From Founder to Funder with Ben Gordon

I'm glad to introduce Ben Gordon , the founder of Threeplex and EcoSquid and now the managing partner of both Cambridge Capital and BGSA . Good morning , ben , and welcome to the show .

I'm a truck broker and I've got freight to ship from Dallas to Chicago . What should the cost of freight be ? There's the old way of doing it , which was I went by gut , or I looked at my own historical data , or I looked at DAT , All of which had flaws . Any individual is never as good as technology .

When the systems work properly , good systems should always provide better , faster analysis . Looking at my own data , well , that's fine , but my data is limited . Of course , markets change and there's volatility . Then , looking at DAT , dat is primarily known for the 64% market share it has in load boards , not for attack . You're seeing pricing .

In fact , the pricing historically was based on trailing data instead of forward . Aggregate market data instead of yours . There's all sorts of selection bias in terms of what's included , which is why , as I know from the many truck workers that I've worked with , the error rate historically for that system is close to 20% .

If I'm a truck broker and my average gross margin just gross forget EBITDA is 14% , I can't take that risk . I'm going to be pricing at a loss an awful lot of the time if I do that .

The thought was wouldn't it be great to use AI to be able to come up with real-time pricing , to know exactly at this very moment for my shipment , for my origin and destination and my specific commodity , what the price should be with complete accuracy , instead of this wide uncertainty ? That was really the idea behind green screens .

Like most AI systems , the more data you feed it , the more accurate it becomes . As we started feeding more data to the green screen system , the error rates came down lower and lower and lower , to the point where it's now the most accurate real-time dynamic pricing system .

Green screens really , after years of R&D and a tremendous amount of technology investment , with a brilliant team of engineers in Vilnius , lithuania , in the last two years , by narrowing its focus on predictive pricing and by upgrading the team with real depth of understanding on the freight side , things took off Really in the last two years .

Green screens began with one great early adopter customer , which was NFI . Today has over 100 of the top 200 truck workers companies in the industry as clients . The company grew 550% last year . Really , it's become the in my opinion , head and shoulders above everybody else number one company in predictive pricing . I'm proud and excited to be a part of it .

I'm co-founder , although really the true founder , felix , put in years and millions of dollars of his own money to get it there . He calls me a co-founder . It's charitable , but titles aren't what matters . What matters is results . The results are that we've now got a tremendous team led by Don Selvucci-Favir and a broad range of other outstanding folks .

I'm excited to be a part of it and support it .

On the one hand , it was a great time to start a business because much like , say , 2021 , there was lots of entrepreneurial energy , there was lots of capital availability and there was a recognition that you could use technology to do things today that you couldn't do years earlier . What was different about 1999 was the end markets .

The people that would adopt technology were a lot less enthusiastic and a lot less willing to try things that were radically different . I'll get to how that impacted me . My idea back in 1999 was a simple one , which was why don't we use the internet to automate the process of matching freight with capacity ?

There were a lot of people back then that thought , hey , I could use the internet to disintermediate the middleman . You saw companies like Expedia and Kayak in the travel industry . In the B2B exchange realm , there was a company called Chemdex that really was the pioneer doing this for chemical distribution . I thought , hey , maybe I could do that in logistics .

I knew something about logistics because I'd had exposure to it . I had a family business . My grandfather started a truck leasing company called AMI . I was a strategy consultant at a firm called CDI , which was a Bain spinoff , that really focused on growth strategy . It was like McKinsey , but purely focused on growth and how companies could achieve strong growth .

Most people at places like CDI or Bain didn't want to go into transportation not the sexiest of industries . I thought , hey , I'll be the guy that builds expertise in transportation and could be in a position to be a leader in an area that , just frankly , didn't get as much attention . I spent time looking at the logistics world .

I noticed that remember this is back in 1999 , ch Robinson had just gone public , a hub group . Before that as well , these guys were doing great . Not a lot of people knew about the logistics arena .

I saw the growth and opportunity , but I also thought , hey , wouldn't it be amazing if you could use the internet to do what companies like CH Robinson do , but make it even better , more automated and higher margin ? What I quickly realized was what truck brokers do is really hard , adds real value .

When Silicon Valley guys naively say they're going to disintermediate , the middleman doesn't really lend itself to truck brokerage . In the same way , as Mark Twain said , rumors of my death have been greatly exaggerated . Rumors of the death of the freight broker have also been greatly exaggerated .

I decided a better strategy would be to partner with the freight broker , not to try to disintermediate him or her . I thought wouldn't it be great to use internet technology to give 3PLs the power to dramatically boost the productivity ?

You'll notice echoes in this 23 years later , 24 years later with green screens , and so , anyhow , the core idea was let's make 3Plex what today you would call SAS , tms that truck workers could use to give them an advantage , and a lot of it was exciting , but didn't always work the way I had intended , and I'll give you an example .

I was at that point in my first year at Harvard Business School and , by the way , the one thing that you can't do at Harvard Business School is skip classes . That's like the hardest thing is getting in , but once you're in it's hard to screw it up . But not showing up for class , that qualifies as screwing it up .

So I missed a few classes because I was trying to get 3Plex off the ground and I was so excited we got a meeting with our first major 3PL .

It was a company in Jacksonville called Stonier , and I put together a management team and we hired our head of sales who came from Schneider and had a product manager who came from Hub Group , and I naively said to them remember , I was 26 at the time , guys , we had this great opportunity with this 3PL Stonier .

So we all flew down to Jacksonville and had a meeting and we had our guys and they had their team and the meeting think of it as like a long table , like the table in Batman , where Michael came through one end . So they've got their team of one end , we're at the other end and their CEO says gentlemen , let's start the meeting .

I'm going to have to edit this , by the way , nate , for affinity reasons . He said gentlemen , let's start the meeting . And I'd like to get one thing straight . And at this point he bangs the table for emphasis and says I hate effing technology . And I thought , gee , this is a terrible start to my pitch meeting , right ?

So , needless to say , they were not prepared to be a buyer or a customer , and that was my rude awakening to the fact that what I thought was going to succeed wasn't necessarily the same thing that the market thought .

And really , the lesson behind all this was that no freight broker in 1999 , with few exceptions was super excited about spending large amounts of money on technology . What did they want to do ? They wanted to grow their business , grow their margin and make it simple and easy , and at the time it was a missionary sale .

Convincing a company to spend money on internet technology and they just hadn't been doing that anywhere else in the business was a hard thing to do . And then it was compounded by other things , and I remember we had a handful of mid-sized 3PLs that signed on in the first few months and one of them called and said hey , ben , your system is too slow .

And I thought well , too slow . I'm using it right now . It seems great . So tell me what you're doing , show me what you're doing . It turned out that he was using dial-up internet . I was like well , how is that my fault ? But the point is , things that you and I take for granted today weren't always the case then , and so there was a lot to overcome .

But I guess the last thing that I would say is , despite all of those challenges , everybody knew that we were trying something new . There was something exciting about it , it was fun . I mean , I was in the office past midnight most nights and I loved it .

I didn't complain or feel like I was burnt out or anything else , and I think our team felt the same way too , which was certainly in that first year . There was an intoxicating energy associated with trying to build something , and that was something special for me and something that , despite all the challenges , helped keep me going .

So if you want to scale your operations to save time and money , come join the EDI Revolution with us . Visit bitfratercom to get started today .

I think you have an interesting story because you've gone the route of raising money and exiting . You've had a different path than most . You've had the benefit of Ivy League education and likely a deeper network than most founders starting off .

So a lot of founders nowadays that I have conversations with are intimidated by raising money or they think some incorrect things about it . What was your experience like ? Did you feel like you had a shortcut to knowing how funds would approach evaluating your opportunity , or did you feel like you had an edge in knowing how to raise money ?

Second was I was at Harvard Business School and Harvard Business School I was able to take classes on entrepreneurial finance and again you would study cases of companies that succeeded and you delve into what did they do right and why .

And then the third was there's an unfair advantage associated with this , but the network in some places I mean Harvard Business School at the time was the place where 20% of all VCs had gone to business school . So whether I learned anything or not , or whether I knew what I was doing or not , I had the ability to reach people .

Now , I mean , in the end there's opening doors and then there's getting to closing . So that gave me a huge edge in terms of opening doors , but in the end , you're on your own when it comes to what happens next .

But I had the unfair advantage that I had access to all these people , so I could cold call or cold email all these VCs and if I had a credible idea and a shortened to the point message , and I was also able to leverage that network . There's no question that that helped .

Now , on the other hand , you could do all those things and then if the idea was dumb or the team was weak or badly executed , like . Obviously you're not going to get past that , but that certainly helped and I was lucky for that and grateful for that , and I think it's .

But having said that , I want to add something else , which is we did a friends and family round about a million bucks and that helped get us off the ground . But I probably in 2000 , I think pitched at least 40 VCs who all either said no or maybe . By the way , do you know why they usually say maybe ?

They say maybe because in the unlikely event that you're successful , they wanna be able to come back and say , oh , we're still interested . They don't wanna piss you off and shut the door . And then have you remember that you were treated badly by Kleiner , perkins or Greylock or some other major firm ?

So most of the time they would say maybe , but maybe really means no in the venture business .

So I got a lot of maybes and a few nos and nobody said yes , for like the first I mean just to give you a sense of how humbling it was I went out to Silicon Valley and rent a car and went up and down Sand Hill Road , met with all these VCs and most of them went badly , but none worse than the parking .

And then the parking lot in and I think it was 2850 Sand Hill Road and I was leaving one venture firm heading to Kleiner , and while I was in the parking lot I got side-swiped by another car and it was a woman in a Mercedes station wagon .

We get out and exchange information and her last name is Byers and I think , huh , that's interesting , because where am I going for my next pitch meeting Kleiner , perkins , caulfield and Byers ?

Okay , so I got side-swiped by the wife of Brooke Byers and if she's listening , I forgive you but , I was late for the meeting and frazzled and did a terrible job and certainly didn't get to a yes .

What were you like as a kid and how did you become who you are today ?

And but it's funny when you're a kid and you think you're a good writer . Sometimes it means that you use big words , and I remember my first job . I had an employer . He said to me Ben , you need to be less Faulkner and more Hemingway . So what did he mean by that ?

If you've ever read anything by William Faulkner , one sentence could run the entire page or more . In Hemingway it's like all nouns and verbs and you strip away everything else .

And what he was saying was get to the point and skip the flattery words and pretty good advice , and so that's something that stayed with me , and I think , to the extent , that there's a lesson in there . Whether it's writing or speaking , get to the point , note the main ideas and cut everything else out .

By the way , if you've ever watched , there was a special that Jerry Seinfeld did about how he writes jokes , and people think that someone like Jerry Seinfeld is just naturally brilliant , naturally funny , and I'm sure he is .

But when you go through , when he takes the audience through his creative process , basically he writes a joke and then he spends most of the time just chopping away at it it's like Michelangelo and just chopping until he finally gets the exact right shape and image .

And so , yeah , winston Churchill said I would have written a shorter letter , but I didn't have time because it's easier to write long and it's hard to chop it down . So , anyhow , chopping things down to something that I always noticed was a good way to communicate better .

The other thing is and , nate , maybe this also helped shape me is I was always the scrappy underdog . So what do I mean ? I mean , like when I was born , you know , you get an Apgar score when you're born one to 10 , 10 year , perfect . I was a one .

And I was a one because I wasn't breathing , because the umbilical cord was wrapped around my neck , and so I think that not to read too much into what happened when I was born , but I've always felt like the scrappy underdog . When I was in middle school , you know , I was a scrawny little kid who got picked on but fought back .

I didn't like bullies , didn't like letting bullies get their way , like , like you know , being scrappy underdog to , you know , stand up for himself and to help others stand up for themselves . When I got to high school , I was a . I tried out for the cross country team and I was so bad the first .

First of all , I got lost , which is not a good thing in a race . And then , you know , I ended up I don't know if I was last , but I was pretty , you know , close to the back of the pack . You know it was like 30 minutes plus for a 5K .

By the end of freshman year I had shaved nine minutes off , I was around 21 minutes , and then the next year I'd shaved another , you know , two and a half minutes off . And by my senior year I was a co-captain of the team , but it wasn't because I was naturally the best athlete , because I had very clearly was not .

But scrappy underdog , worked hard , tried to get better and you know , to be honest , coming back to the entrepreneurial side , look , I think it's anybody who's an entrepreneur has to have a chip on their shoulder , has to feel like there's something that they have to prove , and I always felt that way and I still feel that way now , so I think that's it's

something that I also look for when it comes to finding other entrepreneurs .

When let's talk about Cambridge for a second , when you're evaluating potential investments and you've been the founder , you've been the entrepreneur who's raised money and you've exited does that give you now an unfair advantage as a fund ?

And and that's a big deal , because I mean , look , when I started three plex , I had , you know , all these different venture firms and you know no offense to them , but most of them had no idea what it was like to actually go through the process of starting a business and building a business , and they were all happy to give their advice , lots of opinions ,

but , but not much that was grounded in the actual entrepreneurial journey .

And so if there's one real , what unfair advantage for us now , I think it's knowing what it's like to go through that and knowing how hard it is , but also knowing that you don't get points for , you know for , for , for , for empathy , you get points for ultimately getting the results and and we know what that's like and , I think , have the ability to help

people because we've been through that journey before . I think a second unfair advantage is all we do is transportation and logistics supply chain . So because of that sort of like the ten thousand hour rule , you do one thing more than other people . You should be better at it .

And and so Jerry Seinfeld's a better comedian because of the ten thousand plus hours that he put into honing his craft . Tiger Woods is a better golfer because he started when he was 18 months old , but you know a massive amount of time and anybody that puts more time into one thing should be better at it .

And , and I think you know to the extent you can specialize , you should . And and then I think the third you know potential unfair advantage is that we started early . Right , I started early . I mean , I'd started my first company and I was 26 , started our investment bank , bgsa , in 2001 when I was 28 and then started Cambridge Capital a decade later .

So starting early and seeing more reps , whether it's on the entrepreneurial side , the deal side or the investing side it just it helps you get to see more , no more , and hopefully be able to help more . Are you ever able to identify ?

But also , I Think , I think there's this romantic ideal that we have , that of you know , it's like Roy Hobbs in the natural , you know someone who , just who has that talent , has that it factor and despite all the adversity and , in his case , despite being Shot and and everything else , somehow he's just able to , you know , come through and , and I think that

that's that's , or , for that matter , hollywood endings , or , you know , disney World . I think it's not true . I think most successes are more about Grinding through and not focusing on the right things and then being a good learner and getting better at them and so .

So I think there is an it factor and there are qualitative things , but , but , but in my mind it's less about the so-called natural and and more about I think . I think it's more about what you do with what you have than what you have . And I'll give you an

example . Okay , the CEO . You asked about green screens earlier . Okay , dawn is the CEO . Dawn is not the prototypical CEO of a venture-backed company . Okay , what's the prototypical CEO ? I mean it's , it's the . You know the stereotypical . You know young Silicon Valley tech bro .

Right , you know who , who , what , worked at a high-profile tech company or dropped out of a high-profile school , is great at telling a big story full of much , is mo and and , and and and and tells you how they're gonna build a multi-billion dollar business that changes the world . And you know , don't isn't Any of those things .

Don is somebody who worked hard and became one of the world's leading experts in product management , transportation technology , but is understated .

You know , far from that braggadocious Silicon Valley tech profile we talked about , much more cautious , much more focused on under promising and over delivering , will pause or say I don't know and she doesn't know the answer , instead of embellishing with some huge kind of you know Adam Newman style . You know , monologue , monologue . But .

And so , interestingly enough , when I met Don , I , we first thought , hey , she would be great for product management .

We didn't make the decision about CEO and we actually collectively , don and me , felix , we , we , we have a lot of other CEOs and after a while what we realized was you know , the best CEO for this business is the one that understands the product the best , the customers knows how to deliver , has the most credibility as a product manager .

You have to understand the engineering side as well as the customer side , so that kind of the ability to sit in the middle and understand everything and don was all of those things and a plus level . And so , you know , I felt silly about it .

I went back to Felix and said , hey , the right answer has been right here all along , and I was too dumb and we , we missed it . It's done , she's , you know , she's the answer . And the funny thing is like we knew it . But you know , we're a little bit slow and figuring , figuring out something that hindsight was so obvious .

I mean , don's been such a spectacular leader for business . But the market , the venture market , you know , same thing . You know we met with a lot of other investors and of course we came , which we're interested , enthusiastic , but we had kind of like three plexon , ninety , nine and two thousand , a few nose and a lot of babies .

For all the reasons that you know that I alluded to , she didn't fit the model of what you know , the stereotypical Kind of classic , you know , venture backed CEO would be at that stage . But guess what ?

In the end I worked out and Tiger came in and led , and a variety of other firms joined us and , of course , you know , cambridge put in more and the proof is in the pudding , right , I mean done for the business five hundred fifty percent last year .

So so , but the lesson was that the thing that the everybody else was looking for was the wrong thing , and and that's important , and I guess the last thing that I'll add is , I think to be an entrepreneur you have to have humility , to know that you have a point of view but you test it and if you're wrong , then you change your point of view .

This isn't like politics , where you're rewarded for having the same opinion for your entire career and you're castigated if you were one thing before and you're another thing now . I mean , you know , if someone goes from pro choice to pro life and pro life to pro choice , usually both sides hate them , right ?

I mean , in politics you're awarded to have one opinion , but in entrepreneurship you're awarded to look at the data and say , ok , well , what's working ? And if it's not working , let me change to something else . So you know I was wrong in the beginning about the right answer for the perfect CEO .

But you know , thankfully we woke up and realized that , that you know that we had that , that perfect fit , and I think that's you know .

That's just a microcosm of what I think any , any entrepreneur has to deal with , and I think any good investor has to have that same mentality , which is the humility to know that you might be wrong and the willingness to look at things differently and figure out , ok , what did I miss and what might be a better approach .

But this education component of helping other founders learn from other founders and people who've gone before and people who've sat in different seats around that table , I believe is incredibly valuable . It's valuable . It's part of why I'm so committed to bringing as many founders together through this as possible .

So thank you for exploring your entire journey thus far . The last thing I always like to leave with a founder is gratitude , so I'm curious who are the people that have been the most impactful and have contributed the most to your journey that you want to recognize ?

watching him . This was somebody who , when he was a senior in college , his dad was in the steel business and he met with one of the VPs at Bethlehem Steel . And the VP said to him his name was Gene . He said , gene , what would you like to do after college ?

And my grandfather said well , you know , I've heard great things about the Bethlehem Steel management training program . I'd love to have the opportunity to be a part of that . And do you think I could ? And again , this is a senior VP at Bethlehem Steel who did business with my great grandfather .

So , like you wanted to help , he said I'm sorry I can't help you . Well , why not ? He said well , this is 1947 , by the way , he said , we don't hire Jews for that program . So think about how crazy . I mean , here we are in 2023 . And , by the way , I mean , there's still plenty of prejudice in the world .

Maybe it's less open and explicit , but so my grandfather said well , I guess the plan that I had isn't going to work . I better come up with a different plan . So what does he do ? He goes into business , he goes to join a car dealership in Worcester .

But he says to the owner and this is a pretty pretty I would say ballsy thing to do he said I want to work for you for three years and then I want the opportunity to buy you out . And remember , he's a 22 year old kid , he wants the opportunity to buy him out . How's he going to do that ? Well , sweat equity and borrowings , and you know , guess what ?

That's exactly what happened . So he ends up at the age of 26 , becoming the CEO and owner of this car dealership in Worcester called Harford , and Harford would become the basis for an exp . He ended up building a chain of car dealerships and then a truck leasing business and then got into dedicated contract carriage .

But it all started because he had the gumption to turn failure into an opportunity for success . And it's such a beautiful , inspiring story for me because you know , every day when you're an entrepreneur , you have failures , right .

I mean , some of them are big , some of them are small , and it's not about what happens , it's what you do with what happens to you . And I think he was such a great example of that and you know , look , throughout his life he built a great business . He ends up running a major global nonprofit .

What he did in building and running the Joint Distribution Committee , something that inspired me , among other things , to start the Ukraine Logistics Coalition last year to use , you know , my network and capabilities to help create supply chain networks to bring more medical supplies into Ukraine .

So I think , you know , I'm very grateful for the role modeling and the opportunity to learn from my grandfather . I would say a second person to be grateful for , I mean , look , my that first job and the you know the boss that said less , less , less Faulkner and more Hemingway .

You know it's great advice because , look , I thought , and I think probably most of us , and let's face it , this is sort of I'm sure it was different for our parents' generation , our grandparents' generation , but you know , but many of us were raised to think that we were brilliant , we were perfect , and our parents told us all these great things and then life

slaps you in the face and you realize , gee , maybe I'm not all these . You know things that I , you know , thought I was but done properly . I mean , what a great service it is for someone to tell you hey , you're not actually that good at this , even though you thought you were . Rethink it , figure out how to get better at it , and I think that's .

By the way , another boss that same month told me asked me , said you sure you want to work here , which is not really a great thing to come up in a review , right , if you're reviewing ?

There was a woman named Tanya Yanis who sat next to me in section in business school , also happened to have the exact same birthday and and a lot of similarities but also a lot of differences . And when we talked about the idea for Threeplex , you know , tanya said well , let's do it .

And you know how sometimes you come up with an idea but you're not really committed to following through on it , and sometimes it takes somebody else to say hey , nate , you know that's a good idea , do it . And and you sometimes have that moment , there's a moment of truth and you go am I really going to do this or not ?

And Tanya , by encouraging me , helped cause me to think you know what , I could not just be the guy that comes up with an idea , I could be the guy that goes and start something and , and you know , starting the first business . It's kind of like like a flywheel effect Once you get things started , everything gets much easier .

So the process of starting my first company it might not have happened if Tanya hadn't challenged and encouraged me . And , and I think you know , it's way easier to start your second , third , fourth business after you've done that the first time . So lots of other people , but those are three that stand out .

Where can people find you if they want to reach out ?

Capital . Today we really want to be the first call for entrepreneurs building great businesses and supply chain . We're typically writing $10 to $50 million checks in either growth or buyouts , and so that typically means we're not investing in pure startups .

We're investing in companies that are a little bit further along in the journey and that have some proof points of attraction .

We also have an annual conference every January in Palm Beach at the breakers , and so even if Cambridge Capital isn't the right fit as an investor , you know we're always happy to invite more great people and great entrepreneurs to come to the BGSA supply chain conference , and you know anything I can do to help support the entrepreneurial journey for other folks in

the supply chain arena .