When Flock Freight CFO Pat Dillon thinks back to his investment banking days at Morgan Stanley and considers the variety of CFOs from whom he once sat across, the banking veteran is struck by how at times the CFOs seem to have had little in common with one another.
“What I saw was that their roles could be very different from one to the next,” explains Dillon, who notes that he came to view the CFO position as not one but many roles along a continuum across which finance leaders migrate as their companies mature.Read More
“It wasn’t like a split, where this person was an accounting CFO and that person was a strategic CFO, but really more about the mix of responsibilities and where the CFO was allocating their time,” recalls Dillon, who observes that it was during conversations with CFOs that he would seek to make the finance leaders aware of where along the continuum they would need to begin allocating more of their time.
Reports Dillon: “It’s no longer just about a good technology or about acquiring market share. You have to have predictable results. You have to understand that the role of the CFO and of the finance team is going to change and the requirements are only going to go up.“
Asked whether as a banker he had ever had to coax a finance leader to make finance team staff changes or beef up the company’s FP&A team, Dillon remarks: “I think that you have to tread lightly when it comes to making a particular staff recommendation. As an advisor, we have exposure to senior members of the finance team—but not enough to make a judgment regarding operations day to day.”
Still, Dillon says, “You make very clear what kind of output and results the finance team is now going to have to produce as the company is evolving. Whereas it used to be just kind of providing information, you now have to hit your results.”
Undoubtedly, every banking relationship has its own unique challenges, and certain finance leaders are better listeners than others.
Comments Dillon: “The best relationships that I had as an investment banker were where I could talk about that evolution and say, “Hey, I can’t tell you how to run your organization, but I can help to preview where you’re going to start confronting a higher set of requirements and where you could experience pain points with investors if you don’t make certain changes.’” –Jack Sweeney
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CFOTL: Tell us about Flock Freight … what does this company do, and what are its offerings today?
Dillon: Flock Freight is a very innovative freight technology company. We invented what is called the “shared truckload.” The concept is very simple. When a shipper has freight that they need to move, oftentimes they don’t have enough freight to fill up an entire trailer on a semi truck that you’ll see driving down the highway. Our technology and algorithms allow us essentially to pool that freight. As with a carpool, you’re actually pooling freight so that you can make better utilization of the asset, the semi truck and the trailer, by taking two different shippers who have two different shipments that would both fit inside of a trailer and combining those together.Read More
This has a lot of benefits when you think about it. It sounds very simple to do, but it’s very hard to execute. It requires a lot of technology to figure out how to do this, but as you have better utilization of that asset, it actually has a ton of environmental benefits because you don’t have trucks driving around that are half empty. It creates incredible cost efficiencies and savings that we can pass along to our shippers, which is why we’ve gotten the traction that we have. It’s a very compelling opportunity, and it makes the entire freight ecosystem run a lot more smoothly—fewer trucks on the road, less traffic. There’s a driver shortage that has been exacerbated over the past few years, and this helps to make the entire system run a lot more efficiently.
This is very complicated to execute, and it’s what the team here at Flock Freight has been building since the company was founded 6 or 7 years ago. Like a lot of companies, we’re in a new environment in terms of how things continue to be uncertain in the macro environment. The funding environment for growth-stage companies is not going to be what it was like in 2020 or 2021, when you could continue to get a lot of venture. The bar is going to be a lot higher for raising capital, but we’re in a great spot. We’re going to continue to execute on our plan and show that the unit economics for our business are very, very attractive, as well as continue to improve these as we drive toward profitability.
I think that the better or the healthier our fundamental business is, the more attractive it’s going to be to investors, whether this means with regard to raising private capital or trying to go into the public markets. It’s a great place to be. I’m really excited about what kinds of results we’re going to be able to deliver over the next 12 months.
“The CFO role is about relationships and building trust. Whether it is with the board, C-suite, investors, or your team, you have to be genuine and credible to build long-term success.” –Pat Dillon, CFO, Flock Freight
Flock Freight | www.flockfreight.com | Encinitas, CA