Podcast: The Discipline to Do One Thing Well with Gregg Borgeson

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In this episode, Gregg Borgeson, CEO of Ex Works Inc., joins Host Brian Glick, CEO of Chain.io, to discuss:

• The challenges forwarders face managing hundreds of trucking companies
• Building trust and relationships in the supply chain industry
• Balancing product development with customer needs
• How Ex Works helps air and sea forwarders work with trucking companies
• Streamlining forwarding processes with technology

Gregg Borgeson learned the forwarding business from the ground up, answering phones at Emery Air Freight, serving as an executive at BAX and running Hellmann in North America. He then entered the technology side of the business, co-founding QuoteShip.com, which he later sold to Logistics.com. Gregg founded Ex Works in 2004.

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Episode Transcript

Brian Glick  00:04

Welcome to supply chain connections. I'm Brian Glick, founder and CEO of Chain.io. On this episode we're going to speak with Greg Borgeson, who is the founder and CEO at Ex Works. Ex Works is a company that does one thing well - they work with freight forwarders to help optimize the first and last mile activities of working with truckers here in the US. They've been in business for quite a while and have quietly built a very strong following in the industry. So very excited to chat with Greg about building a company up over a longer period of time in a bootstrap fashion and comparing that to other approaches that he'd seen in his career as well as kind of the discipline it takes to do one thing well, so hope you enjoyed the episode. Greg, welcome to the show. So why don't we just start off with a little bit of background, tell me a little bit about how you got into the industry,

Gregg Borgeson  01:06

How did I get into the industry? Well, I graduated from college and was determined to be a journalist. And I spent about two months looking for a paper that was looking for a totally non qualified journalist who didn't find it. And my parents told me, I had another month to pay my rent, and otherwise I had to come home. So I found a job at the airport working for Emory airfreight answering phones, and that's where it started.

Brian Glick  01:34

So I'm assuming some time in the intervening years, you had an opportunity to maybe do something else what kept you in this business?

Gregg Borgeson  01:43

I was not interested in business at all, but found that I really liked it, enjoyed it, and never really straight. I did customer service for a year, I did the export documentation for a couple of years, I did sales for a couple of years. And then I got started running, managing international departments and then ended up running a company when I was 30.

Brian Glick  02:08

That jump, that's something I actually spend a lot of time talking to my team about from doing the work to becoming management. A lot of people I've encountered in my career when they're doing the work, oh, I want to be management. And then they learn that management is actually a skill that's different from Great. What was that? What was that transition? Like for you? And like, Why manage people

Gregg Borgeson  02:29

That's a good question. It just sort of happened. I mean, doing the work was really, I mean, more fun, there was more camaraderie and parties and, you know, beer involved in the working part of it. And I really enjoyed every minute of operations and so forth. Yeah, the management side is maybe more intellectually challenging and bigger consequences to your bad decisions in your good decisions. So I can say I enjoyed both, but I just kind of found myself in management of a very small and struggling company and had to make some tough decisions, closing offices, that kind of thing. But it was rewarding, rewarding, but in a totally different way.

Brian Glick  03:17

So, along that journey, then, you know, kind of take me forward a little bit more. So what was the next step?

Gregg Borgeson  03:26

You know, I had worked for Burlington air Express, in those formative years, sales and starting in management. And I had decided I wanted to get away from my mentor, fantastic man, Kurt Carlson. And I didn't need him anymore. So I went and went to a smaller company and ended up being president of that company. And then about five years later, Kirk came to me with the opportunity to help start helping in the US. So after showing my independence, my mentor decided that it sounded pretty good to get back into business with him again. So we, in 1988, we started Hellman in the US from scratch, which was really exciting to be able to start a forwarder with some financial backing from an established company overseas, and hire people all over the country and build something with, you know, through our own connections to to various people we've worked with over the years. And my next step was helping to found Hellmann.

Brian Glick  04:26

So people, obviously, the rate at which people change jobs is faster now than it was 20 years ago, or 30 years ago, or 40 years ago, right? Just look at the math, right? The average duration that somebody's in a job now is two years or so. At least when I read it online, you left a relationship and then you ended up back with the same person. What advice would you have for people on how to leave gracefully?

Gregg Borgeson  04:53

First of all, you should always leave gracefully burning bridges is absolutely the wrong thing to do in this industry. I think You have to do it with respect and with fairness to the people that have backed you in your, in your current company. If you've had any success in your current company, it's been because people believed in you and supported you along the way. And the wrong thing to do, even if there are some people that you're not happy with, ignore them and do the right thing, you know, for the company that you're leaving, give them enough notice. And for the people that are going to be harmed by your exit, which is usually your boss, give them even some additional notice if you possibly can, so that they can manage your departure as gracefully as possible for them, not for you, but for them. And sometimes that means staying a little longer than you'd like to in the company you are about to leave. But it's the right thing to do. And I think in the long term, it'll, it'll serve you well in your career. The wonderful thing about this industry is it's a size that you can always track somebody down, if you're hiring somebody, it takes one or two phone calls, given their background, to be able to talk to somebody who knows them and worked with them before. So it's your success moving forward in this industry, whether it's on the forwarding side, or the technology side, is going to really has to do with whether people believe in you long term, and they will check you out, and they can check you out. So the worst thing you can do is to leave in a huff, it may be fun, it may be satisfying, in some cases to do, but it's not going to help you in your career. So my advice is always leave as graciously as you can

Brian Glick  06:31

see, I think one of the things that has been eye opening to me, I spent about the first almost 15 years of my career in one company, gone through some acquisitions. And when you only have been in that one company, you don't realize the dynamics of those kinds of networks of how people talk to each other. And I'd say the last say decade, especially since I started chain just really opened my eyes to you know exactly what you just said, like how quickly if I meet someone, I can identify some way to learn about them, that they're not aware of, you know, you know, this person, this person knows this person. And, you know, it's usually not more than one degree of separation.

Gregg Borgeson  07:14

Exactly. And that's a wonderful thing about this business. For people who handle themselves. Well, you know, you can almost always check somebody out before you hire them. And you're not flying blind as an employer. And that, of course, depends on your building trusting relationships with people that you can call different companies. The whole industry is really built on trust, and helping each other out and being able to be credible with people in your company, people with the carriers, people in it. If you've got that credibility, you can learn just about anything you need to about anybody else in the industry.

Brian Glick  07:47

So at some point, you decided, hey, I'm gonna get out of the freight business and into the software business, still around the freight business. But yeah, why?

Gregg Borgeson  08:01

Well, the year was 1999. At that time I was running Hillman in North America. And I was at a cocktail party with a neighbour who came up to me and told me he had just in 1999, for those of you who weren't in business at that time was a wild time where people were getting unbelievably rich on the internet. And money was flowing like never had before. And he had just taken a company public, just in an IPO and said he was looking for his next venture. And I told him when I got some ideas about, like a freight auction. So we got together the next day, and he said, Oh, you like the idea. Let's do a business plan. So we spent a couple of Saturdays doing a business plan. And he said, Okay, well go quit your job. And let's get this thing going. I can't just quit my job, and I'm running a fairly good sized company. And I can't just go with this idea. So we, you know, we need to get some money in the bank to say, Okay, how much do you think we need? So I don't know, four or 5 million. He said, Okay, I'll call you when I got it. in like, a week later, he calls me says, Okay, we've got $6 million in the bank. And it was that time, it was that easy. And so I resigned. And we started, this internet company called codeship.com, got a patent on our design for the auction and started hiring people. And in six months, we had about 50 people, including some very high ranking it people because I know nothing about it. I'm a pure operations type guy. And then he came to me and said, this whole internet thing is going to bubble. It's going to explode. We got to sell this thing. What do you mean, we just hired 50 people, you know, and he had raised a lot of money, but he knew what he was doing. He was a former Goldman Sachs partner. I was like, totally out of my depth in terms of the financial people I was suddenly working with. So we sold the company to a company called logistics.com, which then became part of Manhattan associates. And it like so many internet startups at the time actually went kind of nowhere. That was my first move into into software. But then a few years later decided to start Ex Works. And we did that in a much more down to earth kind of bootstrapped kind of way in partnership with a tech company, but running independently and without the venture capitalists without investment bankers, and so forth. And we just kind of built it step by step since then,

Brian Glick  10:33

tell us a little bit about what Ex Works does.

Gregg Borgeson  10:36

Okay, so Ex Works. You know, when I was running forwarding companies, let me go back to that I was, you know, particularly in Hellmann we went time trying to figure out why it took so much labor to handle every shipment. So we took, you know, like the total number of hours of people in operations divided by the number of shipments, and it was a couple of hours per shipment of, you know, labor. And we had computer systems at that time, and so forth. But it still was lots of labor. So we did sort of a time study to see where people are actually spending their time? Are they all talking to customers? Is it working with the airlines, the shipping lines, what we find out is that people in operations spent much more time dealing with first and last mile, the trucking, pickup and delivery and all the other things involved with trucking than they did working with the airlines or the shipping lines or even with the customers. And number one labor cost had to do with how forwarders deal with all these hundreds of different trucking companies they have to work with. So that was in my mind. And so we built Ex Works as a company that would be focused on trying to help air and sea freight forwarders deal more effectively with the hundreds and hundreds and hundreds of trucking companies that they work with in the US. And that was really the goal, and still is the goal of the company. So we started with two very large, four clients. One was panel, Pina and the other was DHL, through connections that I had at both of those companies. And for 10 years, that was really about all we did, were those two big companies who had very demanding requirements. So we built our system, really around those two clients for about 10 years. And it built it out, sort of into a full TMS. And since then, we've brought in many other major freight forwarders, but 10 years of focusing on them, and then 10 years of building around them.

Brian Glick  12:27

It's funny things take a lot longer than they seem at the beginning, don't

Gregg Borgeson  12:32

take a lot longer, especially when you have no capital when you're when you're bootstrapping it's a slow process.

Brian Glick  12:38

So the big.com idea, right, you've got this idea of like, it sounds a bit like you're going to change the way people do business, right? We're gonna change the world, right? And even today, right, there's a lot of companies, you know, like, I think of like the initial iteration of Uber freight, right, we're gonna change the dynamics or, you know, or a company like Freightos, who is pushing for, you know, a marketplace model, or companies that are looking at, you know, tokenizing containers, or all of these different things that are fundamental changes. And then there's companies like Ex Works, and to some effect like Chain.io, where what we're doing is much more incremental. We're not saying change the way the industry works, and let's make the industry work better. Exactly. Is that, like, more satisfying or less? Like, how do you get your head around this? Like, why aren't we doing the cool stuff?

Gregg Borgeson  13:36

It turned out to be more satisfying, because it worked. I mean, the gold stuff sounded great. And we were going to change the way everybody negotiated pricing and all looked great on paper, it made a lot of sense. It didn't work. And yeah, similar chain, we got focused on a very narrow niche, an important niche, but a narrow niche, something that we knew and understood. And that has been far more satisfying. And because you're not selling a broad concept, you're selling a specific answer to a real problem. And people, our clients understood the real problem in a way that they had to reach to understand the big concept that I had, in 1999, that scared people, what we do is very concentrated, and we're yet to talk to a foreigner client who doesn't understand the problem. We don't have to spend time explaining the problem, they, you know, you can put a couple of bullet points and they're nodding their heads. And then we can show them how we can certainly reduce the problem and create efficiencies and create transportation cost savings through easy to understand solution. So around

Brian Glick  14:48

the same time, you're starting Ex Works, I was working at a software company and we had two customers that I would say were likely, let's say 85 to 90% of revenue. And so So when those customers called, you picked up the phone, right, and and when those customers told you they wanted the button blue instead of yellow, you made the button blue instead of yellow, right? You did you did what you were told to somebody, how have you managed to balance that with building a product,

Gregg Borgeson  15:20

it's a tough balance. And a big part of it is if you get the design right in the beginning, there's not a lot of those kind of changes you have to make for other customers going forward. So I mean, the system that we use, for our original, one of our clients got acquired by another one, but for original clients, is the system, you know, very much sold to the others, the original clients know, they have the power to essentially make you jump when they say they say jump, and that's slightly different relationship with clients. But we've been able to, for the most part in our IT guys might disagree with me here, but for the most part, system, they still complain about any of the if this forward or do this, and otherwise do this stuff that they have to code. And that certainly exists, and probably will always exist to some extent, but we're trying to minimise them. I mean, the good thing is, we're not trying to sell to different types of clients, we don't sell to shippers and consignees, you know, exporters and importers, we don't sell the truck brokers, we sell to forwarders, who are all pretty much doing the same kind of functionality and dealing with the same kind of vendors, I think that's been one of our good decisions is to not chase every related opportunity that comes along. Because when you do that, you're going to have more demand to make the system work like this way for this guy in this way for the other guy. So we've, we've tried to avoid that. I think we've made the transition to be having a system that is fundamentally effective for all of our clients.

Brian Glick  16:54

We recently had Michael Rentz from Gnosis on and they were a much younger company than you are. But he was making the same point right of just being disciplined and focused. And knowing who your customer is, is really just the key right to not just because somebody's willingness to give you money is not the only criteria to configure, here's a good way to put it.

Gregg Borgeson  17:18

That's exactly right. And we have discouraged certain companies that we didn't feel had the right mindset to make the transition into work with us. It's you know, the old Crossing the Chasm concept of going from those initial early adopters to the market as a whole is the chasm is real, and you do have to take a different approach as the company matures.

Brian Glick  17:40

So how do you keep your team interested in what's now a very mature product? How do you keep your tech team, your product team here? How do you keep everybody interested in what is a mature product, when there's a tendency to always want to go play with shiny new things?

Gregg Borgeson  17:57

Well, we've been lucky, our team is small, and they've all been with us a long time. Like our support team, I think all of them have been here at least 10 or 11 years. It's a small but very effective team. Our IT team is also small. Honestly, I think the fact that our company is modest size that we all know each other that many of us have worked together for many years or years in the past makes a big difference. I think the fact that I have very little understanding of technical matters is probably a good thing. Because our CIO, who's worked with his guys for many years, and is able to run an effective tech shop with minimal interference. I hope he feels that way. From my side, certainly not on the technical side, because I have no concept of what advice to give him on anything technical. And I think that allows, you know, are very talented tech people. And they are very talented to avoid the temptation of taking an opportunity to go with a shiny new thing, because it needs the freedom to work effectively. And without somebody looking over their shoulder. But the challenges that are there for our company.

Brian Glick  19:02

I think one of the other secret advantages of a small team is everyone has to live with the consequences of their behaviours to its true, right. So if you go add the shiny new thing, you're the one supporting it, right? You're the one who has to live with that. Whereas I think in bigger companies, sometimes, oh, I'm going to put this thing out there and then someone else is going to deal with it. So it doesn't matter whether I like you and almost act like a consultant. So,

Gregg Borgeson  19:29

yeah, there's the plusses and minuses of accountability that come with being in a very small company. And a lot of that is the satisfaction of seeing the customers react, relate and use the things that you build very quickly. And you know, everybody wants to their work to matter. And in a small company, you can you know, you relate you talk to the customers directly you see how they react to what you've built, you can you can feel the satisfaction or the dissatisfaction if you don't get it right. You And that's ultimately very rewarding to, to most people.

Brian Glick  20:04

What's the thing that gets you the most excited? Nowadays? Like what's catch you optimistic?

Gregg Borgeson  20:10

Well, that's got me optimistic. You know, I think we're at sort of a turning point as a company from being something new and different that a few forwarders used to something that more and more forwarders are realising that we're out there that there's a better way to do it. Most of our new business comes not from us knocking on doors, because we don't have a Salesforce, it comes from someone who works for a forwarder uses Ex Works going to work for a forwarder that doesn't use Ex Works. And saying to their management, you know, how come we're still, you know, emailing bills, a lady and having to pay to enter invoices, and so forth. And so we were getting called More and more we have more and more trucking companies, major trucking companies that serve the industry that are telling their their clients, therefore their clients, you know, no, yeah, we're looking to Ex Works is more efficient, because it's better for the truckers as well as for the, for the folders. So we're sort of excited about this, maybe the very early stages of a bandwagon effect. It's what everybody's looking for in the software business, where you become something where people say, Why aren't we using something where people say, Why aren't we using that? Shit, everybody else seems to be heading in that direction. And ultimately, the into the fear of missing out is the ultimate goal. Yes. So we're not there yet. But we think we're approaching that starting to approach that kind of recognition in the market. It

Brian Glick  21:38

is it is very rewarding when people bring you in who have worked with you before. Yeah, it's very validating to see that on the customer, when I used to be in the customs brokerage side, right, that was essentially our sales model was wait till somebody retires. And then it gets somebody from another one of our customers to go into that. Three years later, was not the fastest sales process. But it is very rewarding when somebody actually like raises their hand and says, I want to work with you. Again,

Gregg Borgeson  22:14

it is and early in the call, you talked about how people change jobs now on average, every two years, that's from our perspective, that's a good thing, because it has more extra work, experience users spreading out to other companies spreading the word. And also, it's a positive because when it comes to implement experts, which is a big change for a company, you have multiple people usually in the new company who have experience with it can be super users from the beginning, as well as the cheerleaders during the sales process.

Brian Glick  22:44

So is this actually most software companies but like, how much of what you guys do is implementing software, and how much of it is getting companies to change their business processes and being the change agent to get them to use the software, it's

Gregg Borgeson  23:00

about half and a half. And particularly, because you know, our business model is connecting the forwarder, where we integrate with our IT system and chain is the partner we use to do that. And that's one of let me just jump in and say that's been a huge help to us the last couple of years as having you guys do that integration piece. But the other half is connecting to whatever their trucker network is, which is typically to under 300 400 500 Different trucking companies, many of which are low tech and no tech. So we have really two things going on when they implement one is the internal issues within the forwarder in terms of getting their people trained and comfortable with a new way of doing things in a new system and perhaps breaking some personal relationships they may have had with truckers that are used to calling on every little thing. And second part is getting all their trucking vendors to use a new system now fortunately, at this point, but a new forwarder comes in about probably 85% of their transactions are with truckers that already use Ex Works in no us. So that process is much simpler than it was, you know, 10 years ago, but it's changing processes both on the trucker side and on the on the forwarder side. And that first month or two can be painful on all on a cheerio. We got a very skilled support team that's now very experienced in doing this. And we and we think the pain is is minimal compared to what it was very beginning for our clients and for the truckers.

Brian Glick  24:33

What's something that you would love to fix in this industry if you weren't busy doing this, but something else drives me nuts.

Gregg Borgeson  24:43

I wasn't doing this. On the operational side I think on the ocean freight side, finding a really efficient way to do street turns for ocean containers. That would be environmentally a great thing would be cost wise a great thing for clients forwarders for the trucking companies, it's really been a difficult thing for anyone to put together. So it's really worked like clockwork, there's huge potential savings in finding a better way to orchestrate the movement of empty containers around the US. That's the first thing that comes to mind.

Brian Glick  25:18

We'll wrap up now. But how can people get in touch with you guys, now that everyone is beating the path to your door? I think that a little easier for

Gregg Borgeson  25:26

there's still room, the door for sure. So you know, we're exworks.com, my email was right on the website. Yeah, we're there for forwarders who want to find a better way to work with their tracking vendors. And we do it in the United States. And we've done it for nine or 10, major forwarders, and also some smaller forwarders. We're happy to work with regional folders, as well as a lot of the global guys. And yeah, find our website, give us a call, we're happy to show you exactly how it works in about 40 minutes, you can understand exactly what we do and how it works.

Brian Glick  26:05

I just have to say, and as we wrap up here, that just it's so nice to work with companies that do a thing well, and can deliver on that, right and aren't trying to do everything all the time. I know, it's kind of a theme of the chat. But I do want to say just like makes me feel good.

Gregg Borgeson  26:24

I totally agree with you. And also companies that that understand exactly what they're doing well we don't have this is what we enjoy about chain is that we don't have to explain anything to your guys, you know, they know the systems that we're working with, they understand the industry as our guys do. And it makes everything happen much faster and without the tension without the delays. So we like to think of ourselves that way. We think you that way. We have other partners that we put in the same category.

Brian Glick  26:51

Well, I'm happy to end on a Chain.io commercial. So all right. So anyway, Greg, it's, again, been a pleasure chatting, and thanks so much for coming on. Oh, thank you, Brian. Well, huge thanks to Greg for was really great conversation. As you can tell, kind of kindred spirits in the industry. We'll have the link to Ex Works in the show notes as well as we have some really interesting webinars coming up over the course of the summer. I know conference season slows down a little bit for those of us who travel a lot. So we've got a recap out there on some recent conferences that we've attended, as well as some customer profiles and some really interesting conversations that we're going to be having with shippers and technology providers and LSPs and really honing in on how everyone can bring value to each other. We'll have some links in the notes again for that stuff and make sure to always keep an eye on the blog. And looking forward to speaking you next time.

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