The Learning Leader Show With Ryan Hawk - 645: Ryan Petersen (Flexport CEO) - Front Line Obsession, Gemba Walks, Relentless Work-Ethic, CEO Mastermind Groups, & Valuing Simplicity

Episode Date: July 20, 2025

Go to www.LearningLeader.com for full show notes The Learning Leader Show with Ryan Hawk This is brought to you by Insight Global. If you need to hire 1 person, hire a team of people, or transform your business through Talent or Technical Services, Insight Global's team of 30,000 people around the world have the hustle and grit to deliver. www.InsightGlobal.com/LearningLeader Ryan Petersen is the founder and CEO of Flexport, a technology-driven global logistics company. He's a leading voice in supply chain innovation and has been at the forefront of solving major trade and shipping challenges worldwide. Notes: "Arrogance is its own form of stupidity." The Tweetstorm That Saved Christmas: Ryan shares the now-legendary story of how he rented a boat, brought tacos, and took another high-powered CEO with him to tour the Port of Long Beach during the supply chain crisis. His viral Twitter thread sparked immediate action, California Governor Gavin Newsom called within hours, and the policy changed shortly after. A masterclass in "doing the thing." Frontline Obsession & Gemba Walks: Why Ryan frequently travels the world (visiting 19 countries last year) to meet employees and customers. He explains the power of Gemba walks, being physically present on the frontlines, and how it shapes his leadership. How He Runs Flexport: Ryan's leadership playbook includes: Managing through writing. Every one of his 26 teams writes a six-page memo monthly, followed by deep conversations. Daily conversations with 30-40 employees to stay connected. Living Flexport's values: Empower Clients, Play the Long Game, Act Like an Entrepreneur, Commit to the Vision, Ask Why 5 Times. Leadership & Decision-Making: He shares his "must-haves" for hiring leaders: Relentless Work Ethic Intellectual Curiosity Humility ("Even wise people are wrong 30% of the time.") Reliability Charisma Lessons from Mentors: Ryan talks about advice from Paul Graham (Y Combinator) and Brian Chesky (Airbnb), including how gathering your top leaders in person sparks innovation and alignment. Hard Decisions & Mistakes: He candidly discusses Flexport's CEO transition gone wrong, hiring Dave Clark from Amazon, and what he learned from that difficult chapter. Personal Growth & Life Philosophy: Ryan shares his approach to lifelong learning, inspired by Charlie Munger and René Girard. He emphasizes reading widely, asking questions, and choosing role models wisely. "We're all imitative people. Choose your role models wisely." "We're making global trade as simple and reliable as flipping a light switch." "Even wise people are wrong 30% of the time. You must stay humble."

This episode is brought to you by my friends at Insight Global. Insight Global is a staffing and professional services company dedicated to being the light to the world around them. If you need to hire one person, hire a team of people, or transform your business through talent or technical services, Insight Global's team of 30,000 people around the world have the hustle and grit to deliver. hiring can be tough, but hiring the right person can be magic. Visit Insightglobal.com slash learning leader today to learn more. That's Insightglobal.com slash learning leader. Welcome to The Learning Leader Show.

I am your host, Ryan Hawk. Thank you so much for being here. Go to LearningLeader.com for show notes of this and all podcast. Go to learning leader.com. Now on to tonight's featured leader, Ryan Peterson is the founder and CEO of Flexport. He's built a reputation as one of the most forward-looking problem solvers in business today, known for taking on massive complex challenges in supply chains and logistics. He started Flexport in 2013 after seeing firsthand how broken and inefficient global shipping

really was. And under his leadership, Flexport has grown into a multi-billion dollar company moving goods for some of the biggest brands in the world. During our conversation, we discuss how he's become a sought-after thinker on everything from globalization to entrepreneurship to tackling bottlenecks. And he's even known for literally renting a boat to help unclog the port of Oakland. Amazing story. there. And Paul Graham has said, quote, Ryan is an armor piercing shell, a founder who keeps going through obstacles that would make other people give up. I think you're going to love this one. Ladies and gentlemen, please enjoy my conversation with Ryan Peterson.

Okay, I remember when this happened, but I want to go deeper into the story because you are a action-oriented leader, my favorite kind. And that is, and what was called the Tweetstorm when they were called that, the Tweet Storm that saved Christmas, where you famously rented a boat to inspect the Long Beach Port inefficiencies, right? And this prompted like this big policy change. Can you take me inside that story and what was happening and then what happened as a result of you taking action and making change?

So that was five years ago. So I had to jog my memory. Oh, four years ago, I think it was 2021. We all remember there was like 100 ships backed up off the Port of Long Beach and all the ports in the U.S. during COVID. And the ports just were not able to keep up with all the demand for products that people were buying when they were trapped in their house. It was obviously very impacting on Flexports business.

Flexports are ultimately container shipping company who have companies ship cargo around the world. Use technology to make that easier. And it was not easier. It was much harder than it had ever been to get cargo cleared. So we had real skisking. in the game, we needed to understand what was happening and was pretty dissatisfied with the answers that I was getting. The biggest problem was we couldn't get appointments to get a container

picked up. It was just taken forever to get containers out of the port. And we kept asking different people and hearing different stories that didn't quite add up for me. Like, people were saying the union's lazy. And I'm like, maybe, but are they lazier now than they used to be? I mean, like, that's not an answer that I was accepting. So it actually started with a joke where I, I said to my team, I was like, let's send a taco truck down to the union and then we'll give free tacos out and we'll just talk to all the union guys and see what they say, what the problem is. And I was joking, but then I decided I wasn't joking and then no one knew if I was joking or not.

So it took me like three or four different flexport employees before I finally found someone who would be like, oh, he's not joking. Okay, I will just go do that. We had a taco truck and our team went down. I wasn't able to go, but the team went down and they talked to all the union workers. And the union workers, they told our team that it was because, again, truckers are lazy. Truckers are missing their appointments. And so when they had an appointment, 50% of all that you need an appointment to pick up a container.

And 50% of the time the trucker wouldn't show up. And so then they've pulled this container to the front. No trucker shows up. Now the container that they pulled to the front is blocking all the other containers. You get this huge bottleneck in traffic jam. So from there, I was like, all right, well, I got to go. interview these truck drivers. And the boat rental, you know, it's not that you can see the port that well from the

from the water. You can't. I mean, it actually is a great thing to do in Long Beach. If you're ever down there, it doesn't cost that much to get a boat to take you around and see the port from the sea. But you're not really going to understand what the problems are. What I did was invite the CEO of one of the biggest trucking companies in the L.A. area onto the boat with me.

And is a great way to get information from somebody. You might try this, Ryan, for your podcast. You get them on a boat. They can't leave. They're stuck. And you can just keep asking them questions forever, unless they want to swim. And so we had the CEO of this truck and company on the boat, and he's the one that told me what his view was,

was the reason that the trucking companies were missing their appointments is that they couldn't get chassis. Chassies are the trailers that hold the containers around. And so if they were out of chassis, and so you go five Y's, you know, Toyota production system, you ask the five Ys, why can't you get chassis? Well, all the chassis have containers on them in our yard. And it's like, well, why don't you unload them? Well, the regulation says we can't stack containers more than too high in a trucking yard in Southern California. And it's like, well, okay, why is that the rule?

You know, we don't know, but that's the rule. That's what the zoning law says. So because of that zoning law, once the containers got stacked too high in the yard, then the third container has to sit on a chassis. And then the chassis can't be used to go pick up more containers and you get a, you get gridlock in the system. So that's what I discovered on that day on the water. And I tweeted about it the next morning. So that was like one afternoon when we went to the boat. The next morning, I took some time to think it over, wrote it up. Originally, I was like a blog post and I realized I'll just do this as a tweet storm. I blasted it off the next day. It went super viral. I think I posted it. said at 6 a.m. the next day, had Gavin Newsom called me by 10 a.m., the governor of California,

written up in dozens of articles and went very viral. I added like 30,000 Twitter followers that day. By 2 p.m., the city of Long Beach voted to change the zoning law to allow stacking of containers up to four high in trucking yards, which anyone who's ever dealt with zoning law knows that this is kind of a remarkable feat of human achievement. I don't think any government's ever reacted that quickly to a citizen action in the history of government all the way back to, you know, several thousand years BC. The thing that's remarkable about the story, though, is your willingness to, as the CEO, right, you're the founder, CEO of the company to just do something about it, to take action,

to get curious, to chase that down, even though you didn't know the answers, there's uncertainty. You weren't sure if it was going to work. I really want to get deeper into just your philosophy and your mentality as a leader to say, well, I'm going to do it. I'm just going to go do it, right? Instead of just sitting in the corner office, you go out and get taco trucks and rent a boat and get some other senior, powerful person to ride the boat with you so you can talk to them and learn.

Can you just talk through your mindset and your process and philosophy when it comes to leading by action? I mean, I don't think that's something that's that unique to me. Hopefully it's something that's imbued into all the flex-more people as advised to action. and go do things. Got to go learn more. There's no better way to learn than to do or to see with your own eyes what's happening. I'm a huge fan of the Toyota culture, Toyota production system. And in Toyota, they call it Gamba Walk.

Gamba is where the work gets done. In their case, it's a factory. Is that an acronym? It's a Japanese word, Gamba. Oh, okay. And so a Gamba walk is walking around. And, you know, you have to go and see what people are saying on the front line where the work's getting done.

For our world, it's harder because it's like we're very distributed. people aren't all in one location. Flexport has offices all over. We shipped cargo to and from 147 countries. I went to 19 of them last year. When I'm on the plane, I'm not doing that. So it's a real tax on the ability to go out there. So other people have to do it.

Our whole team's doing this all the time. Leaders got to walk the floor. You got to find out what's happening. And then when you find out a problem, you have to solve it. And if you do, if you help the team solve their problem, they will then tell you about problems the next time you come around, that is key because leaders can easily get cut off from information if they're hanging out. I'm in my office right now.

It's a risk that I have is like having an office where I close the door and not being out there on the floor and hearing what people are saying and talking to them and solving their problems with them. You probably don't have a standard or typical day, but what in general does a day look like in the life of the CEO of Flexport? Yeah, well, it depends on time of year. We have a real seasonal business. So there's kind of a heartbeat to the rhythm to the year. And what that means literally is you have Q4 is kind of peak shipping season, holiday season, et cetera. And so there it's a lot more operations, a lot of high volume.

It's making sure that we actually have space for all the cargo that's going on the ships or that we're correctly staffed in the fulfillment centers and other operations. Q1 is the low season for shipping. It becomes in logistics world, that's when all the sales get done. I met 200 customers in person during Q1 and another 100 since then. So probably try to meet lots of customers. The only way to do that is scaled events. So I spent two to three nights a week doing a customer event.

Try to do that throughout the year, but it gets a little exhausting. So I'm taking a summer break from travel right now. I mean, I just traveled to four countries last month. So July and August on the stay in San Francisco area. Those are the kind of the rhythms through the year. is like very intense Q1, meeting customers, going to conferences, events, a lot of dinners, and kind of speaking engagements, conferences, those types of things in Q1. Throughout the day, we're a very document-driven culture. We're globally distributed, which means it's really hard

to get everybody in a meeting at once. So we do a lot of written documents. So I do a lot of reading. We have around 26 teams that do a monthly review with me. And so they write a six-page once a month about what they're doing, what they got done, what they're going to do next month, key metrics is page zero. So I meet with the teams mostly in that structured environment, 26 of those every month. And then unstructured, lots of time to go figure out, okay, what's the key problem that we're focused on right now? And so I'll have two or three hours a day trying to solve problems. And often that involves spontaneous phone calls, slacks. You know, you're working with flex-border you expect to get a random, unpredictable message for

asking for something, asking about something. So I probably, if you look at my Slack, I probably message with 30 to 40 people every day, different people all the time. And then, yeah, lots of just, like, call people up, ask what's going on with this or that thing that I'm trying to learn about. And then, yeah, go walk the floor, go figure out,

you know, a lot of travel to go figure out what's happening. Every time I go to an office, I feel like I get 10 pages worth of notes. Again, just like asking them. about problems or opportunities or things that I didn't know. And it's kind of sad, honestly. Like, I can't go everywhere. So how do I get that information flowing everywhere?

It can't be all about me. I think that's one of the things we're working on a lot is, like, how do we develop so that all the people, all the leaders at Flexport know, hey, you're doing the same stuff as me, more or less on a smaller scope or smaller area. But go solve these problems directly. Everyone at the Flexport should be obsessed with learning from the people on the front lines and from the customer ultimately. I think, Ryan, a lot of people, there aren't a lot of them that exist, but if you're a CEO of a large company like you are who's highly competent, who's on TV, who's being asked to go everywhere and do all this type of media, who's really well spoken, it can be intimidating and it can actually make you seem so powerful that you're not approachable.

But I feel honestly the opposite with you. I feel like you have this high level of competence and power and you literally make change happen in a day. but yet you still feel like this kind of down-to-earth, comfortable dude that I'm not intimidated to approach. I have a hard time finding people like that. Do you think about that? Is that intentional or is that just how you are? I'm curious what you think about that. I don't know if it's true.

I mean, I think at Flagsport, I'm sort of at risk of being a celebrity that's unapproachable. Really? Certainly it's a risk. You know, and most people don't, people who know me know that that's not the case. but if you don't know me, I mean, I think that's definitely a risk that I worry about. Like, how do I make sure I don't get cut off from information flows and people are still comfortable? What do you do? How do you do that? I don't know. Try to be lighthearted and you've got to be humble.

I think recognizing that this is not about me. This is about everybody is even really wise people are wrong, like 30% of the time, probably at least. And so it's not enough to be wise. You also have to be humble and, like, accepting that you're all. often wrong and willing to change your mind quickly and change direction quickly and try things and find out because it's very risky if people think that I said to do something, therefore everyone just has to go do it. And yet it's also super annoying when they don't do the things that you ask them to do if you're the boss. That's just messed up. Trying to say humble,

I think is really, really important for any leader because of that fact. Like you're wrong a lot. And it's okay to be wrong a lot. But you guys surround yourself with, people who are willing to tell you when they think you're wrong and have some good debate and change your mind easily when better information presents itself. Who are those people for you? Is that like your exec team? Are they friends, family, all of the above? Exact team.

Yeah, for sure. Exact team, fans, my wife, my brother. But I'd like it to be anybody at Flexport, right? Like, I mean, I'm learned from everybody in the company. I don't know nearly as much as our company as all the people do. collectively. I'm lucky I have this privileged approach. I can get information from everybody. So I feel like I know as much as anybody, but not more than everybody. That's for sure. Got you. Paul Graham's one of my favorite writers and thinkers. I know he's a friend of yours, a backer. You guys have worked together for a while.

You went through Y Combinator in 2014. And he said, quote, Ryan is what I call. And I love this. An armor piercing shell. He's a founder who keeps going through obstacles that would make other people give up. But he's not just determined he sees things other people don't see. The freight business is both huge and very backward. And yet who of all the thousands of people starting startups noticed Ryan Peterson? What does it mean to you to hear him say that? That's nice. I don't remember that exact quote, but he's been a really good supporter for us for a long time. I met him before I did Y Combinator. My brother did Y Combinator and he knew him. And we were renting a house in Palo Alto and we used to see Paul when he just had one Sunday, would be at the children's park

and we were walking our dog all the time. So I would see him like multiple times a week and talk to him there before I got into YC. I got lucky. He made him. Yeah, great advisor. I think Paul's great in that he can only see the good and he doesn't really focus on the bad in people and companies. He's like, what's the possible upside here. Yeah, not really concerned with what could go wrong. An optimist. Yeah, definitely an optimist. And when it comes. comes to startups for sure. Well, one of the things I mentioned about him is he's one of my favorite writers and thinkers. I read everything that he publishes. He's published for a long time. It kind of relates back to what you said earlier about how big your company is and how you guys

need to write the six pagers to get very clear and then have those meetings with you. How important is it for you as well as the people on your team to be excellent writers, thinkers, communicators? Yeah, I don't know. I don't know how to say whether that's more important than other things. It's definitely one of the things that we look at. We try to do like a skills matrix of like, here are the important attributes of people and where, where do they assess themselves? How does the manager assess them? And communication ability is one of the 10 or 12 things on that list. But it'll depend on the role how important it is. One of our values is to simplify. And Paul is the best example of this as a writer. He's like incredibly smart and intellectual,

but he uses very simple language. He's passionate about using simple language, as a great writer should be. In fact, Paul considers his main life calling not to be starting Y Combinator, but to be an essayist. And, you know, he's really passionate about simple writing.

And part of that value, like, comes from global logistics really complicated. And so our ultimate mission is to make it easy, so easy there will be more trade. So it is simplifying, right? We're trying to simplify this very complicated thing to make it simple. and yet the industry has this aura of complexity.

It allows for, like, mediocre people to hide because they maybe worked in this industry a decade and they learned all the buzzwords. They know how the world works. They don't know why, though. And they couldn't explain it in simple terms. But if you don't know how it works at all and you're brand new,

then you hear someone explain all this, you're like, man, this person's a genius. I can't believe they know all this stuff. But actually, they're just doing what I call, all chauffeur knowledge, which is the knowledge your chauffeur gets from driving smart people around in the limousine. And they can repeat what they heard, but they don't know any of the substance of why and first principles thinking, et cetera. So if you can't simplify a problem to a point where layman can, smart layman, but layman nonetheless can understand it, then you're probably

operating it too much with chauffeur knowledge. So on some level, it's a test of that. Like, I never have a hard time understanding Paul Graham or Balaghi, Mark Andrezen, Peter Thiel. These are some of people that I've gotten to know who are really next level way smarter than I am. And like, I don't have a hard time understanding them, even though they're way smarter than me, right? And so it's kind of a little bit of a test. Like, if you can't communicate simply, there's probably because you don't understand the stuff well enough at a deep enough level. Yep. I think that's the ultimate sign of intelligence.

one of them at least is taking the complex and making it simple. I think this is why Tim Urban, for example, is such a great writer and attractive to lots of people because he takes these super complex different areas of life. And you read him and he makes the reader feel smarter. I think great leaders do that. That's part of our job as leaders is to help simplify the complex world. It's a big part of your job. I want to hit on something that you just talked about is I love CEOs who are serious about

values and you mentioned Simplify being one of them. What are your other values? And if you could, I'd love to kind of like hear why the other ones are your values too. Yeah, we have five values. And they start with the first one, which is empower your client, is all about our customers at the end of the day. And this sounds a bit cliche, but frankly, in logistics, it's kind of a mercenary industry where a lot of people are, how much money can I make on this shit, man. There's a lot of transparency, a lot of mystery, a lot of complicated stuff. Where there's mystery, there's margin. You can make money off of that and you can extract as much money as you want on one shipment, but the customer won't come back. And like, how do you build that long game

motion? So that's number one. Playing the long game is another one of our core values is recognizing there is so much short-term thinking in this industry. Those values can come at odds with each other, actually. I don't know if it's by design, but it's certainly the way it works. Like empowering your client and playing the long game maybe at odds. What if the customer wants you to break the law and misdeclare something on customs or, you know, ship something that's hazardous. There's all kinds of ways that you could empower your client, but actually not play the long game.

There's an intentional tension that comes with that. But acting like an entrepreneur is another one of the core ones. It's on purpose that says act like an entrepreneur. I don't think most people should be entrepreneurs. So imagine as if you own this company, but it's about breaking down bureaucracy, asking why over and over again, and challenging, not saying the names of departments as a reason you could or couldn't do something.

Like, if you're shipping, I don't want to hear about, like, Asia, this happened. Oh, actually, a great example for us is we ship a lot from Indonesia, but we don't have any employees in Indonesia. We work with a local partner there. And what we found over and over again is that if we put our own people on the ground, even if they're overseeing that partner and managing quality and relationship and solving problems on the ground, quality goes up as measured by on-time performance, cost, quality, all the response times, all sorts of metrics that you could measure.

Quality goes up. So I was like to the team, hey, why don't we have an office in Indonesia? And this is to my senior leadership team in Asia, called them out publicly. They were like, oh, illegal told us we can't. And I was like, it's very odd to me that statement. So I was like, who in the legal department? you know, because I made it illegal now after that to say that a department said something because it's like departments don't say anything.

There was a human being in the legal department. Who was it? And no one knew. And then I find out that I was like, you need to find out and tell me tomorrow. Like, who's had this? Like, I'm going to talk to them. I'm not saying they're wrong. I want to know what they have to say.

Well, it turned out it was a woman who hadn't worked in our company for two years. You're like, we're being haunted by the ghosts of former employees. And then when you talk to the legal team, I don't even believe she ever said that, to be honest. Because when I talked to the head of legal, he was like, no, legal would never say that. That's not our job. We'll just tell you, here are the costs, here are the risks, here are the challenges. But it's a business decision whether to go and do that. I won't call them out because it might have been, it was headed in private.

But a great CEO told me, tell your people, they don't have to listen to illegal unless they tell you something, is he illegal. Otherwise, they're just giving you business advice. I like that. I want to use that. You know, no entrepreneur or whatever, be like, oh, the legal team says I can't do this. It'd be like, show me the law. Like, show me what is it about this that is illegal? Why can I not do this?

Like, ask more questions. We get the name of the person. So that value comes from that. Simple if I already mentioned how important that is to our business. But we build up this tendency. I think every company probably, people show their expertise by showing how complicated their world is. And you need me because look at all this complexity here.

And if I can't understand something, I'm not the world's smartest person. but like logistics, we're kind of on some level. Like we're shipping cardboard boxes from here to here. And we're trying to create a more streamlined flow to eliminate defects, to make it more reliable. When there's a problem, we need to root cause it and ask why five times and figure out, well, okay, is this, how do we avoid this happening again in the future? None of this is that complicated.

So if it's getting to the place where I can't understand it, we're over-complicating things. So, yeah, that's simplified value score. And then winning as a team, we're all in one team. I feel like it can happen as your company gets big, that people, it starts to be about me versus other people or my team versus other teams. And it's just like constant reminder,

guys, we're all on the same team here. Like, we're just trying to help our customers solve these problems and go win. We've got to align. We should not be at odds. How hard is that one, though, Ryan? Because, like, you have 26 of those. You have 26 different groups that are meeting people. There's probably more than that.

right. Well, yeah, I mean, 26, just like having a meeting with you that they write up the six-pageer and then talk through it. So technically, whoever's in charge of those 26 people, if that's how it's organized, this is the thing that we actually run across when we do like leadership development work within companies is someone will say like, my team. Well, that person does have a team within the larger team and then the CEO gets frustrated or the owner gets upset. It's like, it's our team. It's our team. And the person's like, it is. But I know I'm responsible for my team. team and I need to make sure my team's right. So I keep my job. I get my bonus. I get my rate. You know what I'm saying? This is a very normal thing that happens. So how do you, especially that one? Because for you, you're the guy in charge of all of it. It is one team for you. But literally it's not one team for anybody else in the company. How do you manage that?

It's got to come through the culture, through the vision, through the commitment to the mission, to what we're trying to do to alignment, to a larger, higher set of goals through lots of teamwork. So like these meetings are not just with me. Like other execs are there. You know, people are, we're identifying who else needs to be here. Everybody's reading all the 26th monthly business reviews and annual plans together. A lot of work to map dependencies and say, yeah, you own this. And then constant assessment of are these teams aligned? It is true. People will optimize for their own work structure changes can make a big difference in achieving an outcome. I don't think there's anyone that's more complicated than freight forwarding, more interdependence,

because, you know, there's a lot of global companies like Coca-Cola has probably more offices and more countries than we do. They're at every plate. But like Coca-Cola and Vietnam doesn't need to cooperate with Coca-Cola in Mexico. They run their own little P&L. They just run fast. They do their own thing. But in freight forwarding, every transaction from Vietnam to Mexico, both those teams have work to do that they need to collaborate on. to get that shipment moved.

And there's an ocean team that's getting its space on the boat, customs teams clearing the customs. So there's domain expertise. And there's regional operational work, all needing to collaborate on each and every single transaction. So you do it a lot through metrics, a lot through alignment, a lot of video calls at different hours of the day. People know they got to work nights or early mornings.

But we made it one of our values to just clarify, like, guys, we're all on one team here. Let's solve this problem together. A lot of it can be done through metrics. Never underestimate the incentives. You know, that's one of the core aspects here is you've got to have a strong mission that ties people together, a sense of purpose, a real focus that comes through the metrics, good decision-making processes.

If you need to change direction, it's clear who can make what decisions and a good program for knowledge and learning and make sure we're all, like those are kind of the underpinnings of, good culture in addition to the values. It's a reminder of my dad has reminded me a million times. Dude, leadership, if it were easy, then you wouldn't need to exist. Like, this is why you, whenever, like, I complain about something, it's like, this is why you exist as a leader. This is specifically why. If it were easy and everything just worked, you wouldn't really need leaders. You just kind of go out and do the thing. But this is why leadership is a thing is because you have

to work through these complexities, through these issues, through the messiness. of human beings. That's why leaders exist. Yeah. And the relationships really matter. COVID really derailed Flexport in a lot of ways, not just the fact that we couldn't ship containers successfully because of the port situation and other problems. We stayed to work from home for way too long. Now, we're five days a week in office, but we stayed for like a couple of years too long. We should just always work through it in office for our business.

Then on top of that, regardless of whether you're in office, we're not all in the same office. So you got to get people together. So started this on the recommendation of Brian Chesky, the CEO of Airbnb, who's someone I really look up to on the culture front. And he recommended it. He got it from Steve Jobs of take the 150 most important people in the company, not the most senior people. And it doesn't have to be the same list every time.

It's not. But get the top 150 together twice a year is what they do. I think we're doing once a year for the top 150. and then twice a year, in addition to that, for 350 people, gather them together and go through, here's what we're doing and why, deep dive into the different teams and the different plans that are happening and trainings. And part of that, we do a speed dating thing, just like meet this person for 15 minutes, talk through what you do, what they do, just trying to create serendipity on some level. But I think that in person is just key. I'm jealous of companies where just everybody works in-war.

everybody works in one building. Is it hard to choose those 150? Yeah, it is. And I just do it. We just do it. The leaders have to pick their list and I reallocate and then I keep 25 slots that are just based on contribution to our culture and values, not based on level at all. Yeah.

The leaders will always pick their direct reports and the senior most people, but I don't want it to be the 150 most senior. So I do a lot of hand-selecting of people who are like high contributing culturally as well as people who are just like, all right, this person, maybe not the most senior, but maybe it's a key designer or a staff engineer or a salesperson who's just absolutely crushing it or something. You know, you want to have a mix of different people there. And then it's not the same every time. That has to be like, this is not a static list. If you're one of the flex-forters who didn't get invited, it's like, it's fine. Maybe you'll come to the next one.

Or here's these avenues of ways that you can contribute more to get invited. And it's not the only thing that we do. I'm trying to do more like, as we get more and more profitable, our goals to end this year, sustainably, durable as a company, then big way to reinvest, I think, is going to be these types of summits and getting, it's not cheap, right? We're doing the next one in Vietnam, taking 150 people to Vietnam. So I want to do more and more of that and different types of groups, right? The summits we do are like 300 people where we're coming together as more operators, people who are like moving freight and stuff. That we do in Vegas because it's cheaper. We do it in Vegas in the summer. It'd be nice to do that more frequently and more places like get

people more exposure. Yeah. Getting together with people, there's just nothing beats that I actually think it's in demand more now than ever because we got to feel, we got a taste of what it's like to have that taken away from us. And so now I've sensed in-person events, companies getting together, leadership off-sites, all of the above are way more in demand. I'm going to talk about culture and maybe even costs getting out of hand. So the last time we talked, you were the CEO, founder, CEO of Flexport. Now we're talking, you're the founder, CEO, Flexport. But in between the two times we've talked, you were just the founder, but not necessarily

the CEO. You hired a CEO to come in and run the business. There's a lot that goes into that. It doesn't necessarily go great from what I gathered. I'd love to hear what made you initially want to hire an outside CEO, and then what made you decide to say, nope, I'm taking this thing. back. I got to come back and run the show. Yeah, you clearly didn't go well or, you know, you don't hire the CEO and then plan to come back. Right. And I came back after six months,

but a lot went wrong during that period. Why did we do it? I wasn't trying to hire CEO. I actually, I was trying to hire COO and met. His name's Dave Clark. He had become the CEO of Amazon's retail division. So kind of what you and I think of Amazon, not AWS, but Amazon. But he'd really come up through the supply chain logistics group there. He ran supply chain and logistics. So it seemed like a marriage made in heaven. I think I made the mistake and fall in love with the resume. But honestly, it's not Dave's.

We had our problems, but I wouldn't blame Dave at all. Even just listening to myself earlier talking about the culture and how complicated it is, how complex it is, and how interrelated. It's just very hard for an outsider, probably impossible to take over the company. And if doing it over again, I mean, first of all, I wouldn't, but should have hired the CIO, if that's what I needed.

And it turns out I don't think I'd, You needed that. I needed to have more confidence. But we're now, like our key HR focus is just hiring from within. You've got to promote from within. And so if I ever, someday I will pass the torch, you know, hopefully when I'm very old, and it will be someone who's been at the company for many years,

who's grown up. And it's a natural transition, not an outsider. It's just too hard to, too much to learn. The fundamental problems, the short-term proximate cause, we let cost get out of control and quality suffer. Our customers, our churn went up, our NPS with our customers went down and our cost ballooned. You're like, this is like a perfect storm. So we did have to go through quite a turnaround the last 18 months, but it's bad.

Companies in a good place right now. Did you think you weren't knowledgeable enough? Why bring in somebody else? Because I'm just trying to distinguish for maybe someone listening who I get the population isn't that big. If someone who started something and then it gets so big or gets to the point where like, you know what, we need to bring the guy who ran the best. company in the world and it's Amazon. You know what I'm saying? I'm just wondering for that person. What was it? I'm a huge Amazon fan. I think Amazon's a really interesting company. And in our world

of tech plus logistics, it's kind of an end of one type of company. Yeah. Maybe that's not quite true on a global basis, but in the United States, Amazon is like tech and logistics. That's what I think of besides Flexport. And the problems that I was trying to solve is operationally doing the same thing over and over again a little bit better every time. How do you drive? that operational rigor to improve quality, remove defects, just like drive repeatability, reduce variability of outcomes, just that whole lean is what it's called in the U.S., but it's Toyota production system ultimately is who pioneered this in the world. And Amazon was very well known for doing that.

I'd hired a lot of good people from Amazon. A lot of them told me this guy was amazing, would be perfect for us. I trusted some people on the reference checks more than anything. Of course, I had some bad reference checks that I just ignored, so that was my fault. So those were, I was looking for someone who could do those types of things. Like, I'm more of the creative type. I like to do different things every day, not the same thing over and over again. And operations is review the same metrics every day, find the defects, root cause it, ask why over and over again, do it again, kind of build those rhythms. And so I was

looking for a partner to do that. Next thing I knew, I kind of convinced myself that he'd be better as the CEO rather than the COO. And probably that was the only way to hire him in the first place so kind of fell into that that should have been the first sign that this was the wrong fit because it wasn't what I was hiring for and yeah in hindsight should have had more confidence in my ability to go learn these things and put it in and get the team to own those challenges it's a fun intellectual problem and like philosophical problem and really it's actually very very interesting to take Toyota production system and apply it to our business because we're a different business we're not a manufacturing business and yet there's a lot of parallels so it's actually very

intellectually simulated and they'd be like, oh, what is the concept of inventory in a logistics company? We don't have inventory, but what would be the related concept that we'd work off of? Interesting. I want to talk about poise. I think excellent leaders have this. I've got to learn about being kind of calm and composed and poised as a quarterback and playing in college a little bit afterwards that stuff's going bad all the time. You throw an interception, you get sacked, you got to bounce back. You got to stay cool. You got to get the play call in and call it with confidence, right? And I read that you said something, rule number one in a crisis is everybody will rally around the calmest person in the room. You got to have poise, right? You got to be composed. Can you talk to me

about the importance of being the calmest person in the room? Well, it's great advice. I'm not that good at it. I'm kind of emotional and get pissed off too easily. It's something I need to work on, but it is intellectually correct. And you need to remember it. come back to it and figure out, you know, it's a real, real crisis. Sure, you can, you have the moment to digest. But when people are just, like, disappointing you, and sometimes it's valuable to get mad at someone and yell at them. And what was the, um, the gentleman is never rude, except on purpose. There is a time and place. Do you do that in front of peers or do you do that privately or both? Probably both. Does that something you think about though? Because some,

some exec teams, it's just part of the sports background. You just get used to that. You're going to get ripped in front of all your buddies. And that's just how it goes. I don't think it's that bad. Actually, there's some value in, I don't do this that much, but reading about it. It's kind of an interesting idea that there is value in getting mad at one of your directs in front of their team. Yes.

Because then the next time they ask you something, they'll be like, oh, we better, we better. The next time that exec asked them to do something, they're like, we better deliver or Ryan's going to yell at him again. I don't do that consciously, but I was just reading someone talking about that. I was like, it's kind of an interesting idea. I think, though, there is value if somebody is viewed as, this is like a Belichick Brady thing,

but somebody is viewed as like above everybody else, you make sure that that's not true. I had a coach, I remember one of my favorite coaches, he pulled me aside and said, you know, this is when things were going pretty well for me, and he said, hey, I'm going to rip you in front of the guys regularly

because they need to see that nobody's above the team. And so if you make a mistake, I might overdo it a little bit. Actually, I've built a ton of trust with me and him because he's like, it's not going to be fake. It'll be when you mess up. But just know, and I know you can take it. And so I think like there is some art to that when it comes to communicating and leadership to making sure that everybody knows the standard here is really, really high.

And we're holding everybody to it. I think that's a good leadership moment. Yeah, that's interesting. There's so much. I never played. I wasn't a very good athlete. So I don't have that background, but I wish I did. There's so much.

Where do you pull like your leadership lessons? I feel like you're well read, but where do you pull from? Is it from your peer group, your friends, the Paul Graham's of the world? Like, where do you do it? Some of that. I have a good CEO group that there's 10 of us. I think CEOs of kind of peer-level companies that we meet really regularly and give each other feedback and help support. How was that formed?

I don't know. They already had it going and they invited me. I'm fascinated by these things because I think we need these things. Like all of us need these. So I am curious, there's probably some parts that you don't. talk about, but I am just curious about how the whole thing goes. Like, what are the meetings? Are they formal, informal? How does it work? They're semi-formal. There's formal in terms of like, we have it pre-scheduled. You're only allowed to miss two a year or you get kicked out.

Wow. Do you get together in person? Every other month in person. Wow. Are you guys located, all in California? Everyone's in California, but some are in SoCal and somewhere in S-F. So that's why we don't do every month in person. Okay. And then we alternate SF or L.A. So you have to fly every third month to the other city. Okay. We do update, so you'd say what's the best thing that's happening the last month and the worst thing, kind of personal and professional, share. And then someone times it and makes sure people don't go for too long.

And then we save time at the end to synthesize topics that looked relevant across different people's areas in deep dive or offer to help somebody who had a problem that someone thinks they could offer input on. So it's pretty good. I recommend people. You've got to find peers that can do that for you. Right. We're not in like a formal association with a bigger group,

but I think it's kind of similar to what YPO does. Yeah. In their little formations, I think we probably copied it. I think one of the guys is a member of YPO and helped us structure a little bit on how they do things. You have simplified your Twitter bio or X bio about making global commerce as simple and reliable as flipping a light switch. And you highlighted this recently. Can you talk me more about, again, back to simplicity. and the, we all can envision just flipping a light switch.

What's that all about? Oh, well, I like the light switch analogy because very similar in the old days, when electricity was first invented, every company had to have their own power plant in their factory. Well, originally before electricity, you had to put your plant next to a waterfall to make power off the water mill. But then when electricity came along, everybody ran their own generators. and it was only with the development of the grid,

now we just take for granted that you had electricity and you flip that light switch. But when you control, if you're in a place that's coal-fired where you're getting your power from coal, which most of us are, if you flip that light switch, you're actually controlling the power plant itself. Like, it's getting a little bit hotter for you.

There's not a battery between you and the generator. It's generating a tiny bit more electricity on-demand for you. We just totally take that for granted, and yet it powers everything that we do. And I think in logistics, In commerce, you have this mindset. You don't really think about it. The idea you buy something on a website and it just gets delivered to you,

you think, therefore, oh, there must be this complex interconnected system that flows data back to the factory that's making those goods. And they produce one more on demand to replenish and move it in. And that's not how it works today. Today, it's like a bunch of emails and attachments and kind of duct-taping this thing together, a phone calls and spreadsheets. But that's what our ambition is, is to make it. work a lot more like the electrical grid, that you buy something, the demand signal is

automatically sent back to the factory to queue up production on demand, make one more, or maybe they shouldn't make one more. It depends on the product and what the machine learning models say about what demand forecast looks like for the next one and where to position that item. Should they put it in a fulfillment center near you or in the center of the country or fulfill it off the water, fulfill it directly from the factory? Yeah, we want to make it more like the electrical grid where you can just take it for granted and have it work on demand.

Interesting. I like the simplicity and the use of metaphors and making something complex easy to understand. Changing gears a little bit forward. We run in a few minutes. I'm always fascinated in what a CEO looks for in somebody, specifically on a leadership team. So these are really important decisions.

I know it sounds like you're shifting more towards promoting from within. And maybe you've always done that for other jobs, but you didn't for the one brief stint for the CEO. but what are some of the must-haves when someone's going to get promoted or hired into a role that's super important, like a leadership role? It's a number of things. Work ethic, very underrated, and you won't find that in an interview. You've got to talk to people who worked with them.

Is this one of the hardest working people we've ever met? Will they outwork everybody else? Work ethic is super key. I think John Calvin is probably the greatest religious genius of all time. Well, maybe that's an overstatement. But incredible genius because Calvinism basically that your fate is predetermined whether you're going to go to heaven or hell is already decided before you're born. You have nothing to do. However, the only way you can know which one you're going to do is based on how much wealth you accrue and how hard you work.

It's like basically the origin of capitalism comes from that insight. It's like, I got to work really hard and don't spend money so that I can prove that I'm going to heaven. I'm not like literally looking for Calvinist Protestants, but there's something to that work ethic. It's not innate in everybody. Some people have it. Some people don't. You can be any religion to have it, but there's some argument that the origin of it comes from Calvinism.

Intellect, I want really, really smart people. I want to be wowed by how smart they are. And that comes with curiosity because you're not born that smart. You learned all this stuff. And so someone who's constantly learning and excited by learning. Then I mentioned earlier humility, because, again, even the really wise people are wrong 30% of the time. So you got to be willing to be wrong and admit it and stay humble.

And frankly, like, arrogance is its own form of stupidity because you stop learning. Reliability, something that you want to look for, someone that actually does what they say they're going to do. Public speaking or charisma. I mean, I guess that goes along with the communication that we talked about earlier, your ability to simplify and communicate well. And then there's in our space is domain experience, which could be logistics, legal, finance, whatever the domain is, that they've got to be. have seen a lot of edge cases and developed enough experience to have intuition. How much of this is done through an interview process versus how much is done through referrals and talking to people who've worked with them?

It's almost all referrals and references. And that's why I try to do internal hiring for everything. Because it's just like, how do you trust these external people that they're telling you? Do you know them better than they know the person? Yeah. You could see it that they've actually done it while working at your company. That's a hard problem. Really, really hard.

Been humble, curious, learned new things. We can't fill all the rules internally. We try so hard. But when it's external, I try to get someone whose referrals from people who work at the company worth way more than a random reference check that the candidate themselves gave you. Right. Right. That's my ideal. Like, I've only hired one executive in the last couple of years and he was someone who was one of my direct report's bosses for six years and said he was the best boss ever without remember

that he works for me now. Are you still doing much work with Founders Fund? Well, I mean, I was full-time there. And now I'm kind of a part, not really. I'm so focused on Play Explorer. I hope to in the future. At the end of the year, we turn profitable at Q4, and then I think I'll have more options there.

Most people in your position, they have moments where there's more balanced in their life, but a lot of their life is not very balanced. So I don't really even strive for that. I think people that do big things usually are obsessed. they have amazing work ethics. They get after it, right? They chase it with great rigor.

I am curious, so you're a family guy, married kids. Like, how do you manage making sure that you have a strong marriage and you're a good dad in addition to doing this impossibly hard job? Yeah, work at it, I guess. I got two little kids, two little girls. So I'm trying to give them as much attention as I possibly can when I'm there, make it home for bedtime most nights, weekends, a lot of time. But I'm kind of bad.

I'm like constantly thinking about flexport itself. Really? Yeah, constantly. I'm sure investors love to hear that. And employees probably love to hear that. But what does your wife think when you say that? Well, I mean, I'm just being honest. She knows she's correcting me.

She's pushing me. She's a good partner. She's like knows, you know, what's best for me. What's good for the company? She knows that it's good that I'm obsessed with Flexport. It's like Hannibal, right? Like Hannibal, the general. He was always praised because his soldiers were never defected.

They were always very loyal. He was like, ah, he's a great general. But the only thing is he was pretty cruel. Whenever somebody defected from his army, he would torture them to death. You're like, well, you can't criticize him for that if you're going to praise him for his soldiers never defecting. You know, on some level, you've got to take the good with the bad. So are you saying, though, because I feel this so much of when you're kind of an alpha type of a person who gets things done, who does big, big things in the world, who leaves a positive dent, right?

You employ thousands of people, you're helping so many, your customers, all this. There is a cost, right? You don't become that type of a guy who does those things without being obsessed, without being a maniac, without working really hard. I think there's just a price to it. And I don't think we should act like that doesn't exist. That's just a real thing. That's my thing.

Yeah. But, I mean, like, it's amazing to have kids because it gives you instant fulfillment. sense of purpose, why we're here. I mean, I would always wonder about that. Like, I always got my purpose and fulfillment from building flexport. And I would wonder, like, what are all these people that aren't doing this? How are they getting purpose in the world? And then you have kids. You're like, oh, I get it. You just need to raise your kids. And that's all the purpose you ever need. So there's a tension there because I see it. I feel it. It's great to care about so much about them, about anybody besides yourself. That's the thing. I feel like it gives us massive purpose.

remember after having one and I was thinking there is no possible way I can love the second one as much as the first one. It's not possible. But here's the weird thing and you know this, right, because you've done it. But then you have the second one and all of a sudden, you can. Like you do. Like you actually are able to have more love. And I think that's a good thing for a leader. That's a good thing for a person is like, I didn't think it was humanly possible because I love this thing so much. And then you have the second one, you're like, wait a second, I'm capable. Like, it's just so bizarre, dude. I mean, being a dad is the best. It is the best. It is the best. And as a, uh, some of that work on constantly is like work on my tip. Put my phone away.

Don't pick it up. Don't get distracted. It'll be there. Yeah. But also the example of working hard is a really, really good thing. One more thing before we run, dude, you're meeting with a young person, maybe like a newer employee who's straight out of college or straight at like Columbia Business School like you were. And they want to like leave a dent, right? Like, they want to leave a pot. positive dent in the world. What are some general pieces of life slash career advice you give to them? Oh, I mean, I think everything is about learning is like building your capabilities and learning. And I really like to point people to Charlie Munger's essay on worldly wisdom. You can find it. I think it was actually a graduation speech that he did.

I think it was at USC. Yeah. Yeah. Yeah, that's a really important piece of knowledge and wisdom is, is the idea that in life there's only a limited number of domains of areas. It's not infinite things. Yeah, these are arbitrary lines between those. You can say how many there are, but I call it 300 different areas. And in each of these domains, there's two or three big ideas that if you understand that, you kind of get 80% of the whole domain. And so it's not an infinite problem to learn, to become worldly wise would mean you know

these kind of main ideas and therefore mental models from all the domain. And that's a very good starting point to strive towards in life. And you know, you can read pretty easily. The world's smartest people have taken the moment, taking the time to write down their ideas. Like, you can engage with the smartest people to ever live. And a lot of people don't take advantage of that. So we're going to read constantly,

find the people who know the thing that you want to do and model them, ask them. Those are all good ideas. And then I guess the other one comes from René Girard, which is the idea that we're all imitating. people. There's no way around it. That's what human beings are. We imitate others. That's what separates us from the animals is that we're very good at imitating. And there's no way out of this. You're going to imitate somebody, so you should be very conscious about who you imitate. Choose your role models

wisely. Surround yourself with people that have similar values to the ones you want to have that are working towards inspiring things that are leading the type of life that you want to lead. because you're going to naturally imitate those people. And if you're not careful, you'll be imitating the wrong model. You will imitate someone. This is why Christianity can be really important is like, imitate Christ. Pick the ideal and imitate that rather than at least you're consciously choosing someone great to imitate. Otherwise, you will imitate someone who's, you get it wrong, and it can be disastrous.

So I think picking really good role models, whoever it might be, is really. important and do it consciously. Those are all good ideas and optimized for that for learning and like who are you going to learn from. You don't have that one role model. You can have role models for different areas of development or different areas you're trying to learn. Luke Burgess has a book called Wanting, which is all about Renee Gerard. So that's really good. It's funny, Ryan. Actually, I leave on this trip tomorrow. I go on an annual trip with my younger brother. And it's with people who have definitely sustained excellence. They've generated a lot of wealth in their life. They haven't inherited. These are people who've worked really, really hard and made tons of money and are kind of world changers.

And I'm super lucky to get to go. We've done it the last 17 years. We have dinners every night. We hang out during the day. When I come back from that trip, I think differently, man. Being around kind of world dominators, it raises your level of thinking. It truly, truly does. So I love that advice to put yourself in environments with people who do big things, who get after it, who are optimists, who want to do it the right way by working in.

stately hard, like the first thing you mentioned when you're going to hire somebody. It's so good. And remembering that success compounds, right? Because those people don't want to hang out with you if you've never done anything interesting or haven't contributed, et cetera. And so you've got to work your way up. And then the more successful you become, the more capable you become, it'll compound on itself because now you're going to be able to surround yourself with people even more successful than that. And that will inspire you, that you will learn from them, etc. But, you know, you don't, networking is not that useful. Like you come out of college and like, oh, I met so and so.

Like, I've met tons of famous people and entrepreneurs, but it doesn't really help me unless they're see me as a peer and want to engage with me and develop. And that, you know, I've earned over time by being more and more successful. So you've got to work on yourself. The best networking tool is being insanely good at whatever the thing is that you do. Yeah. It really is.

Like be so good you can't be ignored. The Steve Martin, Cal Newport stuff, right? Whatever the thing is, it doesn't necessarily matter. would be insanely good at what you're doing. That's how you don't get kicked out of groups like that. Because those groups are ruthless too. They are not afraid to disinvite people, right? They're just out.

So I think like that's a big part of it as well. And in business world, you know, coming back to that mental models thing of like learning all stuff, like a lot of the most successful people have come from like taking one domain and another domain and mixing these things out and find out like, oh, the best idea from this. No one's even thought about over here, but it would work.

I mean, in our case, like SaaS and. One of my early inspirations for Flexport was this web app called Dropio. Sam Lesson started it, who then went over to become, I don't know what's senior job at Facebook. Facebook acquired it and killed it. It just wanted the team. But it was like the earliest web app where you could just like upload docs. Now you take it for granted Google Drive or something. You upload these docs in there and had a really nice UX.

I was like, oh, we should have this for customs. So cool. It's funny. You mentioned Sam. He's coming on in three weeks. I think we just booked that one a couple weeks ago. fascinating dude. Hey man, I love this. I love to continue and do it again as a little bit more time passes just to hear from you, man. I always learn a ton. I appreciate it, man. Likewise, man. Thanks a lot.

It is the end of the podcast club. Thank you for being a member of the end of the podcast club. If you are, send me a note, Ryan at learning leader.com. Let me know what you learned from this great conversation with Ryan Peterson. A few takeaways from my notes. How about the tweet storm that saved Christmas when Ryan heard about the problems at the Long Beach port. He asked the five whys, as he mentioned multiple times, the five wise and then went to the front lines himself. This reminds me of General Stanley McChrystal and his front line obsession. I think senior leaders need to have a front line obsession.

Ryan got a taco truck, rented a boat, and brought another high-powered CEO with him on the boat, kind of held him captive, as he mentioned I should do. And then afterwards, he wrote a tweet storm about what he learned. It went viral. And then Governor Gavin Newsom called a couple hours later. And then policy changed a few hours after that. Ryan's action created change. That is frontline obsession. That is powerful. And then rule number one in a crisis is everybody will rally around the calmest person in the room. It is on us as leaders to be poised and level-headed when things go bad, as they inevitably will. Be prepared for those moments and how you will respond. Everybody will rally around the calmest person in the room. And I love his idea of going deeper

than having, quote, chauffeur knowledge. A chauffeur can repeat back with the people that are driving said, but they don't know why. As leaders, we had to go deeper than that, understanding the things so that you can answer again those five whys and be able to describe it back to someone else with simplicity. That is when you truly show that you know something about that and not just having show for knowledge. Once again, I would say thank you so much for continuing to spread the message and telling a friend or two, hey, you should listen to this episode of the Learning Leadership.

show with Ryan Peterson. I think he'll help you become a more effective leader because you continue to do that. And you also go to Spotify and Apple Podcasts and you subscribe to the show. Really important. You write a thoughtful review and you rate the show, hopefully five stars. By doing all of that, you are giving me the opportunity to do what I love on a daily basis. And for that, I will forever be grateful. Thank you so, so much. Talk you soon. Can't wait.