I’m the co-founder and CEO of Cargofy.com, the company that created AI-driven technology to automate the manual work in logistics. I was born in the small provincial town of Kalynivka Druha in central Ukraine (population of 253 people) to an ordinary family. Last year, I moved to the U.S. and created a business with over $2.5 million in revenue, Cargofy.com.
Cargofy.com has helped 5,000 truck drivers to be employed more often and more profitably, helping them to ensure good lives for their families. Cargofy.com also helps to reduce shipping costs, helping businesses and individuals ship goods by truck.
How did the concept for Cargofy come about?
When I was nineteen, I started my first trucking company Wozward in Ukraine. This allowed me to understand that individual truck drivers are always facing problems such as inconveniences working with truck dispatchers, high dispatcher fees, and too much downtime. To solve these issues and more, I decided to create an AI-powered assistant for owner-operators which can find loads without human involvement and substantially lower commission rates.
To build such a product, I needed the best team possible. I offered Alex Kovalchuk the opportunity to join our team, as he was one of the top developers working at the Space Research Institute in Kyiv. I then talked to Dimitris Alexiou, who I knew was working at Maersk in Copenhagen and had a similar idea and actually came up with the name Cargofy.
We decided to join forces and start Cargofy. Later, we came to the realization that these problems exist not only in Ukraine but also across the entire world. We started scaling our product to India and then the U.S.
How was the first year in business?
90% of businesses die within the first year, so our decisions while the company was in the “Valley of Death” were crucial.
Due to our previous industry experience, we were lucky to get around most of the common mistakes of novice entrepreneurs and grow quickly.
But despite of this fact, we had many questions:
1) How to hire the right people?
2) How to find product/market fit?
3) How to coordinate remote teams on all target markets?
4) How to raise funds?
5) How to scale quickly?
What was your marketing strategy?
In the market Cargofy is in, it is important to provide the first liquidity, as there is a “Chicken or the Egg” type of problem. We set a goal to recruit carriers, and deal with shippers on our own. We use AARRR (Acquisition, Activation, Retention, Referral, and Revenue).
We paid a small amount of money for Google Ads and watched the conversion rate for every group of keywords. If the conversion was good, we invested in SEO optimization. This allowed us to lower CAC (Customer Acquisition Cost) in the long-term and not spend a lot of money on excessive optimization of keywords that are not bringing us customers.
Next, we clustered the keywords and created similar landing pages for them that adapted for specific places or types of trucks such as “box truck delivery in San Francisco,” “semi truck delivery in Miami,” and “construction goods delivery in Chicago.” Every page had an average of approximately 10 visitors per month, but because we had generated 20,000 of them, we had around 200,000 visitors from organic searches, monthly.
We heavily worked on community building and organized a yearly festival for truck drivers where we reward the best drivers with our “Driver of the Year” award. These efforts have allowed us to build a community of over 10,000 drivers on Facebook. We launched an imperfect product but spoke with every person who left negative reviews on Google Play or the App Store to improve it. We also focused on NPS (Net Promoter Score) to measure loyalty because we do not cover the customer acquisition cost from the first order. It is important that clients are satisfied and order constantly.
How fast did the company grow during the first few years?
Quickly! We grew 613% in 2017 from $0 to $2.7 million in revenue in the U.S. and ranked in as the #2 fastest-growing company in Iowa based on the Inc. 5000.
How do you define success?
If you want to have a successful life, you should be tied to a goal that can bring strong people, generate enough money, and that pays attention to having a strong, healthy, and a lovely family. Success is when you have the freedom to do the things you want, anytime you want.
What is the key to success?
Consistency. If you are doing something, do a few steps every day. If you work only when you have motivation, the people who work because they are self-disciplined will overtake you.
Self-discipline in all aspects of life like business, family, and sports gives you energy which can turn into results.
What is the greatest lesson you’ve ever learned?
1) Often, meetings are the enemy of business
2) Write all agreements on paper
3) In any unclear situation, say “NO”
4) Do not consider the opponent more ignorant than yourself and do not humiliate others
5) Filter bad news
6) Keep a break
7) Do good deeds
8) Nothing happens quickly
9) Do not become a slave of your business
10) Fire bad employees quickly
11) Don’t hide behind employees
12) Always speak with customers
13) Never stop improving business
14) Money demands respect
15) There is no shame in admitting a mistake
16) Your co-founders are sacred. Don’t let anyone speak bad about them
17) Do not partner with strangers
What are some quotes that you live by?
“The result is a reflection of our actions.”
“Eat ‘failures’ for breakfast to gain more experience.”
“You’re the average of the five people you spend the most time with.”
What are some of your favorite books?
Hard to say. I read a new book every two weeks, but here’s what first comes to mind:
The Financier by Theodore Dreiser
Atlas Shrugged by Ayn Rand
The Lean Startup by Eric Ries
Good to Great by Jim Collins
Sapiens: A Brief History of Humankind by Yuval Noah Harari
Tell me about one of the toughest days you’ve had as an entrepreneur.
In 2015, during the crisis in Ukraine, the national currency devalued more than two times against the U.S. dollar. Most of our customers paid for transportation with a delay of 90-120 days. When we received payments, the money was quite different and was not enough to cover the cost of transportation we carried out.
We burned all our reserves and hit a big cash gap. The bank had cut the overdraft in our account to $0. One day, I had no money to pay office rent or salaries, and I felt that this would be the end of our business. I had to make unpopular decisions and get rid of the least profitable assets to stay afloat. This was an entrepreneur’s baptism of fire!
When faced with adversity, what pushes you to keep moving forward?
1) Adversity takes your energy if you pay a lot of attention to it. Pay attention only to solutions that will allow you to solve the issues.
2) The normal state of an entrepreneur is to solve constant adversities.
3) Entrepreneurs don’t show their failures on Instagram, but everyone has them.
4) When faced with adversity, sometimes I do not want to do anything. I have no energy and don’t know what to do. I cancel meetings, stop going to the gym, travel to some remote location in the mountains with no people, and drink alcohol. This is a shame, but it’s what actually happens. I can be in this condition for 3-5 days, but then I come back full of motivation and new ideas on how to beat my adversities.
5) I realize that I don’t have to do anything and, above all, stop pinning myself for doing nothing.
6) Sometimes, the only option is to relax, trust the wisdom of life, and take the next step as you understand it, because what else can you do?
What advice would you give to young entrepreneurs?
1) Do not blindly believe in the educational system, because most knowledge (except fundamental) has become outdated on the first day of your studies.
2) Being shy is a waste of time. Tremendous amount of opportunities and acquaintances come from accidental connections. Hide the iPhone and go chat with people.
3) Over time, people become more conservative. If you want to do risky things, do them while you’re young.
4) Get enough sleep at night. Lack of sleep greatly affects the quality of decision-making.
5) Transfer all important information from the brain into the to-do list and notes. Human memory is not enough to remember everything. Today’s goal is tomorrow’s reality.
6) Have a big dream that goes beyond life. Any long-term dreams should not be limited to the limits of human life, because you do not die when your life ends, but when the memory of you dies.
7) Learn foreign languages. Knowledge of language also gives an understanding of culture and an understanding of diverse points of view and values.
8) Life is a competitive thing and the inability to compete reduces your chances of changing your position or social status.
9) Life is not about money, but money is an indicator and tool to achieve your goals.
10) In games, you kill mobs to receive experience for your character. In entrepreneurship, you make mistakes to gain experience for your business.