While rubbing elbows with FreighTech elite at FreightWaves LIVE Chicago in November, I had the opportunity to connect with some major players in the logistics technology space. With so much innovation coming into our industry, it’s easy to get lost in the stories and messages of the various tech startups that are coming to market of late. While some founders come from industries outside of supply chain and logistics, many of the best and brightest company starters in logistics tech today have one thing in common – they started their FreightTech careers at one of the original digital freight brokers, GlobalTranz.
GlobalTranz was founded in Phoenix, Arizona, in 2003 by Andrew and Michael Leto and was one of the industry’s first brokers to go online. Since founding their company in Andrew’s apartment, infamously funded by his unemployment checks, the Letos have grown several businesses as have several other entrepreneurs that came out of the GlobalTranz employee base during their hyper-growth years of the early 2000s and 2010s.
Tech enthusiasts all recognize the “PayPal Mafia” as a group of entrepreneurs who were united during the Internet 1.0 gold rush. PayPal was the cross-product of several companies that came together in the name of solving the internet’s digital payments problem. As PayPal became pervasive it has widely been viewed as a catalyzing factor in the explosive growth seen in e-commerce over the past 15 to 20 years. The founders and entrepreneurs that were originally known as the “PayPal Mafia” went on to solve many other problems for our society and have birthed such innovative companies as Tesla Motors, LinkedIn, Palantir Technologies, SpaceX, YouTube, Yelp and Yammer. This uncanny group of founders included the likes of Elon Musk, Peter Thiel, Reed Hoffman, David Sacks and more.
Similar to the Paypal Mafia, a group of entrepreneurs forged from the powerhouse freight broker GlobalTranz have become known as the “GlobalTranz Mafia,” a gritty group of founders that have gone on to start and operate some of the most innovative and influential companies in supply chain and logistics today. The story of the GlobalTranz Mafia starts with the founders of GlobalTranz, Andrew and Michael Leto.
The brothers Leto grew up in the freight business, working in their father’s Pilot Airfreight franchise in the Phoenix area. After high school, older brother Andrew joined the U.S. Navy where he worked on submarine technology. After completing his naval service, Andrew returned to Arizona with a new view on technology and a different outlook on his father’s freight company. “This was post-9/11 and airfreight just wasn’t what it once was. Volumes had bottomed out and I knew we needed to get into the ground game and go online if we wanted to grow,” said Andrew Leto. One day a less-than-truckload (LTL) representative from a national carrier dropped a tariff off on Pilot’s dock and the idea came to Andrew. “We need to build the tech to let people book LTL online, just like people book air travel online,” said Andrew to his brother Michael, and the two got to work building version 1 of the GlobalTranz platform. Michael began developing the business model and strategy while Andrew built the original version of the software. Michael quickly added shippers, carriers and agents and the software enabled the brothers to grow quickly and efficiently.
In no time, GlobalTranz became a force to be reckoned with in the freight brokerage space. A key factor in GlobalTranz’ growth throughout the early 2000s was its high-energy, high-intelligence culture. The company had amazing offices in Scottsdale, Arizona, and Laguna Beach, California, and built a large corporate team that was really good at helping people learn the brokerage business while developing in their careers. As a hybrid tech/logistics company long before the term digital broker was a thing, GlobalTranz led with technology in its sales and recruiting strategies and grew its business quickly in a time when many small to mid-sized companies were looking for digital tools in an effort to enhance their supply chain processes.
When asked why he thought GlobalTranz employees have gone on to found so many innovative companies, Andrew Leto’s response was, “When we first started GlobalTranz one advantage we had was we could build applications faster than most of our competition. Hence the culture was built around ‘we have a customer, dig in and let’s find out ways we can build technology to solve its current supply chain needs.’ We essentially created products and services as we went. I think that is a big factor on why so many people started their own firms using technology after leaving GlobalTranz. They knew the gaps in the market as far as technology was concerned, and were able to create applications at their startups that filled these gaps in.”
I ran into Andrew recently at a FreightTech event in Los Angeles and we found ourselves talking about trends that are changing supply chain and technology and eventually we began talking about the companies created in the past five to six years that have been founded by former members of the GlobalTranz team. After some reflection, I thought it would be fun to write about some of the founders that were battle-tested at GlobalTranz early in their careers. Andrew agreed and we decided to get some people together at FreightWaves LIVE in Chicago to talk about the good old days and how they’ve shaped this group as they’ve gone on and conquered other, newer problems in supply chain technology.
During that chat, members of the group reflected fondly on the GlobalTranz culture of the early years and the pace at which the team grew. “We were just growing so fast. Every day brought a new challenge but we had no choice but to move things forward,” said Carson Holmquist, founder of Stream Logistics during our impromptu GlobalTranz reunion at FreightWaves LIVE. “We developed this reflex of going fast and figuring things out on the fly. It was so much fun but stressful at the same time. It taught us how to grow and build. It was awesome.”
My list below by no means encompases every company founded by someone formerly employed by GlobalTranz. However, the group highlighted in this article does represent not only an amazing group of entrepreneurs who are thriving in our industry today, it also exposes a theme of intellect and innovation that was core to the success achieved by GlobalTranz in its early years and into today.
Here are some of the innovative companies that have come as a result of founders with backgrounds that include GlobalTranz.
10-4 Systems – Andrew Leto’s second big-time win in the transportation tech space came in the form of 10-4 Systems, an early private freight marketplace that eventually evolved into the first modern visibility platform for the trucking industry. 10-4 Systems was based in Boulder, Colorado, and raised nearly $14 million before being acquired by Trimble in September 2017 after being in business for only four years. While Andrew Leto is recognized as the founder, former GlobalTranz chief technology officer Travis Rhyan was 10-4’s CEO and drove the day-to- day operations and strategy through the company’s life cycle.
Emerge – Founded in 2018, Emerge came out of stealth mode with a massive $20 million seed round led by Greycroft Partners, a tier-one venture capital firm based in Los Angeles and New York. Billed as a “Private Freight Marketplace,” Emerge was founded by Michael and Andrew Leto and has quickly established itself as a single source of truth for shippers, carriers and brokers alike. Emerge is not a digital freight brokerage; rather it’s more of a private load board and marketplace where all stakeholders in the trucking ecosystem can collaborate and find shared supply and demand. Emerge charges software-as-a-service fees to its users, allowing them to maintain an agnostic position in each transaction since Emerge doesn’t have to charge mark-ups like traditional brokers.
Convey – Founded by former GlobalTranz employees Dan Bebout and Carson Kreig, Convey was originally called Pivot Freight. Convey now helps ecommerce companies manage the complexities of final mile deliveries by providing a suite of tools to help online shoppers curate the delivery experience that works best for them. By reducing the friction in scheduling deliveries of big and bulky items, Convey helps ecommerce companies of all sizes sell more large products online.
According to Angelist, Convey has raised nearly $15 million in venture funding with support from TechStars and Austin-based Silverton Partners. Convey raised eyebrows in 2014 when it snagged Rob Taylor as its CEO after he sold his two previous companies, TrueCar and BlackLocus. “Customer delivery is an area where retailers have traditionally thrown the ball over the fence for the carriers to deal with,” Taylor told Austin’s The Statesman newspaper recently. “Large items in particular are problematic because all of these deliveries require appointments. The retailer is relying on the carrier to provide great customer service, but that doesn’t usually happen. Everybody I talk to has had a disastrous experience with a large delivery.”
With their roots in LTL, the founding team of Convey is wholly focused now on tackling ecommerce’s final mile problem by enabling transparency and happiness for home delivery customers and brands. When asked why he started Convey, Bebout said, “I noticed many opportunities to modernize the industry – amplified by ecommerce growth and solve complex problems that impact our everyday lives. I gained deep supply chain knowledge at GlobalTranz and it inspired me to start Convey with my co-founders. We saw a need for retailers to balance cost, speed and customer experience in an era with Amazon continuously raising the bar. We assembled an experienced team that could deliver a suite of solutions to execute that vision.” Bebout went on to say, “Ecommerce has changed our entire industry and especially the last mile of delivery. Eleven percent of shipments today encounter an exception and 73% of customers will never return to a retailer after a poor delivery experience. We provide a platform powered with machine learning, artificial intelligence and human expertise to help the world’s largest retailers deliver this promise.”