“The Hardest Coordination Problem on Earth”
Flexport CEO Ryan Petersen on the founder’s role, operating with velocity, and learning from Brian Chesky.
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Friends,
It is difficult to separate an entrepreneur from the era in which they operated. How much of a founder’s success depends on the circumstances they inherited?
Would Mark Zuckerberg have run a banking house in the early Renaissance? Would Jensen Huang have been a textile magnate in the 1800s? Might a soot-browed Elon Musk have stomped across the Permian Basin in search of oil?
It is not an easy question to answer. And yet, when it comes to Ryan Petersen, it feels obvious. Quantum Leap Flexport’s CEO into any epoch, and you suspect he would find his way to build a logistics business – whether that meant digging a Great Lakes canal network or laying tracks toward the Pacific.
Is this just because Ryan looks a bit like a railroad baron – all cut and thrust and mustache bristles? It doesn’t hurt. More important, though, is the sense that he is a quintessential, natural entrepreneur, who seems to have an inexplicable love of logistics deep in his blood. Even before founding Flexport in 2013, Ryan had already spent years in the industry.
While you suspect he would have thrived in most eras, Ryan is building at the perfect moment. Global logistics is a $4 trillion industry that touches every product in your home, run largely by companies founded in the 1800s. That dynamic means Flexport has been blessed with colossal opportunities and significant obstacles. It is hard enough to build a successful startup, but doing so in the physical world – spanning continents, currencies, regulatory regimes, and time zones – is especially grueling.
Those challenges are part of the reason I’m especially excited to have this correspondence with Ryan, as part of our “Letters to a Young Founder” series. It allows us to explore what it takes to build one of the most operationally complex businesses on the planet.
As you’ll see, Ryan is an unusually thoughtful articulator of the founder’s journey, making this conversation especially valuable. In today’s exchange, we discuss how Ryan generates organizational velocity, quashes internal politics, and a founder’s unique responsibilities.
This correspondence is available only to subscribers of our premium newsletter, Generalist+. For $22 per month or $220 per year, you’ll get full access to my conversation with Ryan and unlock our library of case studies, tactical guides, and interviews. Get an MBA’s worth of insight for the price of a business lunch.
Lessons from Ryan
Build for velocity, not speed. You might wonder: What’s the difference? As Ryan points out, velocity has a vector. It includes a sense of direction. For a team to be productive, it’s not enough for each member to move quickly – they must pull in the same direction.
The physics of scaling. As you’ll find out, Ryan is fond of scientific metaphors. Another thought-provoking one involves the formula for kinetic energy. The Flexport CEO points out that velocity matters more than mass when creating kinetic energy. This is how small startups outcompete hefty incumbents.
Create clear decision rights. For every decision, it should be obvious who has authority. When conflicts arise, Flexport escalates them to where the disagreeing parties meet on the org chart. It’s a simple framework that removes politics and makes disagreements transparent rather than secretive.
Don’t reinvent everything. Just because an industry is stale doesn’t mean every practice is broken. For too long, Ryan ignored best practices from freight forwarding, slowing Flexport’s development. The better decision would have been to focus on which parts of the process truly needed reinvention rather than rethinking everything from scratch.
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Mario’s letter
Subject: Organizing entropy
From: Mario Gabriele
To: Ryan Petersen
Date: Monday June 30 2025 at 8:14 AM BST
Hi Ryan,
I’ve been looking forward to this correspondence. Tech can often feel like an overly imitative industry, with a dozen companies chasing each obvious opportunity. But while others scrap for a share of the latest AI fad, at Flexport, you’ve been steadily building in a manual, complex, unsexy industry for over a decade. A dozen trends have come and gone and you and your team have remained focused on streamlining the transit of goods from Shanghai to Busan to Rotterdam to Los Angeles and beyond.
In that respect, you are one of tech’s quintessential “hedgehogs”– someone who has dedicated their life to a single powerful idea, rather than dancing across dozens. You’ve succeeded in building a truly unique company: a global logistics platform, with tech at its heart. Instead of competing with other well-funded startups, Flexport battles for share against freight forwarders that started operating in the 1800s.
It has evidently not always been easy. Flexport has had to endure the chaos and congestion of COVID, the route disruptions of Russia’s invasion of Ukraine, and the recent tariff turmoil. There have been startling surges, such as the $1 billion mega-round led by Softbank and $8 billion valuation secured in 2019. And there have been inevitable plunges. From the outside, at least, the most dramatic of those appeared to be the appointment of Dave Clark as CEO in 2022, only for you to take back the top spot less than a year later.
While parts of these stories have been told elsewhere, I’m keen to explore what these moments felt like from your vantage over the coming correspondences. What did you think at the time of these inflection points? How did each force the business to change? What lessons did you glean from these chapters?
To kick things off, though, I’d love to focus on a few fundamentals that I think will be of great tactical use to current founders. In particular, I wanted to focus our first letter on how you’ve architected Flexport for success in such an insanely complex industry. How have you structured your teams? What do you do to maintain speed? How have you had to change the composition of the business as you’ve scaled?
A big part of my motivation in beginning here is rooted in the industry that you operate in. Global logistics is, I would hazard, at least a couple of orders of magnitude more convoluted than SaaS. You cannot simply ship code; you must ship products from one corner of the world to another. A pure software company might be able to get away with a little background disorganization, but Flexport surely requires a different degree of precision, control, and structure.
I’m also asking these questions because I’m certain I will get an interesting answer. As I’ve told you, I remember attending your talk at a Columbia Business School incubator in 2016. Though I was studying international development then, I was trying to build a payments business on the side and managed to wrangle a spot in the program. You were only two years into Flexport at that point. Still, I remember you talking in compelling detail about how you’d built multi-functional SWAT teams to counteract the inherent complexity of the sector. Have you still kept that cross-disciplinary approach? Does it make sense at an organization of Flexport’s size?
The last reason I’d like to begin here is that, like all scaling CEOs, you seem to be constantly tweaking things. Earlier this year, Flexport launched a slew of new features as part of a shift to a semi-annual release schedule. Reportedly, you decided to make this change after talking with Airbnb’s Brian Chesky and being inspired by his now-famous “Founder Mode” speech, which you attended in person. Given how much that speech galvanized Silicon Valley, I’d love to hear any other wisdom you derived.
Best,
Mario
Ryan’s response
Subject: Organizing entropy
From: Ryan Petersen
To: Mario Gabriele
Date: Monday July 14 2025 at 6:20 PM PST
Hi Mario,
We’ve picked a good place to start.
Building a company in global logistics is the hardest organizational design problem in the world. No other industry comes close, because a single transaction has to flow across multiple countries, in multiple modes. You must have your tech, operations, sales, and account management teams involved the whole way through. You have to serve your customer at a very strategic level (addressing their supply-chain goals) and a very tactical one (getting a container on time, in full, from A to B). No organizational structure can put all that under one person’s remit – except the CEO’s.
It’s hard for outsiders to understand just how complex it is. Compare it to a company like Coca-Cola, for example. Coca-Cola is a very global company, but fundamentally, Coca-Cola’s team in India does not have to coordinate at all with its team in Mississippi. In our business, though, if we’re shipping from India to Mississippi, both teams need to do some work to ensure everything flows smoothly. They need to talk to each other.
How do we do that? It’s about generating velocity, designing the right decision-making structure, and ensuring everyone has the right incentives.
Velocity
The first thing to say is this: I have not built Flexport for speed. I’ve built it for velocity. That’s an important distinction. In physics, velocity has a vector. Speed only makes sense if you’re pointed in the right direction. To generate velocity, you need to make sure that you have people who are super-aligned both in the short and long term. Are they aligned with our mission and vision? Do they understand what we’re trying to achieve? Do they embody our values and show that through their behavior? Are they focused on the most important things right now?
Without that, people can move fast, but in opposite directions. That’s what matter looks like – atoms moving all around, while the whole appears to stay still. You need everybody moving in the same direction, and that’s where having a plan is useful. Things like the semi-annual release schedule you mentioned can help. Other roadmapping exercises are part of this, too. In general, you’re doing this planning to ensure different teams are aligned over the next 18 months.
There’s another aspect of velocity I try to keep in mind. The formula for kinetic energy is one-half of the mass (m) times velocity squared (v²). (K.E = (1/2)mv²).
The velocity is a square function. That’s what allows small startups to outcompete incumbents. When you’re trying to generate energy, to create this big kinetic release, your velocity matters much more than your mass. As we’ve grown, I’ve also started to think about the other side of that equation. When you become bigger, your mass increases, which means that you need a lot more energy just to maintain velocity. Mass is slowing you down at some level, so you have to keep putting more in.
As a founder, that means leading from the front, outworking everybody, and being involved in everything. You must constantly search the business for pieces that aren’t working anymore. You must look for bad incentives, people who don’t have skin in the game, or lack focus. Where is the sense of purpose no longer alive in the organization? Founders have to run around and do all these things because no one will care as much as you.