John Machacek, Chief Innovation Officer for the Greater Fargo Moorhead Economic Development Corporation, has worked with countless startups throughout our community over the years. He knows their ups, and their downs, but most of all, he knows the questions to ask them. Here are John Machacek’s 10 questions for Jeremy Vrchota, Founder & CEO, Cota Systems.
01 Will you please tell us your Cota Systems elevator pitch?
Cota democratizes access to the largest trucking fleet by providing a window into the trailer capacity of small carriers connected around the world. By sharing their available trailer space with small to medium-sized shippers, we’re able to “Tetris” shipments together, which we call a LoadBoost, onto our CotaCarriers that otherwise would be shipped in a traditional less-than-truckload, aka LTL, manner. A comparison would be CotaCarriers is like a private jet to the destination, while LTL is like a commercial airline.
02 What do you mean by democratizing access?
A lot of small to medium-sized businesses don’t have logistics departments to make shipping decisions. We’ve built unique tools, such as FreightPro, to help make shipping easier. For example, if you’re importing raw materials from overseas, you often don’t know details such as pallet count, which makes it very difficult to get an accurate delivery rate. With FreightPro, as long as you have weight and cubic volume, we can give you an instant guaranteed quote using unique algorithms that will place your freight on the best CotaCarrier. If your freight gets on a CotaCarrier, your shipment gets to you faster, cheaper, and with more visibility than if you were shipping traditional LTL. Like I just compared, it’s like taking a private jet versus taking a commercial airline that has to go through airport hubs to get to your destination.
03 How have you been getting connected to your customers and/or marketing to them?
We started with a handful of customers but didn’t really market much, as we were working towards an MVP. We went to trade shows and had a little digital marketing, but those were mostly to gather feedback that we were on the right track with the product and for brand awareness in the industry. This fall, we will really be ramping up the onboarding process for more CotaCarriers in select regions that need trailer capacity. Our import business is growing off both coasts to the Midwest, and we’ll be looking for not just capacity for those imports, but other shipments to fit alongside them.
We’ve noticed much of the marketing in trucking is somewhat standard and less creative. Cota Systems thinks a little differently; the way we’ve designed our trade show booth is clean and beautiful but somewhat vague which draws people in to ask, “What is Cota Systems?” Our head of marketing was a former head of digital at Oakley Standard Issue, which sells its brands to military personnel. It’s a great fit because the trucking industry is a big employer of veterans, so we have a very good feel for how to reach the segment. In fact, Cota Systems is about 1/4 veterans.
04 motivated you to work on solving problems in the trucking industry?
My first job out of college was at a relatively small trucking company. I was amazed by the process and all the variable factors that play into shipping products from Point A to Point B: the weather, driver issues, missing information, and wrong information. If you’ve been in the trucking industry for years, you’ve probably seen it all. There’s never a dull moment and it’s incredibly fast-paced. Also, the industry reminded me a bit of cattle ranching— which I grew up with in the northern part of South Dakota—in that it is made up of many independent operators and not big corporate players. I saw a huge opportunity to help small trucking operations without them needing to spend a ton of money and time on systems and support that may be too large or complex for their needs. They don’t want to spend a lot of money on software, as they already have so many other inputs per truck. That was 20 years ago, but the same issues persist, and now with drivers having their own smart devices compared to the days of computer systems and onsite server needs, as well as improvements in software development capabilities and information in the cloud, this has enabled technology like Cota Systems to be developed and solve problems in an efficient way.
05 Your company started in and has operations in California. Was growing up near here one of the reasons you chose to add the Fargo office and invest in your growth here?
Growing up here was a little bit of it. I have connections and family here and it’s nice to come home, but I was looking for talent, and I realized I could find it here. The Emerging Digital Academy has been an excellent resource for finding software developers. In addition, there is also the great business and tax environment and cost of doing business. It’s been great how much the community comes together to help arrange meetings and connections and get the word out for talent. Here, if you have a question about a form or a program, you can get a live person right away to get you the answer. Getting things done and getting them done quickly is important to you and your business. I looked at other competing cities in the region, but they just don’t compare to Fargo in my opinion.
06 you have any best practices or tips or lessons learned for running a new company with staff in multiple states?
Lean on an expert in a field for advice such as an HR professional or attorney to ensure you are doing things properly and in compliance in each state. There are great software platforms out there that help with HR administration, but they may not cross all the T’s that vary based on geographic jurisdictions and other nuances. Currently, we’re spread out with about 1/3 of our employees in North Dakota, 1/3 in southern California, and 1/3 in the Minneapolis area; and each of those areas seems to be very different in terms of worker’s compensation policies for example.
07 Finding great talent is obviously important to you. You mentioned the Emerging Digital Academy coding school. How has that worked out for Cota Systems?
This question allows me to give them a plug as well. Starting around a couple of years ago, it was getting tough to find available developers and a lot of large companies were accumulating that talent for themselves—almost putting them on a shelf to keep them from competitors. That’s when we were introduced to EDA and looked at their curriculum—I just thought it was awesome how they were teaching. Anyone can learn to code on their own, but in the real world, you have teams to collaborate, review, present, and push code with and the EDA was teaching that. We hired our first graduate about a year ago and it was great. We’ve hired four now. There is a ramp-up period because we use a different architecture than they’re used to, so it’s been ideal to have a few months between the new hires to give them time to adjust. We’ve also been able to work with them to further shape them to what Cota Systems needs and likes. Also, if hiring entry-level developers like this, you really need a staff member with engineering knowledge who can serve as a mentor to the new hires to be really successful. The EDA students have been excited about the speed of the work going into the product and pushing the code out, and how they can quickly see the fruits of their labor. My organization mantra doesn’t do the perfection paralysis, as we like to work fast.
08 As you’ve spent more time here and continue to progress with your technology, are there any particular opportunities you see for our region’s shipping and trucking industries?
I think there is a big opportunity for shippers to collaborate on their shipments to get better service and rates from trucking companies. There are too many shipments going to Minneapolis that are held there in storage waiting to be consolidated. Also, I think there are too many containers that ride the rail right past the state only to get unloaded somewhere else, and then trucked back to the final destination here—it’s a really big waste of time, cost, and carbon.
09 If you could go back in time to Jeremy from several years ago, what hindsight advice would you give yourself?
I would tell myself to be more direct and confrontational if deadlines or goals are missed. I was a softy back then, but now I’m super direct and you have to be if you are a leader of a growing team. I’ve learned the hard way that feedback on anything from product to customer relations is needed constantly. If you’ve waited a month for feedback, that’s an eternity. 1% improvement every day leads to 37x in a year, and there’s no excuse to not get better.
10 Lastly, what can we do as a community to help you and Cota Systems succeed?
Give Cota Systems a shot if you’re a small trucking company or if you’re shipping freight in and out of the area. It doesn’t cost you anything. Also, keep supporting things like workforce development because it attracts and helps companies like us.
John Machacek has been helping local startups with the Greater Fargo Moorhead Economic Development Corporation since prior to his position with the GFMEDC. Before joining the team, Machacek was the VP of Finance & Operations at United Way of Cass-Clay and a business banker at U.S. Bank.
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