Building a Consumer-First Last-Mile Network

How do you do um to start to embed AI into the business?

If you really want to accelerate your growth in in the AI world and build a competitive advantage with AI, it needs to be part of your core offering of your core technology.

Why emotion matters and how do you create an emotional relationship between these brands and these consumers with logistics?

You need people who are very very very committed. What does VHO differently when it comes to e-commerce and last mile and so on?

If it didn't create any value, then we would be just like throwing money. But what does it give you that is unique?

Welcome to the supply chain technology podcast. I'm your host Nabil Maloli and I'm so glad to receive today ita the CEO and co-founder of VHO. Ita, how are you doing?

I'm doing great and thanks for having me here. I'm excited. That's great to see you. That's great to have you here at the podcast. Definitely a lot to talk about e-commerce last mile. So, you might not know, but you know, if you're consuming in the US, it's very very likely, and it will tell us more. Very, very likely that you actually got deliveries from VHO. And uh you know, I I shared with you this story before, but uh I'm a big uh Nespresso fan. And so, um I uh receive always my uh my caps in my house from uh from the espresso with VHO and I see the labels. I'm like, "Yeah, it's I Ita's business. That's It company." And I'm sure you'll tell you'll tell us a bit more about many of the other customers in a minute. So, um, it for the people that don't know you, um, share us share with us a bit about your story. You know, um, know you have a a really unique career and and journey, right? uh a Israeli Air Force, Israeli Supreme Court, uh Proctor and Gamble, an executive there, and then a founder of uh of a technology e-commerce last mile company. So, tell us about about you.

Um okay. Um so, born and raised in Israel and uh just like anybody else in Israel, you know, served in the military. I was an air traffic controller actually. Uh and you know if if if this is interesting we can go back to it later because I do think that there are some really interesting lessons from that.

Um and then you know uh there's a there's a famous speech with uh Steve Jobs where he talks at the commencement I think uh at uh Stanford University

and uh great video right it's uh it's it's where he talks about how uh you can only connect the dots looking backwards. So, you know, when I was going through my career so far, uh it's not like I had a big plan to one day run a technology company and certainly not in logistics. Uh but I can I can certainly look back and say here are all the things that actually made it possible and helped us get to where we are right now. Uh my goal has always been to make a big impact. Uh I always wanted to leave a mark. Uh and I had a lot of things that I was very uh passionate about. Uh human rights as an example. uh and helping people in general and just improving people's lives. Uh so after my military service, I went to law school and uh my goal was to think about you know over time how do I build the skill set to represent those people that um you know I I could make an impact on their lives in a in a in a favorable manner. And I went to law school and I and I clerked for a Supreme Court justice which was an incredible experience. Uh but one of the things I learned along the way and that was around the time that I was volunteering uh at the law school uh representing asylum seekers uh in Israel is that um you know you really take it one case at a time and you know you fight for the case you fight for the person you try to make an impact on them and and you know we like to say that every person every human being is a whole world

of of of their own. Yeah.

And yet it's just one person. How do you make large scale impact? Um so while I was at law school I started uh getting exposed to u the concept of social businesses and uh I started reading about the micro finance movement uh which uh uh won the Nobel uh you know peace prize I think and I started thinking differently about how I make an impact and I realized that maybe representing clients on a one-off basis is not the way to go. maybe there's a about a better way of doing things. And so when once I uh graduated and after I worked for the for the judge, I decided that I actually wanted to go to business and learn business. And um then I I joined Proctor and Gamble uh which was an incredible school how to think about business end to end from a consumer standpoint from a branding standpoint. We can also go talk about that. You know, everything I've done has a sort of like an a relation or an impact to what we're doing here at VO, particularly Proctor and Gamble. And then I had the chance to work at a very small company at the time uh called Monday.com uh turned out to be one of the greatest uh success stories technology success stories out of Israel and then I moved to the US and and started VO. So it's not like there was a very big master plan to do this specific thing but everything I did along the way taught me a little more about how to make an impact. uh to the point that you know when I saw the opportunity in front of my in front of me in 2016 I said okay I'm I'm gonna go all in on this one.

Yeah. And so tell us about these learnings right because these are very different experience. You talk about the one-on-one case versus the bigger impact but what else what else did you learn at uh you know being PNG or Monday.com or even the military right I mean a lot of um for sure a lot of learnings there.

Yeah I mean we can go we can go uh one by one. Let's start with, you know, being an air traffic controller. Um, dealing with stress. This this is an incredibly stressful job. Uh, you're sitting there and talking with airplanes. There's a lot of uh things going on at the same time. How do you keep composure uh while you know, somebody is reporting in uh engine failure as an example, right? And there's so many people's lives depending on your decision in real time. Uh working very long shifts. How do you make sure you stay focused? Uh those kind of things. The other the other skill set I think for air traffic control is the ability to see the bigger picture and never lose sight of the bigger picture. Here we're talking about aerial picture. Airplanes moving from different uh areas going into uh an airport or leaving the airport. How do you make sure they're all separated from one another? They're all safe. The runway is clear. Uh so I think keeping an eye on the big picture all the time and not getting too hooked up on very little details uh that may or may not matter less. um you know is is is a really important skill as you're scaling companies long term right you have to know to drill into the details when they matter and then zoom out and see the bigger picture long term you know then I went to law school and working for the judge that was just an incredible experience uh just applying judgment right going very deep into first principles and understanding the root how to analyze a problem from uh root cause from like for first for first principles from what are we really trying to achieve And at the same time having really good judgment about how decisions should be made not every decision you you can make you should make when should you defer to others when you should not make a decision uh when you should actually say I'm going to set my foot down and I'm going to make a decision because this one is really important which you know you can't win all battles you got to choose your battles that was one of the biggest uh learnings from uh this you know Supreme Court justice who was the deputy president was about really having an insight. PNG was an incredible school because you know when I was a consumer before PNG I was looking at um you know brands advertising online. Uh a lot of those advertisements just seem the same to me. It's a product and they're selling on some dream. Uh what I what I didn't realize is that some of them had actually a very deep insight that is rooted rooted in how consumers think. And so that was the biggest thing at PNG. uh I was uh I was working on a very particular segment. It's the ultraorththodox segment consumers. These are individuals who are very religious. They don't watch a television. They read their own newspapers. Uh and there are things that are taboo you can't talk about.

As an example, you know, you can't talk about, you know, sanitary pads for women. You can't really talk about, you know, diapers uh for babies in a very explicit way. You have to be very implicit about those things. How? And then you know we'd go to their homes and we'd shop supermarkets with them and we'd have deep conversations really understand how they see the world and then craft the right message and think about how do we present a product in a way that resonates with them that actually helps in their lives helps solve a problem in their lives. Right? So just having a very deep insight and again applies you know really importantly to uh you know uh what we're doing here at VO which we'll get back to and then uh my time at Monday.com u this was a very different experience. It was the first time I was actually working for a startup and um my biggest takeaway there was that it's okay not to be perfect. It's okay not to be methodical about everything and go very deep. you just try different things and you move really quickly and you see what works, what doesn't work and you iterate along the way and that flexibility actually changed my mind completely because I was so methodical in my life but I realized that that you know being so methodical also comes at the expense of speed and sometimes you got to be balanced those two things together.

That's great. I think there's a lot there to to uncover and to uh to go deeper on the uh level of stress and managing that that high level of complexity and stress with high risk. uh the insights I I really want to push on the inside topic also a a amazing so let's let's go into the um into the insight part so is understanding that there is consumer preference and and specific insights in every single basically consumer interaction or sales process is that what then drives VHO positioning and maybe for the audience that might not be so familiar with VHO can you connect the dots between that maybe and um what does VHO differently when it comes to e-commerce and last mile and so on.

Yeah. Um you know I started a company because I wanted to solve my personal problem

which was

that's that's the best kind of best kind of way right like going after

I I think that's right and and in even until today uh when you know it's a business where we deliver millions of packages every week but um every now and then we're going to get something wrong right um and we always strive to get better and you know every now and then a consumer will email me and they say you know you got this wrong you got to fix this and I I obsess over it. I obsess over it for two reasons. One, number one is um it is important for me to set the right culture for the organization that we obsess about every package and every customer and each one of them matters and we want to solve things that then we don't make the same mistake twice. But the other reason reason I obsess over it is that I care because I wanted to solve my personal problem and I I empathize with with consumers uh who are having a problem you know getting something delivered to their doorstep. Uh and I can go very deep on this but I want to stay uh you know on course with your question. Uh my insight was that um when I was expecting a box actually multiple boxes to be delivered and this is 10 years ago. By the way, we should we should mention that uh yesterday was uh my 10th anniversary since starting the company. So

absolutely. Yeah. Happy birthday. It's true. I saw the post yesterday on LinkedIn. So 10 years of VHO and that's a that's a big deal, right?

It is a big it is a big deal and it's just been an incredible journey and and reflecting on it. Uh so thank you for that. um you know but um I had multiple issues uh receiving boxes at my at my door uh and things would get lost, stolen etc. It was just a pain. As a consumer, I realized inher inherently that you know while the delivery business UPS or FedEx or process service, whoever that was, you know, unsuccessful at delivering the box, I actually go went out and blamed the brand. And the reason I went and blamed the brand and said maybe I shouldn't buy from that brand anymore was that there was an alternative. I could always get the stuff on Amazon. And I knew that Amazon if they Amazon today is great at delivery. Even then they were just starting up. But I knew that if somebody screwed up, you text them and then they send you a new one on the spot. No questions asked whatsoever and they will fix the issue over time. And they just obsess about the customer. And uh and so it became evident to me, became clear to me that delivery whether you you like it or not from a consumer standpoint is the extension of the brand. I bought something online. You sold me on the product. I fell in love with your value proposition. Now you need to deliver. And if your delivery partner is not able to do that, then I'm just not come gonna come back and buy from you again. Right now on on the flip side, what I also noticed with myself and everybody around me, and this is 10 years ago, you know, today that's like, you know, order of magnitude bigger. I think everybody's understanding is that why why do we all buy from Amazon? And I'm an Amazon customer. uh we buy not because they have you know huge assortment of products uh yes it arrives really quickly but we buy because we trust it says it will arrive tomorrow it arrives tomorrow you know there's any issue you have 30 days to return you have 30 days to return right you can contact customer support it's like extremely easy so you know I came back and bought again again again became a high lifetime value customer with you know Amazon because of the delivery

like many of because delivery was great. Now there's other things that Amazon is doing great, but delivery really for me was the thing that you know was the big deal in buying from from Amazon. And so the insight was how do you become an extension of the brand for everybody else who is relying on uh you know delivery businesses that were not designed for e-commerce. So they were designed for the 20th century and we can talk more about the differences between differences between VO and them uh that was really the the insight. Yeah, that's uh that's very powerful and I think um I think that topic of reliability and trust is you know I will I will fully agree with that that uh today you hear so many of these stories too right I mean if you ask your if you ask your friends to tell you hey give me an Amazon story often times it's more about the delivery experience than anything else it's not about the app it's not about the consumer a a you know experience through the through the uh interaction the digital experience it's really nine out of 10 is about the delivery experience about the speeds, about the reliabilities, about so

let me tell you a quick story, a quick quick anecdote. We we were hosting uh the VHO delivery summit um just a few uh weeks ago in Austin. That was the first event uh that we've ever done hosting our clients uh to talk about the future of the industry. We had amazing speakers and we talked about the next evolution of our own product. One of the the stories uh I told when I was on the stage was of one of our earliest clients which was a meal kit company.

So a subscription box really you receive your meal every week and um so when we started working with them you know and even today we text customers who receive the box and they can reply and they can give instructions they can give feedback in real time. Every time we deliver a box then we follow up with a question. How great was your delivery between one and five stars? And the rule is if it's not a five or a four, you go deeper. You know, help us understand what can we do better, what can we sell, etc. So, we measured uh those same people who would receive a box from us every week because these were consumers and consumers who bought the subscription and we measured the feedback they've given us over time. And it turned out that the people who at some point early in the process gave us a one or two star review once we fixed their issue, they became much higher lifetime value customer than those who always gave us gave us five in the first place because we knew how many boxes were delivering to their box to their door. And we saw that over time we're delivering many more boxes to their door than those who never gave us uh negative feedback. And and keep in mind the feedback was not about the product. The feedback was not about the uh online experience. The feedback was about the delivery and when we went out out of our way to make sure that you know drivers leave the package at the right place that we collect all the information, we have access code that you know they have all the information they need and we fix it systematically. People appreciated it so much and they're like okay you fixed my problem. I can actually now enjoy my product. There is no reason for me to go and try another meal kit as an example. That is a proof that delivery is part of the brand experience and not only part of it maybe one of the biggest opportunities for brands to create loyalty and customer lifetime value.

Yeah. Yeah. I mean I think we can all relate to this, right? I mean if somebody fix a problem for you, this is memorable, right? If they do it the right way or they give you something that you don't get normally, you you'll remember them, right? And so I I think yeah, I mean it's it's an amazing insight, but I think uh we don't necessarily think about this. I mean customer success team in general I don't think that they're wired that way right thinking like hey I actually do that I'm I'm going to change the entire relationship with that client potentially right but it is true that when it's well resolved you feel the difference if just somebody treats you well in a very differentiated manner

yeah and and people uh like to trust who they buy from and and they will develop loyalty toward that product the product itself is just one aspect of of customer loyalty it is the consistency of the experience it's whether you can get in touch with them if anything goes wrong. Product has to be great as well. Consumers will give you uh you know an an option to correct yourself if you've faulted once if you will. But you have to take advantage of it and you have to to correct it. And if you don't

and then say okay I guess this company is not obsessed about me enough. I'll just go somewhere else.

Yeah. Yeah. And so on that you know like you took a decision to go in a space where there was a lot of competition. they were like big players and I've seen a couple of your posts in in the past you know around the you know the emails to the FedEx I think um leadership team at the time um you know tell us about this like how do you decide to I think at that time you were you were proposing a partnership on the belief I think that technology could be a big enabler to FedEx and and the likes um without a high level of success maybe let's call it this way a a how do you look back at that and say Yeah, we were actually, you know, a small company wanting to go and then at that point literally say we're going to compete and today you compete with with this these massive companies,

right?

Yes. Um well, first of all, I I know I there was a famous LinkedIn post um got to a quarter million views, maybe even more at this point, where I talked about my experience trying to uh propose uh a new product to FedEx and and their response. You know, in in in FedEx's defense for just one second, uh they're a very large company. They have technology teams and it's okay to say no to a small company that is offering you something. You don't have to jump on every opportunity. I think it's a mistake. I don't think it's it's like anything that is like terribly wrong. I think it's a mistake because, you know, if somebody comes and try to sell me in something very innovative, I kind of want to listen and I kind of want to learn from them, but I also understand what it's like when a lot of companies are approaching you, etc. That's that's okay. Um the learning from that though was that um if we wanted to build a great company by selling software to other logistics providers then uh we are going to be uh constrained by their willingness to improve their own operation and to think differently about how they do things and there were two things that were really tough with it. Number one you know these were scaled companies. Logistics especially national logistics is a scale game. Uh which also makes it defensible. It's hard to build scale. You have economies of scale. You have network effects. Uh that all attracted the attracted me into this business in the first place. Uh but you know you're dealing with very large companies. And so when you're selling it to very large companies sometimes you have to go through procurement and you have to go through u you know um people who need to buy into the service where there's also the element of telling them hey the software you've built to run your business we have a better solution it's really hard to admit and it's really hard to change because they're already operating in scale they designed the whole operation in in that way. So that learning sort of like pushed me into thinking maybe we should not be trying to sell software. Maybe we should build our own operation. Uh because when you build your own operation, you can design it for first principles actually for the needs of the customers and you can deploy your own software without having to go through a third party that for all kinds of reasons may want to use your software may not may want to customize it for their needs etc. The whole idea was how do we solve the customer experience? That's what I obsessed about since day one and as I mentioned before I still obsess about and I will obsess about forever because that's what I cared about. I want to solve customers customer problems and make delivery great and build loyalty with brands. And the only way to do that was to design the operation from scratch and deploy our own uh technology so that we can then go and iterate and improve and toss out and bring something else if we need to and not having to go through a third party.

Yes. Yes. No. And and I think I told you this like when you talk about the consumer experience, I also I think I sent you that message that a friend of mine sent me um because obviously he knows you know my background and you know having worked at DHL and so people when they have this logistic experiences they usually send me you know my friends and he sent me this this this message saying oh I just got the delivery from a company that uh asked me to write the experience and it felt like Amazon and so on and I was like us.

Yeah it was you. Okay. and uh and uh and that's like yeah I think I know these people and he's like yeah it was really good and so on so it does it does make an impact right and um you talked about something that I think many people don't talk a lot about but I think for you it's so there's there's the customer experience which is a very broad term but you talk about emotions you talk about consumer emotions and um um I have also a personal experience so you know I in 2016 I worked on a project for one of the biggest sports and and and uh apparel company. Um and we were launching their first same day uh program and um I went and I did some of the deliveries myself and it was like a very unique launch of new um new footwear. And when I got to the house of one of the guys, he hugged me. He was so so emotionable the delivery, you know, and uh was so happy to receive these sneakers. Well, these sneakers were not diapers. They were like they had something, you know, that was a bit more maybe um special than the regular, you know, uh uh online online purchase, but still he was I could see in his face he was so happy to receive them that fast and that was not he didn't know he would get them that fast. But talk to us about why emotion matters and how do you create an emotional relationship between these brands and these consumers with logistics. The first thing that comes to mind is just a few examples are running through my mind about uh people whose problems we just obsess over solving and how thankful they were when we finally were able to get it and I can run through a lot. Maybe I'll give you just one or two because otherwise we'll take the whole hour here. uh

and not only what it did to them but al but also what it did to our team to feel that you've truly made an impact that matters on somebody's life and then how it helped us foster a very deep relationship with the brand who understands now that what we do actually matters far more beyond you know just cost uh you know I think emotion is is the thing that connects all the dots between all the parties involved you So, let me actually address the emotion question for a second, why that matters so much as an entrepreneur and then go back into uh some examples of how we were able to uh I don't want to say capitalize on this. That sounds transactional. That's not it. How we were able to bring that to life in a way that made us feel that we're doing something really valuable. uh emotions matter because you know when when you build a company uh and especially in an industry like logistics which you mentioned it's very competitive it's hard there's a lot of problems a lot of moving pieces and you're growing it really fast you need people who are very very very committed uh I like to say it's not that I like but it's a reality when somebody joins VO before they join we make it clear listen it's not a nineto-ive job um yes we care about you taking time off we care about you not burning yourself We want to make sure you have a good relationship with your family. It's life is sustainable, but it's not an easy job. You got to work really hard and we solve really hard problems and we we take pride in it. We love it. U but it's going to be hard and there's going to be peaks and valleys along the way, etc. So, the thing that keeps them there is not the um you know, money that we pay them or the title. These are the the wrong reasons. It's the emotion of taking pride at solving hard problems and making an impact on other people's lives. That's why emotion matters because it gets somebody committed to achieving something great. If it was just rational, we would all find easier jobs and we'd be just fine, you know, and I don't think money is a huge, you know, motivator in life once you get to a place where you're comfortable and and there's just that's just not me. It's, you know, there's a lot of research that says this emotions matter matters to building a company. Now the reason it matters from a from a business and um value proposition standpoint is that those moments where you create an emotional uh experience for the customer just go so far you know in terms of building our value proposition for the brands and making sure the brands that work with us um really value the service. So I'll give a couple of examples here. You know, one is um I remember during the pandemic, this is this is still early days for V because in the first four years since I started the company in 2016, there was very little that was actually going on. It was just, you know, us very small team trying to survive. Then the pandemic hit and when the pandemic hit, um many of the e-commerce companies, actually everybody really, uh was starting to starting to grow really quickly. Consumers weren't going to the store anymore. And one of the industries that was growing the the fastest or one of the categories was the meal kit category, right? People receiving food at their home. Now, especially important for those who had a comp compromised immune system, right? Or somebody who was handicapped who now could not have the person who used to come in and help them go out and do shopping. They they lost that during the pandemic, right? because people didn't, you know, were were so concerned about interacting with one another and getting others sick, etc. And so there was a case where there's a consumer who could not leave their place and they were living on the seventh floor of a building and they used to receive their packages from some other shipping company and they the driver would always leave it at the wrong place. The consumer couldn't couldn't get out of the place. They couldn't go down the elevator. They were handicapped. they were im immune compromised and they could not have the food delivered. You know, think how terrible that is. And so we worked with that person. First time was not perfect. And then we worked with the person through the the two-sided communication where they left us very specific instructions. How to get into the building, how to get in the air, where where exactly to leave the package. We let them upload a photo of their apartment. We drew a map for the driver. All those things showed up in the driver app with particular instructions where we mentioned, hey, this person needs help. They're not able to come down. And then you translate into Spanish. Nowadays, it happens automatically. In 2016, you had to do all those things. We went all this way through a couple of deliveries until the person finally got what they needed and they said, "I cannot believe you saved me. Thank you so much, Vio, for for doing that."

It's amazing. the emotional satisfaction you get in that moment of oh my god we're able to actually make a huge impact in somebody's life at one of the most devastating times in in our lifetime the pandemic right was just so great and um you know we we felt so so so grateful that we were able to be in that position team celebrates it we go and tell the clients we just want you to know that we made that difference for uh for client is the brand that we're shipping from

um you know this is why emotion matters it's because it brings everybody together to the thing that actually matters which is solving customer problems and so it makes us feel great about ourselves but it also helps us win and those two things work the best when they go hand in hand.

Yeah. and win for the good reasons right and I think that's also why you know uh logistics and delivery businesses were right away on the back of the pandemic um when pandemic started I mean uh right away classified as critical jobs and uh and uh everybody had to work I mean people like like in our space in the pandemic were were running 24/7 right so so uh yeah no that's a great that's a great example and I think many people lose sight of that and I think when you're in this indust Indry, but yes, you can change lives. You can change the day-to-day of people. Um, I love that. Um, tell us, let's let's switch gears a little bit around um from the general company and perspective to technology itself, right? Like so you started day one, you know, thinking about like how do I do I um use technology and leverage technology to actually make um the entire delivery experience plus this connection with the consumer and and the brand how did you do that you know how does the technology helps in what dimension you talked a bit about uh the two-way communication for example which I remember uh I think when at the very beginning when you started to launch the two-way communications I remember this did not exist when you launched the gig economy model. It was really the early days of Amazon Flex and and the large carrier would never touch gig economy. So tell us about like some of the things that this has enabled uh that became also now a pretty much two-way communication is certainly not standard but you do get notifications from more and more companies. So tell us about about that.

Yeah. Okay. Um I I'll tie this into uh you you mentioned something very interesting about 2016 Amazon was uh you know starting to scale Amazon Flex. It was very early stage. They were like in in you know a few dozen cities at the time. Nobody was doing anything other than them.

Uh I remember

and nobody I remember having this conversation about gig economy drivers. People like you're out of your mind, right?

This is this is the story I want to tell but I will I will get you know connected back to technology. Um so in 2016 I I I knew that I was going to start VO uh yesterday 10 years ago. I sat down and wrote down the values but I didn't exactly know what the company was going to do. What are we going to do? Um it was a whole different model that we started with and then ultimately we've evolved into view. By September that year it was very clear what the company was going to do which is what we're doing right now. And I went to a conference. It's called the parcel conference every year. Um it was in Dallas, Texas at the time. This is where uh shipping companies present what they do and they have booth and you know uh shippers walk around the booth and all that. And I walked the aisle of the regional delivery businesses and I didn't have a business at the time. It was still an idea that I was just starting to work on. And uh I stopped by a couple of them and asked the you know the people there what do they think about Amazon flicks? And the answer was always the same. It was like oh that Joe Mo in the car we hear it's terrible service. It's never gonna work. It's not this. It's not that. I remember, by the way, we talked about FedEx earlier. Uh I got connected with somebody senior at FedEx. Um you know, it was was a marketing person and I pitched them on the idea and they said, "This is irrelevant for FedEx. We love having a branded truck with a FedEx logo driving around the city. That's free marketing for us." So, you know, maybe you think about it from a marketing standpoint, but it was it just it blew my mind that Amazon was scaling this thing. Obviously, they were on to something and nobody was even doing the math or thinking how is this thing going to get better and better and why it's so disruptive. You know, when Uber started, Uber wasn't amazing from day one, but you saw the playbook and then technology. This is where I'm going to start talking about technology. They just obsess over technology and getting it better and better. And now when I land at some airport and I open the Uber app and it says 15 minutes, I still wait for 15 minutes instead of going to the taxi line and getting the taxi because it's so much better experience.

Yeah.

Because technology made it there, right? So technology is the key for building you know what we're doing and um remember we wanted to solve the customer problem. So day one I asked myself how are we going to solve the customer problem? Two-way communication is just one thing. So the customer can say, "I'm not going to be home. I need you to leave the package with my neighbor. Here's how you get in. I need to reroute to a different address. I need you to not deliver today." That solves a lot. But what it doesn't solve uh and this is where we get into crowd sourcing is the fact that the driver when you when you're doing an eight or 10 hour route as a uh professional UPS driver by definition there is an optimal way of doing the route and you will stop by that particular customer door just once and you cannot come back afterwards because you still have to do another six hours and you have to finish your day before you're not allowed to drive anymore. Now you move it to crowdsourced. All of a sudden in this smaller vehicle, the person doesn't have to do this on a full-time job and then you have a lot more flexibility. You can do a two-hour route, a four-hour route. They can go and come back later and need because they're not running out of time. They can still do that and then get paid for it. Um you can deliver in the holiday season, you can scale up your capacity two times, three times uh without falling behind on on time delivery in the most important time of the year. Right? So it's not just a two-way communication. We realized that the way to really solve the customer problem which is getting stuff delivered on their terms when where how they wanted it and particularly during the holiday season which is the you know the the brand's really money time of the year you had to rethink about the whole model from scratch uh and build it toward flexibility that's how we came up with the idea of of crowd sourcing obviously we saw that Amazon was doing that as well so the whole technology as you think about it was designed to support this type of model when you ask me today what our technology does really special I mean first of all it's a full stack approach and a vertically integrated approach these are big things let me break them down for you

full stack means that we actually do everything we build everything now there are there are small things that will take off the off the shelf right we can use offtheshelf software for here and there everything that is core to our operation the way we run our warehouses transportation the way we do last mile routes the way we can communicate with customers that is inhouse. It has to interact with one another. It has to be um customized for our operation which is different than how other logistics companies have been designed. Crowd sourcing is is a novel thing. It's it's not how UPS and FedEx were designed. And so there's no company externally who has sold to many crowdsourcing platform in logistics because they don't exist. It's just VO and maybe a little bit of Amazon, right? And so we had to build our own and we had to make sure that everything interacts with one another in particular um driver marketplace an area that allows us to uh onboard driver partners very quickly into the platform. Make sure they're ready to go. Make sure that they see the routes are available in your neighborhoods. They can choose when and where they want to drive. They know how much it gets paid. They get paid ahead of time. It's not on demand like Uber. So that allows us to basically guarantee capacity for the following day. And yes, there's an element of pricing, uh, you know, search pricing, real-time pricing dynamic where, you know, if last minute we can't fill a route, the price will go up. We observe the price. We have a team that constantly optimizes, you know, supply and demand to make sure that we don't have to jack up prices last minute, but we will pay more to get a driver out. That solves the problem of on-time delivery, of not having enough drivers, you know, like UPS and FedEx didn't have enough during the pandemic, etc. the way drivers get on the on the road, the way they interact with our driver drive driver mobile app. Uh we collect information about where to park the car, how to get into the building. Uh consumers can upload photos of where exactly they want the box away from the street, etc. Uh we use uh photos of drivers who have been there before that have been sent to the consumer and the consumer rated it five stars,

okay,

that we use and if it's a one star, we don't use it. And then our customer support team which is yes AI plays a role in it but it's human beings who communicate with customers and then when we make a mistake or consumer wants to you know sharpen something they go and add specific instructions for the for the for the driver of what not to do and what to do and you know we then incentivize drivers. We can't tell them what to do. We incentivize drivers uh with uh you know the ability to if you follow instructions, if you get five star reviews, you qualify to the next tier where you can choose routes before everybody else does, you can get paid faster, etc.

That's that's that's how the the rating

Yeah.

translate as a benefit to the driver.

A benefit to the driver because those people love to drive with us, of course. But, you know, they they want to get the guarantee that they when they want to drive, they actually get to drive and they get to drive the route they want to drive and that getting paid really quickly matters for people who live paycheck by paycheck. So, a few days of difference make a difference.

So, and it's also enabled by technology, I assume, right? because because it's like you're competing with that workforce also compared to they could go and drive for Uber or for Door Dash or for so so technology enablement is is important then that

to an extent some some some people you know there's an overlap a lot of people do just this this uh type of gig because they don't want to drive passengers around or they don't want to wait in line in a restaurant or whatnot.

Um anyways uh long this is just one area which is how we interact with drivers. Now apply the same concepts to how we interact with consumers to how we want our warehouses to how we uh do our entire supply chain for the products that we build for our clients. We go very deep into all these areas. So it is correct now to tie all the you know the points back to what you said. It is correct that other companies now send you a photo of the delivery and says delivered.

Yeah.

Okay. That's the thing that is like you know jumps out there that is clear to clear to everybody. What about the entire stack and all the data and all the information that allows you to get there get it better and better and better and better as you scale? I think that's uniquely real.

Yeah. Yeah. I uh so I I as a consumer I obviously only experience the um the final delivery and you know I've I've been railing experiences and so on which you know I'm not saying this because you're here but has been always very good. Uh but just to be clear um how does owning the technology because there's always this challenge of how much do I build myself versus you know using and you say yeah we might use tools here and there um but how much of it actually creates a competitive advantage for the consumer I'm really clear on you know because you're really building it to to where you said hey look the drivers have references of past deliveries they see where what what is a good experience and so on but on the when you start to think about like sortation facilities and middle mile and transport that is less visible. Does it give you um higher productivity level? Does it give you the ability to just do whatever you want without depending on another vendor? Um what is the most important in your view of because it's harder, right? Also, you you also have to invest a higher amount in in development and and maintaining and keeping upgrading and so on. But what does it give you um that is unique there in in the back in the background?

You know when I talk with investors uh we open our P&L

and we compare it with the P&L of UPS or FedEx etc. Right. We want to explain to them how the entire company is designed differently and what the benefit of doing it is which which is what really asking for. So I'll just say that yes we are investing heavily in technology. 40% of our SGNA cost so sales general administrative really the headcount cost is just R&D. It's uh engineering it's data science it's uh product it's it's design. Uh now if it didn't create any value then we would be just like throwing money right? Why would we do that? Uh it actually is the most important thing in what we do. I would

how much that just because I was in a board meeting recently and we had a big conversion. How much how much does this compare 40% compared to sales and marketing for example just to get a sense

at a high level.

Uh sales and marketing is maybe 5% I think. Yeah something like that five maybe 10% it's like four times more. A lot more.

Okay.

It's an interesting insight.

If you're if you're a salesdriven company you're putting most of your eggs in a sales bus. which is sell sell. We are an R&D productdriven company because we believe but sales is very important like we we need to have the the people who are able to explain what we're doing in a different way uh consult to a brand especially a brand that uh you know follows the the saying nobody ever got fired for choosing IBM or in our industry it's UPS how do you make them think differently about things so of course that's really really important but um I come from a brand management background at PNG And the first thing I'll tell you when you ask me like what makes a great brand, I'll say the consistency. It's not just what you're selling. It's actually living up to that promise every single day because if you sell on something and then you don't live up to the promise your client is going to leave and then you have no brand. The brand is in the consistency across all experiences and the consistency is actually on the operation and the operation is driven by technology. Right? So the biggest advantage uh that this gives us beyond a great customer experience which is by the way in and of itself a great advantage is the ability to scale and maintain the very high level of operation and service that we have. I think it's easy you know when we were starting up uh and we were in three cities and we had this crazy stat of 99.9% on-time delivery. That's crazy. Nobody does that, right? and we were obsessing over it. And I'll tell you some of the things that we were doing at the time. Let's say a driver delivered to the wrong door. Customer gets a photo of the delivery and customer says, "This is not my door." So what do we do? We get another driver and pay them 80 bucks to go and move it from this door to that door. And that sounds crazy, but we were so obsessed about 99% 99.9% on-time delivery. And uh we were winning clients this way and we're growing the business. Now the problem is that when you start doing those types of things at scale, you are throwing money left and right because there's an endless number of things that could go wrong.

Yeah.

How do you scale in a way that allows your economics to work as well without compromising your quality? And that's where technology comes in. The precision of how we run our warehouse, our entire supply chain, the orchestration. I'll give one example that I think is really interesting which is not related necessarily to just the last mile you know uh how do you make sure that you forecast ahead of time you build the flexibility you build for different scenarios how do you use information we got from customers to make sure that we don't repeat the same mistake uh twice how do we channel all this information to all the partners so that they have visibility that's all technology this is why it's so core to the way we run the operation it's not just for so small scale it's is to make sure that we stay as good as we are and get better and better and better as we scale more and this ultimately this is how you build a great company. Let me give you just one example of what I mean by that just to to demonstrate. Um so real real life logistics constraints you know that logistic you know you know better than everybody right that logistics has so many different constraints right it's a balance of trade-offs all the time um and so one of the constraints in real life is the number of doctor doors you have at your warehouse we have a warehouse there's call it 12 doctor doors but let's say there are you know 24 uh trucks that need to leave within a certain And let's say that for whatever reason our operation runs a little behind,

right? It happens. Uh we have more volume than we expected for the particular day. Uh some trucks from the first mile arrived a little late that delay the entire operation. Okay. So how do you know which truck to prioritize? You could say first in first out. But then if you think about the impact of some truck running late, that may have a huge cost further down the line. as an example, you know, maybe that truck that is running late is actually not going to just one last mile destination or or spoke, but it goes into another hub that serves 30 other spokes, right? And by the way, what if uh you know the packages on that truck are of a client that is paying a premium for on-time delivery? And what if uh you know the people who are at the next destination are already working you know long hours? we're going to have to pay them overtime to stay longer because that truck is running late. So this is the point about technology. Technology AI allows us to simulate in real time all the different scenarios. What if this truck runs late? What if that truck runs late? What is going to happen to the cost across the network, the on-time delivery, uh you know, people working extra time? how much we have to pay drivers in the last mile to get them to drive a route when all the routes are starting late and then make in real time a recommendation to the operator at the warehouse about which truck to prioritize.

That is where technology pays huge dividends for us as a company.

Yeah. Yeah. And I think I think uh these are all the complexity that that nobody sees but that are the day-to-day of the operation. And uh so you didn't go into the numbers but I think uh you talked about investors conversation and how the unit economics change directionally like how better are they compared to the likes of like large established companies because you are bringing technology and because you have a model that is way more flexible around g economy. I mean anything that you feel comfortable to share? Um,

well, it's a it's it's a little bit of a secret sauce here. So, um, let me just say this. Um,

we like secret sauce.

Of course, this is all about learning.

Everyone likes secret sauce. Let let me just say this. Um, if in the past, if you wanted to, you know, beat UPS and FedEx, you had to get to their scale so that you get the density on the routes, the utilization on the warehouses, utilization on the trucks, so that you have similar unit economics. Why did that matter? It mattered because there's there's a famous case of and I actually think I actually it may have been even DHL and you're a DHL person. I'm not.

Uh but I remember talking with somebody who was very senior at FedEx and we talked about u you know early 2000s DHL tried to get into the US market. What was the competitive response from UPS and FedEx? And the competitive response was at the time dropping rates

uh and make it really really hard. And so you're operating at subscale. burning money in your operation and then you can't really charge uh because the rates are so low in the market then you're bleeding cash along the way right

huge huge cash

is that is that a real story

oh yeah yeah yeah I mean DHL had to pull out from the US the US domestic market stayed on the international service but

because it was it was huge losses I mean this public information

yeah well that type of behavior in general I would say has raises some legal questions right from industry incumbents uh so what I will say is that at vio scale today which is certainly not as large as as any of the national, you know, UPS and FedEx. Our unit economics are as good or better than theirs, which gives you a lot of flexibility on pricing, a lot of flexibility on where you want to make investments as a company, you know, how deep you want to go in price, how how high you want to go on price and then on quality, etc. And it gets better and better and better with more scale because the operation is designed differently and because the um technology allows us to really maximize things like uh you know route density and utilization warehouse utilization etc forecasting planning and I can go into particular examples of how technology does that. So without getting into the numbers you see the unit economics actually is a strength for this model because it was designed completely differently.

Yeah. Yeah. Yeah. Yeah. No, I think um I think uh I can see obviously on the different the different pieces that you're putting together uh certainly how this this helps. I mean ultimately the biggest costs are usually also labor on all these businesses and so if you can optimize that and and so on you get some certainly some major improvements. Um what's what's the um what's the expansion plan? Uh uh it so you you um you started in a region in the US expanded you know I think if I remember correctly the the beginning the biggest value proposition was really geared towards next day but I think now since then you have definitely expanded so what's the what's the um next release and and where the the company's going

from a product standpoint from a geographical coverage standpoint

both yeah like maybe let's start geographically because the easiest one but I I would love to hear also technologically what do you think is is the the next big things there

yeah I will touch on three different things. Uh let's talk about geograph geographical coverage. Let's talk about uh offerings which is what we sell into uh e-commerce brands and let's talk about you know where technology is going as well.

Uh so with the coverage starting with the coverage in uh 2026 and 2027 our north north star is to become a primary shipping partner for e-commerce brands. Up until now for most brands that we work with uh were secondary. they would give the majority of their volume to a UPS or a FedEx or the postal service and give the minority to VO. Uh we think we are better. We the numbers uh show us that our clients are telling us that they want us to have national coverage so that they can give us the majority of their volume. Uh that's where we're going. We're expanding quickly around the country. Uh as of today, I believe we cover 49% of the US population. Uh so that's a majority of US cities. Uh we're not in all of them quite yet. We're expanding. We're opening uh Northern California in um in June as an example. We're opening more and more and more cities around the country. By end of 2027, we want to cover all the major cities in the US, primary, secondary, and potentially tertiary as well. So, that's that's happening right now. On the offering front or what we're selling, we're selling into e-commerce brands. Uh we're now introducing a new suite of products and by the time this interview will be aired, I'm assuming this will already be announced. Um so essentially uh letting e-commerce uh shippers decide uh the exact date by which a package has to be delivered. Right? So you can say I want it same day, I want it next day, I want it two day, I want three, four, five, six, seven, eight. So have complete flexibility about that. And then what we're that gives us the flexibility essentially to say okay if you're giving us three days we have up to three days to deliver great we can deliver it on the second day we can deliver it on the first day. Now we're optimizing for you know utilization. We're optimizing for our density and uh we can drive down the cost this way which is why our three-day offering even if it gets delivered on the first day customer wins but the brand brand wins and you're paying us less money because we were able to play that optimization game. And what allows us to do that is the orchestration platform. Me estro AI which is a proprietary technology that allows us to make those real-time optimizations and always meet the customer uh promise date which is promised on the checkout page where you place an order with you know an espresso. You'll always get it by that date but now they can give you a lower price. We can charge them a lower price because we're making all that optimization. So uh that is being rolled out right now and based on our technology in all our warehouses and the supply chain the AI requestation platform. So that's really really exciting. By the way we could go very deep on this. I'm not going to do that right now, but what possibilities that opened uh for e-commerce companies to engage their customers on the checkout page and how do you optimize and customize and personalize checkout pages based on what the consumer is buying and whether it's a first-time customer and they need a free same day delivery and next day delivery to convert versus a fifth time customer who may not need that but they need uh they need a guaranteed option at a lower price. So we can start talking about how Vio plays a role in that. That's where we're going. The third areas of expansion is uh you know our just technology and I'm not talking about supply chain. I'm talking about what VO is actually going to start doing with brands. Today we're selling a logistics service and uh that allowed us to solve the um the core problem which is the consumer experience problem and building brand trust and brand loyalty. So many of the brands we work with are asking us for more. They're asking us for deeper access to data. They're asking us for uh the ability to customize things for their own needs. They want to onboard customer service teams on our platform. They want to onboard finance teams on our platform. Um we have an opportunity to go and start building tools or allow e-commerce brands to actually build their own tools on top on top of our own infrastructure.

Uh and this is something we're going to start seeing later in the year and into 2027. And

I think a very promising future for for the company to expand in that way as well. Yeah, that's uh that's um that's really interesting. um you you you had mentioned also um a couple of times I mean we talked about it's the obvious um player also the Amazon the Amazon impact into the industry and I always like to think about Amazon as a as a company that has a positive impact into the business because they do even if they compete with you they do push the market in a certain way around delivery expectation around delivery experience and so on but at the same time they also compete more and more into the logistics What's your view as to um does this Amazon effect benefit VHO or is it a challenge especially now that they are opening their network to to more companies?

Well, in 2018 I wrote an article uh called make no mistake Amazon will uh take on delivery behemoth FedEx and UPS. Uh and I posted

you shared it with Fred Smith at that time. Uh I did not share it with Fred Smith but it was it was based on actual an actual interview that Fred Smith uh had just given I think to Bloomberg.

Okay.

Where uh he was asked uh in front of a live camera you know is he worried about Amazon

and he said um Amazon is never going to compete with us. Uh the merchants are not not going to put up with the channel conflict.

Yeah. these were his words and I called him out on it.

Uh I was like I don't agree. I think Amazon will compete with you and I think it will happen because you just look at the trajectory of what Amazon has been doing. They were partnering in industries and then they were like you know building enough scale enough data and they were starting to do this on their own and so it was pretty clear to me that Amazon was going to do that as well. Now it took them a long time to go and announce it but for years they've been building this and they've been in the market for a while now. It's not like a new thing. They just announced it this year, right?

Yeah, I agree with you.

So, so now you have to, you know, sort of like assume that um this is not a new thing for us. We we were designing the business with a strong hypothesis that Amazon will become a competitor one day. Uh so when people text me, hey, what do you think about this? I'm like, hey, we've been operating on that assumption. It's not nothing has changed. Well, you have to have remember we went back to PNG and we talked about that you have to have a unique insight. Otherwise, why why you in this business? If you don't have a unique insight, if you think that Amazon is just going to come in and and and you know, take over the entire industry, just don't build this business, right? Build business where you think more secure. And since day one, I felt very strongly about this. When you're an e-commerce brand and you want to own your end customer, it is extremely risky to give your package to your biggest competitor.

Yeah.

Now, Amazon can say, "No, we're separating." uh logistics is completely separate from you know um uh from from you know your customer data we don't

okay

but you know we remember the story of uh Toys R Us how Toys R Us were was designing their entire e-commerce experience with Amazon they were outsourcing to Amazon and then uh at some point uh they just lost that capability altogether and and I don't want to say Amazon took over the business they didn't but Amazon became the channel where consumers go and buy for toys and not Toys R Us was one of the reasons not the only one of the reasons that they declared bankruptcy at some point uh most e-commerce companies certainly the scaled ones the ones that care deeply about customer experience the one that care about LTV over CAC it's not just number of sales I'm making on on Amazon but it's the ability to retain the customer make sure they come back and buy again again more SKUs go deeper spend more money with me are very concerned about that because when when you give your uh you know when you give your data of you know customer name, phone number, address, how to get into the building, how much they're buying, all the issues that happen in that area. You give it to your biggest competitor. There's a day when you know that may come back and hunt you. Yeah. And so I think this is actually an incredible moment for we've designed our company for that need. E-commerce brands need to own their customers, need to control the delivery experience. They need to do it in a way that drives LTV and they should not worry about doing that with the only other company that is able to do that which by the way is competing with you directly. VO is well positioned for that. That should give us a lot of uh tailwind in the market and I think it will just accelerate our growth.

Yeah, that's um that's exactly what I meant actually by the the net positive, right? I I um um I forgot her name now, but the the former uh founder and CEO of uh of deliver uh Deafne.

Deafany.

Deafany.

Yeah. She she said one time in an event I attended she was like yeah Amazon actually my best sales a person because whenever they do an announcement while many brands have to respond to that or many retailers have to respond to that and then becoming the enabler of that response is also I think where you you're going in the sense of like if you want to own your experience your relationship I can actually help you to do the same or better even But hey, I'm going to enable you to do that. I'm not going to compete with you. I'm not going to take over your business. And I think it's a very it's a very appealing value proposition for sure.

So uh so that's uh that's absolutely uh relevant and I agree with you like I can't agree more. I actually also made a post on this you know u as a announcement. I'm like, well, you know, yeah, the for the people in the industry that really follow this closely, it's it's just like putting a new name and putting it together under a new umbrella. It's more of an orchart kind of of change rather than a new strategy or anything like this. It's it was very I mean the Amazon shipping product is is is being pushed in the US at least for three years in a in a meaningful way uh already. So u so certainly in that space that is maybe the closest to you. Um yeah, it's just a little uh a little uh marketing change there. Um I just want to go back on the topic of of AI and technology. Um so you mentioned AI and you mentioned technology and you mentioned people still responding maybe some of the customers requests. How do you do um to start to embed AI into the business uh in a meaningful way and that it becomes you know I would say an integral part of what you've started to build you know pread GPT and pre uh pre maybe wider AI adoption uh across businesses

very top of mind topic certainly not just for me for any CEO running any company and in particular technology companies nowadays we spend a lot of time talking about this in in uh in the company. I think about AI uh in multiple uh verticals if you will. So first of all um if you really want to accelerate your growth in in the AI road and build a competitive advantage with AI, it needs to be part of your core offering of your core technology, not just people building apps to do uh email management or spreadsheets better. We'll talk about that in a second. I think it's important in and of itself but it needs to be part of the way you run your core business your core product. So we already mentioned this earlier you know my estroy AI uh the orchestration platform uh is what enables us to go from deliver you know two options either you know next day or five day uh which was the previous product called premium economy into go and actually you choose you as an e-commerce company choose a particular day you want and then you choose kind of the pricing structure and AI allows to orchestrate in real time so they actually meet your your uh customer promise on the checkout page. Uh and then we also talked about the ability to simulate in real time different scenarios of trucks departing late from a warehouse and how do you make the optimal decision? This is all AI. This is part of the uh you know the product that we're building. So uh we're making several um uh infra strategic infrastructure investments across pieces of our operation, transportation, ground operations and and supply chain in general customer support to really make it a competitive advantage. Let me give you an example on customer support. I think it matters as well. You know, there's a lot of like out offtheshelf customer support AI agents. Yeah. What do they do? They take um the information that you already have of, you know, pre previous interactions and then they streamline that.

Uh what it misses is the understanding that a lot of the problems are not ones that have already been solved. I give you an example. Um customer reaches out to me. I get an email from a customer and they say, "Hey, you know, your uh delivery platform has uh you know, left the package at the wrong at a wrong placement. They missed the right location three times. Instead of putting it at the back door, so it's away from the street, it's you know, on the front door and somebody may take it." Uh, which shouldn't happen, but you deliver millions of packages per week. You know, those types of things happen. And so we haven't solved that particular use case before for that particular customer for that particular house. An AI that is off the shelf will say, "Oh, we really apologize. Let me fix the instructions." But we've already done that, right? Uh a veh built AI is vertically integrated into the entire operation can go very deep into what happened at the warehouse, you know, particular driver and how many times they've delivered to the right place, wrong place, etc. and the time of the day and the instructions for the customer and you know that particular neighborhood and take all that data in real time and understand what the root cause is and propose a solution so we can solve it for the particular customer and then we can scale it for all other use cases. You cannot get that off the shelf. It needs to be embedded deeply in your operation. So number one is infrastructure plays like this. Number two is, you know, you have to make sure that you're building an infrastructure for everybody else in the company to

connect to the data and

to connect to the data, involve the way they work. Yeah.

Uh right. So, you know, sales teams now want to be able to get uh information about clients faster before a call. How do they go and quickly get information from all the previous conversations we had with that client, run analysis, etc. You know, so that's not just logistics. It's not part of the core offering. It's just the way everybody works. You got to build a platform for that. So, that's number two. I would say number three is trust uh element. So this is a critical piece that I think a lot of organizations don't spend enough time on which is when you give uh AI data um you know and you're not being deliberate about what type of data you share with it then you may be sharing data that you don't want to share you know uh confidentiality data etc you know we have all confidentiality agreements we have all confidential information we don't want to share how do you label data in a way that allows you to say what am I sharing what am I not sharing so that people when they access the data you feel comfortable I think a lot of large organizations are really spooked by AI because they're concerned about their problem. You can design a solution but it has to be part of the infrastructure that you're building and you have to be investing in that. Uh we're no longer talking just logistics. we're talking about in general.

And then there is and then there is the piece about the cultural transformation

uh which uh to me is perhaps the most important thing and when you go to LinkedIn and when you read other companies posting you rarely read about the deep infrastructure plays you mostly read about cultural transformation because that's what everybody's trying to get right. How do I make sure the people on my team truly adopt a new way of working? So when I look at VO today, I'm thinking how can we scale our operation and get better and better without continue to hire a crazy number of people because that's a very hard company to run when you have so many people and that's how other companies in our space have been built. How do we make every person a mini CEO? How do we give them the set of tools so that they can run agents? uh they can build their own stuff and they can be so much more valuable. And by the way, they can get paid more, they can be more valuable, have bigger roles, grow their careers. AI shouldn't be as scary as it should be an opportunity for people to say there is a better way for me to become extremely valuable in the workplace. But, and there's a big butt, it needs to be the right person and it needs to be the right mentality. Yeah.

And so what we're creating at V is the culture in which we're encouraging people to get up to speed with AI, experiment, run with it. Everybody has access to cloud. We're working cloud code. Uh we're running um you know weekly sessions where people demo their work. Uh we have leaderboards. We have all those things and it become it becomes part of performance reviews like we tell people if you do really really well, we'll give you more

and if you don't do well, there might be a point in time where it doesn't work anymore. So you should get there.

Yeah. Yeah. Yeah. Know I think what you're doing around the change the change and the people the people is the hardest is the hardest part of the of the job right as a leader is to make the company come with you because you could give them all the tools but if the people are not ready in term of mindset you're not going to see the outcome you want right so um it you talk about like how important it is for the team for your team and and u and the entire company to evolve towards this a more AI enabled world. What are you personally doing as a as a leader, you know, to keep learning or to also use the tools better? Like what's your favorite anecdote of like a tool or or something you're doing now with AI that has really improved, you know, your ability as a leader or or the way you run the company? Anything that uh that you can share?

Yeah, I'll give you one example. Um but but maybe a framework beforehand. Um, so I'm thinking about what what am I uniquely positioned to build uh as as CEO. I am not probably going to build the infrastructure that allows everybody else to use AI and label the data and all those kind of things. Um, you know, I I don't have that training or the time to go very deep on that. uh but as CEO what matters the most to me personally and my most uh expensive asset is my time

how I spend my time and so uh I'm thinking what are the things I'm spending a lot of time on that I can basically automate and make better uh so that I make more time for myself um so I'll give you I'll give you one example um one thing that I spend a lot of time on is hiring hiring uh executives for all kinds of roles uh as uh as CEO, I mentioned this yesterday in my 10 10th anniversary post. One of my key learnings as CEO is you have to spend disproportional amount of time building the team and obsessing over getting the right people on the bus and just spend as much time as you need on that. That is by far the highest ROI investment on your time.

So hiring a lot was the point number two. People are everything.

What was that?

It was the point number two of people are everything.

Yeah, people are everything.

People are everything. Period. Even in the world of AI. So then I asked myself, well, what what am I spending so much time on interviewing? I'm not going to replace myself with somebody else to interview. Yes, AI is taking notes. Yes, we've automated the whole way that AI is now can write down the scorecards for me based on what I'm looking for, etc. So that's one aspect of it. But actually, I spent a lot of time defining the roles up front. Uh because so many times in the past, uh I remember going into a hiring process, interviewing people, interviewing people, and you never get to the finish line and you ask why. And then you realize I don't think we defined the role the way we needed to.

Who are we looking for? What problems are we going to solve? What success looks like in six months, 12 months, uh 24 months, what companies to hire from? You can get all those things and still you hire from the wrong company and the person is just not going to have the DNA of moving fast enough at the speed that we need them to move or aggressive enough etc. So that used to take a long time to think about all those things. And you know that my example is I've built a skill that allows me to you know drop a few thoughts. It asks me a few pointed questions and it builds and it knows all the history of all the roles we hired for because we built it a library to go to and it has context about you know board decks in the past and things that we're trying to build and context about road maps for the next two years and then it comes back with a job description that is 97% good enough and that streams line a whole process of different people weighing in providing input etc. So that's just one example. Yeah, but I love it because I've heard so many use cases towards recruiting process down the path of scanning resume and looking at this but like you're taking it upstream towards what you actually really need to define which is really like hey help me to figure this out because that also triggers down then maybe I I don't need to interview 10 people maybe I just need to interview two already in the from the get-go because I actually define much better what I need.

Exactly. And and now now I'm not talking about AI anymore, but just like recruiting philosophy for just one second. I see it so many times and and I I keep you know this is feedback I always give new managers. Uh people say well I'm going to run a funnel and I'm going to spend same amount of time with you know X candidates and I'm going to move all of them slowly into the finals final stage and then I'll be able to have five candidates from which I'll choose. And I tell them it just doesn't work this way. The way it works is that you say no really early on to the wrong people. And if it's not like slam dunk, I'm excited about this person, just don't spend time there. Try to figure out what is the fastest way that you can learn about enough about the candidate to say yes. No. Of course, it doesn't mean that you're always right, but there's some pattern recognition. And then go very, very deep on the few candidates that you're really excited about. Get to learn them. Bring them to drive around with us. Bring them to the office. Go out for dinner with them. It's a partnership. you want to hire somebody who's going to be amazing for the next four, five, six years. And so AI is helping us just like define very clearly what we're looking for and only spend time with the people that we should actually spend time with. And it's not 100% accurate because people are people and it's not, you know, exact science, but it makes such a big difference further down the line.

Yeah. No, absolutely. Absolutely. And so as we talk about people, um, tell me about like some I I love to hear from CEOs and entrepreneurs. Who do you look up to? Like who is your, you know, inspiration from like other entrepreneurs or, you know, is there people within the industry that you look up to and you know that you think have done like amazing things? Is there anybody?

Yeah, there are there are a few people who are uh you know have been inspiring us in many ways. Uh I I do want sorry I do want to caveat uh everything that nobody's perfect. So anytime you come up with a person other people may say well that person also did XYZ that I don't

yeah yeah it's fine.

So right okay so in that

you can take polyical people Elon Musk all that thing

in in yeah in that context I think Jeff Bezos is the greatest entrepreneur uh sorry not entrepreneur but business builder of all time

uh at least that I'm aware of and Elon Mus has done incredible things but Elon Musk is is micromanaging his companies and he's working 20 hours a day and uh I don't want to work this way.

Mhm. Jeff Bezos started talking early on about sleeping eight hours a night, making three good calls every day. And the way he's built Amazon into the powerhouse that it is today is by teaching people how to think. It's a principles. Amazon have I think has I think 14, you know, leadership principles. People use those principles in in meetings. They have a system of running meetings which is you know a person comes in they write a six-page document everybody reads the documents questions about the there is a system in place that allows people who come from outside to learn how to work in that environment understand what the company is optimizing for and be successful in that environment. And so for VO, if we're able to as we continue to grow to bring in more people and increase the likelihood that they'll be successful here from 5050 to 8020, 9010, not only because we chose the right people, but because we also taught them how to work in this environment, how to think that that has tremendous impact on our ability to scale really quickly. Because going back to the the previous question, people are everything.

Yeah.

The way we do things, the way people think, that's that's like everything in a company, right? So I look up to Jeff Bezos in build in terms of building the systems. I also I I'll mention one more person uh Steve Jobs the late Steve Jobs. Um there's many things to be inspired by chief Steve Jobs. Um but to me the the the biggest thing is think different you know um I think some of the greatest uh you know entrepreneurs builders of all time are people who did not just approach a problem and say this is how you know others have solved it they looked at it from a from a fresh perspective first principles completely different way and they've unlocked things that nobody has ever thought they would be able to unlock and uh you know I I really take this to heart I have my own uh leadership principles just for me that I share with any person who starts

before they start working with us. I just want them to know what they're buying into and they're comfortable with it. They have the conversations about this.

What's the most important one in that?

Um

I know it's hard. It's hard like Yeah.

The number one the number one principle is is this.

Oh, the one that come first to mind. Yeah.

It's the number one and listen for a reason. It's my job is to make you the best you can be and it's not always going to be comfortable.

Okay. I love that.

Right. And so we talk about like working here is not meant to be easy. We're here to win. And my commitment to you is I want to make sure that when you come out of this experience, you are you've grown incredibly in your career. And that's my responsibility to you as my as your manager. Uh but I'm going to push you. Uh the principle I want to talk about is challenge conventional wisdom. Steve Jobs think different. Challenge conventional wisdom. Just because somebody says something doesn't mean it's true. You have to have your own first principles approach to everything. And then that unlocks so much. than more than what anybody thought was possible.

Fantastic. Well, it a getting you here on the 10 years of VHO is amazing. Thank you so much for coming here to the podcast. I'd love to have you back, you know, talk about I think we could have extended a lot about the AI implication across the business. We love to have you back at some point for sure. Um, thank you so much for your time. All the best with VHO and we're excited to see how it continues to scale and bring more more solutions and uh have a look not only if you're an Espresso customer but you know look on your packages you'll see probably a lot more VHO labels on on your D2C orders. So thanks so much for joining us and uh and all the best to you and the team.

Thanks for having me. It was a pleasure and and always a pleasure to speak with you whether we're sitting at a restaurant in Miami or uh here at the sauna. It's which is a whole different topic we can talk about.

Yes, exactly.

Thanks for having me.

No, great. Thank you so much. Thank you so much for joining us. Ita, if you want to reach out to it, maybe um where do the people find you maybe the best in LinkedIn or

I think LinkedIn I'm quite responsive on LinkedIn if you want me to send me a note. Um yeah.

Yeah. And also you should follow it. He puts a lot of um of his experience and it's a great great learning. So uh so on LinkedIn you'll find him easily. So thank you again and we look forward to uh to see the continuous growth of VHO.

Thank you. Have a great day. Cheers. Cheers. Bye