Episode 172 | Scaling an Autonomous Trucking Company with Financial Discipline

James Reed, COO, Kodiak Robotics joined Grayson Brulte on The Road to Autonomy podcast to discuss how Kodiak is scaling the business with financial discipline, economic scenario planning and operational readiness as the company ramps up commercial operations heading into 2024. 

The conversation begins with James sharing his thoughts on the current state of the autonomous trucking industry.

Next year DARPA will have been 20 years ago, finally all of us that our on this path are at the point were autonomous vehicles are real and driver-out autonomy in the trucking business is going to happen in the very near future. – James Reed

Over the next decade the autonomous trucking industry is going to enter the commercialization phase with a strong focus on financial discipline. Financial discipline is one of James’ strong suits as he was previously CEO of USA Truck that was successfully sold to DB Schenker in September 2022 for $31.72 per share in cash. 

It’s not just success that James brings to Kodiak, it’s a deep understanding of economic cycles and how those impact operations and cash-flow. In the depths of 2008 financial crisis, James served as Division CFO at Washington Mutual. The bank was ultimately acquired by J.P. Morgan Chase because of their sub-prime mortgage portfolio. During the banking crisis James saw first hand how one division that takes on too much risk can sink an entire corporation. 

I learned about this dichotomy of you can be widely successful and still fail as a team. – James Reed

Being in banking is about risk management and this is a skill that influences how James runs operations at Kodiak. To manage risk, the team matters. You have to hire the best to mitigate the risk and limit your potential downside exposure. Including planning and forecasting as the economic environments can change suddenly. 

As we prepare to enter 2024, we could be entering a potential recessionary environment depending on the actions of the Federal Reserve and how the economy reacts to those actions. 

Well run companies plan for upsides, downsides including recessions as part of their on-going operations. – James Reed

Kodiak is planning for this potential economic environment as was an economic growth environment. Planning for all economic environments and what the potential impact will be on the Kodiak business is one of the core strengths that James brings to the team from his years of financial experience. 

The Kodiak business is not a pure-play autonomous trucking business, it’s a diversified business with a defense division because of the ability of their autonomy stack to work in unstructured environments. On December 5th, it was announced that Kodiak has been awarded a $49.9 million, 24-month United States Department of Defense agreement to help automate future U.S. Army ground vehicles. Moving forward, defense will be a key pillar of the Kodiak business. 

We plan to become a defacto prime in the autonomous software space. – James Reed

In 2024, Kodiak will continue focus on commercialization, industry partnerships and driver-out operations on public roads. 

Wrapping up the conversation, James shares his vision for the future of Kodiak which includes a potential IPO.

Recorded on Tuesday, December 12, 2023

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