← Social 333 Podcast
Social 333 Podcast
From Wall Street to Owning Al-Kholood Football Club | Ben Harburg #social333podcast #67
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A
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B
Hey, welcome to the Social 333 podcast. I'm your host, Chris Bentley. Today my guest is Ben Harburg. Ben, welcome to the show.
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D
Good to be with you.
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B
Awesome. Tell the audience a little bit about yourself and what you got going on.
- [01:12]
D
I split my life into kind of three buckets. So one is venture capital and growth equity. So investing in technology companies. I've been doing it for about a decade and trying to find kind of the next big things and be a few years ahead of the market. I do that on the private side and I've recently started doing it on the public side through an ETF family. And then my second bucket is sports ownership. So I've now got a piece of now three soccer teams, one in Spain, one in Mexico and one in Saudi Arabia. And we're building out kind of what we call a multi club group around those. So kind of creating synergies and helping them kind of build off of each other. And then the third is kind of political activism and kind of being involved in different parts of the political stack. I'm originally from New Mexico and so we're working to get more involved in electoral kind of partisan politics there and doing some stuff in Washington and trying to keep the train on the tracks and geopolitically. So that's kind of the third bucket.
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B
That's a lot. I thought I had a lot on my shoulders. That's a lot. Tell me a little bit about your beginning. So you were on Wall Street. Were you a trader? Were you doing okay? So you're.
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D
Well, I started off actually as A consultant. So my first job was with Boston Consulting Group.
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First in Germany, and then they sent me to the Middle east and helped to set up the Dubai offices in 2007.
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After that, I left BCG to start a mining and commodities trading company. So I was a trader, but a physical trader. We also had a derivatives trading business, but a lot of what we did was physical. And so we were supplying chrome, iron ore, coal out of various geographies, mostly into Asia. I did that for better part of almost eight years and built what at the time became one of the largest commodity trading companies in the region. And then started talking to my friends in Silicon Valley and listening to what it felt like, this secular growth in technology. Friends who were early ish Apple employees by my standards. And they then left and started a company called Nest. It was acquired by Google. So I'm starting to watch this growth of technology and venture capital. I said, this sounds like the next big thing. And so I sold everything I had out of my trading company and started investing in technology.
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That was a decade ago now.
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B
Wow, that's really, really cool. Because I saw on your Instagram that you said, go from San Francisco to Beijing a lot, and then in Beijing you were looking for new startups or different companies for tech.
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D
Yeah, I came to China as a commodities trader. So China is probably still today one of the world's largest consumers of all commodities. They import a lot of things, particularly energy. That brought me to China in around 2010, 2011.
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I was witnessing the rise and growth of Chinese technology and seeing how they were building replicas of all the American technologies, but then starting to turn the corner and develop what I'd call first in class technologies. And so I was studying that pretty hard. I was not like a Sinophile by birth. I don't speak great Mandarin. I wasn't interested in the history and culture and art of China. But I just thought as a geopolitical rival, strategic competitor, enemy, whatever you want to call it, it was a market that we had to understand, we had to have exposure to. And I feel like today we live in what we call a G2 world, where it's just US and China and nothing else. Everyone else is kind of side participants. And so as a result of that, I stuck around and tried to really gain a strong understanding of both this technology industry and geopolitics.
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B
Tell me about that G2. That's really interesting. You really think that the rise of those two kind of titans of us and China, you think one's going to win or it's just going to, eventually they're going to cooperate somehow or it's going to be a situation where.
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We do one thing for one person, do something else for somebody else. What is your take on it? Without getting too political?
- [05:02]
D
No, it's a great, that's a great question. I think there was a time when people thought that we could be more synergistic and we do the more high end innovations on the software side and China builds the lower cost hardware. There was a time obviously when China was building much lower quality manufactured goods, be it T shirts and toys. But then we saw them rise up very quickly and all of a sudden they're dominating in the smartphone market and robotics and now even they're challenging us for supremacy in the automotive space.
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We witnessed that rise and I think it set everyone back and realize, oh, China is no longer that low cost manufacturer. They are a direct economic competitor and in many instances, obviously a political enemy and an adversary. And we've entered a world now where it feels a little Cold War ish, where it's kind of there are Chinese spheres of influence, there's American spheres of influence, both economic, politically, militarily, and then there are kind of like crossover zones that I would describe as kind of geopolitical swing states. And those are the ones we're vying for influence in just the way we did during the Cold War. And so I do think it has more of a feeling of a zero sum game today than it did even five years ago.
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B
Wow. So you do a lot more stuff like in China for the venture capital stuff as well.
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D
I don't anymore. So what I, you know, we started investing there in 20, 2015, and then I kind of saw the writing on the wall. I was going to Washington and kind of talking about, they were starting to talk about this concept of decoupling under the first Trump administration. So I kind of took the view that I should withdraw myself personal from China. And so then I went to set up our investment firms in the United States and also in the Middle East. And we have now kind of different venture and growth funds in those two different kind of geography, geographic buckets. But I still was very, very much involved in kind of the China geopolitical relationship and trying to kind of advise policymakers in Washington how to best and effectively compete with China.
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B
What's really the difference? Because I've never been to China or the Middle east. So what is really, and I don't know if any of my viewers have either, but like what is really the difference that You've seen between China and China investors and the Middle east. And the Middle east investors. I know obviously Dubai is the one that like sticks out the most because of just what they've done so far and what they're planning to do, which is amazing. Kind of talk to me a little bit about that.
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D
Yeah, so the, the geopolitical poles of the world have shifted a lot. And you know, Europe was, used to be a focus. You know, if you want to do business, you're. And if you're not in the United States, you're going to London, maybe you're going to Switzerland somewhere. It felt like that was still kind of the geopolitical hub. Those polls have shifted now where I would say the Middle east is third to America and China as the convening point. For instance, last year the Omani stock exchange had raised more money through IPOs than the London Stock Exchange. So the London stock exchange has become irrelevant and tech companies that went public in London immediately crashed out the gate. And so I think people are starting to realize that, that Europe is kind of a, has been their labor laws, their approach to innovation, their approach to meritocracy, immigration, you name it, is just backwards. And so Europe is falling behind. It's a great place to go for vacation. But it is now where the Middle east is kind of that new Switzerland, that new convening place. So when you go to Dubai, you see Russians, you see Chinese, you see Americans, you see Africans. And it's a pretty interesting kind of confluence. And so the Chinese are now kind of trying to use the Middle east as a gateway, say to Africa and other adjacent markets like South Asia. America's also trying to create influence there and already has military bases and spheres of influence. And so it's really kind of up for grabs. And the leaders there are smart enough to kind of walk in the middle rather than declaring alliances one way or another, I bet.
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B
Because I remember when I was a child, the Middle east was just, yeah, it wasn't really much to talk about. And then now it's just about in the news every single day, Something new coming up, something going on.
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D
You had these leaders coming. It's kind of like to live in Singapore and you had this guy like Lee Kuan Yew, who literally took Singapore from having the same GDP per capita as Jamaica. And now it's one of the highest GDP per capitas in the world within a generation. Saudi Arabia, the uae, Qatar, of course, Kuwait had done similar things through kind of very enlightened one party rule. So to Speak monarchies. And they've advanced these countries far beyond what they were just a couple decades ago.
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B
Talk to me a little bit about the football clubs, because I thought that was really cool. So how did you get the invite? Did they find you? You found them? How did that kind of work out?
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D
Yeah, I love football. You can kind of get a sense of what my personal interests lie. And it's geopolitics, it's business, it's whatever influence. And it ends up that football, or soccer, as we'd call it in the US Is this amazing confluence of all of those. It's religion, it's geopolitics, it's business, it's entertainment, it's community. And in some cities, when you own the football team, you're the equivalent of being the May. I mean, if you win, everyone loves you. If you don't win, everyone hates you and wants to kill you. So I was always a huge football fan. I lived in Spain as a kid. I lived in Switzerland. I kind of got the bug there. I played soccer, and then I was a big sports junkie. I mean, I'm on ESPN app all the time, and I could tell you everyone who's in the NFL draft, what college they went to and whatever. But I realized that actually probably the best approach was actually to be an owner and not a fan. And so during COVID I actually started a process where, to your point, like, a lot of times people come to you, like, someone will approach you and be like, hey, I have a team for sale. Maybe you want to look at it. Usually those are the bad teams, right? Those are the ones that have some hair on it or some hidden problems. So what we did is we initiated a process to go out and look for clubs proactively. And so I called or had someone call, like, almost every club in Spain across the top three divisions and ask, what's your price? You know, how big is the stadium? How what's the GDP per capita, your city? Like, what is the kind of, you know, let's. Let's like, plot all these out on a matrix and say, what's the best value for $? And ultimately, I picked a club in Cadiz, which is my hometown club, which is kind of weird because emotionally have a tie to it. But on the other hand, it ended up being the best kind of situation economically as well.
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B
Well, yeah, because I've always wondered about that because, you know, when you look at American football, like, I've always been interested in that. I used to play high school football, so I was always like, okay, well, you know, maybe the Dallas Cowboys and Mr. Jones will reach out to me and be like, okay, hey, Chris, like, we have, you know, a 5% stake. You know, go ahead and pony up some money. I haven't gotten that call yet, but, you know, I was always just kind of wondering, like, how does that really happen? But that's cool that you did like it kind of proactively. Like, like, I guess your background to vc, venture capital, you're just like, you're looking at your numbers and you're looking at what's available. I wanted to ask you because I was really interested in the political side of it. I noticed that Jeff Bezos, he got his money, he had his company that going great, and then he kind of turned on to Washington and just started doing more of getting into politics, raising money, donating money, trying to get into people's basically pockets, right? So when he did decide to do a lot of different projects and expand Amazon from just shipping and FBA and all that kind of stuff to more of, you know, we're going to sell data centers and do this and do that, right? Like, how does that really work? I'm from dc, right? But like, and I kind of know a little bit about the political stuff, but, like, how does that really work? Is it because you get to a point where you're like, okay, well, we got the money, we got this stuff, we got stuff going on now. I want to see something change. And the only way to get change is by meeting my political people in that arena and then starting to donate. Is that how really that works?
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D
Yeah, I mean, I think when these guys get involved in politics, there's probably an altruistic rationale and then there's also an economic rationale, right? So once you have a business of any scale in America, you have to have a lobbying organization, you have to be present in Washington. You have to legally give money to politicians and support their reelection campaigns or super PACs where they're involved in. Because of election finance regulations today, you can, in many instances, you can give an unlimited amount of money. And that's critical because you need certain regulatory barriers that are restricting the growth of your companies removed. You need permits for building a new fulfillment center for Amazon. You need all that. That political apparatus, I think, exists for all businesses. And then you've got more, let's say maybe in a more altruistic or at least ideolog.
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Narrative or path, which is, now, I have enough money, I want to have influence. I have certain issues that I care about, for instance, I think a lot of us are united by something. We want America to win. We want America to win, and we want to make sure that then, therefore, the regulation, the workforce enablement, the housing, the subsidies and cost offsets, whatever it is, are aligned so that American companies win, particularly as they compete with the Chinese, who have a more mercantilist economic system where everything's working in lockstep.
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I think people like him and Zuckerberg and others were drawn into politics more recently than maybe most people would have thought because they wanted to get behind policies that they supported. And so, again, that's donating to candidates, that's supporting research, that's supporting think tanks, nonprofits, whatever it is.
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B
I was looking at that. I was looking at Elon, too, because, I mean, he's just. He's obviously the number one person in the world that's like, in terms of money. And he got into politics and, like, it almost ruined his business, in a sense. But at the same time, I think he was trying to basically fix America in terms of not have overspending and the budget and stuff like that, which obviously some people agree with, some people don't, because politics have gotten so. Because I remember when I was younger, it was kind of like, okay, cool. And News was like, 30 minutes. And now it's gotten to be where it's no different from watching a sports team. You got one person that loves this particular team, and they think that team is the best, and you get the other person. And it's just. It's gotten to the point where it's. I think, for me, like, people forget that people are people, and it's okay to just have an opinion about something, whether you like that team or don't like that team. And it's gotten, in my mind, just kind of to a different level.
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D
We've lost that middle. We've lost that kind of constructive, you know, pragmatic middle. And it's become very ideological, separated east and west, north and south, left and right.
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B
Talk to me about the VC side of stuff, because I got a little bit into vc. Not nearly anywhere where you're at, but with investing in tech companies and ETFs and stuff like that. How did you go about getting into that in the beginning? Did you kind of work your way up? Was it kind of something that was presented to you and you were like, oh, cool, let's run with it?
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D
But VC is a weird space because there's very rarely a prescribed path into it. And you find great venture capitalists who come from a very wide array of backgrounds. Some of the best were previously founders. They were journalists, they were technologists and operators. Maybe even some of them were previously politicians or doing something more on the front end of the regulatory side of things. There's very few VC funds, for instance, have a prescribed hiring path that comes out of business school and you work your way through the firm. A lot of venture capital is also just making your own personal investments like it sounded like you did, and doing well off of them and building your own track record. And then someone sees that and says, well, I can put more capital behind you, but oftentimes it requires that you bet on yourself first. Actually, our first fund, as many people, was largely our own capital, largely money that I'd made through the commodities trading side of things and wanted to bet on myself then. I think it's just a lot of listening and a lot of really deep digging. And that's why I think journalists often do well at it, because it's really about talking to as many people as humanly possible, collecting and really just squeezing out and extracting their views, and then forming your own thesis and a very strong opinion, even if that goes against the wisdom of the crowd or the consensus.
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And then following that path. And with venture, then usually it's human driven because you're going so early in these businesses, you can't diligence the financials of the business. You can't model it out with a discounted cash flow or whatever it is. You've got to really think deeply and have deep conviction in that founder. And that's maybe because they previously built a business before because they have deep industry knowledge. They have some kind of a monopoly on the vertical that they're doing. They're solving a really hard problem in a novel way. All kinds of different rationale, but it's a very human first business.
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B
I've noticed that too, because I would go to these networking events where it'd just be like an M and A and VC stuff. And.
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A lot of the people that I dealt with in business were people that I just really liked and like, they would pitch me or I would pitch them and like, they were like, I could. I don't know if I just have a good feel about that person and then I would end up doing business with them. And I'm sure it's kind of like the same thing going back out. Ben, if you were. Here's a kind of a curveball for you and a fun one. If you were to go back in time and change something.
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To get you faster to where you are today. What would it be?
- [18:46]
D
I literally go around, I think this week I'm going to give a talk at a university and I literally just kind of walk everyone through all the mistakes I made and all the ways that they could get about, get to that kind of destination much quicker. One of the things that I've always done that was on the one hand, I think made me a bit of a maverick and an out of the box thinker, but also maybe inefficient was I never really went through the kind of prescribed training of another firm and let them brand me, educate me, and then went out and did my own thing, for instance, in commodities. I just went out the gate and started my own firm without any experience. I probably could have benefited from a year or two inside of a big company like Glencore or Trafigura, where they trained me, and then I learned the ropes within a system that was more protected, where they had the money already available and they had the supply and the demand, and I just put things together instead of having to put all the pieces together and spin all the plates myself. Same thing with venture. If I had had the benefit of spending a year or two at a Sequoia or a Benchmark or a Lightspeed or whatever, and learn the ropes from a great venture capitalist, maybe as their chief of staff or something like that, seen how the best did it, and then left to start my own thing rather than trying to raise my own money, figure out my own investor relations, figured out my own investing strategy, hiring. I've never benefited from operating within a more controlled environment where other people did a lot of the hard work and I could just kind of focus on my zone of expertise. And even that's true in the sports space. I mean, I went out and started buying teams right out the gate and learned from trial and error rather than spending like two years inside of Manchester United and seeing how they do it and then trying to apply it to my own little club.
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B
Right, Ben, if somebody were interested in learning more about your story or maybe about investing or maybe about just anything geopolitical, where would they find you?
- [20:35]
D
I'm active every. So I'm active on Twitter, Ben Harburgh. I'm active on Instagram Ben Harburgh. We do a lot of podcasts, a lot of media. I've been fortunate to get called upon by a lot of national media and great podcasters like yourselves every week to kind of give views across the spectrum from geopolitics to technology sport, and so there's a pretty great archive of that. I used to have a website, benharburg.com, which had all that archive. Now that redirects to my sports club holding page. But there's a lot of material out there. If you just kind of google my name, there's that outlines a lot of my views on most of these topics.
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B
Awesome. Ben, I really appreciate you coming on the show.
- [21:11]
D
Thanks for having me.
- [21:12]
B
Awesome. Thank you.
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E
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