Lily Shen’s first week as the new chief executive officer at Transfix started off as fast-paced as any in the company’s history.
Shen had to manage an immediate transition of the company’s operations and engineering team from the office to working from home, while at the same time taking the pulse of customers and carriers and meeting their needs. According to accounts coming in to FreightWaves, the transition was seamless. This was likely, in no small part, to Shen’s operational talent, honed over the course of a career at Goldman Sachs, eBay, Wealthfront, Canvas Ventures, and IDEO, as well as two years at Transfix.
Today Transfix, the digital freight brokerage based in New York City, announced that its co-founder and chief executive officer, Drew McElroy, would step aside to become chairman, and that chief operating officer and president Lily Shen would be the new CEO.
McElroy, who grew up in a family-owned freight brokerage, founded Transfix in 2013 with Jonathan Salama, a computer engineer who became the startup’s chief technology officer. The company was built on the premise that advanced technology, including machine learning and automated freight matching, could drive rates lower for shippers and asset utilization higher for carriers, accruing value to all marketplace participants.
Transfix said that its revenues doubled in 2019 compared to the previous year. Since Shen joined the company in 2017, revenues have grown by three times, the number of enterprise shipper customers by five times, and headcount has nearly doubled.
McElroy said that he decided to step aside from operational decision-making to keep working on the vision and cheerleading after realizing that he was not the best person at Transfix to manage the complexity of growth at scale.
“The transition itself, to be perfectly honest, was one of the easiest decisions I’ve made,” McElroy said. “There was a little bit of personal turmoil, but it’s been a straight-forward transition. I take between Christmas and New Year’s annually to do big-picture planning and a retrospective on the year that just ended – what worked, what didn’t, how are we getting there – the big philosophical questions we don’t have time for.”
“For a while now it’s been in the back of my mind that I’m not the right tip of the spear if we’re going to go as fast as we possibly can,” McElroy said. “With the complexity of the business, to maximize efficiency and velocity is the role of a true operating badass, and that’s absolutely what Lily is.”
Shen and McElroy emphasized that the succession decision was driven by the reflection and long-term planning of the management team and was presented to Transfix’s board and investors, who accepted it.
Shen said that she’s known McElroy and Salama for five years and always believed in their vision for Transfix; she cited eBay’s Pierre Omidyar and LinkedIn’s Reid Hoffman as examples of founder-CEOs who passed the torch in order to unlock the next wave of growth.
“I’m really looking forward to continuing working with Drew on long-term strategy,” Shen said. “His vision for the company and what’s needed in the industry, his leadership, and his deep understanding has brought the company to where it’s at today and made it as successful as it is.”
McElroy said that at Transfix every employee has a superpower, and the goal is to put employees in a job where they can use their superpower most of the day.
“I think Lily can do it better,” McElroy said. “I’m not going anywhere, but I genuinely believe it will allow us to go faster. I care about our team and our team’s family – there are a lot of people invested in this in more ways than just cash.”
“My number one goal is to execute on Drew’s vision,” Shen said, “which is to build the best platform for our shippers and carriers, increase our level of development in rolling out products to help shippers and carriers to manage and run their own businesses, especially new offerings and analytics.”
Future of Supply Chain
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Transfix is bleeding money. THe board needs profits fast or it’s dunzo for them. Time is up. The VC money hose is now official turned to the off position. Brace for crash landing…………………………………
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