MOAR ON BORGERSON
https://www.institutionalinvestor.com/article/b14z9qvl205nh2/cargometrics-cracks-the-code-on-shipping-data
Morse introduced Borgerson to commodities, and to trading terms like “contango” and “backwardation.” Morse himself had, earlier in career, gotten the jump on official oil supply data by hiring planes to take photos of the lid heights of oil tanks in Oklahoma’s Cushing field.
WORKING FOR THE CFR IN NEW YORK RECONNECTED BORGERSON WITH HIS MISSOURI ROOTS. BILL BRADLEY’S AUNT CALLED THE FORMER SENATOR TO SAY: “THE SON OF A FAMILY WHO WENT TO OUR CHURCH IN CRYSTAL CITY IS IN NEW YORK. WOULD YOU WELCOME HIM?” BRADLEY DID — AND WOULD LATER PLAY A PART IN BORGERSON’S CAREER DEVELOPMENT.
WHILE AT THE CFR, BORGERSON BECAME AN EXPERT ON THE MELTING OF THE NORTH POLE ICE CAP, WRITING NUMEROUS PUBLISHED ARTICLES ON ITS IMPLICATIONS; THIS LED HIM TO CO-FOUND, WITH THE PRESIDENT OF ICELAND, THE ARCTIC CIRCLE, A NONPROFIT DESIGNED TO ENCOURAGE DISCUSSION OF THE FUTURE OF THAT REGION.
Borgerson recently spoke to 50 international generals and admirals about the Arctic and is co-drafting a proposal for a treaty between the U.S. and Canada that would help resolve the differences the two countries have in allowing international ship and aircraft travel through the Northwest Passage.
His Arctic research led to an aha moment early in 2008, while he was still with the CFR, on a visit to Singapore and the Strait of Malacca with his Fletcher School classmate Rockford Weitz and their former Ph.D. adviser, Perry. Seeing the mass of ships sailing through the strait, Borgerson and Weitz decided to build a data analytics firm using satellite tracking of ships.
Like many successful entrepreneurs, the two struggled to find financing before reaching out to a network of friends and their contacts. One was Randy Beardsworth, who had sat with Borgerson at a 2007 Coast Guard Academy dinner, where Beardsworth, then the Coast Guard’s chief of law enforcement in Miami, was the guest speaker. Borgerson “made references to history and literature, and I thought, ‘Here is a sharp guy,’” recalls Beardsworth. “We have been friends ever since.”
But Borgerson didn’t turn to his new friend in his initial fund-raising. “He came to me in 2009, after he had been turned down by 17 VCs, was maxed out on his credit card, was married and had a newborn son,” says BEARDSWORTH, WHO WAS REVIEWING THE DEPARTMENT OF HOMELAND SECURITY AS PART OF THE OBAMA ADMINISTRATION’S TRANSITION TEAM.
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Beardsworth came to the rescue, not only committing to invest a small amount but introducing his friend to Doug Doan. A West Point graduate and Washington-based angel investor, Doan took to Borgerson right away. “To be honest, it wasn’t his idea, it was Scott I invested in,” says Doan, who provided $100,000 in capital and introduced Borgerson to a few friends, who added $75,000. Manzi came on board as an investor in 2009, having been asked by Bradley to check out Borgerson’s plan for a data metrics firm. (Manzi knew Bradley from the late 1990s, when the latter was considering a run for U.S. president.)
With Doan, Doan’s friends and Manzi as investors, CargoMetrics was finally able to garner its first venture capital commitment in early 2010, from Boston-based Ascent Venture Partners. That gave the start-up the capital it needed to hire a bevy of data scientists to build an analytics platform that it could sell to commodity-trading houses and other commercial users. IN 2011, CARGOMETRICS ADDED SUMMERHILL VENTURE PARTNERS, A TORONTO-BASED FIRM WITH A BOSTON OFFICE, TO ITS INVESTOR ROSTER, RAISING ROUGHLY $18 MILLION FROM VENTURE CAPITAL AND ANGELS FOR ITS DATA BUSINESS.
By then Borgerson had already begun to CONTEMPLATE CONVERTING CARGOMETRICS FROM AN INFORMATION PROVIDER INTO A MONEY MANAGER; HE SAW THE POTENTIAL TO EXTRACT POWERFUL TRADE SIGNALS FROM ITS TECHNOLOGY RATHER THAN SHARE IT WITH OTHER MARKET PARTICIPANTS FOR A FEE. Among those he consulted was serial entrepreneur Peter Platzer, a friend of one of CargoMetrics’ original investors. Platzer, a physicist by training, had spent eight years as a quantitative hedge fund manager at Rohatyn Group and Deutsche Bank before co-founding Spire Global, a San Francisco–based company that uses its own fleet of low-orbit satellites to track shipping, in 2012. “We had lengthy conversations on how to set up quant trading systems and how [commodities giant] Cargill had made a similar decision to set up its own in-house hedge fund to trade on the information it was gathering,” recalls Platzer.
So Borgerson reset his course. DOAN DESCRIBES THE DECISION AS A “TRANSFORMATIVE MOMENT” FOR THE CARGOMETRICS CO-FOUNDER. “THE MILITARY TRAINS YOU TO BE A STRATEGIC THINKER,” DOAN EXPLAINS. “SCOTT HAD BEEN TACTICAL UNTIL THEN, MAKING SMALL PIVOTS, AND LIKE A GENERAL WHO SEES THE THEATER OF WAR, HE MOVED INTO STRATEGIC MODE.”
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