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Bootstrapping to $33 Million: Freightwise CIO Richard Hoehn (Part 6)

Posted on Sunday, Nov 3rd 2019

Sramana Mitra: I know you are above $5 million in revenue. Do you want to provide any metric beyond that? Any more granularity?

Richard Hoehn: We’re quite a bit more than $5 million. We did $33.6 million last year. We’re number two, fastest growing company in the United States on Inc 5000.

Sramana Mitra: Fantastic. Did you reach this level of revenue purely on the strength of heavy manufacturing? How did the vertical and geographical strategy change?

Richard Hoehn: Heavy manufacturing is a really good one, but we have actually made quite a bit of money now with our mature products in helping wholesale distributors work really well. We now help wholesale distributors that have many branches. From safety products to oil & gas. It’s that kind of stuff.

For some reason, we hit a profitable vertical in the restaurant supply business by helping franchises open restaurants. We helped arrange all the pieces of the kitchen and tables that have to arrive when it needs to arrive. We’re pretty good at that. On parcel, one of our clients is Facebook. That should probably tell you how big that is. We have aspirations to go down that road there more.

Sramana Mitra: How do you find these clients? What is your customer acquisition strategy? How do you pick the verticals?

Richard Hoehn: We take a three-pronged approach to customer acquisition. We have an office-based sales team that is 100% focused on new client acquisition via email and phone calls.

Second, we have account directors who travel to meet prospects and clients. They’re responsible for both managing their portfolio of clients and bringing in new business through their own prospecting efforts. Third, our clients often refer new business to us based on their positive experiences with us.

For the wholesale distribution, one of our clients started one of those verticals. That’s how we got a foot in the door with one of them there. With Facebook, we just emailed them. We just sent out a blast and somebody there called. Our application looks pretty good. That’s one of the feedback that we got from Facebook – it looked modern and exciting.

Our key verticals are dictated based on shipping needs. We specialize primarily in LTL and parcel cost management and support. We target industries that typically leverage those modes of transportation.

Sramana Mitra: Do you have insights into what drives your primary customer  acquisition strategy? In the beginning, you sent out a lot of cold emails. Is that still the strategy? What’s working?

Richard Hoehn: We still do a lot of blasts. We buy more detailed lists. With so many clients, we do have quite a bit of data that we can start correlating and find trends on. If you stay in a vertical, you’re going to learn about the suppliers for that vertical or customers for that vertical.

Where I spend quite a bit of time is on working with our inside sales team in mining that data for them so they can use it to try and branch out. That works really well. If you’re in a vertical, you can call somebody and say, “One of our clients sells their stuff to you, or you are selling things to our client.”

Sramana Mitra: It’s a great pitch. 

Richard Hoehn: It works well, but it’s not quite my area. We try to focus on our areas of responsibility. Mine is not sales.

Sramana Mitra: It sounds like you have done an excellent job of executing on a largely bootstrapped strategy. Was there any equity financing?

Richard Hoehn: Nothing at all. We are 100% bootstrapped. We have no debt.

Sramana Mitra: No debt, no equity. Just your founder equity.

Richard Hoehn: Correct.

Sramana Mitra: Fantastic. Congratulations. I’m inspired by what you just shared today. Thank you for your time.

This segment is part 6 in the series : Bootstrapping to $33 Million: Freightwise CIO Richard Hoehn
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