In March of 2009, when the economy was still in the clutches of the global financial crisis, Time Warner spun out its subsidiary Time Warner Cable into an independent company.
“As we spun off, we paid a massive dividend to the parent of $18 billion, and our central thought became: ‘How do we survive? How do we survive as a newly public company with lots of debt?’” recalls Christian Lee, who at the time was a Time Warner Cable senior vice president and head of the company’s M&A strategy.Read More
Over the next several years, Lee says, he experienced a fast ride of ups and downs that provided a string of lessons when it came to speaking to debt holders and investors inside ever-changing market conditions.
Fast-forward to 2014, and Lee and Time Warner Cable (TWC) CFO Artie Minson receive a hostile takeover letter from competitor Charter Communications, which made no secret of its intent to replace TWC’s board of directors with its own selections.
“We spent the next two and half years of our collective lives working through our hostile takeover defense—a merger with Comcast,” explains Lee, who adds that ultimately Charter and TWC were able to put together another deal that would secure the sale of TWC.
“In the background of all of this, Artie had gotten introduced to Adam Neuman [WeWork founder], and he said to me, ‘Hey, I’m thinking of going over as COO—you should think about the CFO role,” recalls Lee, who would step into WeWork’s CFO office in 2015.
“I had done a lot of deal work and capital-raising in my career, but my first year as CFO of WeWork was really about building out systems—we didn’t have an accounts receivable or accounts payable system, so I was leaning into things that I had never done before,” reports Lee. He exited that role in 2017 in order to move to Asia, where he would help to launch and manage WeWork’s Asia business, an appointment that helped in part to satisfy his long-term career goal of serving in an executive business development capacity overseas. –Jack Sweeney
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CFOTL: Tell us about Transfix. What does this company do, and what are its offerings?
Lee: To understand Transfix, you have to go a little bit into the logistics and transportation ecosystem, at least in the U.S. You’ve got this very interesting dynamic where you have 14 million shippers. These are the targets, from the GEs and the largest companies in the world down to small people who make candles and who need to kind of put something on a truck. You’ve got each of these, and especially the large ones that are doing hundreds of thousands, millions of shipments a year. There are three and a half million trucks in the U.S, but there are between 500,000 and 700,000 trucking companies. So, generally speaking, the very large companies are doing half of this business internally. They have their own trucks to do it, but then they basically have to outsource the rest of it.Read More
They’re not really well designed to work with these small, five- to 100-person trucking companies. Reagan’s deregulation of this back in the late ’80s led to the rise of truck brokers. This was someone who would get a call from whomever at company X and had, say, a relationship with four trucking companies. They would call the companies and say, “Hey, are you available? What rate?” Whatever. The whole industry was basically built on the obfuscation of information and always trying to find a little bit better rate. There’s a real lack of trust between truckers and brokers and shipping companies.
Drew, one of the cofounders of our company, grew up in this industry. His parents had a brokerage that became a 3PL provider. He said, “Well, this industry just seems totally broken. Right? The dynamics don’t really make sense. What if we could take data science and machine learning and start to match things up in a much more efficient way? We could take all of the needs that the shippers have. We could develop relationships with the hundreds of thousands of trucking companies out there and start to match them in real time. Give transparency. Give visibility. Give full price information to everyone. Instead of having it be phone calls and pieces of paper, we could use the machine to make that match and do much more.” So, I started the business 7 or so years ago and have really spent the past 7 years building it up. How do we do this many-to-many matching? If you need to move hundreds of thousands of loads over the next 12 months, we can now start to better predict the price and the variability in the seasonality.
More important, we have a database of 25,000 trucking companies and the hundreds of thousands of trucks that they have. We match them in real time and achieve transparency and visibility in a way that no one’s seen before, which is just a fundamental shift in the industry and super exciting, I think. 2020 was really a year when people started to understand that, wow, it’s not just about the lowest-cost way to get from point A to point B. What matters is whether it’s reliable. Do I know where my shipments are? Do I have certainty of what’s happening? Is it showing up on time? If it’s not, am I being informed of it? These are all of the things that Transfix has started to do through data science, models, and just sort of better interfaces.
Transfix | www.transfix.io | New York, NY