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.