Greg White (00:00):
This week tequila, sunrise, we talked to scrappy, underdog turned investment icon, Ben Gordon from Cambridge capital. We learn how Ben works with companies like XPO, DHL, and bring to capitalize in every sense of the word on this amazing supply chain industry. There’s a lot to learn from Ben. So you better listen up.
Speaker 2 (00:31):
[inaudible]
Greg White (00:32):
It’s time to wake up to tequila sunrise we’re unfortunately, without the aid of tequila, we opened your eyes to how venture investing ticks focused on supply chain tech every single week, this unholy hour of the day. If you want a taste of how tech startup growth and investment is done, join me every week for another blinding tequila, sunrise, Greg white here from supply chain. Now I am always happy, never satisfied, willing to acknowledge reality, but refusing to be bound by it. My goal is to inform, enlighten and inspire you in your own supply chain tech journey. Hey, if you are listening on SoundCloud, you should know. You can only subscribe to tequila, sunrise on apps like Apple podcast, Spotify, Google podcasts, or others, and be notified when we pour out another shot, subscribe to tequila sunrise today. So you don’t miss a thing.
Greg White (01:43):
All right. The most important thing going on in supply chain tech this week is our discussion with Ben Gordon. So get ready. We’re going to cut over to that and you’re going to get to move from smooth jazz voice to yelling voice. We’re going to hear from Ben and his perspective on the marketplace. In this two part episode, you better listen up. All right, let’s bring in our guest, Ben Gordon, founder, and managing partner of Cambridge capital and founder of Ben Gordon, strategic advisors and investment banking firm. So let me tell you a little bit about Ben. He’s dedicated his career to building successful supply chain and technology companies. I’d say he’s done. Okay. They’re advised over 1 billion worth of transportation and logistics transactions. He has been invested in several companies in the field, some of which we’ve mentioned on the show bring and lift it.
Greg White (02:43):
And there are some deals pending, which we are contractually bound not to talk about just yet. In 2010, Ben founded Cambridge capital, a private equity firm and the transportation logistics and supply chain tech sector. And in 2002, prior to Ben founded BGSA AF for mentioned. So get a load of the companies that Ben has worked with consulting with at BGSA DHL ups, agility, coulda Noggle nations express, re trans Dixie GENCO. My buddy, Eric Wilhelm at will pack and echo. They’ve all trusted been to help grow strategies and acquisitions. I’m going to let Ben take the rest of the story from that point back in his history and tell it to you. Let’s welcome Ben in Ben. It’s great to have you on tequila, sunrise. Thanks for joining us.
Ben Gordon (03:33):
Thanks Greg. Great to be with you and great to see you again.
Greg White (03:36):
Likewise, it’s always good spending time with you. So I want to figure out what you’ve been up to lately that you can share with us.
Ben Gordon (03:43):
No, I’ve spent the last six months in one place here, and that’s the longest that I think even prior to college, I think it’s really since high school, the longest I’ve been in one place,
Ben Gordon (03:57):
But we’re all, we’re all living through this. The same disruption, the silver lining for me is that we’ve actually gotten three deals, done it in this COVID environment. And we’ve been able to, to discover that we can still find, invest in and help great companies, particularly in logistics, technology, not, not withstanding this, this huge and, and disruptive covert environment. And I think, I think it’s a Testament to the fact that, you know, first of all, life goes on. Second of all, logistics technology companies are actually doing better than ever, uh, because the virus doesn’t stop software and goods and commerce still continues. And so supply chain continues to play a vital role in helping to make it happen. So companies like lift it and bring in others, continue to actually increase their growth amidst these challenging times. And I think that’s been amidst the, all the horrible losses of the last six months. That’s been a silver lining for
Greg White (05:02):
It has, you know, I’ve heard it said many different ways, but essentially this is supply chains time. You know, that we’ve made it been when we don’t have to sit and explain now in your family, it’s different. But in my family, every time you sit down to a meal, you have to explain now, what is supply chain again? When you hear your parents understand it, consumers understand it. And even politicians understanding what supply chain is, you know, that it’s supply chains time.
Ben Gordon (05:30):
It’s funny you say that. I remember 18 years ago when I was on a panel with Joey Karnes, the CEO of Bax global, and somebody asked him, Joey, how do you explain what you do to your family? And he said, Oh, I tell them import and export. And they think I’m a drug dealer. So we’ve come a long way in terms of recognition of what’s right.
Greg White (05:50):
It’s the right kind of recognition for sure. No doubt. Well, all right. So I wanna, I want to make sure our gets to know you a little bit, then I would love to have you share your wisdom with them a little bit about your journey. You know, we’re always trying to inform investors and founders and executives of these supply chain tech companies and some casual and not so casual observers, believe it or not. We’ve got a ton of listeners in our community who aren’t in supply chain tech, but are somehow fascinated by it. I think they see the future coming like we do. It’s a great opportunity for them to hear from you. I’m really excited for them to get your knowledge, but let’s start way back in the beginning. Tell us a little bit about your upbringing, a little bit about childhood and youth and any kind of life shaping or changing moments that jump out at you.
Ben Gordon (06:41):
Yeah. Well, I had a couple of defining moments in my life. I mean, first of all, you know, I grew up, you know, middle-class Philadelphia suburbs of Philadelphia. I didn’t grow up dreaming that I was going to be a supply chain investor. I thought I was going to be a baseball player, thought it would be a pro athlete. And actually, I remember I was shooting baskets in a gym in Philadelphia and Charles Barkley came by and as a kid, you know, you, you look up to these sports heroes and they are larger than life, but all the more so, uh, you know, in that contractually large. Yeah, exactly. He’s six foot six and three, 300 and I’m considerably less on both fronts. So I asked him, I said, mr. Barkley, do you have any advice for me? And he looked at me and I was this scrawny little 14 year old kid. And he said, son, my advice to you is go to law school.
Greg White (07:36):
He did really say that you got advice from the round mound of rebound. That is truly impressive.
Ben Gordon (07:42):
I did. And you know what? I didn’t go to law school, but he was right that my future was not going to be as a professional athlete. And so, you know, I decided that I wanted to learn how to build businesses. And I had a role model. My role model was my grandfather. My grandfather had started a truck leasing company in 1948 and his grandfather had started a horse and buggy business in 1903. I had five generations of, of this crazy transportation Jean and I went into strategy consulting. I worked at a Bain spinoff called CDI. I spent three years in Boston, in Paris doing strategy consulting. I looked for opportunities and transportation. Cause I thought maybe this would be my path because start as a generalist. And then specialize, we worked with a company called extra trailer, leasing, great company, Warren buffet ended up buying the business.
Ben Gordon (08:35):
So trailer leasing company, and we developed a strategy, proposed a strategy for them to go into logistics. I remember we were talking with them about buying hub group or ch Robinson or others in the three PL space. They didn’t do any of those things cause they sold to Berkshire Hathaway. And I remember thinking, you know what, it’s fun to do the work and develop the strategy, but it’s more fun to actually do it than to talk about it. And that’s what I knew that I wanted to go do something entrepreneurial. And so while I was at Harvard business school, I came up with this idea of using technology to help my grandfather’s truck leasing business. So he had all these trucks that were going out full, coming back empty. Remember this is 98. So I said, Hey, there’s this thing called the internet. You may not have heard about it, but I think it’s going to make an impact.
Ben Gordon (09:25):
I might be wrong and we could use the internet to broker the dead hall. So you’re going at full coming back empty, uh, use the internet to match the freight with capacity. And I remember, you know, in true business school geek style, I wrote this 80 page business plan and I showed it to my grandfather. And you could imagine I’m sitting face to face with my grandfather. Who’s a, he was a great entrepreneur, but not somebody that really wanted to sit through an 80 page business plan. And uh, I get to page three and he stops me and he says, I’ve heard enough. I said, well, what do you think? He said, Ben, I think it’s a good plan, but I have a better plan. I said, well, what’s your plan? He said, well, I’m selling my company.
Speaker 4 (10:16):
Well, hell he’s selling it. That’s the only, that’s only a few words that doesn’t take 80 pages.
Ben Gordon (10:20):
No, it doesn’t take 80 pages. And it was not in my plan, but guess what? It wasn’t my company. It didn’t get to be my plan. So he sold his company. It’s now it’s now part of Penske. And I figured if you believe in your idea, you ought to go for it. And so the defining moment for me was the decision to go ahead and start something. And you know, it felt risky and scary. And you know, you you’ve been an entrepreneur yet. The moment when you commit it sometimes seems like a crazy thing to do. But once you decide you shift from, should I do it to, how will I do it please? The moment, right? It’s when everything changes when you stop thinking, should I? And certain thinking, how will I, uh, it all comes together. There’s a professor at Harvard business called Howard Stevenson. And he said, the definition of an entrepreneur is somebody who pursues opportunity without regard for resources. And isn’t that exactly what we do. Right? You have the idea and you say, I’ll figure out how, but first you have the idea and you make the commitment to go for it. And that’s, that’s how it started for me. And so, so I ended up starting threeplex I wrote this business plan. I almost got kicked out of business school for missing too many classes. Um, squeaked by
Speaker 4 (11:36):
You and Fred Smith, right? Did you get an F on yours also?
Ben Gordon (11:39):
Uh, I didn’t get an F I, I gladly would have traded getting an F for a fraction of Fred Smith’s success. But what, what happened for me was we had an idea. We got some traction, the idea to use the internet, to help automate how three PLS operate today. You would call it a SAS TMS, but back then it was an ASP for logistics to automate the transaction process. We landed some three PLCs customers and realized that we had something with a little bit of traction. We ended up raising money. We raised 28 million over three rounds, Goldman Sachs Morgan Stanley bank, Boston ventures, a host of others. And in the end, mayors would acquire the business. So I’m summarizing a lot. There were, the highs were fantastic. The lows were horrible. And, and another thing that I learned was as an entrepreneur, you just have to try to balance that and keep an even keel you as a sailor can appreciate that, that, that, uh, that even keel is really what allows you to keep your wits when everything feels magnified on, on, on the upside and the downside. Right? And so, you know, a lot of lessons learned, but, but in the end, coming out of that, uh, selling the business and then being 29 and realizing that I had a next act and plenty of time to do it, that that was pretty exciting. So that’s really what sent me down this trajectory of logistics.
Greg White (13:04):
It never ceases to fascinate me how many people did not plan to go into supply chain, mostly because when we were coming up, it hadn’t yet even been named supply chain, or it wasn’t universally called supply chain. Sometimes it’s still not, you know, sometimes it was called transportation or logistics or every single aspect, every segment of what we now call supply chain had its own name. You know, I used to joke when I was working, I was working at a supply chain tech back around that time as well. I used to joke with people, how many of you wanted to be an astronaut, right? How many of you want to be a race car driver? How many of you wanted to be dreamed of being in supply chain? You know, same, same deal. Most people didn’t even know what it was until they kind of fell backwards into it. And that transformation from fallback to intentional career is accelerating the progression of supply chain excellence with incredible rapidity, especially right now. And I think we’ll well into the future. It’s interesting to hear so many people that we talk to say that very thing didn’t intend to get into supply chain. You at least came by it genetically somehow, right? From 19, 1903 to 1998. That’s a good history of at least understanding transportation, right? It’s one of those things you probably talked about over the dinner table once or twice. Yeah.
Ben Gordon (14:26):
I’m probably missing a chromosome or two, but
Greg White (14:30):
It might’ve gotten might’ve cost. You have more brain cells than college did since you’re a Philly guy. I got to ask this question. Do you have any particular fandoms or anything like that since you’re affiliate kid,
Ben Gordon (14:43):
I’ll tell ya. In 1980, when the Phillies won the world series and I was seven years old, it was amazing. And, but know, you’re spoiled as a kid. You don’t know what to compare it to. Right? So, uh, in some respects, you appreciate the successes more when you’ve had these long streaks of failure, right? So I moved to Boston in 95 for my first job. And the Boston sports fans are fantastic, partly because given the curse and the 86 year drought from 1918 to 2004, when the red Sox would finally win the red Sox fans appreciated success. I don’t want it. I hope I am not becoming one of those old guys that says in my day.dot dot, but Boston sports fans today, they’re spoiled. They had, they had a string of victories, red Sox, 19, uh, 2004, 2007, 2013, 2018. But the red Sox fans of the nineties, when, when I moved to Boston, you know, they, they knew the Yankees were the evil empire. They knew they were probably going to lose and they had to find some way to deal with the continuous torment of being like Charlie Brown when Lucy pulls the football away every time. So, uh, so I was lucky. I was spoiled to have the Phillies win in 1980.
Greg White (16:07):
It’s funny, I’m a chiefs fan. So I’ve been alive for both chiefs, super bowl victories, barely alive for the first one. I appreciate it. Believe me, I appreciated it. I get that. That’s interesting. That’s an interesting perspective. So I’d love to ask you something because you’re such a talented guy aside from basketball, which fortunately was identified fairly early by a professional. Is there anything you’re not very good at?
Ben Gordon (16:37):
Well, there are lots of things I’m not good at. Uh, in addition to basketball, you know, I remember I always thought of myself as the scrappy underdog. So like my freshman year in high school, I tried out for the cross country team and I finished last in that first race. Okay. But it motivated me. I worked hard. Uh, I think it took me about 30 minutes to complete the 3.1 mile race. And by the end of the year, I’d shaved off about eight minutes and come down to 22 and was the most improved runner, uh, sophomore year, similar story and shaved down from 22 to 19 and junior year continue to shave down and was co-captain by senior year. Look, I was not winning any races. I was not setting any records, but I really, I took a lot of joy in starting, starting badly and then working my ass off to get better. And that’s kind of been my ammo all along. I mean, you know, I don’t think I was ever naturally the best at anything, but, but it was motivation for me to work hard. And so there, there are lots of things today that I’m, I’m also not good at. Um, as, as my wife is a quick to remind me,
Greg White (17:52):
Are you still working hard on them, on those things?
Ben Gordon (17:55):
She doesn’t think I am, but, but I think I look, I think, I think, uh, you know, being a better listener, uh, pausing, not, not jumping in to think you have the answer. I mean, this is, look, this is sort of the entrepreneur’s double edged sword, right? You start a business because you think you can do something better than other people, but you succeed when you realize that you don’t have all the answers. Right? So like the mistakes I made with my first bit with threeplex, they were largely mistakes where I thought I could do it all myself and I couldn’t and I was wrong and I made judgment errors and I made strategic errors and execution errors and people management errors. And I thought I knew everything and it probably made me an asshole. And so knowing what, I didn’t know, it was probably the biggest learning for me in making sure that I got better with my second company better, the third company, better, better with the fourth company. So listening, humility, trying to recognize what, what, I didn’t know, those were all things that, that I worked on and continued to work.
Greg White (18:59):
Would you say that that lack of fear to start and ability to recognize when you’ve screwed up and learn from it, or keep trying to just keep getting better? Would you say that’s your greatest strength or is there something else?
Ben Gordon (19:13):
I mean, I always think of myself as the scrappy underdog, you know, that the ninth grader who went from worst to most improved in cross country or the middle school kid who got picked on by the bully, he was much bigger, but fought back. You know, I, I always thought of myself as that scrappy underdog, that was just going to work harder and wants it more and figure out how to get there. And, you know, like I think, I think rationally anybody that starts a company has to have some of that tenacity and, you know, pugnaciousness even because, because if you don’t then why start it, right? If, if you don’t think you can do it better than it’s being done, if you don’t think you can solve a problem that exists, then, then why do you exist? And what is your business exists? And what is your idea of merit? So for me, uh, I think, I think the scrappy underdog and the willingness to work harder and, and just figure out how to get there. That’s been the most important thing for, it’s also what I look for today as an investor. When I back entrepreneurs, I look for entrepreneurs who are willing to acknowledge that they don’t have the answers, but are also committed to fighting and clawing and doing whatever it takes to figure out how to get the answer and get to the other side. I think that scrappiness is
Greg White (20:31):
That’s really crucial. You forced me to ask a question that I was not planning on asking, but I’ll tell you the backstory about this afterwards. I feel compelled to ask you this, and it’s probably unfair. It’s kind of a introspective question. So if you need a second do it, my is you probably know deep in your soul or maybe off the top of your head, do you love to win or do you hate to lose?
Ben Gordon (20:58):
That’s a great question. I think the obvious answer is both.
Greg White (21:03):
You gotta pick one Ben, come on, man.
Ben Gordon (21:05):
I think one, I hate to lose.
Greg White (21:08):
I would have guessed that.
Ben Gordon (21:10):
And you know, whether it’s in sports or business or, or anything else. Yeah. When my back’s against the wall, that’s, that’s usually when I found that I’ve been able to discover resources that I didn’t know that I had. And I think, I think anybody that doesn’t hate losing, I don’t know what that’s like.
Greg White (21:30):
Right. I can’t even imagine myself. I get it. So I learned that question from an athletic coach. One of my daughters is a college swimmer and her club coach before when she was still in high school, said, I can ask one question and tell you, which of my swimmers are going to be the greats and which are going to be the good there because they’re all very talented athletes. And he said, I asked them this one question. So we were sitting at a bar and having this discussion, which was a great experience. And he said, I always ask them that question. And universally, the grades say hate to lose. And here’s why is because they, one thing winning is the job, right? Winning is not something to celebrate. Winning is like showing up, punching the clock and going home at the end of the day for them, the, the mindset that hate to lose gives you is that drive that, seeing yourself as the underdog, that pugnaciousness, that trying to prove everybody wrong, that doing everything you can to train to better yourself so that you eliminate any possibility that you’re going to lose.
Greg White (22:45):
And when you eliminate any possibility that you’re going to lose you do your job, you win. I just thought that was a really great insight and a great introspect. And I’ve used that to evaluate particularly salespeople over time, 100% correct every single time. So at least for me, um, I was really thankful for that. I mean, that was one of those that was one of those life changing moments for me, but we’re not supposed to be talking about me. We’re supposed to be talking about you. So, but it’s interesting because I would have guessed that you would have said that hate to lose undoubtedly.
Ben Gordon (23:24):
Yeah. Well, I mean, you know, w w w we all find channels for our competitive spirit. I mean, for me, the cross country runner in that kick in that last quarter mile, right. In my mind, I always looked ahead to that final quarter mile and I thought, okay, this is the part of the race where I own it, where I’m going to leave everything the field. I’m not going to let that guy in front of me when I’m going to get, I’m going to get there. And, and, uh, I dunno, I dunno how much of that visualizing success, you know, versus imagining how, how bad it would feel to lose. Um, but, uh, but I think that that finishing kick, you know, for me, that was a great metaphor. It was something that I learned in high school, and it’s something that has stayed with me in business as well. So definitely, definitely an example of that hate to lose
Greg White (24:16):
No doubt. You know, you’re always looking at the next target, right? Whether it’s the finish line or the person in front of you or whatever it is, you’re looking at that next target. And just trying to get to that, that thing really philosophically, have you ever had something or someone that held such a power over you, whether it was real power or just perceived power that you felt like you might not be able to get over it, and, and if you did get over it, how, Oh, sure. Well, middle school,
Ben Gordon (24:46):
Uh, I remember Greg in sixth grade in middle school, it was Halloween and I was on the bus. And I remember I was the scrawny little kid that Charles Barkley with later
Greg White (24:59):
To be a lawyer.
Ben Gordon (25:01):
And, uh, and I had a bag of Halloween candy and there is a kid sitting behind me who is much bigger than me, a year older in my memory. You know, the guy was on steroids in the seventh grade. And, uh, you know, and, and he, he was, he was a thug. I mean, there, he was a gang leader in this, in this, you know, schools, you know, public school in, in, uh, in Philly. And, and, uh, and the kid grabbed, uh, grabbed me and said, and this is your show. So I assume I can, just,
Greg White (25:35):
Whatever you said,
Ben Gordon (25:37):
Give me your fucking candy kid. And, uh, was this really, what am I saying? Yeah, exactly. They wouldn’t do this in Kansas.
Greg White (25:49):
Yeah. Might be amazed.
Ben Gordon (25:51):
I said, I said, no, and I don’t appreciate your talking to me that way. So he takes my head, he bounces it off the window of the bus and says, I said, give me your fucking candy. So I don’t really know what got over me, but, you know, came over me. But I said to him, Hey, Bobby, why don’t you do that again? And let’s see what happens. Okay. Guess what? He did it again. So I got up and, you know, I’m a small, I was a small scrawny kid, but the element of surprise is a great thing. And I just popped him. Right. I hit him twice, you know, once in each eye. And he went down, unfortunately he came back up and, uh, you know, but you know, I, I blocked him as best I could. And eventually, you know, other kids, you know, pulled us apart. Uh, but you know, I stood up to that bully in sixth grade and, and I felt pretty good about that. Yeah. But school, the next Monday, uh, Bobby’s got marks around his eyes and he says, Oh yeah, that, that kid, uh, Benji, Benji poked my eyes. So it didn’t look like pokes. It looked like, you know, uh, you know, rings, right. Yeah.
Greg White (27:02):
Let’s see the knuckle marks couldn’t,
Ben Gordon (27:05):
But, but you know, this, this, you know, thug and his, you know, his, his little gang chased me around the school, sixth grade, seventh grade. It was two years of constantly being afraid that I’d make a, you know, turn around the hallway. And there would be the bully with a couple of his gang members. And, and, uh, you know, there were a couple of times when, you know, when I actually, I was in, I think, five or six fights, you know, six, seventh grade after that, it wasn’t, it wasn’t a great time. Wasn’t a lot of fun. Uh, and yeah, I remember being at a scared kid being, being bullied, isn’t fun and being afraid of physical violence, isn’t fun, but you know what I got through it and, and I felt stronger and tougher. And also they finally pulled me out of that school and put me in another school in eighth grade.
Ben Gordon (27:54):
And that helped, uh, and I guess it helped me with cross country running. So, uh, so there’s a silver lining, but you know, for me, you know, those are, those were two bad years, but what was great about it was I ended up feeling a sense of strength. I felt good about having stood up for myself. I felt good about learning how to protect myself. And I felt good about feeling like I wasn’t a victim, but someone that could try to take control of, of, of my own destiny and, you know, look, it’s, it’s a, it’s not like that for everybody. And certainly not like that for lots of other kids. And I could have made a couple of wrong turns and things could have been a lot worse, but you know what, it feels good to stand up for yourself. And it feels good to know that there’s a way to change what’s around you.
Greg White (28:44):
Yeah. That’s a really good point. I mean, there, there’s an old saying, there are people who are changed by their environment and people who change their environment, even if it didn’t fix everything, I mean, at least made you feel better about it. You did get a couple of good pokes in, so congrats for that. And I mean that, I mean, you can’t let somebody Lord over you like that. That’s fantastic. All right. Let’s fast forward a little bit. So I want to understand a little bit more about Cambridge and BGSA, and of course you told the threeplex story, but tell us a little bit about how, how BGSA and Cambridge, how they came about, and then how, how they play today in the supply chain tech ecosystem. Because it’s rare. I think that somebody has an investment bank and an investment firm, but the bank was first. Is that correct? That’s right. Yeah,
Ben Gordon (29:42):
That’s right. Yeah. It really began with the basic idea. The basic idea was I had a lot of logistics companies coming to me when I was running threeplex and they were all interested in the software, but they were usually more interested in something else they’re interested in figuring out what’s happening in my industry. Where’s my business going, this, this clash between technology and services, this disruption, what does it mean? How’s my world changing and what do I do going forward? Those were the questions that people really wanted far more so than should I buy your software or what are the other transportation technology offerings? And so I thought, you know, as an entrepreneur, what are you supposed to do? You’re supposed to listen to your customer. Okay. Well, the right thing for me to do is PR is meet the perceived need, which is to help CEOs of logistics companies to build and grow by anticipating changes on the technology side and on the consolidation side.
Ben Gordon (30:44):
And so really that led me to decide, I wanted to build an investment bank that would help CEOs of logistics companies. And it would be different from the other banks, remember on the scrappy underdog, right? Why would I do that’s different from what those giants, Goldman Sachs Morgan Stanley, the big banks, great smart lots of resources, but we have something that we don’t think those other firms have, which is an understanding from the bottom up of what’s happening in supply chain. So really the premise back then was let’s give CEOs of logistics companies, the insight that they’re not going to get somewhere else about what’s really happening in the sector. And so I went to some of the three PLS that I’d gotten to know as I was building threeplex. And, you know, people like Sid Brown, who’s building NFI, herb shear, who was building GENCO lose to joy.
Ben Gordon (31:39):
He was building new breed. You know, these are three examples of fantastic entrepreneurs who are building, what would ultimately become major multi hundred or multibillion dollar businesses. But at the time were, were very small. And I had the privilege of getting to work with those and others as clients, and that involved helping them with strategy and then working with them on acquisitions, buy side and sell side. And so we did bring a deals, you know, working with NFI NFI was really our first client. And, and, you know, it was fantastic getting to work with Sid Brown. That was a hundred million dollar trucking company. When I first met Sid Brown. And today it’s a two and a half billion dollar business, by the way, our firm BGSA just helped NFI CAI. Right? Exactly. We helped them by CAI logistics. It was the largest non-asset logistics acquisition in their history.
Ben Gordon (32:33):
Uh, and so, you know, that’s a 20 year plus relationship. And I I’m really, uh, I’m proud of the fact that we’ve been able to build close relationships with great companies and great CEOs like NFI and Sid Brown and from shear GENCO and loose to joy a new breed because those entrepreneurs in turn build great businesses. And, you know, we, we played a small role in, in supportive of their accomplishments. And, you know, in turn a small role in the evolution of this industry, uh, as technologies become more important, as consolidation has become more important. And as convergence of different logistics services become more important. And so BJ say really played a role in all those areas for the 50 plus deals that that BGC has worked on over that timeframe. And so that really is, that was the simple focus of the business.
Greg White (33:25):
So how did that evolve into your own fund then? That’s what Cambridge became is the private equity growth equity and private equity, I think, is your niche correct?
Ben Gordon (33:36):
That’s right. So after about a decade of building the advisory business, it BGSA, I decided that I wanted to be in a position where I could put my money where my mouth was. We’d worked with some great private equity firms. So for example, we worked with Warburg Pincus on the, um, the, the, the majority investment effective acquisition of coyote logistics in Oh seven. So we’re puts in a hundred million, ends up producing a $1.8 billion exit when they would sell to ups eight years later. Fantastic. Right. So we worked with a lot of great companies, a lot of great private equity firms and helped make those clients and partners a lot of money, but there was something missing. It wasn’t just the money. It was also the feeling of accountability, right? I mean much like I like the idea of building, threeplex building a company more than just being a consultant.
Ben Gordon (34:29):
I like the idea that I would put my money where my mouth was, and then have a vested interest in the long term growth and success of these companies, not just a deal where it’s a hit and run. And so, so I decided in 2010 to start Cambridge capital and our premise was number one, invest in which you know, which is supply chain. Number two, focus on people. First, we look for great entrepreneurs that we could back, who we thought were winners. Number three, businesses, where there was a strong growth, uh, because we’re growth investors. We’re, we’re not making money based on piling massive amounts of debt on companies. It’s really investing in great people and supporting their growth. Um,
Greg White (35:15):
So sorry, that’s a really important distinction. I want to share with our audience. And that is that piling debt on a company is the way that many, many private equity firms make their money back. They burden the company with all this debt, and then it leverages, and you can, you can correct me where I’m wrong. Cause I’m getting I’m. I already feel like I’m over my head at this point, but that helps the bank make money. It doesn’t necessarily help the company or the original shareholders of that company make money. Is that a fair estimation?
Ben Gordon (35:50):
Yeah, exactly. Exactly. I mean, look, leverage can be a great thing, you know, and if you look at the leverage buyouts in the 1980s, when Blackstone and KKR and bane, I mean, you could buy a business and use debt for over 90% of the value. Doesn’t take a lot of growth for your 10% sliver to go up enormously. On the other hand, if it goes the wrong way, you can destroy the company. And that happens a lot. And leveraged buyouts created a lot of wealth for the people that were involved in them, but they also imposed a lot of risk on those operating companies. And for me, it’s just more fun to be a part of rapid growth and to be focused on financial engineering. And so RMO has always been focused on growth. And lastly, it’s, it’s a value add. We look for businesses where we can bring something to the table that contributes above and beyond what would otherwise be there. And so, you know, look, it’s good to be. It’s good to be smart. It’s better to be lucky. And we were lucky because, well, in 2010, a guy that a lot of people had never heard of in logistics showed up and his name was Brad Jacobs. And he said, Hey, you probably don’t know me, but I’ve done four roll-ups and other industries. And I’ve decided my next industry is going to be in logistics. And I hear you guys know a lot about logistics. Maybe you can help me.
Greg White (37:14):
Hey, thanks for tuning in to hear Ben this week. And don’t forget to join us next week to hear more wisdom from the master. All right, that’s all you need to know about supply chain tech for this week. Don’t forget to get to supply chain now, radio.com for more supply chain now series interviews and events. And now we have two live streams per week. The most popular live show in supply chain, supply chain buzz every Monday at noon Eastern time with Scott Luton, the master
Ben Gordon (37:50):
Plus
Greg White (37:51):
Our Thursday live stream to be named later where we bring you whatever the hell we want. Like a few weeks ago when we interviewed our producer clay
Ben Gordon (38:04):
Phillips.
Greg White (38:05):
Thanks for spending your valuable time with me and remember acknowledge reality, but never be bound by it.
