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SaaS Backwards Episode 18: Making Bank on the Supply Chain: News and Data Power Growth at FreightWaves

Welcome to episode eighteen of the SaaS Backwards podcast, where we interview CEOs and CMOs of fast-growing SaaS firms to reveal what they are doing that's working, and lessons learned from things that didn't work as planned. 

You can listen to the full episode directly below via Spotify, or visit SaaS Backwards on Buzzsprout or wherever you listen to podcasts.


Making Bank on the Supply Chain: News and Data Power Growth at FreightWaves

Craig Fuller, CeO, FreightWaves

Edited for clarity and readability 

Host, Ken Lempit:
Welcome everyone to another episode of SaaS Backwards, it's a podcast that helps CEOs and CMOs of software as a service businesses to unpack what's working and not for other SaaS enterprise. My guest today is Craig Fuller. He's CEO of FreightWaves. And hey Craig, welcome to the podcast.

Craig Fuller:
Glad to be here. Thanks for having me.

A pleasure. And before we dig in, could you just give me a little background for our listeners on you and your company, and then we'll get right to it.

I'm the founder and CEO of FreightWaves, which is, really has one mission with two primary businesses.

We're the largest provider of real-time information for the global supply chain.
40% of the global economy is tied to physical goods, and we provide real-time intelligence on what's happening around the globe. That information is available for companies that are buying or selling transportation services to use, to make decisions about their business.

And then we have a media business that provides content to help bring context to all that data.

The company's been around since 2016, I am the founder. I started the business and very few people believed it would ever be successful. And couple years later we've had a great run.

What was the founding idea?

I've been fascinated with financial markets my whole life. My father took a business public in 1994 that he had bootstrapped since 1985. I really wanted to learn a lot about that process, and so I became really enamored with financial markets.

The internet was being born as I was in high school and going to college. And the dotcom days’ first bubble of the internet age was taking place at the same time. And so there was a lot of information about financial markets.

I became very enamored with financial markets, but had grown up around freights, because my dad had a freight company that he had built. And as any founder’s son would know, the best way to interact with your dad was to learn how his business worked.

I learned a lot about the trucking and freight industry, and my goal was to really blend data services that you would get in financial markets with the freight industry--to bring real-time information to this very fragmented market.

There are millions of individual participants that take place in the freight market; companies that sell transportation services as well as companies that buy transportation services. Because it's so fragmented, there are so many parties buying and selling services, information isn't ubiquitously shared.

No one really knows what's happening across every single part of the global supply chain.

Our goal at FreightWaves is to bring real-time intelligence to that world. I love Bloomberg and CNBC, and that was really the goal was to build the Bloomberg or the CNBC of freight.

All seems like you're definitely on your way there. Maybe we should talk a little bit about the content model. How does content drive the business at FreightWaves?

We run our content like you would a traditional media business, or a digital media business. Basically we have journalists who are out telling stories.

We try keep a firewall where stories, even if it's about one of our customers, and even one of our large customers, they'll run the story as really a journalist would.

And they can take a very discerning look at the story without regard of what it means to the financial corporate relationship we have on the data side.

I think it's important because as you do that and you build out that editorial integrity, you end up gaining a lot more credibility in the market, which means when you do cover stories, people tend to believe what you're saying.

We run our media business as any media business would, where it's advertising and sponsor driven, but more importantly, it's a content supported SaaS model.

So, what it actually does is enable us to take the contribution margins from advertising revenues and helps us invest in our SaaS product. Our SaaS business is effectively the most valuable piece of the business, but in many ways it's supported by this media business.

So you have a content supported SaaS business, which is I think the first time I've heard that. You make an analogy that I think is also very apt to Bloomberg. What makes its content so valuable is that it is without regard to their other contractual relationships with Bloomberg.

Without a doubt and I think Bloomberg is the playbook.

If you think about, I sat in a presentation a couple years ago with the CMO of Bloomberg and she said, when she was hired, it was an $8 billion corporation with no marketing officer. They had three people do marketing, which were basically doing customer presentations for individual deals like PowerPoints and stuff, three people in an $8 billion corporation that is effectively, Bloomberg is a SaaS business, an enterprise class data business and data subscription business that really is the OG (slang: Original Gangster) of blending content and supporting its subscription model. So the Bloomberg business, a lot of people in the early days accused Michael Bloomberg of building a radio business and a TV business to support his own ego.

And that business in the early days lost a lot of money. He was subsidizing his media empire through the profits of his subscription business.

We're in many ways doing the opposite. We built a strong media contribution margin and advertising business that supports our SaaS business. But what it's enabled us to do is educate the market of the need of the data and how it could be used to help better inform their business.

And it creates top of the funnel for our SaaS business. In many ways, it has enabled us to create a massive brand halo in our market, because people oftentimes consume our content without even being aware that there's a data business behind it.

And if you went and asked someone on the street if they knew the brand Bloomberg, most people would identify Bloomberg with the media business, but people on Wall Street that are paying $25,000 a year know that really the valuable part of Bloomberg is its data business.

The terminal business is the golden goose.

Absolutely. And so we've effectively followed that and it has worked really well for us, and has enabled us to be one of fastest growing enterprise SaaS companies in the country, simply because we have this really vibrant media model.

Are there investors in the business? Was this bootstrap?

We raised $92 million in capital. So we've got 11 institutional investors that are investors in the business, but we've used venture capital to really scale it up quickly. We're at a point of cash break even. So we're still growing almost a hundred percent year over year, so low nineties at breakeven, which is pretty exciting.

That is awesome. And I want to go back to this SaaS business being supported and driven by the content. Can you talk about the impact on your acquisition costs and what that business model looks like at a high level.

Folks that are listening to this podcast or concerned about LTV and CAC ratios, that's ultimately one of the most important metrics that a SaaS company has to get right.

If you think about what that means is lifetime value, what is this customer worth to me once I acquire them? What contribution margin or revenue are they going to generate for my business?

And then you have the CAC side of the house, which is customer position cost. What does it cost to acquire them?

I think any SaaS executive should be trying to optimize that as much as possible. The way we think of it is we track LTV and CAC as metrics independent of our advertising business.

We tried to optimize that as a SaaS business would, but then we also have this really nice contribution margin, our media business is in the low seventies of gross margins. So it throws off a lot of cash and basically we're able to take all of that contribution margin and it offsets our customer acquisition costs on the other side of the house.

Our subscription business effectively can grow, because the people that are consuming our media content, our news, are also the same companies that buy our data. And because we embed charts and graphs and information from our data business into our content, oftentimes they'll read an article and they'll say, well, that's an interesting chart. How do I get access to that data? And we embed links where they can go in and actually grab the data and subscribe to the product.

What that enables us to do is, as we put out content and put out articles that are advertising sponsored, or contributed articles, we are actually also doing marketing of our SaaS product because it is embedded in the article itself.

Going back to the Bloomberg analogy, you'll notice this—if you ever watch Bloomberg news or read Bloomberg articles, they have charts that are embedded in their articles, or on their TV product, that reference a set of data that's on the Bloomberg terminal.

So if you wanted access to the data, the way Bloomberg is selling you is they're reminding you that the best way to get access to that data is through the Bloomberg terminal.

We're doing the same thing. We're doing it freight.

That's really remarkable. Not everybody has the expertise or can find a marketplace with such a need for data as you've tapped into here. But I think there is definitely, in almost every vertical market, the ability to create meaningful content that people will find of value and cause them to want to engage with you and your product.

There's two lessons here: there's the, hey, if you can figure out a place where it's underserved from a journalistic standpoint and a data standpoint, you could almost lift the same model, I'm not sure where that other market is. Even if you're selling accounting software, you could probably find a way to have content that's meaningful and drive opportunity into your pipeline.

I think it's very easy to take, if you're a workflow product, you're an enterprise B2B software product, and you have sufficient scale.

In order to be able to sell data that's anonymized and aggregated, again, we're not providing individual customer information. So just to be very clear, it's all aggregated and anonymized. It has to be of sufficient scale to be representative of a company of what they're interested in. But if you get to a point where your product is a large enough sample size of a fragmented market, it's quite easy, and you could do it, hotel industry is another example, a travel industry of looking at average rates. There's a lot of these markets that are big and fragmented, and what you want if you're selling fundamental market data is a fragmented market, because if you have a fragmented market, it means that no single participant has all of the information of the market. If you're in a market where it is heavily concentrated and monopolized, it's very difficult to build a data as a service business.

Let's talk a little bit about the actual users of your data, what they're doing with it and what the use case is, and how they access it.

In the logistics market most routing decisions are made a couple of days before something moves, and it is fragmented--there's all of these independent decision-maker companies.

These are big box retailers and big box major e-commerce companies that are buying transportation services to move their products across the globe, oftentimes those routing decisions on whom they give the transaction to, or the load to, are made within a couple of days of when that load ships.

They may have long-term plans, but oftentimes those plans are disrupted. We're seeing it--you don't really have to go very far in watching newscasts to see how fragmented the supply chain is globally, and how container prices and trucking prices are shooting up. It's because the transportation companies have a finite amount of capacity and are trying to maximize the price they can get for those loads.

They may have a committed price for the company, but they're not taking that load at a committed price, they're going back and saying, “Hey, e-commerce company or CPG company, I had offered to do this, move the container for a thousand dollars in our contract, but now it's going to cost you $20,000 to move it.”

They have all the leverage because of that fragmented nature and the fact that most transactions arrive within 48 hours of when they pick up. So there's a lot of instability and volatility in pricing.

What we're doing is providing information to the participants of our data customers, the real-time pricing information, and forecasts of what's taking place over the next year.

For example, if you're going back to COVID in early March, we saw very unusual activity in demand coming in the domestic US freight market. We saw accelerate up until March 23rd, I think was the date, and the market crashed, but around mid-April, when everything was shut down last April, we then realized that this was the bottom.

This was the lowest part of the freight economy that we would ever see. And we started to see some activity come back on really quickly, but like wait, we believe this is an aggressive V-shape recovery. And we put out a couple posts. I get a lot of hate mail for it, because people thought we were nuts. We're like, no, we're seeing all of this activity, the economy's coming back. And meanwhile, the media's talking about all this unemployment, companies that are laying off, shutting down.

There’s a lot of stress in the economy, but we were very bullish because we could see a lot of real-time activity taking place.

We posted a lot of this information and the companies that are buying our data are also getting the same level of intelligence to figure out what's happening with physical economy.

I'm wondering who's using that data in the mainstream media, to aid their reporting?

We have journalists and media outlets, we have the selling outlets that are buying data, or consuming our data. And typically, with media, we provide it for free.

Most media companies don't have the budget for buying third-party data. We're in many ways trying to support information and make our indexes the benchmark of the industry, and the best way to do it is to have other media businesses using your data as a reference point of what's happening.

And we provide content and context for what's happening to them. So, that increases the halo of what we're doing in the market.

I want to wind back to the founding of the business--that's a lot of investment capital. How did this come together? How did you actually found the company and gain that initial investor traction?

Had a PowerPoint presentation--that was the way we started it, which is probably more invoked these days than when we did it in 2016, but had a presentation and assembled a set of advisors and a management team that had a knowledge of the freight logistics industry.

We were very deeply seated in the industry and knew how it worked, and then went to go pitch investors. We probably talked to a hundred investors before we found our first committed investor, and the product at that point wasn't even live, but we were able to raise, our first institutional round was 3 to 4 million, which enabled us to build basically an MVP and then launch it.

The first thing we did was we to host a future of freight technology event in Atlanta. At this point, we didn't have a product, and I don't think most people realized that they were going to a product release, because we had 30 other companies that we had invited (other executives and founders).

Everybody from Microsoft was in attendance demoing to very small companies. And we basically had this giant demo session, in the middle of one of the days we embedded our own product in front of everybody.

The event was what brought people to see our product and created the first set of customers.

I’ve also spent some time in payments. Payments is a high growth industry, and one of the things I learned in the payments business, was that volume is everything. But the secret to payments, or any technology business, (something I learned the hard way), is it's all distribution.

And so, one of the things I set out to do at FreightWaves was I wanted to solve the distribution problem first.

So how do I get people to buy a product?

Well, they have to be aware of it. And what I had learned in my old business was, if you don't control a channel, if you are not responsible for a direct channel, your success lives and dies by the channel partner that you work with.

And I used to think having a channel partner would be great because they would distribute my product, and they would do the hard part of sales and customer acquisition.

It doesn't work that way.

If you're not controlling your own channels, then you don't have any say on how successful that channel is.

It doesn't matter how good your product is--It's all about your channel.

One of the things that I tried to solve at FreightWaves was I had to figure out the channel--And I realized that there was an opportunity to bring the industry together.

If I could build a community, I can then use that as a springboard to bring product and distribution, and that's what we did.

There was a guy in the payments industry who's gone on to build events, Shoptalk is one that people know, Money20/20 is another. But what he did in payments to build a payments platform and ended up building an event around the, a blog around payments.

Well, that enabled him to sell his company and then enabled him to start another one and then sell it to Google.

And I saw this playbook and then he did Money20/20 and Shoptalk and a bunch of events. I thought this was brilliant--and he was revered as this god of the industry, this power broker--because he controlled the event that people were at. He controlled the media that people were at. And in many ways that was the playbook that I tried to copy here was, can I do this in freight?

In 2016, 2017, freight was an emerging industry in terms of venture capital and technology, but there wasn't really a place for everybody to come together to talk about trends. There was no event for it.

So we went out and created it to bring the industry into a central place, and then we developed content to talk about all the technology innovations that were taking place.

And that was really how we springboard into our data product. The data product actually came about a year after we raised our first set of capital. The original concept was to create really a community behind the business, and that's really what we did.

Was the data business planned at that outset?

No, no. And this is still true today. Oftentimes when investors find out about our product launches after we launch them, we do a lot of what I call rapid experimentation, where we launch things and there's very low risk. And then after we figure it out, then we say, “Hey, we've got this product and we launched this, and this is what it's doing.”

But oftentimes our investors don't really know what we're actually launching until after we do it. And I think that enables us to say pretty agile and because we've had a track record of successful launches, they enable us a lot of latitude in that.

Let's dig in just a little bit on that being willing to fail. That's a special thing, requires a real trusting relationship between you as CEO and the people who are thinking up and building stuff for you. How do you manage that? How do you make sure people feel comfortable?

I think in the early days, it didn't matter. Most of the people we hired in the early days had been frustrated in the companies they worked for and just wanted to build something cool, and probably didn't think it would ever work. When it did, it was magic.

A lot of the people who joined the company early on were unemployable. They were frustrated at the companies they worked and they weren't really good employees. They had something to prove--a little bit of chip on their shoulder.
I think it's interesting, because in the early days when we hired pure breads who had really impressive resumes, those people defined out, they worked at big companies. They were used to structure, they were used to committee driven innovation. It never worked out.

I think what we did early on is we found a bunch of people who weren't successful employees, were really brilliant, and were willing to put in the effort to go do something.

But they were by no means the most desirable by employers. They were nonconformists.

We actually had a consultant, one of our private equity, or venture investors came in and made us take personality assessments.

And the consultant who had done work for GE came back and said, you've got a problem, you have a bunch of nonconformists that work for you. I don't see how you'll ever be success.

And the CFO who was a conformist by all definitions called me and he was very upset about this.

I realized this was an opportunity to double down on the fact that we're nonconformists.

So, we made pirates our theme. We’re pirates, we're not the Navy.

And I think that edginess, that desire to prove something, because oftentimes you get people who have something to prove that are used to failing, founders and entrepreneurs are geared to fail, we're used to not being successful and, but we keep going at it and trying and eventually figure it out.

If you get those right types of people that will keep experimenting to figure it out, because they really believe that they're right about something, and they'll eventually hack their way to it, that's who you want on your early team.

Now, as a business at scale, we have a 170 employees now and we're growing really fast, it isn't that way anymore.

Now we've been able to bring in the conformist in our populations and ranks, and we're actually having to co-create what we call labs, which is an entirely separate group that is set of nonconformist, who are just there to go build cool stuff because it doesn't fit really well into the corporate architecture of an organization to optimize.

As a CEO then, what you're managing as you scale up is finding a way to keep the innovation going while you're building an organization that's meant for scale, bringing different kinds of people skills.

That's correct. So, I've fired myself from every job I've had, and I've appointed people who are optimizers who can come in and optimize the operation, can stream my policies, who are far more predictable in terms of the decisions they make, the moods that they're in, and are far less mercurial than I am, and who are trying to build structure into the business so there's consistency.

But what I've done in conjunction of that is figured out that we still have to keep innovating, but it can't be disruptive to the core parts of our product. And so that group is completely segmented and doesn't report to the same set of executives that are focused on optimize. And it's this balance of being the large shareholder, I want the value of the company to increase. And I recognize that having someone who can optimize the business, that's better at that, who has the patience, optimization is in many ways a marathon, it's not a sprint.

Yeah, it's a long game.

Founders, at least for my attention span, I prefer the sprints. I want the quick gratification of what building is all about. I don't find the marathon very fun.
So, I've built people who get a lot of reward out of that. And I try to stay out of their way. If you get the right management team that understands that there's a group of people who their job is to break new ground, and they're willing to give away to that type of energy, but they focus on things that really work for our organization, and you have a supporting task who will like myself, who's a founder of the company who stays out of their way, it creates a really nice harmonious experience between new ideas and growth and innovation and structure and optimization, which I think you need both in a successful business. I think most founders are really poor at optimization.

Nothing will ever be perfect, but near perfection. A lot of energy goes into that for very low returns versus building something from scratch and seeing it come from zero to 90% is much more sexy for someone like myself.

You can't build long-term value if all you're doing is building cool stuff, right?

It's really an important point because I think that I've seen plenty of founders who can't let go of the operational side of the business. They're the visionary, they've got the ideas, they can innovate and create. But for some reason they haven't backfilled the infrastructure of the business, such that they can continue to press forward. I’ve got to commend you on that, because I think it's really important part of getting past the founder's capability.

It's hard. It's not easy, it's a battle I fight with myself.

There's a sense of guilt because you're not doing everything that you did before. Frankly, there’s a sense of boredom because as the founder, you're everything, you're the janitor, the CFO, the accountant, and the HR person.

And then as you start to find professionals that do those jobs full time, you end up giving away most of your responsibility. And for me, most of what I did for the first couple of years was raise capital and deal with investors. When we got to a point where we didn't need to raise money anymore, I had no job--I had nothing to do.
I have found that the management team that I've hired, it's a lot of ego on both sides of the table. And a founder must recognize that ideally, you're the largest shareholder of the company.

If things have worked out the way they should, therefore you must look at your financial obligations and your fiduciary obligations to saying, “I have something of value here. How do I help maximize it?”

And oftentimes you're not the best person to do that. You must have an ego check of yourself to say building value for my family is far more important than me being the person that's in charge.

But the other parts of the team must recognize that as the founder, your influence should be universal. They should give you the respect as a founder to have influence. And there are occasions where, as a founder, you must push back and say, I don't care what you think, or what looks like on a spreadsheet, or a balance sheet, or an income statement.

We're going to do it this way because this is a fundamental value that we have, and that happens every couple of weeks. I have to insert my opinion, whether it's welcomed or not, to say this is something the company stands for. This is a value statement.

And while you're correct, that looks better short term, it is different than what I want to accomplish the company long-term. And I think as the visionary, as long as your management team understands your role and you respect theirs, then you can get to some really cohesive magic.

But it's not easy. It is challenging because as a founder you get bored oftentimes, because you want to go do something, you want to build something, and your team is already stretched as far as it can go in terms of projects and they just don't need you involved in it because you can break the momentum that already exists.

It is a balance, and I think every founder will struggle with it, but I think the really successful ones will often tell you that stepping out of it and hiring a management team and elevating them, giving a lot of responsibility, while it hurts your ego and your power, if you will, it's much more effective for the business long-term.

Tell me a little bit about the near term future. Where's this company going? What are your goals?

I'm continuing to scale. I think right now we're in a mode where almost like clockwork, we sign up 25 to 30 new customers a month, and we want that from 30 to 35 to 40 new customers a month, so we continue to optimize our channels.
We have historically relied on inbound activity for a new customer acquisition and we're starting to add outbound. We've hired a whole new business development group and starting to actually spend some money in customer acquisition.

Those are exciting. We have a couple of new products that we're rolling now that are at a point of commercialization that we're really jazzed about.

What happens as a founder as a company grows up, is the scope of what you're doing starts to narrow. And you realize, “okay, this is what this company's really, really good at.”

In a lot of ways, it's just doubling down on what we're already doing, and finding ways to deliver more value to our existing clients, as well expand the net, if you will, of clients that potentially take advantage of our products.

I think that's the secret to building the next two years, we potentially IPO the company. As a company that's about to head in that direction, you're starting to build infrastructure, start to get ready for Sarbanes-Oxley, start to build data rooms, really boring stuff that doesn't really excite me. But if you want to build real value, that's where you get it.

A liquidity event is on many founder's agenda. So whether you're going public, or if you're looking for a strategic acquirer, those building blocks, that financial infrastructure is really important. You can't match up against the expectations either of a strategic acquirer, or an underwriter if you don't have that stuff, right?

One of the great things about not managing day-to-day activity is that I get the chance to interact with other founders that are at later stages in the business, or perhaps have sold a company. I spend time with investment bankers to talk about strategy. And I think about exit a lot, not because I want to exit, but because when you take on outside money you know at some point you have to give them return. And so that means the destiny of a company is, at some point is going to be an event where they get paid out.

It could be a private equity purchase the company, it could be a strategic purchase the company, it could be an IPO.

I'm trying to figure out what things do we need to do to help maximize that value as much as possible. You are, as the founder, most likely the only person spending time on core strategy.

If you've got a really good management team, they're doing everything they need to do to build the business. You get to set the tone of where the company's going for the next couple of years.

Our CFO has gone out and built the infrastructure to be a public company, to make sure that we can report on a consistent basis and have really good forecast so that if, and when we become a public company, we're able to give analysts and investors a forecast and consistently deliver that.

And so, that's the process that we're working on right now. It's not sexy, but when you know that there's an end game in mind, it's quite exciting. It's always this discussion between founders and investors where founders feel like investors have gotten so much value from them, I think of it differently.

These investors supported me when no one else would. I find great pleasure of knowing they're making so much money. These people bet on me and I want them to feel pride in the fact that those bets have made them a lot of money.

I think as a founder, you need to have a healthy relationship with your investors and respect for their investment. You're on the right track from my experience. I think it's a great place also to land the episode. It's been a great conversation.

I want to thank you for being a really great CEO guest on the podcast.

Well appreciate it, Ken. Thank you for your time.

Thanks for listening to the SaaS Backwards podcast brought to you by Austin Lawrence Group. We are a growth marketing agency that helps SaaS firms reduce churn, accelerate sales, and generate demand. Learn more about us at You can email Ken Lempit at about any SaaS marketing or customer retention subject. We hope you'll subscribe, and thanks again for listening.

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