Former Amazon consumer chief Dave Clark has a new job: co-CEO, and eventually sole CEO, of $8 billion-valued supply chain software startup Flexport.
Clark, whose resignation announced on Friday surprised observers, finishes up as CEO of Amazon’s massive Worldwide Consumer division last day on July 1. And on September 1, he will take over as Flexport’s co-chief executive, alongside Flexport founder Ryan Petersen. Flexport plans for Clark to become the company’s sole CEO six months later, with Petersen moving to an executive chairman role at the business he founded in 2013.
In an interview, Petersen said he and Flexport connected with Clark as part of a search for chief operating officer that the company had conducted over the past few months. “My big fear for Flexport is just that we’re not good enough to reach our potential,” Petersen tells Forbes. After discussions with Clark, Petersen says the decision to phase the veteran executive into running all of Flexport, and not just some teams, was his own decision. “There’s a perfect complement of skillsets,” Petersen says. “Mine are much more creative, zero-to-one founder time, and Dave is the supreme executor and a legend in the supply chain world.”
Most recently valued by private market investors at $8 billion, Flexport offers digital freight forwarding and other software tools like customs compliance, inventory financing and insurance to businesses shipping across 112 countries, from Georgia-Pacific’s paper towels and toilet paper to Sonos speakers and Rothy’s shoes. An alum of the startup accelerator Y Combinator, Flexport is backed by investors including Andreessen Horowitz, Peter Thiel’s Founders Fund, e-commerce platform Shopify and SoftBank.
Revenue at Flexport reached $3.3 billion in 2021, as detailed in Forbes’ January cover story on Petersen and his outsized (and at times controversial) role as the face of the tech industry’s response to a global supply chain crisis. The company expects to bring in about $5 billion in revenue this year. (About 80% of that gets passed along to shipping partners.)
As Flexport has grown, Petersen says he’s told people there were only two people he’d consider as a second CEO for the business: Jeff Wilke, a longtime lieutenant of Amazon founder Jeff Bezos who led its consumer retail business until his departure in early 2021, and Clark, the executive who replaced him in that role. “Jeff’s definitely not interested, he just retired basically, and he’s working on other stuff,” Petersen jokes. “And I never thought I’d have a chance to hire Dave. So it was a real wildcard, for me personally, that we got that done. I’m still kind of amazed.”
Clark’s own departure from Amazon, confirmed in a Friday blog post that reshared CEO Andy Jassy’s note to the company, was widely reported as a major shift for the tech giant, one year after long-time cloud chief Jassy took over from Bezos, and not much longer since the company had felt the seismic shift of Wilke’s retirement. An Amazon employee since 1999, Clark built out the company’s multi-billion-dollar global operations, with a workforce of more than one million and a global logistics network including many thousands of planes, robots, trucks and warehouses. Known as an efficient and exacting boss with a hard edge, according to past reports (a 2019 Bloomberg profile claimed his nickname internally was ‘The Sniper’), Clark took over Amazon’s global consumer retail business, which also includes Amazon Prime and Whole Foods, mid-pandemic, during a period of massive consumer demand, and spent accordingly, per reports.
The shift in global markets in recent months and the commensurate e-commerce slowdown hit Amazon hard. In his note last week, Jassy echoed his remarks from the recent shareholder meeting that Amazon “still have more work in front of us to get to where we ultimately want to be in our Consumer business” following a “challenging and unpredictable” few years. Amazon revenue rose just 7% in its first quarter this year, down from 44% growth a year before, as retail sales declined 3%. (Another recent development: the April vote by workers at a Staten Island warehouse to unionize.)
In an interview, Clark tells Forbes that speculation his resignation was the result of such were false. A self-described “supply chain geek,” Clark notes that over the past year, following his personal move to Dallas with his family from Amazon’s Seattle headquarters, he’d considered going back to a smaller organization, specifically in a CEO role. “I’d outgrown my joy a little bit,” he says. “I have gotten to have a lot of success at Amazon and a lot of really good things, but I really enjoyed building, creating and designing networks in a supply chain. It’s hard, and I wanted to get back to that… see if we could build it all over again in some way.”
As for the timing, Clark says that he’d spoken openly to Amazon leadership, including Jassy, about his thinking for the past year; the question, he says, was whether he would leave this summer or in the summer of 2023. “I didn’t want to leave in a place where the business didn’t have a solid plan and where we were still struggling to recover from Covid,” he says. Clark presented a long-term plan for that and handling inflationary costs to Amazon’s board last week, he says. “That was well received, and so I walked out of that feeling like okay, I can go now, I can do something new.”
Clark and Petersen had corresponded in the past, but when they reconnected, Clark said he was intrigued by the opportunity to move Flexport from solving cross-border shipping to a broader solution “across the full length of the supply chain.” Recent challenges in global shipping from Covid-19 lockdowns in China and the war in Ukraine have proven, according to Clark, that the system is fragmented and fragile – “we may be recovering for years,” he says. Amazon was solving those problems “in a very specific way, for a very specific use case,” he adds. “To me, this represents an opportunity to do that more globally and more broadly, and that’s exciting to me.”
Clark’s mission will be to improve Flexport’s processes and add efficiency to its shipments, including as it pushes into automation. Don’t necessarily expect Flexport to build out more of its own assets, the way that Amazon built up capabilities to counter its dependence on FedEx and UPS; both executives say that providing technological connective tissues between systems and partners will prove crucial to Flexport, as it was with Amazon’s logistics networks behind the scenes. One challenge is for Flexport to drive its costs lower than its competitors – and owning more physical assets is expensive, Petersen notes. “If you’re better and cheaper, you’re an unstoppable force in a really, really big market,” he says.
Both executives say that Flexport is strongly positioned to grow in the next several years, even given global economic challenges. (Or as Petersen puts it: “Neither of us were fired from our jobs!”) Flexport was profitable for the first quarter this year, he says, and still has more than $1 billion of the $2 billion-plus it’s raised to date in the bank. Burned once by over-spending and layoffs in the past, Petersen says Flexport plans to be cautious about spending this year all the same, slowing down new hiring to be cautious. “If in five years, when you say, ‘what’s the most important company in global supply chain, and in technology across global supply chain,’ then we messed this up,” says Clark (using a more colorful word than “mess”).
What does Flexport’s succession plan mean for Petersen’s long-term plans? After saying often in the past that he planned to run Flexport for his whole career, Petersen’s new claim that he “wants to work on Flexport full-time, hopefully forever” must be taken with a healthy dose of salt. But Petersen insists all the same. “I love Flexport, and I’m pretty convinced that I can add a lot of value as a partner for Dave, and I have a lot of good ideas and places to contribute,” he says. “So I don’t see this as retiring. I’m not going anywhere.”