Dave Gulas:
Hello, everyone, and welcome to another episode of the Beyond Fulfillment podcast. I'm your host, Dave Gulas. This week, my guest is the founder and the CEO of BGSA supply chain strategic Advisory Services, as well as Cambridge Capital. Ben Gordon. Welcome, Ben.
Ben Gordon:
David, how you doing? Great to see you.
Dave Gulas:
Hey, great to see you as well. I'm doing fantastic. Thank you so much for being here. So, Ben, clearly you're a well established figure and well known throughout our industry. If you could, can you just tell us, you know, about your backstory and how you got into supply chain originally?
Ben Gordon:
Well, I was born without a chromosome, and so I had no choice. No, I'm kidding. I've been in supply chain all my life. It's an industry that I've really been involved with since the beginning. I actually had a grandfather who started a truck leasing company. His grandfather started a horse and buggy business. So you could say that there are five generations in my family in the supply chain world. 25 years ago, which seems like ages, and it is.
Ben Gordon:
I was in business school and had the idea to start an Internet company focused on logistics. At the time, there were these other companies sprouting up in the e commerce arena. So two years ahead of me at Harvard Business School, a guy named Dave Perry had started Chemdex. That was really the first b two b exchange in the industrial world, in his case, in the chemical industry. And I thought, hey, wouldnt it be great if we could do something like that in logistics? And ended up starting what would become three plex. It evolved into a TMS, one of the first. Today you call it SaaS. TMS Venture back, raised 28 million, sold it in zero two to Maersk.
Ben Gordon:
Maersk sold it to IBM three years later, and here I was in the supply chain world, and I've started a string of companies since then and now advise and invest in them. And I've had the opportunity to work with lots of fantastic companies in supply chain over that time.
Dave Gulas:
Okay, so coming right out of school, right, you had this desire to start a business, be an entrepreneur. You went to Yale and then Harvard Business School. So when you first started, what was to become three plex, right. Clearly great timing in terms of.com and where the Internet was going at that time. But what was it like in terms of your first venture and really figuring everything out as a young entrepreneur and to get that type of backing and then have a successful exit so soon. What was that process like you?
Ben Gordon:
Well, it was intense. I mean, fun, rewarding, made a lot of mistakes. I mean, I think when you talk to people who've done something over and over again, you know, they're really good at making the world slow down for them. You hear this from great athletes, right? I mean, you know, when it's, you know, pick, pick your, you know, Kobe Bryant would, you know, talk about the last minute of the game with the ball in his hands, and time would slow down for him because he was so good at it. Well, on the other hand, when you're a first time entrepreneur like I was, it's the opposite, right? I mean, everything is coming at you fast, and you've got lots of decisions to make. You know, who do I focus on? What customers do I go after? When do I know to say no versus yes? What people do I hire? How do I know what to look for? How do I know if I'm making a mistake? How much money to raise? How do I convince people to invest? Knowing that you simultaneously are juggling questions about capital people and customers, and they can't all simultaneously happen, but you sort of have to make them simultaneously happen. So a lot of challenges. But in the end, I guess I would summarize it by saying that the first month of three plex was an amazing, exhilarating, and intoxicating time, because essentially, we came up with the idea, which was originally a b two b exchange that became a marketplace, that became a tms, but it was all about how could we use Internet technology to streamline the logistics world.
Ben Gordon:
Spent a lot of time talking with brilliant people, some of whom I'm still friends with. I mean, I remember calling George Abernathy when he ran sales at Sabre. And George went on to. To run or help run companies like transplace and freight waves and a number of others, but asking questions from smart people so that you could learn more, which is really, I think, the foundation of the entrepreneurial journey was great. I mean, I remember we did over 40 interviews with people like George and voluminous notes, and that just helped us get smarter about what was broken and how could you do better? Third, I remember some of the key early decisions. One of the most important was people. And picking Tanya as a co founder and partner who ended up being a tremendous ally and sort of a great team, division of labor and who's doing what. Ability to candidly discuss, debate, and, as Jeff Bezos likes to say, disagree and commit.
Ben Gordon:
A, because you don't always have agreement on everything, but you still have to figure out how to move forward. And then lastly was raising capital and figuring out how to find investors that would believe in us and back us and allow us to continue on our journey. So I think those are four of the critical things that really happened in the very beginning and made a lot of mistakes, but learned a lot from it.
Dave Gulas:
And that last point you mentioned about raising capital, clearly you're an expert in that, and you've got one of the largest private equity firms within our industry. As someone such a young entrepreneur, what was that like for you? Trying to figure out how to give investors confidence in a new idea, in a new technology, as the Internet was at that time, and someone was young in your career?
Ben Gordon:
I mean, it was super hard because first of all, in the beginning, I didn't know what people were looking for, right? I mean, as an entrepreneur, as a founder, you think, you know what matters. But number one, you might be wrong. And number two, different people have different opinions, right? So, like, I remember spending a lot of time talking to investors and explaining to them what was a three Pl. Why would we ever want to focus on this weird niche that most VC's had never heard of? This sounds crazy. It probably sounds crazy to you because, I mean, you know, like, obviously you know a tremendous amount about what a three Pl is and so does your audience. But at the time, people outside the industry were much less aware of what this industry was. So, you know, I quickly realized that I had to spend more time educating investors on, well, it's a three pl. Why does it matter? Why is this even a category that matters? Spend a lot of time educating them on, why was this a large, growing, fragmented market with real problems, and how were we solving something that was significant then? Lastly, I just showed them that people that knew the industry believed in us.
Ben Gordon:
And so my initial approach was, oh, well, we'll just go to Silicon Valley and talk to venture capital firms. I had a somewhat a hilarious but embarrassing trip to Sandhill Road, you know, the legendary street adventure capital, in December of 99. And I was driving from one vc to the next, and I was driving from sequoia to kleiner Perkins, which were both on Sandhill Road. And while I was in the parking lot leaving sequoia, I got sideswiped. Okay? So I'm driving this rental car, and now there's a massive dentin the side of it. Like I had to get out and pull the metal off the wheel up the tire because the tire wouldn't operate. So now I'm dirty, I'm covered in grease, I'm late for the pitch meeting. And then, best of all, I exchange insurance information with a woman that hit me.
Ben Gordon:
And I noticed that her last name is Byers. And I think, huh, that's interesting, because the next pitch that I'm going to is Kleiner Perkins, Caulfield and Byers. So I just got sideswiped by a named partner's wife. I'm thinking like, okay, this couldn't be worse. I'm going to show up late, dirty, I'm agitated, and I got in a car accident with a partner's wife. And so, needless to say, wasn't my best pitch. None of those Silicon Valley meetings went well, actually. And we didn't get term sheets from any of them.
Ben Gordon:
But what we did do, and this was very important, we ended up going to people from the industry that knew what we were doing. New supply chain, new three pls knew why technology could help, and we got some CEO's in the supply chain arena to invest in us. That helped partly because they were smart, but also because the investment world really is full of lemmings and everybody wants to know who else that knows more than them is in. And so if you told a generic VC that you were going to revolutionize an industry that they knew nothing about, usually they would pass. But if you told them that several of the smartest people in the industry were already in as advisors or investors or otherwise, all of a sudden, same business, much more interesting to them, much more appealing. And we did that. And in the end, we ended up getting investors like Goldman Sachs, Morgan Stanley Bank, Boston Ventures and a host of others. So, a lot of false starts, but I think the important lesson was start with smart, value added people that know the industry.
Ben Gordon:
And if you fast forward to today, David, one of the reasons why we're building Cambridge Capital the way we're building it, is we want to be that kind of smart, value added partner for other entrepreneurs and supply chains. So, because I know how hard it was for me, and I also know how much value an industry expert investor can bring to a business. And so, you know, that's really, this is all about applying what we learn to help companies in the next chapter.
Dave Gulas:
Okay, so was that part of, like, the impetus to start Cambridge is the experience you had going to the VC's and what it was like, and basically you're learning through that experience. That said, I'm going to start my own and do it differently.
Ben Gordon:
Exactly. Our goal was, let's be the kind of investor that I would have wanted at three plex 25 years ago. Let's be the kind of firm that number one knows the industry. So we don't waste entrepreneurs time asking a lot of remedial questions about how does this work. Number two, let's make sure that we can not just bring money, but can bring expertise. Whether that's knowing the business, knowing customers, being able to make introductions. This is the number one thing, by the way, that I think companies really value. It's the commercial introductions.
Ben Gordon:
Most investors believe they add value through strategic insight. And most entrepreneurs really just want practical help. They don't want to be told what to do by somebody wearing a vest and sitting in New York and claiming expertise in something that they were never on the operating side of before. But everybody wants access to customers. So, for example, for pretty much all the companies we've invested in at Cambridge Capital, we'll get involved in helping in those areas. We'll introduce them to customers, and we know hundreds of CEO's and cs and other supply chain leaders, that commercial impact really makes a difference. You were at our conference a few months ago, there were over 350 CEO's, csos and other supply chain leaders there. So the access to those people, I think, really matters.
Ben Gordon:
And then lastly, pattern recognition. So one of the things that, that I think can be really valuable, when you're an entrepreneur, you're building one business, and maybe if you've been a serial entrepreneur, you built another one or two or three other businesses. But wouldn't it be great to have access to the playbook, the pattern recognition, from seeing lots of great successful companies? Well, thankfully, we have a playbook like that because we've worked with so many great companies. Original investors in XPO, which spawned GXO and RXO, we were original investors in a whole host of other companies in different areas of supply chain that you might know, bring in last mile reverse logics and returns, bird and e commerce fulfillment. And so the pattern recognition from seeing what's worked elsewhere is something that most entrepreneurs end up finding really helpful. Because you want to know, okay, how did somebody else do it? What did that guy do right? How can I learn from that? Because, I mean, like Brad Jacobs built $20 billion of value with XPO, RXO and GXO. Wouldn't it be amazing to be able to learn from the things that he did right? Or think about some of the other amazing people that have built multi billion dollar value, growth and success the way Sid Brown built NFI, the way Herb shear built Genco, the way Doug Wagner's built echo. Like, these are all great guys, and those are companies that we've worked with.
Ben Gordon:
In some cases, those are CEO's who are operating partners or advisors. And those are some of the kinds of amazing people in companies that I think being able to study, learn from, and contribute to helping others on their entrepreneurial journey can really make a difference.
Dave Gulas:
Yeah, absolutely. And I can speak to that firsthand in terms of being at your conference. And just so for the audience, if they don't know exactly what we're talking about. So you put on every January at the breakers in West Palm beach. It's called the BGSA supply chain conference. And we'll link this up in the show notes for everybody. But like you said, it's 350 plus logistics, CEO's packed agenda, excellent roundtables. You do a shark tank there on site.
Dave Gulas:
Can you just speak about, like, what inspired you to start that event and how it's evolved over the years?
Ben Gordon:
Absolutely. So back in 2005, after I had sold three plex and we were starting, we were building BGSA, I went to a Goldman Sachs transportation conference. Actually, I brought my wife to it, and she said to me, well, you know, why are you bringing me to this? And I said, well, look, I mean, it's a fun event. I'm going to go see a lot of CEO's and have some interesting meetings. And how can you not have fun? I mean, you're going to be at a great event, and Goldman's putting it on and they're the best, right? Well, the event was okay. And I asked her, what did you think? And she rattled off a bunch of things that she thought could be better. So I said, well, I, you know, you think you're so good at it, you know, why don't you put something better together? She probably regrets this, and if she hears this, I'm sure she'll have her version. But ultimately she said, okay, I'll do it.
Ben Gordon:
And so we ended up, my wife ran the conference the first year back in January of 2007, and we had, I think, like 70 CEO's. It was at the breakers. The goal was simple. It was really, let's bring together the best and brightest in the industry. Let's reframe it as something that doesn't really exist here now, which is not a trade show, not like an industry association event, not a Wall street event, but really a gathering of the best and brightest, debating the big issues. How do you think about m and a? How do you think about growth? How do you think about technology? How do you think about innovation? One thing that's worth noting, and, I mean, look, if you're a student of the industry as I know you are, David, 2007 was around the time that big industry association was still called CLM Council of Logistics Management. I don't think they changed their name yet to CSCMP, to supply chain management. So people weren't using the phrase supply chain that much back then.
Ben Gordon:
But our thought and our tagline was really the gathering of the best and brightest across all areas of supply chain. And that was so important because letting top CEO's in warehousing, top leaders and truck brokerage or freight forwarding or intermodal or various areas of supply chain software, that cross pollination of ideas was really powerful. And the model that we had washing. There's a Sun Valley conference for the tech world, tech media and telecom that the Allen company investment bank hosts. The Sun Valley conference is sort of like that. Best and brightest in TNT. People go, they have fun. It's a great destination.
Ben Gordon:
They learn a lot. A lot of deals happen. We thought, well, why don't we build that for supply chain? And I mean, you've been there. You were there for our 18th annual conference, and I believe we've built that. And I think it's measured not just in the caliber of the people that are there, but the quality of the ideas, the nature of the deal activity that comes out of it. Deals like Uber, transplace, and many others that have happened there. And the fact that people keep coming back over and over because they learn so much and the people are so outstanding. I'll tell you, David, during COVID in 2021, we canceled the conference.
Ben Gordon:
And then I got calls and emails from something like 30 guys, mostly CEO's, and they said, ben, you have to host a dinner. I said, what do you mean I have to host a dinner? They said, well, we're still coming anyhow. I said, well, what are you talking about? We canceled it. They said, nope, we're coming. We've been coming for years and Covid is not going to stop us. So we hosted an outdoor dinner and it was different, but, you know, it was, it was fun and it was special. And I think it tells you something about the cult following of CEO's and leaders that keep coming back and benefiting from it.
Dave Gulas:
Yeah, absolutely. Tremendous event. Okay, so like you mentioned, after starting Cambridge, you had string of successful investments and, you know, like you said, XBO and many other companies, and you're still very active present day. Can you just talk to our audience? Because I think that'd be very helpful too. Just about like when you're investing about in a company, I mean, clearly, you have to understand the business and all of that, but as far as the entrepreneurs themselves and like the founders that you're backing, what are some of the most important things that you look for in a founder that you're going to invest in?
Ben Gordon:
Yeah, great question. So, look, it's important because, I mean, it's worth noting, David, that we do both growth and buyouts. Growth investments tend to be companies that are earlier, not super early, but they're typically like five to 25 to 30 million of recurring revenue if they're software companies. And so you're investing in business, but you're really investing in the people. And it is a binary thing. You have to believe the business is great and you have to believe the people are great. If both of those aren't there, again, it's a binary decision. We wouldn't proceed.
Ben Gordon:
So the question that you're asking is important, what do we look for? And people matter on the buyout side, too. But I would say it's extra important when the business is just earlier. What do we care about? Well, number one is tenacity in overcoming obstacles to succeed. Why? Because life throws you curveballs. If you were building a company in 21, 22 and you were riding the wave of e commerce and Covid and shortages and all kinds of growth, you might have thought, hey, I'm on this straight line upward, and things continue that way. And, well, the last two years has been a slap in the face from reality that doesn't work that way. And so people with grit, resilience, ability to overcome obstacles, figure out how to solve those problems and deal with them, but not everybody can and not everybody does. So I think that's super important.
Ben Gordon:
And it's hard to measure. It's hard to assess. I mean, you can get at it by asking people, how did you overcome adversity? What was something difficult? What did you do about it? How'd you get past it? But in the end, that's a really important thing to evaluate. So I think that's one, two is, look, I think you look for people who are related that are winners. And, yeah, there's winning in business, there's winning in sports, there's winning in life. But, I mean, there are lots of different ways where you can be a winner. And, I mean, it's helpful to know what's somebody's passion and how did they figure out how to be the best at something, whatever it is, whether it was a sport or a nonprofit or an extracurricular or otherwise. But in the end, you know, people say past performance is not indicative of future performance.
Ben Gordon:
That's partly true, but it's partly not true because, you know, as I said, winners figure out how to win in different places in their life. And so I think that that matters. Third is coachability. And that's important because, look, nobody has all the answers. I certainly don't have all the answers. But, you know, there's a great line about, I think it was Socrates, and somebody asked Socrates, why are you known as the wisest man in Athens? And he said, well, I'm not the wisest man in Athens. And he rattled off several people that he thought were smarter. And then he said, well, maybe it's because I know what I don't know, that I am the smartest man in Athens.
Ben Gordon:
And, I mean, that's not just a philosophical aside, it's a big deal. I mean, you have to know that you don't have all the answers. Embrace that and recognize that there are other people that can help you on your journey. And if you think you have all the answers, great, you know, but maybe, maybe you're the one person that's ever lived that has all of them. But for the rest of us mere mortals, humility, growth, mindset, learning, the desire to question what you've done and see whether there's a better way to do it and to be coachable, that's super important. By the way, a lot of people don't have that quality because part of what makes you a great entrepreneur is that you're stubborn. You're going for something that's hard. But if you're going for something that's hard and you don't also step back and question, hey, am I doing the right thing? And does this still make sense? And does this assumption still hold? You're often just going to put your head down and run, but you might run right into a wall.
Ben Gordon:
So coachability matters. And then, look, I think the fourth is realistic assumptions and goals about what you're looking for in a partner. There's some people building a business and they say, all right, having an investor is a necessary evil. Like, I need it because I want money for growth or I want to sell a stake or I want something else, and that's fine, but it's not really a good way to pick a partner, right? I mean, if all you're doing, you're looking for a tool, you know, a hammer or screwdriver, some other tool, that's not really what an investor is. Ideally, an investor is somebody that knows your business, that knows you, that can be helpful, and that's a welcome part of the process. And if you don't have that mentality or if you don't have that partner, then you're just set up to fail. So, in my mind, those are the four critical things. Ability to overcome obstacles, winning mentality, great, great listening skills and curiosity and growth, mindset and coachability.
Ben Gordon:
And I think if you really boil it down, I think those are the four common ingredients and the best CEO's that we've worked with. And so those are things that we look for.
Dave Gulas:
Okay, outstanding advice. All right. And Ben, if people want to get in touch with you and find. Find out more about Cambridge Capital or BGSA or the conference you put on every January, what's the best way that people can reach out to you?
Ben Gordon:
So I'm pretty accessible. You can go find me on our website, cambridgecapital.com, comma, you know, BgsA.com, comma, go to LinkedIn. You know, the handle is. I think it's Benjamin Gordon, 18. I should know that. But if you just search for Benjamin Gordon, Cambridge Capital, pretty easy to find. You can find me on hacks or elsewhere. And, you know, I am, because I know what it's like to go through that journey.
Ben Gordon:
I definitely try to go the extra mile to be available and be accessible, to be helpful. I can't always promise how much time I'll have, but I tend to be responsive same day, responsive whenever I can, you know, travel notwithstanding, because I know what it. What it feels like on the other side. So would encourage anybody that's building something great or knows somebody that's building something great, you know, please reach out.
Dave Gulas:
All right. And we'll link all that in the show notes for everyone. All right, Ben, thank you so much for taking the time. We really appreciate all your wisdom, and that's all the time we have for now. We will see you next time.
Ben Gordon:
Thanks, David.