Dan Lewis, co-founder and CEO of a digital freight company Convoy, didn’t start his own company because he had a deep and abiding passion for trucking. At least not at first.
The executive has a background in strategy and management consulting that has grown into a career in product development for leading technology companies such as Google and Amazon. But when the desire to start a company hit him, he researched the world’s money-making industries and then, using AngelList, saw how many companies were trying to destroy those industries.
His search turned up thousands of companies that worked in industries ranging from telecommunications and fashion to video games and food. Billions of dollars were invested in trucking every year, but less than 30 startups showed interest in this area.
“I saw a huge opportunity and few people took advantage of it,” Lewis told TechCrunch.
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Lewis and Grant Goodale co-founder of Convoy in 2015, and has since attracted a number of major investors. A couple of years after the founding of Convoy, at a turn of events, the company received its Series B from the YC Combinator continuity fund.a fund that was usually intended for companies of an earlier stage.
Recently, Convoy gets $260M Series Eled by Bailey Gifford and T. Rowe Price, which raised the company’s valuation to $3.8 billion. To date, the company has raised almost $1 billion to scale its platform, which brings together a fragmented network of shippers, carriers and brokers across the United States.
Speed is an important characteristic of building a startup, and also an important characteristic of not diluting because you can show tremendous progress and then move up at a higher price based on that. Dan Lewis, co-founder and CEO of Convoy
We sat down with Lewis to talk about the importance of being an obsessive client when starting a company, why compensation packages in the early days can help you avoid over-diluting your fundraising company down the road, and how to set limits on the compromises you will make as a founder.
The following interview, which has been edited for brevity and clarity, is part of an ongoing series on the founders of the transportation sector.
TC: YC’s investment in your Series B was notable because Convoy was not part of the Continuity Fund’s portfolio companies at the time. What do you think made Convoy different?
Lewis: The YC culture is very curious, so they didn’t feel like they needed to stay in a certain direction, especially with the Continuity Foundation, which was geared towards companies in the early stages of growth. When we met, I think it was the unique story that was the breakthrough. People usually don’t realize how fragmented, how big and how autonomous the trucking industry is. So YC saw it as a serious wrecking game.
We were happy to work with them because they are an incubator and accelerator, so their whole system is designed to help founders succeed. They had so many unique programs that helped us succeed and grow that I had never seen other investors at the time.
You mentioned that a good way to choose a direction for a startup is to compare industries that have a lot of money with companies that are trying to change those industries. Is this still a good method?
I think this is a really good method. It would be interesting to compile a list of industries and find out how much money is being spent in those industries and then see how many companies are chasing those industries. AngelList is a great resource for finding the newest, most innovative companies that are aiming for these places.
Even before I started the company, I wrote this Quora article that went viral and was published by Forbes. It was the answer to the question: how to come up with an idea for a startup. I wrote this really extensive theory, essentially a collection of plays. So when I was about to start my own company, I thought I should eat my own dog food. I went back and used my own process and now I can say that it is trustworthy because it works.
Credit: techcrunch.com /