Growing Pains HURT! Life At A Startup.

Thanks It sure is the nicest truck I’ve ever drove.

Thanks It sure is the nicest truck I’ve ever drove.

OMG!!! i didnt know that was Your truck!!! how the heck do you back that thing in at Pilot loves and customers????? you mist be goooooodddd! (Rainy bows before royalty)

Damn Rainey you bumped your head lol. It’s not easy but I take my time and get’er done. Truckstops are the easy part. My customers are cemetaries. Sometimes it takes me longer to get in and out than it does to set their granite off. It’s 275” wheelbase and I pull a 48’ spread axle flatbed or stepdeck trailer.

That is a super interesting story and tomorrow I'm going to have quite a bit to say about it. I'm about done for today and there's a lot I'd like to cover with this one. Thanks very much for sharing all that. I'll respond thoroughly in the morning.

We lost Brett on this one PJ.

Sorry about that Jenny. I hadn't forgotten about it, I just wasn't sure about what I actually wanted to say. I've written a long response but I've set it aside for now. You're enjoying yourself and you're happy where you're at so I don't want to spoil that. You've already learned a bunch of hard lessons about why it's so difficult being at a small company, and unfortunately there are a lot more to come that you're unaware of. Like you said, "growing pains." Well those growing pains are far from over for you guys, you can be sure of that. I can either spell them all out for you now and look like "Mr Rain On Jenny's Parade" or I can let you enjoy yourself and learn the rest as you go. My job isn't really to let people learn things the hard way but I guess I'm getting fatigued with being the "hard truth" guy all the time.

I am rather curious about this statement though:

I am a founder. I have a title, I was the 24th of 25 hired to have it.

What is it that makes you a "founder" of the company? What did it take to become a founder and what are the benefits of it?

Jenny I respectfully yielded to Brett before offering a reply.

First off, loved your story. Truly enjoyable.

I have been involved in 3 separate and distinctly different startups during my previous career. The most notable was a pre-IPO funded with 80% VC money. That one damn near killed me. Lol.

Unknown to me during those experiences, it was great preparation for the long hours, mental toughness, work ethic and flexibility required to be a successful truck driver. No such thing as "not my job" in a start-up!

Although in a different type of business I empathize to a degree with what you are going through, however the excitement and rewards in a start-up can be exceptional for someone with a strong will and stomach.

Terrific story, thanks for sharing and enabling my reminiscing of past challenges, failures and fortunately a few triumphs.

Best wishes for continued success!

Thanks Brett, I don't mind the raining on the parade info either. It's a bit unnerving to me at times not knowing what's coming, but it's also a bit exciting.

As for being a "founder" it's really called being a member of the Founders Club. It's the first 25 drivers who took the chance on them. We get a better benefit package than the drivers who came on after us. It started with higher CPM , more splits in our bonus tiers, (we earn 1/2 cpm at 500 mile marks, and new hires only earn 1cpm at 1000 mile marks), premiums fully paid for medical and dental insurance, more input in which way the company policies will go, and just being closer to the top. Also, we get first dibs when new trucks are bought.

The insurance has changed, we have to pay part of our premiums, but the package is considerably better, and worth it.

Right now, I'm enjoying the ride, learning TONS about what I'm willing to do and not do. I also enjoy being the hero of the day. I limped a produce load, using jumpers to maintain temp (regularly stopping, not leaving them hooked up) because none of the shops had the right alternator, until I decided to call ahead, get the alternator ordered, overnight, by a shop and finally got it repaired the next day when I got there. I spent about 1200 miles fooling around with it. (Just west of Cheyenne WY to Toledo OH) while staying in contact with the broker, and the maintenance manager, basically just telling them what I was going to do next. It was neat that I solved the problem when ones I'd have normally depended on were at a loss.

Thankfully the true Founder has done this before, successfully, so some of the sting has been worked out before.

G-Town, I'm glad I could do that for you.

As I mentioned above, I'm really enjoying the challenges. I really do have it easier than most of these guys, simply because I don't have pre existing expectations. I also am fully aware that my job is to make money and save money for the company, and my compensation for that is my paycheck. My ONLY expectation is honest, and open communication in both directions about how it's going (and not going) and of course my paycheck at the end of the week lol

As a long time business owner and investor myself I've run small businesses and followed the business world through books, blogs, seminars, and CNBC for almost 20 years. I can tell you one thing for sure - your company is going to become more and more like the large carriers every day or they're going to disappear altogether. They really won't have a choice.

Here is why I'm saying that.

The trucking industry is fiercely competitive because trucking is a commodity service. That means no one cares what name is on the side of the truck. They simply want the lowest price they can get. That means profit margins are razor thin. The key thing to remember is that the average profit margin in the trucking industry is 3%. That is a tiny, tiny margin.

You mentioned that you guys have to "prove yourselves" to the entire industry. Not only does that mean proving that you can get the job done consistently, safely, and on time but you have to be able to do it as cheap or cheaper than your competitors.

So all of those "perks" you've mentioned like ungoverned trucks, fueling wherever you like, and fully paid health insurance are all slipping away right before your eyes, aren't they? Obviously you're aware of that and I know in the back of your mind you're thinking, "This isn't going in the right direction. All of the things that were so neat about working for this company and all of the benefits of being a founder are slowly being taken away. I could have been making better money at a large carrier doing less work with a ton of little perks that these guys aren't offering and I've sacrificed to be here but they're slowly taking these things away."

Unfortunately that's going to continue. It has to. Otherwise, how would the company survive?

You're hauling the same freight using the same trucks with the same engines and the same fuel under the same laws as every other company out there. So how can they provide their service as cheap as their competitors in a business with 3% profit margins if they're going to pay you a higher CPM , pay your insurance, let your trucks run ungoverned causing lower fuel mileage and higher insurance premiums, and letting you fuel wherever you like without getting the best available price nor the volume discount the large carriers are getting?

How can they have that long list of higher expenses and provide their services at the same price as the large carriers who are doing things far more efficiently?

They can't. The math just doesn't add up, and you can't argue with math.

Your company has been using startup money of some sort to get to this point. I have no idea how much they have or how long it will last but at some point they're either going to have to learn to turn a profit, or disappear altogether like the majority of startups do in their first 5 years. You're watching that process unfold every day as they slowly learn to run the company more efficiently.

Small business owners almost always have great intentions toward their employees. They want to pay better, provide a better atmosphere, and really show that they care about their employees. I don't think that changes for most business owners. Unfortunately what happens is the brutal reality of running a business kicks in and they have to make a choice - either continue to give more to their employees and go bankrupt, or cut their costs to a competitive level in order to survive. Again, you're watching the brutal reality of business unfold day by day and unfortunately that's going to mean all of those "founder privileges" are going away.

In the end you're going to learn a lot about the realities of growing a startup. You're seeing it first hand. That is incredibly valuable. Unfortunately it isn't a free education. You're paying for it by doing a lot of extra work, handling a lot more responsibility, getting lower miles (in the beginning especially), and now by slowly giving back your founder perks.

In the end you're going to learn a lot.

Most of the lessons are going to be on the business owner's side. You're going to learn about the brutal reality of running a small company that's trying to compete against larger companies in a commoditized industry. That is an extremely difficult situation to be in, and in fact most fail in the end to make any progress. Once the startup money disappears, so do their chances of growing.

Did you know that about 93% of the trucking companies in the U.S. have fewer than 6 trucks and 97% have fewer than 20 trucks? That's in an industry with 2 or 3 million trucks. Almost no one manages to survive long enough to get any scale, and without scale you have no chance of turning a worthwhile profit or surviving the inevitable downturns in a commoditized industry.

I think the biggest lesson you're going to learn from an employee's perspective is that you're better off being with the large carriers who have a long list of competitive advantages over the small guy and therefore can actually afford to take care better care of their best employees in a sustainable way. They can also make life a lot easier in so many ways for all of their employees.

Learn all you can about running a trucking business while you're there and enjoy it. I think in the end if you're really paying attention you'll learn:

A) Never start a business in a commoditized industry. In a business where price is all that matters only a very tiny number of companies will grow large and survive while everyone else flounders like a fish out of water and fail to get anywhere worthwhile. Think of the plight of the small family farm - same situation.

B) If you're going to be an employee in a commoditized industry make sure you're with a large company that has been successful over a long period of time. In the end the pay, the perks, and the opportunities will be so much better.

You seem like you have a good perspective and you're being honest with yourself about your situation. Your enthusiasm shows, but at the same time I can see you're facing the harsh realities as they unfold. No matter how things go for this company you're going to do fine. You'll either stay or move on at some point but you'll have learned a lot and enjoyed the process.

Obviously I'm not the type that wants to rain on anyone's parade. But I want to educate people about the realities they're facing so they can make the best choices for themselves. I lost count years ago of how many people have given me the finger and stormed away hating me because I told them things they didn't want to hear. But no one ever comes back here to tell me I was wrong.

Thanks a ton for sharing your story and I sincerely hope you'll continue to do so. I would like to see how things continue to unfold and it will be a fantastic and interesting lesson for everyone.

Brett. You are exactly right. I am very aware of the competition out here, that's why I am sticking this out. I used to dream of buying my own truck, and still do, but this has been a real eye opener. If I ever own more than a pickup it will be highly specialized ( though at the moment I don't know why) OR just simply a water truck during retirement to fight fires during the summer, no need to work much at retirement time.

I have been respectful of the things they've asked us to do voluntarily so most of the changes haven't hurt me yet. For example, I've used the fuel brand that they've said they get the deepest discounts at, and even check on which exit is cheaper. So when they locked down the fuel cards to that brand, I didn't know for 3 months, until they told me.

I don't think this one is going to fail, there's too much history, and plenty of financial backing. We've grown in the years and added 100 trucks to our 75 trucks, and have purchased another small fleet that (I believe) had hit its breaking point and couldn't grow. That acquisition has more than doubled our fleet size and profitability. They've chosen to keep the companies working under their own names and in their own demographic. There's a bit of crossover but for the time being we look like separate entities. Some money really has to go out for equipment replacement though with the newly acquired business.

Currently, Knight Transportation has the closest benefit package I've found, bonuses are easily achievable but not as easy as my current one. 10k miles per month is what we need out of each and every truck to even justify having it on the road. The miles above that I run, probably supports the tail end of at least 3 other trucks that don't keep up their end of the bargain. It is pretty cutthroat even inside the company.

The absolute hardest part for me, is hearing drivers complain that the don't get the miles. I can't (well. I won't) discuss mine specifically with them, I have to simply say I am happy, and here's what I do. Then go on to say that I'm never late, I get there early every time if I can and the company notices. This has its own pitfalls when they believe they are gods gift to Trucking and want to argue that they do the same. I've had to eventually shrug my shoulders and walk away.

That's the same everywhere, but I don't need them going to the top playing the "but Jenny said" game. I'm not their boss. I just have a better attitude and willingness.