2019 INC. 5000 RANK: 2
HEADQUARTERS: Brentwood, TN
YEAR FOUNDED: 2015
2018 REVENUE: $33.6 Million
3-YEAR GROWTH: 30,548%
Some companies preach about making sure employees know they're more than just a number. At Brentwood, Tennessee-based FreightWise, each worker knows his or her numerical value--to the cent.
Founded in 2015, FreightWise acts as an outsourced supply chain logistics manager, largely for companies in the manufacturing, distribution, and retail spaces. The Nashville-area startup, No. 2 on the 2019 Inc. 5000 list of the fastest-growing private companies, has seen its revenue grow by more than 30,000 percent since its first year, and now employs 45 people. Co-founder and CEO Chris Cochran credits some of the company's early success to its policies of hardcore transparency and meritocracy: FreightWise allows all employees, from top to bottom, to see how their work contributes to revenue, which hit $33.6 million in 2018.
"We want to be very open," Cochran says, "so that people know what's buttering the bread here and how ideas and projects are turning out."
FreightWise breaks down each department's financial information as granularly as possible and reviews it with employees in quarterly meetings. Marketing team members can track the financial successes (or failures) of their projects as compared with their salaries. Auditors earn extra pay for correcting potentially costly mistakes. Even data inputters are paid based on merit: As they make more mistakes, their bonuses get reduced.
And while it's common business practice for sales departments to attach dollar figures to employees, FreightWise takes things much further. Its salespeople see not only how much revenue they've generated, but also the costs of their health care benefits and 401(k), commissions, and travel expenses.
"They see exactly what they brought in," Cochran says, "and exactly what the contribution margin is that they provided to the company."
FreightWise gives each client access to a platform through which it can see the up-to-the-minute status of its shipments, plus any bills that have been started but aren't yet complete. Charges are broken down line by line.
Still, the company has its work cut out for it as it fights for more market share: FreightWise operates in a space occupied by decades-old incumbents like C.H. Robinson ($16.6 billion in revenue in 2018) and Echo Global Logistics ($2.4 billion). Not to mention upstarts like BlueGrace Logistics, which made the Inc. 5000 from 2012 to 2018.
Cochran previously founded another freight software company, TracBack Solutions, which he sold to logistics firm AFS in 2013. The experience gave him an up-close view of what he calls the "black holes" of the freight industry. Companies generally are left in the dark on the status of their shipments--and how much they'll be paying for them--until they receive a bill.
The entrepreneur co-founded FreightWise with colleague Alessandro Rustioni, partially using funds from the TracBack sale. For the first six months, the co-founders and a half-dozen developers worked remotely and rendezvoused at a local bar when they needed to hold in-person meetings.
Cochran subscribes to a management policy pioneered by General Electric CEO Jack Welch in the 1980s that rewards the top 10 percent of performers with raises or promotions and dismisses the bottom 10 percent. At least, he likes the concept in theory. So far, Cochran hasn't had to do much firing. "There's really no need to eliminate the bottom percent if they're profitable for the company," he says.
Today, FreightWise is on track to more than double its annual revenue from 2018, according to Cochran. The co-founder credits the growth to employees who have bought into the unconventional transparency policy, adding that FreightWise hasn't experienced much turnover.
"The turnover we have had--a lot of it has been people who have struggled in our culture of tracking performance this way," he says. "But that's kind of what we want."