CEO Stories: A Serial Entrepreneur’s Drive for Success

This Is Capitalism: Marc Gorlin

RH: This is Capitalism and I’m Ray Hoffman. Take an everyday problem and you’ll probably find an entrepreneur working on a solution, like the one Marc Gorlin came up with when he couldn’t get a load of tile delivered. He started a company called Roadie. What Airbnb is to overnight accommodations, Roadie is to package delivery.

This is Gorlin’s fourth company and each of them has been a success. In 1996, he cofounded an early Internet security company, PGP (for Pretty Good Privacy). Then came Vertical One, the small-business lender Kabbage, and now Roadie, all of which would suggest that Marc Gorlin must have inherited the entrepreneurial gene.
MG: You are right. A lot of it actually came from my dad. He gave me some very odd advice by a lot of people’s estimations coming out of school. I was like, “I’ve got a journalism degree from the University of Georgia,” and he said “don’t find a job, find a deal. You’ll get stuck in a job and then you’ll move up through that job. But you need to find a deal and start something on you own and that’s something you can build. And the best time to do it is coming out of school where you don’t have a lot of the responsibilities you’re going to have five or ten years down the road.”

RH: That’s remarkable advice. What did your dad do?
MG: He did the same thing. He didn’t find a job either. He started biotech companies his entire life, trying to solve everything from childhood diabetes to cancer and everywhere in between.

RH: And has he succeeded in some way?
MG: Oh yes, he has started things like EntreMed; Medicis;  things like Medivation, which is a massive company now; Theragenics, which provides seeds for prostate cancer and saved a lot of men’s lives. All these things, he literally put the first dollars in most of them to get them going and put the teams together to help take what was an idea and then get some people rallied around it and before you know it, it’s a real thing and a company. And watching that happen time after time, it just seemed natural to me. It wasn’t till later in life I realized how crazy it is (to let one of them?), or much less, many of them.

RH: I’ll have to talk to him some time.
MG: He will talk your ear off, I guarantee you.

RH: It’s amazing that you are the first serial entrepreneur I’ve ever met who came out of a school of journalism, the Grady College at Georgia.
MG: You know, I wouldn’t trade the Grady College at Georgia for anything because if you think about it, you have a lot of business majors, they can do math and they can come out and do layering and they can do accounting, but really what tends to make at least the startups I’ve been involved in work is you are essentially trying to make people care and you do that through telling stories.

And the ability of a journalist to take a bunch of disparate facts and in the spoken and written word, present them to people as something that they can not just understand but get behind and care about is sort of the seed element of any startup, I don’t care what you’re selling. So I wouldn’t trade that education for the world.

RH: Now let’s get to the present tense. The present tense of course is Roadie. As I understand it, the idea for Roadie came from a typical, everyday situation. And of course in an entrepreneur’s imagination, that becomes an opportunity.
MG: It does. I live in Atlanta and I’ve got a condo down in the Gulf Coast of Florida in Perdido Key, and I found out a developer had messed up a bathroom down there and didn’t put shower pans underneath the showers. So I had to rip it out and decided to make it nicer and put up tile.

So it was tile day, it was a Thursday in February of  ’14, I’m driving down there, halfway into a six-hour drive in Montgomery, Alabama, get back in my truck, and I get a call from Glen, who is the tile guy. And Glen, he’s from L.A., which is not Los Angeles but Lower Alabama and doesn’t talk quite like you or I do. But it was a very funny call. I remember it went…it went something like this. He’s like [as Glen], “Hey Marc, this is Glen, that bull nose tile showed up broken as hell, ain’t gonna be here till overnight delivery, which is on Monday.”

And I’m sitting there and I’m like first of all, overnight delivery is Friday, not Monday. But I’m going to get nowhere with Glen with this story. So I said, Glen, “where is the tile?” He said, “I think it’s in Birmingham.” I said, “find out.” So I hang up a little upset.

I’m sitting at the overpass of I-65 in Montgomery, Alabama, I look left and I see all these cars going south, I look right and I see all these cars going north. And I think to myself, “you know, there’s bound to be somebody leaving Birmingham right now heading to Montgomery and if I just knew who they were, surely they’d throw a box of tile in their trunk. Give ’em 20 bucks or come this way anyway…there’s probably someone leaving Birmingham, going all the way down to the beach and I could have my toes in the sand by the time they got down there.”

And then it hit me that there is this unbelievable transportation heat map, almost a natural resource that exists in this country where everybody is going anyway. They’re going in town, they’re going regionally, they’re going across the country, all these personas and profiles that already exist. And if we could help people tap into them you have a more powerful transportation heat map and more vehicles than FedEx, UPS, and the Post Office combined, nearly 250 million vehicles a day with over four billion cubic feet of excess capacity in their vehicles that hit the road everyday.

And then when I talked to more people I realized everybody has a tile story. Everybody has a need that is out there that you wouldn’t think about. It could be as simple as people that are shipping huge amounts of artwork where they need to send it 3,000 miles from Florida to San Francisco and by the time you package it up, put it through a crate, it’s super expensive and you don’t want it to bounce through four trucks and an airplane. But if you could put it in the back of my Expedition, I’m going out there anyway, everybody is happy.

And the added exhaust benefit of this is it creates an unbelievable community of people who, rather than use technology to be pushed apart, use it to come together. I’m helping you out by taking your stuff from here to there and getting paid to do something that I was already going to do anyway.

RH: I assume you thought of this as being disruptive or at least possibly disruptive within minutes of the first thought?
MG: Yeah, I couldn’t breathe real well as I was driving down to the beach from Montgomery because I kept thinking. I started looking around the highway and I saw all these cars and I just…It’s almost like an x-ray vision where you see capacity in all of them. I’m like, why could not this work?

And I mean it’s not like I knew a lot about logistics, but what I did know and then what I have learned from there is, I mean, you’ve got people like FedEx and UPS that have a hub-and-spoke method that require two things to make that work. You need delivery density, which is all the houses within a neighborhood or all the businesses within an office park, and you need utilization, how much stuff you can put on the truck for that system to work.

And then you have on-demand and you’ve heard of Uber and Lyft and Postmates and all these companies. But take Uber for example: You hit that button, someone is coming somewhere they weren’t already going and picking you up and taking you somewhere else that they also were not already going, which is great, I love it, you love it. But it is fundamentally different than on the way, which is someone in your general vicinity is heading in the same direction that your stuff just happens to need a lift.

And that efficiency over time and with scale I think will suck a lot of cost out of the equation. And I said it’s the added benefit–which can’t be overlooked–it brings people together, you’re helping people out. The stories from the road that we’ve seen are unreal. We’ve had a driver that picked up a dog for somebody in California, dropped it off in Chicago, had dinner with the lady, went on to New York, stopped back by going through, back through the country, she moved back to California and he proposed to her on Valentine’s Day and now they’re engaged to be married.

RH: How wonderful is that?
MG: It’s a great story. We also have some great break-up stories too. [Laughter.]

RH: That’s life, that’s love.
MG: Things that you cannot imagine. Within the past week there’s a guy that left a riding lawn mower beside a fence that needed to go from New Hampshire all the way down to Tyrone, Georgia. Somebody came by, picked it up, was heading down anyway, and it got delivered within a couple of days. It’s magic. You can have something in one place and just attach it to somebody that’s already going somewhere else.

RH: So this has a significant relationship then to the sharing economy that’s personified by Airbnb.

MG: It absolutely does. I think the roots of people helping one another out and really the background of ratings and reviews and knowing who has treated other people well comes with Airbnb And then I think the forefathers to that would be eBay. I’m not going to buy something from you if you gave a bad experience to somebody else. As opposed to Uber, where you might rate somebody poorly but that might not stop the next person from getting that driver.

Here you can see Ray has delivered five or six dogs so I’m probably going to let him deliver my dog. Or this person has always gotten a ton of great reviews and has 2,500 miles. You can see that. So yeah, the sharing economy is strong and this is a use case where smaller items, bigger items, across town or a across the country, it all works ’cause people are heading everywhere.

RH: If you had a typical driver member, who would it be?
MG: It depends. And it’s a great question because part of the magic of Roadie is understanding where everybody goes all the time. So if you go to the lake every third Thursday of the month and someone left their laptop, we can delightfully intrude in your day with a simple text message to say, “hey, do you want to make 30 bucks going where you’re already going anyway?” So it could be different people but we do have personas.

So you have sort of like the Uber/Lyft drivers, around-town drivers, where they may or may not be going there anyway but they can make more money than they make on Uber and Lyft for delivering a package and take it somewhere. They can deliver something from the airport to someone’s home and make more and have stuff vs. people.

You’ve got regional drivers. I think like college students that might live two or three hours away from a city center or a traveling salesperson that could take things on this route. And then you might have long-haul truckers that are going across the country on pretty standard routes that often stuff can hitch a ride with on trips that they are already taking anyway.

So understanding all these patterns and the data science behind that– we bring in to be able to make it as simple as possible to let people know when they can get paid for doing what they are already doing and helping their neighbor out.

RH: Now you started with $10 million in series A funding in January of 2015. Soliciting capital is nothing new for you. But I’m wondering what you have learned over time about how to find and approach the right investors?
MG: You need to understand what they have been willing to do in the past. You need to definitely utilize relationships that you’ve had in the past. And probably the biggest thing, and this doesn’t just go to finding investors but it goes to finding partners, customers, employees, and everybody else, is you got to find a way to make people care ’cause you can’t pay ’em to.

You’ve got to make them understand how what you’re doing could change something and believe in you to actually get that there. It’s not so much the idea because, especially early stage, you’re betting a lot less on the idea than you are the person and the people around it and the people that they will then bring in to adjust and mold and move around that idea as you try to find who the best customer is for it and how do you grow over time.

It’s often a lily pad of jumping from one to the other to get to an end goal that is not very direct. So, qualified people that are good with that and are willing to take those sort of big bets. For more standard, like, venture-backed companies, you look for people in the industry. I mean UPS is an investor in Roadie for obvious reasons. There are service options that we can offer that they just don’t do that are interesting. In one of our first meetings with them, it was kind of funny, we were sitting there and they were like, “yeah we ran into this in a UPS store.” A guy shows up with a six-foot birdcage and needs to ship it. I mean it almost sounds like a joke–a rabbi, a preacher, and cowboy show up with a six-foot birdcage and want to ship it. [Laughter.]

And they’re talking about packaging it for freight and all this. It’s going to cost so much more than the birdcage to even send it. And what they really needed was a dude with a pickup truck and bungee cords. So there’s options for larger items and longer distances based on a transportation map that includes everybody, vs. just trucks that are painted a brown or a purple color.

RH: And is there any better promotion than the fellow that picked up a little dog from a kill shelter, I think down in Florida, and delivered it to its new family up north?
MG: That story blew me away. That was actually over Thanksgiving. He and his wife were in New York, I believe, and a family friend down there just passed away and the dog was at a kill shelter. They’re in New York, the dog is in Florida, they live in Atlanta, it’s holiday time–and there is no time. And they put a gig on the Roadie app and within a day that dog is back up and is such a happy member of that family now.

RH: And for a serial entrepreneur, a guy who has started four companies, is this the one, is this the company that can really hold your attention over the long run?
MG: Absolutely. As I said before, UPS is over a hundred years old, we are only a couple-plus years in and trying to create a system that can involve everybody. It can create technology, it can move people faster, it can be more sustainable and get more trucks off the road because you’re utilizing capacity that’s already there, so it’s a very green angle, and it can bring people together, that can keep me busy for a long time.

RH: Marc Gorlin’s big idea from that overpass on I-65, Roadie, is now operating in all 50 states with 40,000 drivers so far.

This is Capitalism, I’m Ray Hoffman.