Episode 36: Making Steel Sexy

In this episode of Marketing Moves, host Madison Riddell sits down with Dallas Hogensen, the dynamic 40 under 40 startup founder and CEO of Felux, a B2B marketplace for the steel industry. Dallas shares his journey from tech-enabled organizations like Lyft to revolutionizing the steel industry with Felux. He discusses the challenges and strategies of making steel "sexy," the importance of human-first marketing, and his mission to transform the Midwest startup ecosystem.

00:38
Madison Riddell
Welcome to another episode of Marketing Moves. I'm your host, Madison Riddelll, and today I'm joined by dynamic 40 under 40 startup founder Dallas Hogensen. During this episode, we're going to talk about sales, marketing and technology evolving, happening right now in legacy sectors, namely the steel industry. Dallas's self proclaimed mission, at least according to his LinkedIn, is to make steel sexy. Dallas is co founder and CEO of Felux a B2B marketplace and platform for the steel industry that allows organizations to source, procure, ship, finance and analyze every steel transaction all in one location. In addition to his pioneering work at Felux, Dallas is a founding member, chairman and chapter head of Pavilion, a premier community for B2B go to market leaders in their Denver and Phoenix divisions.

01:32
Madison Riddell
Pre Felux, Dallas served as vp of sales at a variety of tech enabled organizations, including Lyft, Impraise, Liveli and iCracked. He also successfully exited from Signal HQ, acquired by Bambora in 2020 as their former co founder and president. With a repertoire like this, I'm sure you're all dying to meet him. Dallas, welcome to marketing moves.

01:56
Dallas Hogensen
Wow, what an intro. Thank you for having me.

01:58
Madison Riddell
Yeah, thanks for being here. Dallas and I have only met once or twice, which for most of our guests, I get to hang out with them a little bit beforehand before we record. So I'm looking forward to uncovering more about you. I know a little bit about your story, but I think our listeners are going to like what they hear, specifically our Cleveland listeners. We're kind of in this manufacturing and steel hub or echo center here in Cleveland, and I want to hear all about why you're here.

02:21
Dallas Hogensen
Yeah, where to start again. Thanks for having me. I look forward to spending some time together. It's been fun to watch your journey, get to know what you guys are doing as a company, too. So always excited about people who have ambition and hustle that are in the Cleveland ecosystem. And this journey, I think has been developing for me over probably the past decade. It started way back in San Francisco when I really started to develop a thesis on B2B marketplaces. And so I've spent my entire career really thinking about that ecosystem. And what's been fun for me now is like, you've seen this evolution and the progression of technology making a lot of things within B2B, purchasing more of a reality to what consumer purchasing is like.

03:04
Dallas Hogensen
And so a few years ago, I was like you said, I just exited Signal HQ not to have any knock on marketing, but I didn't want to go work for a Martech company. I played like 30 days of golf in a row. And I was like, I need something to go do. And I was actually building a search fund, which essentially was like a micro private equity fund. And I had this thesis at the time as, where is private equity rich? Where is venture capital poor? And what supply chains are offline? And so that was really like the start of my search. And like, the initial thought was I was going to go buy a manufacturer, use marketing and sales and automation to grow its current customer base.

03:40
Dallas Hogensen
And at this time, you know, there's millions of businesses where you have owners that are 55, 65, that are trying to sunset or looking for some type of liquidity in the business and have had these successful businesses for 20 or 30 years. So I was getting really excited about just like these unsexy spaces. I mean, I was actually having a conversation the other day with a venture capitalist telling him a story. And I was calling dirt Farms, I was calling trailer park manufacturers.

04:07
Madison Riddell
Why do you think that was an interest to you in particular?

04:10
Dallas Hogensen
Well, I thought it was like, where is nobody looking?

04:14
Madison Riddell
Yeah.

04:14
Dallas Hogensen
And how do we leverage technology? And what I've learned from scaling businesses between a million to 30 million to 100 million to a billion? And, like, how do we apply those principles to these outdated, unsexy worlds that are the foundation and bedrock of almost everything we do as a consumer? And I'll never forget it. I talked to this guy. He was probably in his mid thirties, and he was making $5 million a year off a spreadsheet. And all he was doing was selling trailer skirts to trailer parks.

04:45
Madison Riddell
Wow.

04:46
Dallas Hogensen
And I was like, oh, can I swear on this one? Like, oh, shit. Oh, shit. I was like, all right, I'm in the right space.

04:53
Madison Riddell
Yeah.

04:53
Dallas Hogensen
And what ended up happening is I got a call from an old executive recruiter I used to work with at Lyft.

05:01
Madison Riddell
Okay, yes, Lyft.

05:02
Dallas Hogensen
And he said, hey, I want you to talk to these two guys who are doing something really interesting. They're trying to build a marketplace for steel. And at first I was like, listen, I know nothing. I don't know how I can be valuable here. And he's like, I think you should take the call. So I remember I was sitting there with my wife on the couch, and it was like, right when Covid started.

05:21
Madison Riddell
And this time you're in Denver, right?

05:22
Dallas Hogensen
In Denver, yep. So we're kind of locked down, and we're sitting there and probably watching, like, the last dance or something like that. When it just came out and I didn't really do any research, I was like, okay, I'll talk to him, whatever. And I thought I was going to talk to, like, a 70 year old guy who had, like, a 20 year old kid that's like, hey, we need to build a marketplace thing. And, you know, to my surprise, I ended up connecting with Todd Lebo and Chris day. Todd Lebo, today, currently is the CEO of Majestic Steel, one of the predominant steel companies within North America. And he took that over as a family business and grown into something very successful. And he looked at me, he said, hey, listen, the future is online. The industry knows it.

06:01
Dallas Hogensen
We just don't know how to get there. Whoever can build the racetrack is going to have a massive opportunity to help provide this transition from analog, opaque market to something that's digital and efficient. And he's like, I have a 20-30 year thesis on this. And I was kind of like, oh, shit, this is really interesting. And so I started making phone calls. I started talking to a bunch of people, and everybody I talked to, I was like, oh, my gosh, really? That's how things work. And from my previous ten years experience, I was like, okay, it's very easy. We can fix these things right away. And so during that time, I was like, well, my thesis is a little different, is I want to build the largest data graph because whoever can get the apples to oranges problem on the taxonomy.

06:45
Dallas Hogensen
So inventory is called things differently all over the world, city to city, state to state, company to company, sometimes within the same company.

06:52
Madison Riddell
And you're learning this, right, because you weren't familiar with the steal industry?

06:55
Dallas Hogensen
Oh, man, I wish I knew. I mean, I wish I would have started the business now versus three years ago. Cause, like, all the mistakes and millions of dollars we spent, like, chasing those.

07:03
Madison Riddell
Drivers part of the process.

07:04
Dallas Hogensen
Yeah, but I was like, you know what? There's something big. It's a $2 trillion market. It's completely offline. There's no technology connecting. There's no open APIs. Whoever can build and normalize the data, get it online, provide efficiency, has a winner take most advantage here. And it was a really different thought for me because, like, my career had been in thinking in, like, small beds. So, like, how can I find the next rocket ship to spend the next two to three years at, get equity, go public, and kind of rinse and repeat? But this was the first time in my life was like, hey, I think this is worth ten to 20 years.

07:36
Madison Riddell
Wow.

07:36
Dallas Hogensen
Like, it's gonna take a long time.

07:37
Madison Riddell
That's a big shift.

07:38
Dallas Hogensen
Yeah, it was a huge shift, which I think has been healthy for me because it's probably grounded me, like, the amount of, like, adhd that I have, what I like, typically. Cause I wanna do everything. Ground you here in Ohio, 100%. A very different way of life that we've come to really enjoy. And so, I mean, I remember looking at my wife and saying, like, hey, listen, I think this is really interesting. And she looked at me and she's like, are we gonna have to move to Ohio? And I was like, I think we are. And she's like, you better fucking be right.

08:08
Madison Riddell
I was the same thing to my husband when I moved to Ohio. So I'm with her. I get it. Yeah.

08:12
Dallas Hogensen
And that was the start of this, like, crazy journey that had been on the last couple years.

08:16
Madison Riddell
Wow. So let's go back to kind of that initial conversation, because I do want to get into, I know that you're a sales guy by trade. I know that you have a marketing mind. I know that you're doing a lot of cool things to kind of expand your go to market strategy. So we'll get into that. But let's go back to that first conversation. So how did we dovetail from, hey, I met these guys. I like what they're doing. I think they have a unique opportunity to now I'm running the show and evolving this company from the ground up.

08:43
Dallas Hogensen
Yeah, great question. So I remember my first conversation very well with Todd, and I left that conversation going, like, wow, this guy could be crazier than I am.

08:52
Madison Riddell
Yeah.

08:52
Dallas Hogensen
And I was like, if someone's going to do it and has the energy to do it and is willing to think so big, put up their own capital to make it a reality in the beginning, like, that is a bet that I'm, like, really interested in. And for me, it was really easy to pull those analogies. Being around incredible entrepreneurs in Silicon Valley, in New York and Europe and Denver, you saw that spark that he had that allowed me to believe, number one, this is a real problem. You've lived in it. And the masterclass I had in that first conversation, which was supposed to be 30 minutes. Lasted like 3 hours.

09:28
Madison Riddell
Oh, wow.

09:29
Dallas Hogensen
And so it started in what is steel? What's the ecosystem? What's the problem? To basketball, to sports, to life, to vision. Like, what do we want to do? Like, if we're right, like, how do we own the Browns? Like, how am I going to build the tallest building in Cleveland? And so we both were like, I think jab for jab. Like, just as excited about what the other person could potentially offer each other. And he had the expertise in the steel industry, and I brought the sales, marketing, venture capital, startup ecosystem, company building presence to that. Like, how do we make this something real?

10:05
Madison Riddell
And are you guys still collaborating to run the business or what does it look like today?

10:09
Dallas Hogensen
So Todd is non day to day. He's just on the board. Really important within the steel industry, too. We set it up that way because there has to be a division of church and state, because a lot of b, two b companies, like their secret sauce is relationships. And we wanted to make sure that there was no tie into majestic because customers would believe that, like, Majestic's using our information to take advantage of the market makes sense. We were very clear about how we wanted to do that. It did take a couple years for the industry to clearly understand, like, they're not the same company. And that was really difficult. So it was marketing, it was education, it was storytelling, it was showing financials, it was showing cap tables. Like, I mean, it was, I mean, it's brutal.

10:48
Dallas Hogensen
Like, they all believe that, like, majestic might be stealing our information.

10:51
Madison Riddell
And how are you guys continuing to combat that now that you have a little bit more of a foothold as a brand? Has that dissipated or is it still part of the process?

10:59
Dallas Hogensen
No, I think it's nearly gone.

11:01
Madison Riddell
Okay.

11:01
Dallas Hogensen
It did take a couple years and it was frustrating, but now understanding the industry, I get it.

11:07
Madison Riddell
And what was the shift like from publicly traded big companies, West Coast Lyft days, vp of sales to small company startup manufacturing industry, Ohio. That's a big shift. So what perspectives did you take from that? I guess sexy startup world to the non sexy side?

11:30
Dallas Hogensen
Yeah, well, I think, like, traditionally in my career, I've always been hired as like the first executive to come in. So I gravitate to early stage. How do we take it from zero to one to 100? And I really enjoy the building process of that because at that point, nothing works. Everything's painful and everything is what questions do we have to go answer and how do we solve it? Where do we try? Where do we allocate capital, and it's not smooth. And so it started at iCracked, right when were eight, people had just raised 10 million from Andreessen Horowitz and took that from a million to $30 million in revenue and had a good exit to Allstate. And then going to Liveli, which was a team of four, which was building a marketplace for hiring in the restaurant industry within the west coast.

12:18
Madison Riddell
A lot of different verticals for you.

12:20
Dallas Hogensen
Yeah. And then that's what brought me to Lyft. So I came on with the chief business officer to start Lyft business. So were the business platform on top of the consumer network. And so at that time, Lyft was about 180 people, so still relatively small. And during the year that I was there, went from a couple people on that team to 70. We went from zero to $100 million in revenue and ultimately a billion dollars in revenue on that team. And the most profitable, and still is the most profitable team that existed. And basically, I mean, it's so crazy because we came in here, were the first salespeople to ever come into Lyft.

12:56
Madison Riddell
Wow.

12:57
Dallas Hogensen
And so were like the black sheep. You come into this amazing culture, this amazing energy, like, everything about it.

13:02
Madison Riddell
Salespeople, we get a bad rap.

13:05
Dallas Hogensen
We get a huge bad rap. They're like, here's a chunk of money. Solve the problem. But go sit over there.

13:10
Madison Riddell
Yes.

13:11
Dallas Hogensen
And so they kind of put us in the corner.

13:13
Madison Riddell
Don't distract the creatives.

13:14
Dallas Hogensen
Yeah, yeah. Get out of the way.

13:16
Madison Riddell
Right.

13:17
Dallas Hogensen
And so that was kind of like the first year of that was really combating. Like, how do we fit in to the cog that's like, clearly working. So it's really fascinating. It's really interesting. I think the fun part about that stage of a company is that you get resources to do and try a.

13:32
Madison Riddell
Lot of things super different from a startup.

13:35
Dallas Hogensen
Very different. Like you're resource constraint, and you're going to have to make choices and you have to make trade offs. But here was like, okay, we have this amount of capital they've given us. They've given us a timeframe, and we got to piggyback off an established brand. The great part about this is that, actually, I remember this forever. We started this out with no platform. We ended up building a software platform on top of it, just like Uber for business. Same thing. Right.

14:00
Madison Riddell
And who was first on the business front?

14:03
Dallas Hogensen
We were.

14:03
Madison Riddell
Okay.

14:04
Dallas Hogensen
Yeah. But it was really competitive. We both kind of got started at the same time. Really two different mentalities in how we treated our customers. Like Uber had this make 100 phone calls a day type mentality. Our core marketing mission with the team internally was how do we get from text to hug with our customer?

14:21
Madison Riddell
I love that.

14:22
Dallas Hogensen
And how do we get to understand them as people and show them that, like, we care about the safety of the people that they're responsible for? And ultimately, we took a ton of market share from them within twelve months.

14:35
Madison Riddell
And you, how long were you there in that role?

14:37
Dallas Hogensen
I was there for two stints, so I started the team out, was there for a couple years, and I was in New York and they called me to come back to open up the corporate office in Denver.

14:47
Madison Riddell
Okay.

14:48
Dallas Hogensen
And so funny story is, when were, when I was in San Francisco, were like days away from opening up a corporate office between Nashville or Austin and getting ready to sign a lease. And that's when the whole, like, rideshare movement blew up and the city of Austin shut down Rideshare. And so the board was like, boom, let's put a hold on this. And so I was like, okay, is.

15:10
Madison Riddell
That where you started to get shifty?

15:12
Dallas Hogensen
Like, yeah, I got shifty. And there was this long story about, like, how we spent two weeks in New York and my wife really wanted to live there at some point. And so we're like, you know what? Let's go take this chance. Let's go live in New York. Let's go, like, have some fun and go do some things. And so we took that opportunity, and then about a year later, they called, hey, the board wants to, like, go open this office. Like, do you want to come open it? And so I came back to open up our corporate office in Denver for a year before I went to do Signal HQ.

15:39
Madison Riddell
And when you were opening that corporate office, did you still have a voice in the sales and marketing?

15:44
Dallas Hogensen
Yeah, I would say it was less operational or. Yeah, I mean, it was really different, actually. I was actually running like, a startup within, like, the Lyft business startup. So I mean, even like, at this point, you know, thousands of employees at Lyft, I came in, there, was sourced our new office, built our office, hired our team, was putting things on, like my credit card.

16:03
Madison Riddell
Wow.

16:04
Dallas Hogensen
Right? And so, like, we really operated in this, like, interesting dynamic of, like, building a huge corporate headquarters under the monolith of what Lyft was. It was weird.

16:12
Madison Riddell
Yeah, that's interesting. I didn't realize that was your second go.

16:16
Dallas Hogensen
Yeah, honestly, I didn't really care. I was having so much fun.

16:18
Madison Riddell
Yeah, it sounds like a cool opportunity.

16:20
Dallas Hogensen
Yeah. And a great thing about this was like, I remember I was in New York. This is a funny story. I literally had just gone from San Francisco to New York. So the 06:00 a.m. Flight, I just got back. I literally sat down on my couch and one of the executives called me. He's like, hey, where are you? I'm like, I just landed in New York. He's like, why aren't you in Denver? And I was like, I just came out there to sign the deal, to come back, and he called me, he was like, well, I want you there now. And I was like, okay. And so I talked to the recruiting team. I was like, let's open up all these jds, and I'll be on a plane in, like, a day or two.

16:56
Dallas Hogensen
And we had, like, 800 applications for, like, the first eight spots that were gonna hire, like, in the first couple weeks. And so it was a really fun way to, like, launch the company within the Denver community.

17:07
Madison Riddell
Were you vetting that talented?

17:09
Dallas Hogensen
Yeah, I mean, it was me and one other recruiter back at HQ. And, like, just going through it, like line by line, running all the interview, I mean, it was like running my own little company within Denver there, so really great. And getting to, like, the public state of how that happened. Like, the company definitely changes. For about twelve months before going public, things are really starting to tight down. You kind of lose that energy. It's like, oh, there's a process. There's all of these things that, like, have to be to the state. Yeah. And I found myself just being very uninterested in kind of where were. And so, like, what's next?

17:42
Madison Riddell
And was this next? Was Felux your next move from Signal HQ? So. Got it, got it.

17:47
Dallas Hogensen
Yeah. Which was actually a lot of fun. There was three of us that did it. We bootstrapped it and built it into hundreds of thousands of dollars in revenue in a few months. And we actually solved a problem that our acquirer had that was working on for ten years.

18:01
Madison Riddell
Wow.

18:01
Dallas Hogensen
In, like, a few months. It was kind of interesting. And they're like, hey, why don't we just buy you a. And it was kind of a perfect exit. In general, I don't think the relationship between the team was that great. We didn't get along or see eye to eye very well, so I think all of us were kind of like, okay, cool. I think this is time stepping stone.

18:17
Madison Riddell
Move on.

18:18
Dallas Hogensen
Yeah, yeah. You learn a lot. And it was really fun building a bootstrap. Business. But I think the founder dynamics ultimately didn't work out, which was too bad, because they're great people, friends of mine, and I love them, but I think we'd rather be friends, probably, than work together.

18:30
Madison Riddell
And it sounds like you found the synergy you needed in your new role at Felux. You have that kickstart relationship from the first call, and I think that's critical. I think if you can find an industry that needs solutions like you have and find magic, chemistry with a team or with a partner, you're off to the races.

18:49
Dallas Hogensen
Yeah, I think what I learned in that journey, it's, like, really important for team evaluation or founder evaluation, is that you can't be the same person.

18:57
Madison Riddell
Right.

18:57
Dallas Hogensen
Right. What do you both bring to the table that are complementary of each other? And how do you understand who owns what, who's accountable for what? And, like, that's like, the. The health of a great relationship. Like, starts with that, because you're not any relationship. Any relationship.

19:12
Madison Riddell
Yeah.

19:12
Dallas Hogensen
Yeah. Communication, clarity, understanding, expectations, all those basics.

19:16
Madison Riddell
We run on eos, which I'm sure I've mentioned on this podcast a million times. And eos has a lot of different assessments that they have. You lean into from a leadership team perspective to make sure that the leadership team is balanced and healthy, because so goes the leaders, so goes the health of the organization. And if every single person's high quick start and high fact find and nobody's got follow through, you're screwed in organization.

19:40
Dallas Hogensen
Big fan.

19:41
Madison Riddell
Especially in startup.

19:41
Dallas Hogensen
Yeah, big fan of us. Big fan attraction.

19:43
Madison Riddell
Do you guys run on it, too?

19:45
Dallas Hogensen
A pseudo version of it?

19:46
Madison Riddell
Yeah.

19:47
Dallas Hogensen
Right? Yeah, we do. But not, like, pure. Pure letter of the law.

19:53
Madison Riddell
Got it. We're on our journey to pure.

19:54
Dallas Hogensen
We're, like, 80%, but actually going through okrs. And, like, every version of this, like, us, seems to be, I think, the simplest, the most clear.

20:01
Madison Riddell
I think so, too.

20:02
Dallas Hogensen
And it's just like, it doesn't complicate things.

20:04
Madison Riddell
And if the team can adopt it and the team can breathe the same language and have the same conversations that we're having as a leadership team. Golden.

20:12
Dallas Hogensen
Yeah.

20:12
Madison Riddell
So I want to segue into marketing a little bit. So we kind of talked about your background. You've had a lot of different experience and a lot of different dynamic roles, and it seems like within each of those organizations, one of your contributing factors was that sales and marketing lens. So what's the sales and marketing approach for Felux? How are you guys explaining your UVP to the market? What tactics? What channels? What's the mix here.

20:36
Dallas Hogensen
Yeah, this one has been an interesting journey for us. I think a ton of fun because how creative we can be, but also a little frustrating because went through a business shift and we didn't do very much at all last year.

20:48
Madison Riddell
Marketing.

20:49
Dallas Hogensen
Yeah. Yeah. I mean, we actually spent zero marketing dollars in 23. And kind of what you see publicly right now is not maybe all the way representative, like how the value that we add to our customers. So we're just going through that process right now of getting that all messaging launched and things like that. So here's why. This has been the most fun, unique marketing challenge that I've ever been in. You have an old school legacy industry, right? You have. Everything is outdated from the communication to how they think about emotion or establishing value or the things that they even do for their customers, right? It's like I'm going to print my name on a pen or I'm going to print my name, like, on a t shirt or something like that.

21:32
Dallas Hogensen
But one of the things that were, like, very early on, like, very clear about with the entire company is, like, we are not, as we are opposite the antithesis of a steel company. So we're going to act and behave and do everything in the most crazy, wildest way we possibly can think of. Right? That was like, this whole ethos of make steal sexy. And that is the ethos that are in our company, too. We talk about it all the time. Like, there's so much that goes into that. And it really is, like, the guiding light for us of, like, how do we create customer wow moments? That's actually one of our core values is creating wow moments.

22:08
Dallas Hogensen
And so the reason why we took this approach is we wanted people to feel comfortable thinking in the wildest, crazy way possible with an understanding that was acceptable. And some of the things I get really excited about, like, what you can do with these two worlds that combined are, like, really fun. So one of the things that we're working on that we want to go do is actually a billboard campaign on make steel sexy. And so where you take big hairy guys with their shirts off in the steel mill, right. And ways to add some life and fun into a pretty dull, like, run of the mill industry.

22:47
Madison Riddell
I could see that on 90, it.

22:49
Dallas Hogensen
Might be there sooner or later. And so, I mean, that's what we're really known for, too, is like, everybody looks at us now as a company that, like, oh, you guys are the fun ones.

22:59
Madison Riddell
And do you run into issues with that? Because I think, you know, we've been involved in a ton of rebrands and even recent ones in legacy sectors, including manufacturing. I know you guys, you know the docket guys. And Gerald, he was on the podcast, too. And I think with docket specifically, we really tried to figure out the song and dance of how do we pay homage to the legacy sector? How do we not? I don't know if offend is maybe too dramatic of a word, but how do we meet them where they're at? And there's the blue collar aspect to it and their sensitivities, and maybe they don't want young startup dudes with a sexy tagline to come in and shake up what they're doing in their business. So how are you bridging that gap?

23:37
Madison Riddell
Or are you guys just leaning in and saying, we don't care, we want customers that want it?

23:41
Dallas Hogensen
That is an incredible question. And I probably spent too much time and millions of dollars making those mistakes to learn, like, what needs to happen. And that was a big learning. Look, I did not come from this world. And so, you know, the first 18 months were really getting kicked to my ass trying to understand, like, what do they really care about? And to piggyback on that is, we came out, like, technology first.

24:01
Madison Riddell
Okay.

24:01
Dallas Hogensen
Right. Like, hey. And we built the most sophisticated tech, and, you know, we had thousands of different customers on it. And what we realize, though, is, if you look at that triangle, the base of the triangle now is trust. It's relationship. It's people. It's homage to what they've done. We talk about, our customer is 55. They drive an f 150. They like to hunt. They like to fish. They're in the midwest, but they also like to have fun. They're real people, right? They're not concerned or bogged down by technology. Like, when they work with us, it just has to work. And so we really flipped the narrative. We had to. Right? Even though, like, it was working, people were just so skeptical. But once we said, okay, it's not about us, it's about them.

24:51
Madison Riddell
Yeah.

24:51
Dallas Hogensen
How do we build empathy into their story? The whole level of attachment and understanding of how we provide value, what we mean to them, and, like, how that translated to us as a business was that when they called Felux, they would ask for Grant or Blake. When they talk about Felux, they talk about Chris. They wouldn't talk about Felux. And that was, like, an aha moment for me, is like, hey, we figured something out that bridge the gap of the relationship based on our brand, that provides value as a technology service. And so all of the things that we'll be launching and going forward with is not about technology.

25:31
Madison Riddell
Human first.

25:32
Dallas Hogensen
It's human first.

25:33
Madison Riddell
Okay. I love that.

25:34
Dallas Hogensen
Right. And I'm glad we learned. Right. It was an expensive mistake, and that.

25:38
Madison Riddell
Was the expense was going tech first versus human.

25:41
Dallas Hogensen
Yeah. Yeah. I mean, it put us, like, everybody was rooting against us. Right. And it comes back to the Lyft comment is, like, we wanted to get to techs and hugs, and once we started to realize that, why are we going upstream with this? Like, what do people really care about? These are business owners that have been there for 30 years. You know, they've been in the same jobs they have, you know, their group of people that they spend their time with, and, you know, they don't care about us.

26:06
Madison Riddell
And your. Is your buyer, your user.

26:09
Dallas Hogensen
Yeah. So we, in the marketplace, we have along the supply chain. So, like, steel mills, service centers, processing type of material. And then you look on the manufacturing side, everywhere from the Teslas of the world to a roof manufacturer. And so they're the ones that are procuring steel to manufacture their product. And once we kind of really leaned into that story, we're helping the builders of America make their dreams a reality.

26:33
Madison Riddell
Love that.

26:34
Dallas Hogensen
It was really clear how this whole story came together. I mean, Felux means fe, which is iron, and Lux means illuminated. So we're trying to eliminate, like, the iron industry. And the founders day is on May 20, which is Chinese Valentine's Day, which is the largest steel market. So it's a constant reminder every year as a nod to the industry and our love that exists within the steel industry. And everything we do from the colors we choose, they're all part of the steel making process. And so everything is a narrative and story about, like, what we think our mission is in this industry is to help illuminate this industry that's been around for hundreds of years into the next digital wave, but do it in a way where we complement our customers and be a Sherpa and guide.

27:29
Madison Riddell
And when you first started describing your brand and what you guys were doing, you were like, we wanted to come in. We wanted to be tech first. We wanted to be fun, want to be different. We wanted to be like nobody else. But now, the more you're talking, you're also rounding it back to such deep rooted connection to the history of the industry, which I think it sounds like it took a while, but you found that balance, which is critical in my experience, in the B2B sector.

27:53
Dallas Hogensen
Yeah, it definitely did. Right. And that's probably the ignorance I had coming in as a tech person into this world.

28:00
Madison Riddell
It's different world than Lyft for sure. Are there any channels that are working? I know you didn't invest heavily in marketing in 23, but are you guys doing thought leadership, trade media events, leaning into digital buys? What's the mix right now?

28:12
Dallas Hogensen
Yeah, we will. So like, the way that our business works is like right now it's a lot of direct sales, right? Like what we have an advantage of versus a lot of tech companies. We can make one phone call to one connection, right? Like they pick up the phone and we can talk to them as human beings. Also, being in person is a really important part of this too, because we are so different in the norm of what they're typically used to. Like showing up, being there and like, hey, this is how we do it. This is how we might help. And being able to portray that story has been a huge part of where we're going to spend our go to market dollars today.

28:46
Madison Riddell
So not being in Silicon Valley is an advantage for you guys with a.

28:50
Dallas Hogensen
Million percent, like, you can't build this company on the coast. That being said, now we've been doing a lot of groundwork to really get deep at a end market level. So understand. Okay, who, let's talk about like, I don't know, like tractor trailers, right? Okay. Who are the people that build tractor trailers? What do they care about? Where are they located? What's their purchasing behavior? Where do they spend their time? And so all the work we've been doing over the last six months around our rev op strategy, our customer understanding is building our ABM strategy. So our belief is that we want a 360 view of our customer and every action should have a reaction. And we can automate that to provide better education, better messaging and better customer service. And that's a massive advantage that the industry just can't do.

29:33
Dallas Hogensen
Like, we have a huge leg up there and we think about where we're going to start spending some of our marketing dollars. We think right now we can spend about $100 to $150 per lead. Nice to acquire because the payback period is so short. But it's all going to be about education in 24 for us. Who are we? How do we fit in?

29:52
Madison Riddell
And when you think about an ABM strategy, are you guys like developing a couple of key verticals that you're going to spin up content for to tailor to those audiences?

30:00
Dallas Hogensen
Yeah, we will. So, like, construction and durable goods are two major, and there's a two subset, couple subsets under each of those that are, like, they have the type of purchasing and the frequency of purchasing that is relevant to our business model. And so that's where we're going to start, which will start kicking off at the end of Q two.

30:17
Madison Riddell
Awesome.

30:18
Dallas Hogensen
This year.

30:18
Madison Riddell
And are you leveraging, like, marketing automation or CRM, like HubSpot or Salesforce or.

30:23
Dallas Hogensen
Yeah, so we have a pretty robust stack today. Salesforce, HubSpot, outreach, the whole tech gamut today. And, I mean, one of the things we're hiring for right now is we want to bring in an email marketer.

30:37
Madison Riddell
Yeah, you'll need it for sure.

30:38
Dallas Hogensen
Yeah, I mean, it's like top priority for me as, like, the next hire. And we've been waiting because we've been doing a lot of brand development, exploration, like, who are we? What's our message to the world? And we wanted to get that ready first so we didn't waste dollars.

30:49
Madison Riddell
I think that's super strategic. And I think you're in this key phase where a lot of our clients are brands that we interact with the first time, where you've done the trial and error, you figured out who the audience is, you're starting to develop your position in the market. It's pre marketing, but you're starting to get those marketing gears turning. And now it's all going to be about testing. Like, you guys are going to have to come in, pick those verticals, spin up content, and test, test. And I think that once you do that, it'll be rinse and repeat.

31:16
Dallas Hogensen
Yeah, I mean, that's the conversation we're going through right now is what experiments do we want to run? Right. What questions do we want to answer? How do we identify clearly, like, you know, surgically who our ICP is and. And how can we spend more money when we find some success? And so, like, that's the conversation we're having internally, which is a lot of fun. Like, I actually gravitate to the marketing side.

31:36
Madison Riddell
Yeah.

31:37
Dallas Hogensen
I love it because it's creative, it's.

31:39
Madison Riddell
Personal, it's fun when founders do.

31:41
Dallas Hogensen
Yeah. If I could spend my time anywhere, like, I would want to spend it there, because if you ask anybody in our company, like, I am by far the craziest one.

31:48
Madison Riddell
Perfect.

31:48
Dallas Hogensen
And so it fits me really well. But back to your other, like, social. We don't do a bunch of social now, but part of our plan is actually to build a community.

31:56
Madison Riddell
Okay.

31:57
Dallas Hogensen
And then if you look at, like, where our customers ingest information, it's kind of difficult? Most of no, it's a little LinkedIn and we've done some ads been on LinkedIn, but it's like not particularly successful. A lot of Facebook, a lot of Instagram.

32:11
Madison Riddell
Yeah.

32:11
Dallas Hogensen
You know, I think we will do kind of a market podcast today because we'll do like a makes feel sexy podcast.

32:17
Madison Riddell
Perfect.

32:18
Dallas Hogensen
Because people enjoy our energy and, like, the biggest problem that exists actually in our space is where can I find a consolidated view of information to make me buy more strategically with better prices, better lead time. Like that's everybody wants is like, they want information on how to buy better.

32:35
Madison Riddell
And a trusted advisor and a trusted.

32:37
Dallas Hogensen
Advisor to do that. And, like, they want it to not feel like a dull medium that exists. So, like, the market's asking for it. It's probably, if not us, then who? Probably no one at this point. So things I get excited about, but, like, you know, at a stage where, you know, we did 16 million last year with a team of 15, like, we're no marketing. No marketing. And, you know, we're resource constrained. So it's about choice right now. And unfortunately, that one just has gone to the side.

33:06
Madison Riddell
Well, I know a good podcast studio.

33:09
Dallas Hogensen
I know a great one, actually.

33:11
Madison Riddell
We can get your guys in here. I'm sure they sound.

33:12
Dallas Hogensen
Yeah, this place is fantastic.

33:13
Madison Riddell
They sound awesome.

33:14
Dallas Hogensen
You guys have been an awesome job.

33:15
Madison Riddell
Thank you. A couple of things I want to round out with, I think that I love just kind of pulling apart a marketing strategy with someone who's in that conceptual phase or starting to test, because I think it's cool for people to just listen to your raw thoughts and where you guys are headed and it can spark ideas for other people. But I want them to understand so that they can really have takeaways from this conversation. When we're talking about the buyer and the ICP, who are the different icps, and when you guys talk about driving efficiencies in their world, is there fear of job replacement? Is it augmenting their jobs only? Is there some sort of resistance to the technology? And what do your icps care about other than the fact that it's a handshake business? There's a lot of history.

34:00
Dallas Hogensen
Yeah, great question. So we'll start with the ICP because I think it'll kind of lead the horse to water here. The advantage that we have right now purely on the manufacturing side or the OEM side that exists is this mass transition of talent is starting to take place. So if we block the last 30 years in steel, it has been someone that's been in the job for 30 years. That now is kind of at the later stage. And what we are seeing today is a high turnover of young thirties NBA. And for us that's great. And what they're lacking is, hey, I don't have the tools, I don't have the data, I don't have the information, I don't know where to go. I don't have any historical information either.

34:42
Dallas Hogensen
I mean, we work with some of the biggest brands in the world and you'd be surprised, like, there's no data, there's no information if that person's gone. Like, they're just shit out of luck.

34:50
Madison Riddell
Yeah, those industries are tough.

34:52
Dallas Hogensen
Yeah, they might have one or two incumbents, vendors that they work with, but like all tribal knowledge, it's all tribal knowledge. And if one of those supply chains break down, like your pant, your plant should cut down. That could cost you hundreds of millions of dollars. And so I think what's been really fun for us is that you're seeing this new wave of talent come into the world on the manufacturing side that's kind of demanding more and like the resiliency to technology is the complete opposite to some of the legacy incumbent people within the industry. So I think we get really excited about what the future holds there because we're relatable. We're all kind of twenties and thirties in the company. We're living the same pain that they're living in.

35:33
Dallas Hogensen
And so it's been able for us to identify that ICP has made life a lot easier from an adoption or just out of the gate understanding. We don't need ten to 30 or 40 touch points of education. It's like, I get it. Let me see it.

35:49
Madison Riddell
They're going to find what they need before they talk to sales. They're going to do the research.

35:53
Dallas Hogensen
Yeah, I mean like Tesla was like our first paying SaaS customer and we sourced for their cyber hood and that was like one product in the whole, like everything. This guy like young NBA, he was like, I don't know where to go. Can you help like, absolutely.

36:08
Madison Riddell
Have you been in one?

36:10
Dallas Hogensen
I have not. I did see my first one a couple weeks ago though.

36:13
Madison Riddell
Yeah, in Cleveland.

36:14
Dallas Hogensen
It was at the auto show.

36:15
Madison Riddell
Okay, got it.

36:16
Dallas Hogensen
It's big. It's like a boat.

36:17
Madison Riddell
Yeah, they're huge.

36:17
Dallas Hogensen
They're huge.

36:18
Madison Riddell
Yeah.

36:20
Dallas Hogensen
So I know there's more parts of that question, but like for ICP, it's very clear for us.

36:24
Madison Riddell
Yeah. So it's. You have the legacy 55 something. Folks who have been in the industry for a while, you have this new wave of millennials who are ready to embrace tech, and when they find your product, they know that it's gonna solve a need. There's not a ton of competitors yet in your space doing exactly what you're doing. What are the sales objections that you're reaching with those folks, the 30 somethings?

36:47
Dallas Hogensen
Well, right now, the biggest thing is interoperability between systems. So you have these massive legacy horizontal ERP systems, and right now, from a connectivity perspective, we haven't climbed that hill. And so we get an element of dual process that exists in the procurement. So if we solve that and we're part of the daily routine within the systems at our core, that should unlock a lot of that pain.

37:17
Madison Riddell
So that's a focus for you guys moving forward?

37:18
Dallas Hogensen
Yeah, it has to happen in general. The hard part on the supply side is that there's no systems, there's no technology, there's no APIs. So the technology that we've built to ingest information, you can send us information via email, CSV, PDF, and we're running this through a bunch of AI and algorithms to map it to our category, to have mapping to our customers. And so, like, both sides of the market present, like, extremely different problems today.

37:47
Madison Riddell
Wow, that's a. That's a similar challenge that docket navigates to, I think.

37:51
Dallas Hogensen
Yeah, 100%.

37:51
Madison Riddell
Well, I know that we touched on a lot, and I think that there's a lot of key takeaways around trial and error, around fighting your audience, trial and error, around messaging, not putting the cart before the horizon, ramping up a bunch of digital and paid until you have your own tactics and your brand and your CRM and your sales team in place. We completely agree. And buy into that kind of thought process. Lots of good takeaways. I want to wrap up with one thought that I saw on your LinkedIn. You say that you're on a journey to change the midwest startup ecosystem. Why?

38:25
Dallas Hogensen
Yeah. Like, we moved here a couple years ago, we made a commitment that, hey, we think there's a long journey ahead with this company, and we're committed to building it out of Cleveland. Like, we did have a huge remote team at one point, but now the entire company is here besides one person, and we've really committed to that. One of the first things that I noticed here was the access to talented, the access to capital. Right. And the access to incentives don't exist. And I had the chance over the last couple years to meet with. I don't know hundreds of CEO's who all kind of raising their hands and saying the same thing is that we all want this. Where's the community? Where's the access? Where's the infrastructure? And there's a huge gap that exists today.

39:17
Dallas Hogensen
I mean, the state of Ohio is a net exporter of capital, right. In 2020 or 2019, I believe is we only had $400 million of venture capital. In 2020 we had a billion, and now it's a couple billion. You put that into, if you look at the coast in general, they're doing that a quarter, they're doing 20 billion a quarter, $40 billion a quarter. Right. And so right now, there's this negativity on this narrative that the opportunity doesn't exist here. But let's be real. Like the heart of America exists within the midwest. Real businesses exist, infrastructure exists, right. And there's a lot of talent here that is not organized in a way to be successful. And if we want to create an ecosystem that's vibrant, we need to start creating wins.

40:07
Dallas Hogensen
So we have to have the government play its part to bring the incentives to bring people here, to make business easy, to be a business here, we have to do a better job at leveraging our access to all the amazing universities here to drive talent back to the city. We have to show them that there's access to capital, to explore ideas, and we have to shift our appetite for risk. What it takes in what, I mean, from like a venture capital perspective right now, we're a very conservative market and we write check sizes that are very interesting, that don't allow an acceleration of returns. Real ecosystems start. When you have the density of all these things and you start having some liquidity. Right? So if we can get to a point where we have five or six exits, well, what happens?

40:53
Dallas Hogensen
Four or five people from those companies go start their own companies. That capital gets reinvested and all of a sudden the flywheel starts to happen. So, I mean, a big part of this, too. We've raised $24 million to date. I ended up letting a couple people from Ohio be a part of that, but 22 million of that comes from Austin, New York, San Francisco. And I purposely made that decision because I was like, hey, we need to be part of the local story. I need someone that understands the ecosystem better because I know I'm going to need talent. I know I'm going to need help in the government. I know I'm going to need help doing whatever. And I think it was a really important choice.

41:36
Dallas Hogensen
But the biggest thing that I recognize here is the, I wouldn't call it like, the lack of ambition, but the ambition gap. Right. The blue collar ness of this city is sometimes like, let's stay in our lane. Let's not think too big.

41:55
Madison Riddell
Stay comfortable.

41:56
Dallas Hogensen
Stay comfortable. And that's scary to me, and I talk about this quite a bit with the team and our co founders, is that we have to change the perception of what thinking big can possibly be and what to ask for, how to do it. And you know that failure is just a part of that journey. Right? There's a good chance, like, this company goes to zero, like nine out of ten chance, but I don't believe it. But I'm willing to go take on $300 million of capital to give it a billion dollar return, plus or not. And I want to get people thinking that way, create an ecosystem where all those things start to converge in an interesting way. And I think probably in the near future, I'll probably start a venture capital fund here. Love that, too.

42:41
Dallas Hogensen
So we can be a resource for.

42:44
Madison Riddell
The people and an example. I think it's so cool that you're not from the Midwest and you have that passion to drive things back to the midwest and you see what's special here and you want to prop that up instead of just going back to the west coast and doing a job that you could probably do a hundred times over with a million different startups and keep that churn and burn. So I think that's really cool and really special. I respect you for that. I think the city is going to respect you for that. I feel honored to have you talk about that as our wrap up. I think that's the best snippet from the episode, is just hearing you talk passionately and openly about what you're going to do for the city and for the state and for the midwest.

43:22
Dallas Hogensen
So appreciate it.

43:23
Madison Riddell
Thank you for being here. I like to end things on a high note. St. Patrick's Day is this weekend.

43:30
Dallas Hogensen
It is this weekend, and it's on.

43:31
Madison Riddell
A Sunday, which sucks. But we're here. Our team's doing St. Patrick's Day happy hour tonight. So what do you feel lucky for as we wrap up this episode?

43:39
Dallas Hogensen
Oh, man, that's such a good question. Definitely my family, it's been a really cool experience to watch my boys, who are one and three, grow, and now they both have personalities. And like I told you today, like a moment of joy existed when I got a Facetime from my wife where my oldest got a Spider man costume and won't take it off, and he wanted to show daddy his Spider man pose. So I think that's what I feel very lucky for. And I feel lucky that we took a chance on ourselves, on an industry, on a location, in a city, and we feel at home. So there's not much more you can ask for.

44:20
Madison Riddell
I love it. Leaving the episode with some positive vibes. Maybe your sons will be slinging steel like you. You said ten to 20 years, so they might have time to take over dad's business. Who knows?

44:30
Dallas Hogensen
I hope so.

44:31
Madison Riddell
Thank you again for being here. Where can people find you if they want to come connect?

44:34
Dallas Hogensen
Oh, man, that's a Twitter.

44:36
Madison Riddell
Twitter?

44:37
Dallas Hogensen
Yeah. If you hit me up on LinkedIn, like, I might find it a month later.

44:40
Madison Riddell
Okay, but good to know.

44:42
Dallas Hogensen
Yeah, but if you message me on Twitter, I usually get it.

44:45
Madison Riddell
Perfect. Or x for our up to date folks.

44:48
Dallas Hogensen
Sorry, elon.

44:48
Madison Riddell
Get them on x. Thanks, guys.

44:51
Dallas Hogensen
Cool. Thank you again.