

Elizabeth: That's right. 

Josh: But you you more than doubled up. You like quadrupled up on the second time. 

Elizabeth: That's right. 

Josh: Not only that, but you invest in a company at a $10 million valuation. 

Elizabeth: That's right. 

Josh: And you guys are, from what I understand, pretty sensitive to valuation. 

Elizabeth: We are.

Josh: So a lot of this goes against what I know to be your way of investing. it seems like a really big swing. For you guys to to put in 100 K in a company. Why?

Elizabeth: So i think it’s a few things one is just their attitude toward sales and that sounds very simple but i would say there are actually a lot of companies that don’t have a very aggressive attitude toward sales and don’t prioritize sales. 

Josh: Like that set them apart just that.

Elizabeth: Yes. it sounds so funny because it seems like that’s just what you should be doing in business.

Josh: Yeah I would think.

Elizabeth: But actually a lot of founders don’t prioritize customer acquisition as much as i think they should.

Josh: And that’s a big thing for you at hustle fund. 

Elizabeth: I mean, We are Hustle Fund. So you would expect nothing less.


Now, all that happened back in February, and it was right around then, when it became pretty clear it would not business as usual for the trucking industry.

Josh: Do you remember the first time you heard about the Coronavirus? And when does it start affecting your business?

Pierre: Well, the moment for me was when things went into panic mode we saw a surge in our existing customers that are moving beverages or food. They had a surge in requesting more drivers. 

Josh: Right. Right, right. All shelves are getting emptied out. We need somebody to bring in this new stuff. 

Pierre: Exactly. We need more beverages. We need more toilet paper. We need more food, period. 

Josh: So umm how many new requests are you getting? 

Pierre: From the three existing customers that we had that already kind of specialized in these essentials, they're going from taking five to seven drivers per day to about fifteen to twenty drivers per day.  


At the same time that Pierre is seeing a surge in demand from customers that transport essential goods — he’s seeing drivers out of work in other sectors where transportation has ground to a halt.


Pierre: So the regular trucking company, that aren't moving the essentials, you know, since shippers aren't moving, there is no demand out there. So they start laying the drivers off because they can't afford to give the drivers a full week work. But every truck driver can not just pivot and just say, hey, look, I'm going to specialize in moving beverages and moving food. It doesn't work that way. 

But Fleeting, does work that way. Because their drivers aren’t assigned to any one company full-time, they can pick up work from wherever.


Pierre: I just interview today, I said I'll take the time, I say, hey, look, let me speak to seven new drivers that just got onboarded they used to work at some airline. They're all buddies. Used to work at the same company. They all got laid off. 

Josh: And what did they say to you? 

Pierre: They sound like to be honest with you they was a lot older to me. They say, hey, man, you sound very young man to be doing this. This is interesting how old are you? I said I’m 36-years. I mean, you are a young man. I think I believe they’re in the late 40s, almost 50s. All of them used to work at the company for six years and just suddenly like three weeks ago, they all got laid off.

Josh: Right. 

Pierre: Nothing going on and it’s like, you know, they're saying, we have families.  You know, we we we want to work. We're able. But it's just very hard to find companies that are hiring so actually all all of them today just we just got the email that they all went for a drug test today to kind of get ready to start on Monday. Because we have a new customer in the Bronx that’s looking to start with 13 drivers Monday, right?  We think they're going to be a super customer as well because they're talking about taking ten to fifteen drivers per day. 

Josh: Yeah. Is it strange to look at all that's going on and seeing people getting laid off left and right? And to look at your business and to see it growing in this time? Do you?  

Pierre: Yes, of course I feel guilty. You feel guilty. Sounds like you’re an opportunist. But even you yourself, you don't know your fate like you understand they probably lost theirs a lot quicker than yours. Yours might just be a slow death. You don't know. So it's like at the end of the day, I think if everyone can just kind of look at it like, hey, look, we're all in this together as at least if one is thriving, at least let's be happy. Let's be let's be hopeful.

Josh: That's awesome, Pierre. it's it's great to hear that things are going well for you when it’s not going well for so many. But it sounds like things are going well for the right reasons.

Pierre: Exactly. It's not like I'm doing well because I'm throwing parties for people. Right. at least we're providing jobs that are moving essentials, the things that we need everyday. And this is the message that we always want to send across when we talk to people about truck drivers, the level of sacrifice that they make every day we look at them on a road like is just a regular old guy with a beer with a belly. But this guy is actually the one that's providing all essentials that we need. If we don't have that guy, we don't have the fuel. We don't have the clean water supply. We don't have no food in a supermarket. So next time you see a truck on the road, don't bust his chops man just give him the honk sign and honk the horn. Tell him thank you. You appreciate him. Because they're doing a lot for us.

Josh: Thanks, Pierre.

Pierre: Thank you, really appreciate it, Josh.


The Pitch is hosted by me, Josh Muccio. Produced by Max Gibson, Heather Rogers, Chris Neary, and Muna Danish. We are edited by Sara Sarasohn.

Scoring from The Muse Maker, Breakmaster Cylinder, SoWylie, and Emma Munger. We are mixed by Enoch Kim. 

Lisa Muccio coordinated the recording of this pitch.

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