Vikrant Host

Welcome everyone to Execution at Scale. As you know, I'm Vikrant Naik, founder of Lenify and Curator. I started this series because in my opinion best conversations in this industry always happens over in hallways and over coffee or over a beer sometime and not exactly on the stage. And here I have John Brooks with me. Do you prefer John or Jonathan?

Jonathan Brooks Guest

Either is fine. John's good.

Vikrant Host

Awesome. John is CEO of Warehouse on Wheels or as called WOW and they provide on-demand mobile storage and logistics solutions for warehouses when they're running out of space. They're right now operating across 37 locations across US, Canada and Mexico with over 36,000 trailers and as I've heard in process of expanding to 100,000 trailers very soon. So very excited for that. And before building WOW, John actually spent his career in finance and operations and leadership. So I'm very excited to chat about how he started the company. I'm really excited. And anything else like John you would like to add before we start, I guess?

Jonathan Brooks Guest

Well, I guess first thank you for having me. I appreciate it. I'm amazed by the businesses you've built. You're a published author as well. So maybe I should just shut up and listen today because I think you have a lot to offer as well. But I think at its core why I wanted to have these sort of conversations is because I think operators right now wish they were running their business instead of reacting to it. And so that's the conversation I hope we're going to have today and I'm excited to get after it as I like to say.

Vikrant Host

So tell me a little bit more. So like most of the people I have talked to in my career, I would say not just this podcast, have been and who are in this logistics space and when they start, they're more on the like operator background. Like what I mean by that is that either they were working in a warehouse as like in operations or maybe sometimes in sales. But I'm trying to think but I don't think I've seen anyone from finance background, like, you know, starting the company and being the CEO. So like, tell me what that is like, how does it feel like, like, you know, and maybe also from the perspective, because now you are in operations as well. So like, in your opinion, what does that journey looks like, I guess, or what does a finance guy knows, which our operations guy does not know by starting the company or maybe vice versa, sure, sure.

Jonathan Brooks Guest

I think if I had my finance hat on, I was always focused on kind of capital allocation. And as I've evolved to become more of an operator through a lot of great experiences and opportunities that people have afforded me, I often say I was kind of cosplaying as a chief operating officer, all throughout my career, walking the shop floor and trying to help out where there were gaps. But I think that shift is really that awakening to how much money is hidden in process and not just equipment. And so that's really, I think, at the heart of what we try to do, because what you'll see with many operations is they run out of time even before they run out of space when they're trying to execute operationally.

Vikrant Host

So when you say like you are trying to transition from like finance to more focusing on operations now, so like, I guess, how was the scaling happening? And wow, like, you know, people even struggle here to get like a pallet delivered on time, you know, like, and it's not easy. It's not easy at all. So tell me a little bit more about that. Like, what was your strategy?

Jonathan Brooks Guest

So my career basically started at Arthur Anderson. And I was at Arthur Anderson through the collapse. So I like to say I was rearranging the deck chairs on the Titanic, as that was all happening and unfolding. And so that was a big shock to me, because if you had asked me 25, now 30 years ago, whatever that was, what I wanted to be when I grew up, it would have been a partner at Arthur Anderson. So I was all in. And so that was a bit of a step back. And oddly enough, as fortune would have it, I was working on my MBA at Notre Dame at the time, I was doing it on weekends and nights. And it really opened my eyes to the bigger picture beyond finance. And it started really driving that curiosity for organizational development and operational excellence.

And so I leaned into early in the WOW build into kind of that organizational development. And what I decided was we were going to build our group in such a way that the local markets would be run by what I literally call a local market CEO. That person, that guy or gal is going to run that market, say Louisville, Kentucky, Dallas, Texas, and 150 mile radius. And they're going to make every decision they need to make to hire, to fire, to buy and to sell in that market. Now, we'll define some parameters around the economic return and the things that we're trying to achieve. But fundamentally, don't come back and ask me; you have the power to do this.

And so to do that, what I really felt was necessary was we had to have some sort of simple anchor concepts so when I tell people that they're like, oh, yeah, that sounds great. And, you know, yeah, if you turn your teenage kid loose with a credit card, God only knows what's going to happen. So what we leaned into was the concepts in the book Extreme Ownership. So we felt like the tenets in that book, as I have met Jocko and Leif early, early in their careers before they were the celebrities they are now, and they resonated with me. They're so simple. And so those were the calls, the markers that we set as we built our team and said, these are the tenets we're going to follow. And we're going to believe in the buck stops with you. It is about extreme ownership. And now go do this.

Vikrant Host

I mean, all I can say is like, you know, I literally have no words for a couple reasons. One, that is amazing. And two, I follow a very similar process in my business. So I mean, that means like, you know, I'm on the right track, seeing your success and growth. And I have personally, I don't know about if you have met other CEOs or people who have strategized, I've never seen anyone say this thing. And this, honestly, like to me, at least it fully explains the path of growth. And because I guess like the biggest problem here is like, like you said, like, the corporate structure, etc. And I always hated it. So right after college, I had opportunity to get my dream job, like, you know, like you wanted to be a partner. In Arthur Anderson, I wanted to be one in Deloitte or KPMG. And I just didn't do it. I could not even like take my full job there.

You're talking about like, you know, because obviously in this whole journey, because warehouses, including 3PLs, are your primary customers as well, and also your partners. So I'm sure you talk to a lot to them, and you're trying to solve a problem for them. So from your experience, like where in the whole process, we have seen like, you know, that whole breaking point, where do you see that they get stuck at a certain revenue point? And what does it look like operationally?

Jonathan Brooks Guest

Time and time again, we see that the break point is almost always at space and dealing with space, whether the docks are backing up, or, you know, trailers are stuck in the yard, drivers are waiting. The flow breaks because there's no place to stage product. And then ultimately, the costs show up when you're paying overtime or detention fees or demurrage. And so I see operators consistently misdiagnosing that as a labor or carrier problem. So they add a shift, maybe they add another 3PL, they add a TMS, but none of it solves the constraint. It's really not physical, it's procedural. And so, you know, the right question isn't really how do I move the product; it's where is the wait happening? What is that costing me per hour? And oftentimes operators can't answer that question.

Vikrant Host

It is so common, especially for 3PLs, that they need to expand, but they cannot take the risk either. So for instance, let's say I'm in a 100,000 square foot facility. Now I have this one client which is needing like 25,000, 30,000 square feet, let's say approximately, for pallet positions. Now, obviously, I cannot just magically add 20,000 square feet; I have to either add a warehouse, or get a bigger one. Now the question is, okay, even if I trust this deal, I cannot really get a 20,000 square foot warehouse, I'll get a 50,000, whatever the breakeven point is of the math. Tell me some more experiences around that, because you work with everyone, as you said, from renting one or two trailers, one-off, all the way to like Amazon and the big players, everyone, right? So if you see that small space need, what are some of the ways they have utilized WOW to be able to help them scale?

Jonathan Brooks Guest

Yeah, absolutely. No, it's a great question. And just hearing you talk about those scenarios and ways to solve it, sub-renting space or renting a new facility, I want the world to understand that, hey, I'm here to help you not have to deal with that. I'm the guy who doesn't need a five to seven year lease. I'm a guy bringing you square footage that's, in some markets, two to four times less expensive than that warehouse square footage. And so my mission in life is to make sure that all operators know that I'm your break-glass-if guy, I got the easy button for you. And so that's what we're about.

But to your specific question, I would tell you there's a couple of really great stories about how people have used us. So there's a global auto manufacturer, one that people would recognize, we literally study their manufacturing processes in graduate school, and some of us in operations, so well respected. For 30 years, they've used our trailers in their supply chain. And so that's a heck of a good housekeeping seal of approval, if those guys have trusted us for that long and haven't found a better mousetrap, it speaks volumes, I think, to what we offer.

The solution is: they require their parts suppliers to send everything in reusable packaging. That's happening day in and day out flowing through the supply chain. If there's a disruption of more than four hours anywhere in their supply chain, that reusable packaging starts backing up. At that moment, we insert our trailers into their supply chain, and it starts holding and stocking that reusable packaging until the lines in the supply chain can get back into balance and back into synchronization. So I think that's a real testament to a very specific use case.

In other instances, I've got another plastics manufacturer, and they make all the drinking cups for a restaurant that we all would stop at to get our kids a happy meal. And in that process, they know that over a year's time, they have to make X millions of cups. And so in the plastics game, it's really about throughput; you optimize your margins by optimizing your throughput, not by changing tooling over on production lines and so forth. So they'll try to optimize knowing what the year's requirement is, their input of raw materials, by buying resin at the right price, and then they will produce that entire year's worth of cups unprinted. They load them, palletized and shrink-wrapped, onto our trailers and park them 300 yards from their facility.

Vikrant Host

Really appreciate what you said there, most of the time when people are looking, they're focusing on equipment, etc., and space, but what about the process, and fitting into that process? Sometimes more often than not, solutions have to be a little bit out of the box. Because if we are trying to do the same thing we did two years back, yeah, it can work, but it cannot do crazy wonders for you to help you grow like 5x or 10x over the years. So I really appreciate you sharing that.

So what are your thoughts around that, going a little bit deeper on it, like how we touched on different aspects, space, flow, process, cost, what do you think, like, when a business in general is getting stuck with all these things together, what is your observation there? Where do they, how do they get out of it, I guess, to solve the structure, maybe more, I guess, psychologically, if you may, not as much execution-wise, but how do they get out of that mindset?

Jonathan Brooks Guest

Most operators have three departments solving the same problem in three different ways, and nobody kind of owns the gaps in between. And the gaps are where the pressure kind of compounds. So if I walk into a typical 3PL or shipper, you got the warehouse manager who owns the space, the transportation manager generally owns, call it the flow, and then the finance team owns the cost. So three people, they've got three different scorecards and three different sets of incentives. And so the warehouse manager kind of solves his number by adding racks and other infrastructure. The transportation manager solves his number by adding carriers. And then the finance team solves their numbers by trying to squeeze both of them.

So nobody's paid to solve the gap. Nobody walks the yard at four o'clock on Friday and asks, what's this costing us all together? And that's the question I think that gets missed. And to your point, it's when space pressure, flow pressure, cost pressure compound, and then you get to the fourth pressure, which I think is resiliency pressure. That's the day a customer changes a delivery window, or the port shuts down, or we get some tweet from DC that throws us into some sort of chaos, and then the entire system snaps.

Vikrant Host

I totally agree 100%. So tell me a little bit now, switching gears here again, about your company growth journey, in terms of like 4,000 to 36,000 trailers. What were some of the breaking points for you, regardless of how good we do it?

Jonathan Brooks Guest

No, I've made mistakes along the way; I used to have hair when I started this. So absolutely. No, that's a great question. And I would tell you, we've had a very fortunate and blessed run, so not too many mistakes, and none have been catastrophic. So knock on wood, we're good there.

The thing I think that we've learned along the way is we probably have to be quicker to fire, quite honestly. We're very thoughtful in our hiring processes, but we oftentimes struggle with taking too many chances to help someone get along and get up to speed with how we do things. Our business is extremely simple, tactically speaking, and there are just some core tenets; you can see the KPIs, is it working or is it not working. And so that's probably been one of the things as we've scaled; we've had to figure out better ways to identify the issues, give that one shot to make it right, but then otherwise we need to move on because of the trajectory and the speed of our growth.

As I mentioned, we've grown through 25 add-on acquisitions. And there are oftentimes those businesses you described a few minutes ago, it's the 65-year-old founder whose children don't want the business or have other interests in life. And so they don't have an exit strategy. And that's really where we've come in and become the acquirer of choice.

Vikrant Host

Tell me a little bit around that, and this could apply to your business, or, I mean, at the end of the day operations is everywhere, so this could apply to any business, or more as a person, what you see. Earlier we talked about how there's a resilient situation, right, like there's a tweet which drives everyone crazy, or something like COVID, right?

Jonathan Brooks Guest

Mm hmm

Vikrant Host

You said that we cannot take that handbook; it's fiction. I love that statement, by the way, which is absolutely true. And in most cases, even on an average day, most of that is fiction, in my opinion. But so, like, a person, how does that person look like, you know, who is, I guess, able to problem solve in that scenario, think of it, could be a warehouse manager or operations manager, it doesn't matter, how does that person look like? I don't care about designation. How does that person look like who's ready to do that? What are the core values that go into that person?

Jonathan Brooks Guest

Yeah, it really kind of gets back to what we talked a little bit about, scale looking good on paper, and flex looking good on a bad day. When I think about it, those that have built to scale mean they can do more of what they already do. And I guess if they're built to flex, they can do something different than what we planned for. And I think a lot of operators kind of confuse those two things.

Because documented resiliency in a binder, okay, it has playbooks, a contact list or chart for the day the hurricane hits, or whatever the plan is. But operational resilience is like muscle memory. It's whether the dock supervisor at four o'clock on Friday actually knows what to do without reaching for the binder, that muscle memory, I'll call it. And you can tell the difference by what happens on a bad day. So for me, I've seen documented operations run to the binder, whereas resilient operations just really run the play. They react. It's like that athlete that practices and practices and practices for that one moment in time that's going to really make or break the situation.

So resilient operations in our world kind of have slack on purpose, whether it's slack in space, time, or cash. I mean, some people hearing this probably think, well, slack looks like waste on a P&L. And I would say, well, it's really not waste; it's insurance for the day you need it.

Vikrant Host

Yeah, I mean, I think that's a very simple way to put a complex scenario. I love it. But definitely, absolutely true. And I was actually trying to ask more around an individual, right? Like, let's say I'm hiring someone. I'm trying to understand, because you have very amazing core values; I'm trying to learn a little bit here. If I'm hiring someone, how do I hire that person? What do you look for in that person when you hire them? Maybe very specific

Jonathan Brooks Guest

Yeah, so I would tell you that I ask two fundamental questions in every interview. The first is: describe to me a situation in the last 90 days where you went home from work and you thought to yourself, this is why I do this; this was a good day. And be specific. I want to know the situation, I want to know your role; don't sugarcoat it. It's such an off-the-wall kind of question, most people don't have a canned answer.

And then I flip the lens and I say, okay, now tell me about a bad day in the last 90 days, when you went home and you said, I do not want to deal with this, this is not what I signed up for. And what I find in those situations is, if the good day is "all hell broke loose, and we fought the fight, we won the battle, and this was cool, and I was into it", that's great. If the bad day is "all hell broke loose, and I wanted to go hide in my office", you start to understand those people that embrace the storm, kind of the buffalo mentality. You go towards the storm instead of the cow, which walks away from the storm and has to endure the pain longer. And so for me, I want that buffalo mentality; I want that person that's going to run into the storm and embrace the chaos.

Vikrant Host

I totally agree with you. Obviously, especially the last six, seven years have been pretty crazy. And I was just thinking that you even did the restructuring in 2021, right? So I started LeanFi in 2020; it was actually literally two months before COVID. And at that time I was re-strategizing my first company, totally pivoting it, because I was starting the second one. So I was going to focus more on that.

Jonathan Brooks Guest

Way more valuable than any MBA you could have earned right there.

Vikrant Host

Believe it or not, a lot of people don't know this, and I don't mind sharing this, because I do feel that there are people who are in this growth phase, especially, again, emphasizing that whole SME space, they feel like they are doing something wrong, but it is not. There are so many moments, because the ground realities, everyone looks at success, and there are 10,000 quotes about it, but there is no one out there telling you, "oh, there was this moment where I almost went bankrupt." There have been nights where I literally cried as a man, and I'm not shy to even admit that, because it's a reality of it, right? When you are trying to build something which is unconventional, it is not easy. There are so many challenges, and for me, I went a very different route, I was pretty much confident that I'm not going to involve any investors, for some reasons. So that adds on a very big burden as well, because I'm definitely the last one to be paid, for sure.

Jonathan Brooks Guest

Yes, sir.

Vikrant Host

And then all the people, pretty much the entire family is dependent on me, which I think, even CEOs who have investors, the good ones think like that too. But at the end of the day, my point is that it's too much pressure. But going through it, when I look back four years, it was all worth it. So just being persistent, and yeah, you sharing that reminded me a little bit about the bad times which I had.

Jonathan Brooks Guest

Yeah. And please understand, we've felt this freight recession, and what I think is truly an industrial recession in this country, in the last 18, 24 months. Our services generally don't intersect with data centers, or chip building, or big pharma, it's just not what we do. And because of that, we've been weathering the storm with our friends in automotive, with our friends in the plastics space, with our friends in certain aspects of retail. And so, yeah, it's still been a challenge. There were the COVID highs, and then there were what I would call this freight-industrial-recession lows. And I believe we found the bottom of it and we're coming out of it. Now, our latest conflict in the Middle East, I think, has only complicated our lives, especially for those of us in and around transportation.

So, again, it is what it is. There's still first-world problems at the end of the day, because so many other people are suffering and have so many other challenges. I have this little saying, it's written, you can't see it, but I have windows here in my office, and at the very bottom, where no one else can see it, is some letters: N-C-W-H. And so when I'm sitting in here and I'm feeling all glum, and I'm thinking, "woe is me, why can't I get people to do what I want them to do, why aren't customers renting more trailers", I turn and I look out the window to enjoy the landscape of this office. And I look down at that corner, and it reminds me: nobody cares, work harder.