Kaleris: Kirk Knauff

IndustrialSage

CEO Kirk Knauff of Kaleris joins Danny to share all about the major influences in his life and his career in supply chain.

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Danny:

Well, welcome to today’s IndustrialSage Executive Series interview. I am joined by Kirk Knauff who is the CEO of Kaleris in Alpharetta, Georgia. Kirk, thank you so much for joining me today on the Executive Series.

Kirk:

Thanks for having me, Danny. Glad to be here.

Danny:

Well, I’m looking forward to this. We were talking about this before a little bit, hey, this is kind of exciting. You guys are in Alpharetta, Georgia; we’re in Alpharetta, Georgia. We’re just a couple miles apart, so this is exciting. So for those who are not familiar with Kaleris, could you just give us a 30,000-foot view? Who are you guys? What do you guys do?

Kirk:

So we’re a supply chain execution software company. As you said, based here in Alpharetta, happy to be here. We’re really enjoying this budding Atlanta tech scene that we’re a part of. Relatively new company that’s the combination of three legacy businesses that we’ve acquired and put together to build this supply chain execution platform. About 200 folks work for Kaleris headquartered here in Alpharetta. We also have offices in Dallas and Oakland, California and two big development facilities in Sri Lanka and India. So that’s our footprint as well.

Danny:

Excellent. Well, that sounds great. So we’re going to dive into a little bit more of what you guys do, some of the challenges that you guys are solving here in just a little bit. But before we do that, this is the time in the episode where we want to get to know Kirk. We want to get to know you a little bit better, so I’d love to know your story, your background. How did you get into this space? Take me back.

Kirk:

Okay. Well, always been in the supply chain execution space or supply chain space, really. I started with a large railroad here in North America in Jacksonville, Florida, straight out of undergrad, on the sales and marketing side. My first job in the industry was an inside sales job, actually, calling former railroad customers and asking them why they weren’t using the railroad anymore. So that was kind of a baptism by fire. And from there, stayed on with them for about five years, and from there I got to know the founder of a small software business here in Atlanta. Moved up to Atlanta to start my career on the software side back in, around 2000. And I guess the rest is history from there. We grew that business over time. We sold it into a private equity company in 2007.

Danny:

Good timing, yeah.

Kirk:

Yeah. Actually a funny story about that, when we were talking to our private equity sponsors—who are great, by the way—while we were selling the business, we had never had a year-over-year decrease in carloads because a lot of our software still does, it’s involved with rail carriers. We had never had a year-over-year decrease, and the first year after they acquired us was our first year ever, which was 2008, where we saw a decline in year-over-year carload growth. So they kind of gave us a hard time about that, but they understood market dynamics. Anyways, then we acquired four companies between 2007 and 2011 to add to the platform, the supply chain software platform, and sold that business to GE Transportation in 2012. I stayed on at GE Transportation for about seven years, six and a half years, running that software business for GE. So yeah, that’s a quick overview of my background, all software and transportation-related.

Danny:

Yeah, so I’m curious. You mentioned you jumped in right after college. For undergrad, what were you studying? Was it something that you were saying, “Hey, I want to get into logistics,” or, “I want to get into sales,” or both? What did that look like?

Kirk:

Yeah, I think it was more of a sales thing, as timing would have it. When I first went to college, I thought I was going to be a lawyer, so my undergrad’s in history, actually. I love history and loved it then. Really, the only subject I really enjoyed in high school. Anyways, quickly figured out that’s not what I wanted to do. So I’d just graduated with an undergraduate degree in history from Florida State. Actually, that’s where my daughter is now, too. And while I was in school, I had a couple jobs, but one of them was with an insurance agency, Northwestern Mutual. They were having a big high-performance sales push in training and talent development. So my senior year in college, went through that whole program and then at the time CSX was benchmarking their sales processes, so as luck would have it, that looked really well on the resume. No, I had no idea what a railroad was or what a boxcar was or supply chain software, for that matter. So it wasn’t a big aspiration, just kind of where I ended up.

Danny:

Just kind of happened. It’s funny. I always love asking that question because it’s very interesting, that journey. Well, I wanted to do this, but I ended up doing that. You got sucked in, basically. The tractor beam just pulled you in.

Kirk:

Yeah, well the entrepreneur side has kind of been the driving force. When I was at the railroad, I loved the railroad and got a lot of experience and learned a lot about transportation and technology, for that matter, with some of the things I was doing. But five years was all that was going to be. I had the itch to go off and do something on my own or a little smaller and a little more, in an environment that you could control personally a little bit better. So the corporate world probably wasn’t where I was cut out for. Ironically enough, I ended up at GE for seven years.

Danny:

Yeah.

Kirk:

The entrepreneur side is really what was driving my career path.

Danny:

So how did you discover that? Was that something that you knew going on, or was it something that just started growing, and you’re like, “Hey, this is kind of interesting. I like this,” as you started getting involved with these other organizations, these companies?

Kirk:

Yeah. I don’t know; I guess that question—that’s a good question. I think as a kid, we were a middle-class family, as I mentioned to you when we were talking earlier. My dad worked for IBM. We moved around a lot. He was really influential in creating work ethic and a lot of the values that I respect and enjoy. So as part of that, I was always working, even as a kid, not because we needed the money, but my dad always taught me that’s what you do. You go out, and you work. So I always enjoyed the making money part of it, the working with other people part of it. Even as a third-grader, I remember cutting lawns, things like that. I think there was something in there the whole time, even as a kid that doing something on my own and controlling my own destiny and taking a bigger risk than other people are willing to take was always something I was comfortable with. So yeah, maybe that’s the answer to the question. Maybe it’s always been there, a little spark at least.

Danny:

It sounds like it has. I hear a lot of these stories where–– especially when you’re a kid. I can certainly relate to it. I remember literally scheming. How do I make money? What can I do? It’s kind of funny. You touched on how your father had an impact, obviously. I think most fathers and most parents would for their children. But throughout your career, is there somebody that jumps out? And it could be career or friend or family, or it could be an event that really had a measurable impact. And I’m sure there’s a lot, but is there one that stands out?

Kirk:

Yeah. Well, people-wise, there is a lot. I would say, obviously, my dad still is. My dad’s pretty retired now; kicks around doing some stuff, but he’s always been a big influence just from the perspective of values and work ethic and that type of thing. The president of the first software company I worked for, his name was Mack Purdy; he actually died recently. He was a big influence in terms of, he was just one of the kindest people I knew. So one of the first people that, in the business world, I ran into that really set an example of treating others how you want to be treated and you don’t have to be sharp elbows in every business interaction that you have, and respecting and loving your customers and appreciating them, and team members. So he was a big one. Then, today the CEO of that same company, his name’s Pete Kleifgen. We still hang out a lot. I consider him a mentor, still bounce ideas off of him all the time. He’s always been the person that set the best example of doing for one person what you wish you could do for a lot of people, so he always took the time to invest in a few people individually. I guess, hopefully, I picked up a little bit of that in terms of how I work with others on a team.

Danny:

Yeah, that’s great. It’s interesting; you were mentioning treating people the way you want to be treated and that kind of thing, especially with business. You mentioned the sharp elbows. That’s super difficult, especially when you get into scaling a business, PE or bringing in VCs or anything. That’s a very difficult thing to do, so it sounds like you’re pretty fortunate to be able to have a mentor and work with somebody like that.

Kirk:

It’s a balance for sure, and you said it well. I feel extremely fortunate. The people, and even the private equity sponsors that we had then at some of the past companies, and the one we have now which is AKKR now is our private equity sponsor, just tremendous relationship, shares the same values, extremely helpful and not overly involved in operating the business, but adding value every day. You hear a lot of stories that don’t quite go that way when it comes to outside investment in businesses, and I’ve been fortunate enough to land in some pretty good situations.

Danny:

Great. Well, let’s transition a little bit and talk about Kaleris now. Walk me through your involvement. You mentioned it’s a new company, and it sounded like there’s a lot of acquisitions happening. What’s the story there?

Kirk:

Yeah, so our heritage is a little unique in that—I actually worked for a private equity company for about a year, year and a half while we built out this thesis of investing in supply chain execution software companies with the intention of hopping back onto the operating side, like I am now, once we got it going. So in June of last year, in the middle of COVID, we were fortunate enough to acquire PINC. PINC stands for Positioning, Inc. I think you knew Matt Yearling, the former CEO.

Danny:

Yeah, he’s been on the show before.

Kirk:

Yeah, he’s a great guy. We still talk, and he’s working on an exciting new venture now. But Matt was instrumental in helping us make that acquisition. They were VC backed at the time. So they were our first kind of platform investment. And just a tremendous company, fast-growing, not a lot of work to do in terms of value creation there and instilling the values that we’d want to see in a company. So great place to start. And then quickly after that, we carved out a piece of my former business to add to PINC which does railyard management and transportation management systems, software systems for industrial shippers. So think about the shippers that are trying to move goods from point A to point B. They’re our ultimate customers and 3PLs for that part of the business.

That’s also a fast-growing part of the business, so we combined that. And then our third acquisition was a small company out of Dallas that does asset maintenance and repairs, particularly around rail cars. So a lot of these industrial shippers who leveraged the railroad for primary mode of transportation have their own railcar fleets. And this company provides kind of a closed-loop maintenance process where you can do the billing and inspections and things like that for that. And that was kind of a product gap-fill for that second business I described. The founder of that business is still with us as well, so really helpful in terms of growing out that maintenance and repair segment of what we do. So that’s a little bit of the legacy, and that all happened from June to October of last year.

Danny:

Wow, that’s a lot.

Kirk:

Yeah, we’ve been hard at work at integration and branding. We changed the name of the combined entity to Kaleris, and we’ve started introducing that to our customers over the last few months. Now, part of this conversation is introducing Kaleris to the larger market. We’ve had a landing page, just as an example, for Kaleris.com for quite some time. Just this week, we’ve rolled out the official new website that’ll sit over top of the original three websites. So things like that that we’ve been working on, and obviously standing up to business, building the leadership team, a new location here in Alpharetta, and things like that.

Danny:

That’s fantastic. And obviously, what an interesting time. I think, if I heard correctly, you said June of last year, so June of 2020. Obviously, we were seeing, relative to supply chain, a lot of things going on. We’re still seeing a lot of things going on. Was this something that was in the works pre-COVID? Or is it something that was a direct result because of COVID, or a mixture?

Kirk:

Again, timing was really beneficial. We got to know Matt just before COVID. Actually, the last conference we went to was MODEX here in town.

Danny:

Yeah, we were there. We were all over that. The last trade show in the world.

Kirk:

Yeah, I think we were all deciding whether we should go or not, and I think about 50% of the people decided to go, and the other 50% decided not to. That was the last trade show. We hadn’t acquired the businesses then, but we had certainly expressed interest by then. And then everything else was virtual from then on out. So we had the good fortune of getting to know them a little bit before COVID when we were able to do that, and then we were able to complete the transaction ahead of time, or during COVID. Same for the other two businesses, we knew the folks there from other folks in our past life, so to speak. So it wasn’t a fresh start. Acquiring businesses or building partnerships during COVID has certainly changed. A little easier now than it was beforehand, a lot of assumptions that we had before in terms of this has to be face-to-face in order to accomplish what you want to accomplish. Those norms have definitely been challenged, and I think we’ve all learned a lot.

Danny:

So what are the biggest challenges that you’re seeing in the industry right now?

Kirk:

Other than the new dynamic based in just pure supply chain industry, the new dynamic of the importance of supply chain resiliencies is one of the biggest things that we’re seeing. Obviously depending on the vertical, could see some significant impact based on COVID, whether it be positive or negative. So I think looking back and hindsight in terms of everything that we learned during COVID, I think it’s a brand-new opportunity for both our customers and for us to think differently about how technology can help solve some of those problems. I think most of the conversations that we had during COVID and even today are around, what did we learn during COVID? What new challenges did we discover? How do we think about risk differently to avoid some of the mistakes that we made and some of the good things that happened, frankly, for some customers in terms of the outsized demand, things that they’ve never seen before and had to be able to flex their supply chain up and down? So I think that’s a big challenge, just thinking about what’s changed coming out of COVID.

I think another challenge that we’re seeing, not related to COVID is I think our industry, so to speak, industrial shippers, people that are moving things around and the carriers that serve them and the whole ecosystem around that has done a really good job in investing in technology at the point solution level. I think technology has caught up, and there’s enough offerings out there now where the market and customers are really thinking about how to connect all that data that’s coming out of those respective point solutions, which there’s really good ones out there. But it’s solving individual challenges, so given what we just talked about with coming out of COVID and what customers are thinking about differently today in terms of a total solution from a visibility all the way down to the execution-level, I think that’s a big challenge. Where are the black holes? Where’s the missing data? And how do we connect all these legacy solutions that are out there now and add value to their respective businesses? So I think those are the big ones.

Danny:

Yeah, absolutely. How are you guys positioned to solve some of these issues? Let’s say specifically around resiliency.

Kirk:

Our investment thesis and how we’re thinking about our company in general is that every move matters. It’s kind of our rallying statement or cause, if you will. As we talk to customers at higher and higher levels within the enterprise, I think the solution and the story, the narrative that we can tell around solving specific challenges and across the whole supply chain is a really interesting one. I think it is, at least, and our investors agree. Between the yard management portion, if you think about trailer yard management which was the legacy PINC business, that team has just done a fantastic job with helping solve some of the biggest challenges there.

Same on the railyard management or the TMS system which does a lot of billing, order management, work order creation, those types of things within those same shippers and for 3PLs that are serving those shippers, and then the asset repair stuff. I think you tie all those together at the data level and the analytics level, it’s a really unique conversation that we can have in terms of illuminating those dark spots in the supply chain, really adding innovation to those points of the supply chain which have historically been neglected, and frankly accelerating their transformation. In a lot of cases, believe it or not Danny, there are still sticky notes and paper-based processes.

Danny:

Oh, I believe it. I’ve seen it.

Kirk:

I think we add a value there on some of those really vertically-based complications that we still see in the supply chain today.

Danny:

Yeah, absolutely. I think it’s interesting, especially now. No one has a crystal ball in terms of what’s going to happen, hopefully as we’re climbing out. But you keep reading stories, like you mentioned, specifically about having visibility across your supply chain, and you’re moving your raw goods from A to B. I was reading some stories around Toyota and the automotive space. Just the challenges of when you have so many different components coming in from all over, and if you don’t have that kind of visibility to get an understanding of something that maybe ties into your ERP so you say, “We’ve got a problem in four weeks from now because we’ve got stuff stuck on a boat out in the port of Savannah or Charleston or whatever.”

Kirk:

Or can’t get chips.

Danny:

Yeah, chips is a big one.

Kirk:

Demand planning and all that stuff, it’s a—yeah, that’s part of the unique, and a little bit of what’s changed in terms of that whole looking at—I’ve used the word the supply chain several times, but like you just mentioned, there’s a whole bunch of what I would call individual, custom supply chains, whether you’re talking about automotive or energy or food/beverage, or whatever. They’re all unique challenges. But if you roll it up to the highest level, it’s that visibility so you can actually do something with the data and build software or technology around solving those challenges. But the fun part is, we’re just getting to the point where you have enough data to start to solve some of those challenges. So I think we’re positioned well to help with that, that kind of macro problem. But they are unique, depending on the supply chain. The automotive one’s a fascinating one to watch because it goes up and down so fast based on demand and the challenges that they face. They all seem to face the same thing at the same time, so it’s just big swings in terms of positive or negative from a supply chain perspective.

Danny:

Yeah, it sounds like you guys got some great tools and some great solutions to be able to have that visibility. I think it’s super exciting because I’m a little bit of a data dork. To be able to unlock potential and see things that you couldn’t see before because they were in disparate systems or what have you. So I think the future is bright, and that’s exciting to be able to unlock that, see the data, get the insights, and be able to make really informed decisions that you otherwise, it’s best guess.

Kirk:

Yeah, or you just had to duct-tape-and-baling-wire it together and do it manually and do your best at it. It makes it a really fun job around here in terms of customer conversations and thinking about what we can potentially do to help solve those problems. So yeah, it keeps everybody with a feeling of purpose around here.

Danny:

Well, it sounds like you guys certainly have your work cut out for you. No lack of opportunity going forward, that’s for sure. Kirk, I really enjoyed our conversation, our time here. For those who’d like to get to know Kaleris a little bit more, learn about some of your solutions, what you guys do, what’s the best way of being able to do that?

Kirk:

Well, all of our stuff is on that new website that I mentioned, Kaleris.com. And we’re happy to help. We pay pretty close attention to that, obviously, given the newness of it. We’ll try to be as responsive as we can. Also, all the traditional channels, LinkedIn, things like that that I certainly try to be active on and stay connected with the industry and with our customers. So I think those would be the two best ways.

Danny:

Excellent. Well Kirk, again, thank you so much for your time today and sharing with us your story, Kaleris, and what you guys are doing and just some insights in what you’re seeing in the industry. I know our audience will find it really valuable. I’ve enjoyed it, if nobody else does. No, but I think a lot of people will.

Kirk:

Oh yeah, I enjoyed talking to you as well. Thank you for having me.

Danny:

Well, thanks for being on. Okay, well that wraps up today’s Executive Series interview with Kirk Knauff who is the CEO of Kaleris. Some pretty awesome technology coming in to really solve the challenge of—a lot of different challenges, but looking at that resiliency in the supply chain and adding some more visibility so we can have some more data and insights about knowing where our stuff is, when it is, and then we can do better planning and a lot more things beyond that. So go check them out at their website, Kaleris.com.

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