Is Two Better Than One?
Welcome back to the 16th edition of The LogTech Letter, a weekly look at a particular aspect of the impact technology is having on the world of global and domestic logistics. I was off last week, but on Nov. 6, I analyzed the importance of CRM software for logistics providers. Today, I’m getting a bit theoretical and thinking about whether or not two equal powers are better than one.
As a reminder, this is the place to turn on Fridays for quick reflection on a dynamic, software category, or specific company that’s on my mind. You’ll also find a collection of links to stories, videos and podcasts from me, my colleagues at the Journal of Commerce, and other analysis I find interesting.
For those that don’t know me, I’m Eric Johnson, senior technology editor at the Journal of Commerce and JOC.com. I can be reached at eric.johnson@ihsmarkit.com or on Twitter at @LogTechEric.
Anyone who knows me or follows me on Twitter understands I’m obsessed with football (soccer for the North Americans) and so today I’m going to make a pretty tenuous connection between football and the worlds of trade and logistics software. Bear with me.
Sergio Busquets has been a pivotal player for both FC Barcelona (his club team) and the Spanish national team for most of the last 12 years. I’ve lost track of how many trophies he’s been a part of, but it must be close to 30 in all, a glittering career by any measure. The interesting thing about Busquets’ career is that while he’s superficially played the same position (defensive midfield) for both his club team and his country, he’s actually played two very different versions of that role.
At Barcelona, he has largely been the lone defensive midfielder, the shield for the backline and the catalyst for turning defense into attack. The system has always had two attacking midfielders ahead of him. For Spain, that midfield triangle was flipped, with one attacking midfielder in front of two defensive midfielders, a system dubbed the “double pivot.”
Playing alongside another defensive midfielder for Spain meant Busquets shared those shielding and transitional responsibilities, but it also meant there was one fewer player with pure attacking responsibilities. Despite Spain’s success in that time, the double pivot wasn’t universally loved because it was seen as too conservative, too constricting. Just watch a video of Busquets’ mesmeric ball skills to properly appreciate him when you have a sec.
What in the heck does this have to do with trade and logistics, you ask? I’ve been thinking of late about Busquets’ vacillating role in two highly successful teams in two different sets of circumstances. One is the seemingly omnipresent question that trade experts are weighing at the moment: whether the US will remain the dominant economy in the world, whether China will surpass it, or whether there’s some sort of middle ground.
I believe we’re headed for a “double pivot” scenario, one where the US and China decouple in some ways, augment their symbiotic relationship in others, and become entrenched in a relatively conservative phase of watchful trade growth. I’m not an economist or a political scientist. This is just my feeling. I don’t think there’s going to be a lone force driving the bus like the US has for most of the post-war era. The “Barcelona Busquets” era of US preeminence globally is likely over, and we’re likely in for more of a “Spain Busquets” era.
The second issue that brought to mind the idea of the “double pivot” is entrepreneurial leadership at logistics startups. I try to consume as much information as I can about what makes startups work, simply because they have become such a critical part of the logistics technology landscape. And I’ve read a number of recent treatises on whether it makes sense to have co-CEOs or at least equally-empowered founders (even if their titles are not equal). It’s an interesting thought, and there is likely no single answer for each startup.
Rather, a company needs to examine whether it needs a “Barcelona Busquets” - someone with charisma, who takes an inordinate amount of responsibility, and is able to express themselves in a range of ways - or a “Spain Busquets” - someone who is supremely talented in a specific set of ways but who is best suited to sharing responsibility with someone equally as talented. Some companies need that single person to fully flourish, and others need a committee approach.
As with Busquets, a founder needs to be flexible and adaptable to the business it is running and personnel it has, and not presume the Barcelona version is preferable to the Spain one.
I’m utterly fascinated by the concept of the double pivot, because it says as much about the value of a shared power/responsibility structure as anything else. About sacrificing for a broader goal, at the risk of losing the dynamism that comes from a singular vision. About balancing conservatism with aggression. It’s not binary. Both Barcelona’s and Spain’s managers could have chosen the alternative approach and probably still succeeded, which says as much about needing talent and drive throughout the ranks as it does the leader at the top. I’m curious as to which approach best suits early stage companies, and as to whether the world will benefit from having a double pivot drive the global economy.
And if any football blogs are reading, my DMs are open.
Here’s a roundup of pieces on JOC.com the past two weeks from my colleagues and myself (note: there is a paywall):
Make sure you check out a two part series on cloud adoption among carriers, particularly at Maersk and MSC, we posted at JOC.com last week. The first part explores how cloud helps carriers scale investment in tech and outsource some non-value-add components of their technology strategy, and the second part examines how cloud can help carriers be more robust in their defense against cyber attacks.
Loadsmart has been busy this week, first announcing that it added LTL and intermodal rail capability to its platform, and then announcing a massive $90 million Series C round. Loadsmart has now raised $146 million, the second largest amount of any digital broker in North America, and has seen revenue rise 250 percent this year.
Convoy, of course, has the mantle of having raised the most thus far, at $665 million. This week it said it was adding predictive capability to its drop-and-hook program to help shippers proactively stage equipment. Demand for the program is sky-high, with 80 shippers using its nationwide pool of trailers.
The European digital forwarder Forto (formerly known as Freighthub) announced its second funding round in seven months, a $50 million investment as it seeks to expand beyond its predominantly German shipper customer base.
DCSA continues its march toward developing container shipping standards with a database of container facility codes, developed in conjunction with BIC. DCSA has made extraordinary progress in 18 months, but the industry - both carriers and shippers - need to make sure that progress turns into action.
🚨 TPM21 registration is live, and so is a preliminary agenda. We’ll have two days of #LogTech focused programming Feb 25-26, ahead of the main program, which kicks off March 1.
Here are some upcoming and past discussions I’ve had with various experts in the industry:
I spoke on a panel with MSC, DCSA and two shippers at the SmartPorts: Piers of the Future event this week. Click here to see all the sessions, including the one I participated in, which focused on how standards in shipping can benefit cargo owners.
This one’s pretty niche, but it will be a fascinating discussion about using software to manage sanctions screening for military goods and dual use technologies. I’m moderating a panel Dec. 8 with representatives from IHS Markit, Kharon, and Société Générale.
I’m joining Brian Glick of Chain.io, Matt Motsick of RPA Labs, and Annette Mueller of TradeLens for what should be a really robust discussion Dec. 3 around how logistics technology investments can meaningfully enable resilience and agility for cargo owners and LSPs. Register for the International Trade Club of Chicago event here.
Disclaimer: This newsletter is in no way affiliated with The Journal of Commerce or IHS Markit, and any opinions are mine only.