Dave Clark Makes an Exit: Dumpster Fire at Flexport

Dave Clark looks to have gotten ahead of the news cycle and just announced his departure from Flexport after one year of vesting.

Key points:

* Dave Clark and Flexport were never a fit. A virtual logistics business meets a logistics infrastructure builder.

* Flexport was always overrated and overvalued. Dave Clark found himself a much bigger mess than he anticipated and pulled the parachute.

* Flexport’s “new” new direction, freight, is a commodity and in no way is a future Flexport going to justify anything near its valuation.

* The announcement hints that Flexport will eliminate its fulfillment business (Deliverr) in favor of its freight business. This is a business it just acquired a few months ago from Shopify. This leaves Shopify without a fulfillment partner.

Here are a few facts from Dave Clark's post on Twitter/X:

1 - Dave said he joined in March 2023 as CEO of Flexport.

2 - Says he “started transforming” in a “challenging market”.

3 - They are launching a SMB product for entrepreneurs tomorrow.

4 - Founder Ryan Petersen wants to grow the core freight business.

Here are a few initial thoughts from my side:

1 - Freight rates have been dropping precipitously.

2 - Flexport valuation has come down to earth, and its prospects look dim.

3 - Flexport laid off many people in the last year.

4 - Independently, Flexport hired many (ahem, expensive) former Amazon talent.

5 - This former Amazon talent didn’t know much about freight.

6 - Flexport's Founder and CEO wants to return from VC-land and take another swing at the business.

7 - Dave Clark must have been thinking about this for over the past few months. Dave Clark joined September 1, 2022 as CEO, and resigned September 6, 2023. Coincidence?

8 - Does this mean that Flexport will sell its Fulfillment business?

9 - Does this mean Shopify lacks a partner for its Shop Promise and Fulfillment business? I wonder if Buy With Prime wants to be the preferred partner here ;-)

Wow, I can’t say I didn’t warn them, right? Not 4 months ago I wrote an article tearing down the Flexport acquisition of Deliverr from Shopify, and made 3 key points:

1 - Harish Abbott is a genius. This still hasn’t changed. He's the only one who made any money in this whole thing. Does Harish want to be the CEO?

2 - Shopify was right to get rid of Deliverr quickly.

3 - Flexport was in big trouble with its valuation, and Dave Clark made a huge mistake by joining.

What's next is anyone's guess, but here is a quick stab at it:

* Shopify uses it's 18% share of Flexport to negotiate the sale of Deliverr... again.

* Harish Abbott completes the rarely seen triple-lindi. Only seen by the likes of Frank Poore in eCommerce history.

* Flexport pivots back to freight and discovers... freight is a commodity, and demand is not growing as retailers continue to sell off existing inventory and be cautious about reordering.

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
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