The key to being successful is understanding how your are going to generate revenue at scale in the future. It’s a scary thing to launch an endeavor based on only your best friend telling you that he’s going to buy from you. If the company grows, you’re going to have employees, offices, equipment, and other expenses, and you need to remember that revenue needs to scale ahead of your expense curve.
As part of my series about the “5 Lessons I Learned When I Created My App or SAAS,” I had the pleasure of interviewing Richard Hoehn. Richard is CIO/CTO of FreightWise, a cost-management technology provider that tightly integrates with a client’s existing infrastructure to reduce time, money and resources spent on logistics and transportation. He has more than two decades’ experience in tech, management and academia and was a founding director of FreightWise, named America’s second fastest-growing private company on the 2019 Inc. 5000 List.
Thank you so much for joining us! Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I took a bit of a non-traditional route, and did an apprenticeship as a Tool & Die Maker at 16. Four years later, after completing my apprenticeship, I realized that I did like school. So, I went back to school as a non-traditional student in Engineering and Computer Science, and later went on to obtain an MBA. That path got me started in software, and gave me the entrepreneurial spirit of taking that software and building it into a company. At business school, I met Chris Cochran and we had always wanted to start a company together. We found a good platform with FreightWise to do just that.
What was the “Aha Moment” that led you to think of the idea for your current company? Can you share that story with us?
The “Aha moment”? I have to give more credit to Chris and other founding partners than to myself on that one. Because they had the freight-industry background, they had this vision of building a platform like FreightWise, and through talking to Chris and others about it over and over again, we suddenly figured out how we could do it. So, the “Aha moment” for me was when we figured out how to convert visions and ideas into the technological output.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
FreightWise didn’t make much money in the first few years. I wouldn’t say that I ever felt like giving up, but I definitely made sure that I had another one or two startups simmering on the back burner while we were working through FreightWise. Now that FreightWise is profitable, it takes up most of my time, so I’ve had to shift focus and shut down those other startups.
So, how are things going today? How did your grit and resilience lead to your eventual success?
FreightWise has been growing very well. I think that we built a strong software platform that our clients like and that is easy for prospective clients to understand. It’s modern, effective, looks good, is easy to navigate, and is easy on the eyes, all while while providing value to our clients. With that, we’ve had strong success in bringing on new clients. We also have a very strong retention rate, so that, coupled with our growth rate, are our main success drivers today.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
Well, to be honest, I probably made a ton of mistakes at the beginning, over and over again. FreightWise is a logistics company, and I knew very little about freight, shipping and logistics when we started. In the early days, working and meeting with clients, I got a lot of odd looks from saying the completely wrong thing in meetings. You have to learn the industry lingo fast, otherwise they won’t accept you into the family.
What do you think makes your company stand out? Can you share a story?
I think our company stands out because we care about our clients. Of course, that’s a cliche; everybody says that. But we back that statement up by working to react very quickly to our clients’ needs. As part of that effort, we have a policy where we deploy code and updates on a daily basis, and we allow our customer service team to make suggestions on enhancements that would benefit our clients and/or their workflow in serving our clients.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Burnout is a tough one; everyone looks at it differently. To thrive, I believe one thing that we do well is that our sales team is engaged with their clients, and they bring on the technical people quite early on in the process, allowing us to find avenues to bring value possibly outside of the traditional profit model of FreightWise. I think, more than anything else, that has allowed FreightWise to thrive. Being client focused allows us to truly provide value to our clients, and being involved early on in the sales cycle allows our dev team to steer conceptual conversations in the best-fit direction from a technical perspective.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I don’t think that there’s a specific person; there are many. It goes all the way to the team here at FreightWise; we all help one another and grow as a result. I’ve had some great mentors over the years, and I try to reflect on what I’ve learned in past experiences that translated into FreightWise.
Ok thank you for all that. Now let’s shift to the main focus of this interview. Approximately how many users or subscribers does your app or software currently have? Can you share with our readers three of the main steps you’ve taken to build such a large community?
Our clients are typically large to enterprise-sized companies, so the number of users depends on each of those companies’ specific user base. We don’t really track user number metrics, and are more focused on overall number of clients. As far as growing our community is concerned, we have a sales and marketing team that is focused on bringing in new clients, and we also receive quite a few referrals from our existing clients.
What is your monetization model? How do you monetize your community of users? Have you considered other monetization options? Why did you not use those?
Our fee structure differs from client to client depending on their needs. We aren’t marketing an app; we are a service and SaaS company, and as a result we don’t have a monetization model in the sense that you are referring to.
Based on your experience and success, what are the five most important things one should know before one wants to start an app or a SAAS? Please share a story or an example for each.
What I’ve learned as an entrepreneur — and trust me, I’ve had a lot of companies that have not done well — is that the key to being successful is understanding how your are going to generate revenue at scale in the future. It’s a scary thing to launch an endeavor based on only your best friend telling you that he’s going to buy from you. If the company grows, you’re going to have employees, offices, equipment, and other expenses, and you need to remember that revenue needs to scale ahead of your expense curve.
I had a company that provided specialty GPS trackers for medical equipment. I had one client. The product was good, we did a number of test roll-outs, and we even deployed the solution. The tricky thing was that I didn’t understand the sales aspect of the business, and hadn’t figured out how I was going to scale it out to additional clients.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
Well, I really enjoy hiking and spending time outdoors. If I could create a movement where we plant more trees as a community, I think that’s something that I would do.
How can our readers follow you on social media?
You can find me on LinkedIn. (www.linkedin.com/in/richardhoehn)
This was very inspiring. Thank you so much for joining us!
“5 Lessons I Learned When I Created My SAAS”, with Richard Hoehn of FreightWise was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.