FEATURE
Cordstrap: Principia’s Unique
Financial Win-Win
STORY BY ERIC MORSE (US'90)
IT WAS AN UNUSUAL PROPOSAL. But when it came to businessman Fred van Eck, outside-the-box thinking was hardly outside the norm.
While van Eck never attended Principia, the dedicated Christian Scientist enjoyed Summer Session, playing tennis with Principia’s Chief Executive, Dawn Larmer. As his appreciation for Principia grew, an intriguing idea took root: would Principia accept his interest in a Dutch manufacturing business as his gift?
Cordstrap BV manufactured polyester straps for securing shipping bundles that were safer and more efficient than traditional steel bands. It was a modest but necessary commodity doing moderate but steady business.
While van Eck’s love of Principia, commitment to Christian Science, and business acumen were unquestioned, his unique gift had one glaring drawback: Cordstrap wasn’t profitable. Stewarding this gift would require the dedication of a quartet of Principia alumni and one shrewd Dutchman. The goal: a mutual win-win.
“Fred called me up one day in 1994,” recalls Mark Tousey (US’77), at the time a London banker. “He wanted a Principian on the board of Cordstrap to help with this gift. It was a modest company, but Fred had brought on a new CEO and added Gert Jan van der Hoeven to the Board.” Mr. van der Hoeven quickly formed a tight partnership with the Principians involved.
Soon, James “Ned” Odegaard (US’70, C’74) joined Tousey on the Cordstrap board. In the meantime, Willard Hanzlik (C’68), chair of Principia’s Investment Committee, was familiarizing himself with this unique bequest.
“At the time, it would not have been economically positive,” Hanzlik recounts. “But by the time Fred made the gift five years later, he had taken steps to turn the company around. Thanks to strategic guidance by Mr. van der Hoeven, it became quite profitable.”
After Fred van Eck’s passing in 2000, Charles “Tuck” Spaulding (US’63, C’67) joined Hanzlik and van der Hoeven on the Cordstrap board. Together, the trio guided Cordstrap into the future—expanding product lines and adjusting the business model to sell direct, putting Cordstrap at the cutting edge of the direct-to-consumer economy.
Reflecting on the shift, Spaulding recalls, “the CEO of Cordstrap went to bed one night and his wife asked him how his day was. He said ‘I really don’t know. We’ve just been bought by some religious school in the middle of the United States!’ Imagine how frightening that must have been.”
But Cordstrap’s 240+ employees embraced their new partners. “The fact that they were working for an educational institution was something Cordstrap took pride in and spoke about with their customers,” says Hanzlik. Mark Tousey concurs: “Principia became a source of great pride for the company.”
Hanzlik and Spaulding created a Dutch stichting—a purpose-driven foundation. The stichting distributed Principia’s proceeds, and that enabled Cordstrap to expand into a high-growth market: the United States. The new ownership structure proved revolutionary for Cordstrap’s business, and in 2006, the company opened its first stateside manufacturing facility in Racine, Wisconsin.
Tousey: “Once Principia was the beneficiary, that opened up new avenues of sales, which was huge.”
Hanzlik: “With some strategic steps guided by Mr. van der Hoeven, we were able to generate excess cash that contributed to Principia every quarter. It was surprisingly profitable and fulfilled a need at Principia.”
In 2022, after Hanzlik and Spaulding had spent nearly two decades on the Cordstrap board, Principia sold its interest in Cordstrap for $155 million, bringing Cordstrap’s total contribution to Principia’s endowment to $300 million over 15 years.
Reflecting on the experience, Willard Hanzlik says, “It was hard work, but it was an opportunity to give back to Principia. It was fulfilling; it was fun to see this company grow, and its growth and success directly benefited Principia.”
Tuck Spaulding agrees: “My joy in all of this has been knowing that Fred is able to smile and realize that this nice but modest gift has turned into an enormous benefit to Principia—even more than he could have possibly dreamed that it would.”
A businessman whose frugality was the stuff of legend, Fred van Eck inspired wonder, admiration, and more than a little gratitude.
The third child of Baron Jan Carel van Eck, a Dutch aristocrat who came to the US and rose to be president of Shell Oil, Fred and brother John van Eck, founder of the Van Eck Global investment firm, pursued careers in business and finance, while younger brother Bart (C’47) committed his career to the practice and teaching of Christian Science.
The van Ecks came into Christian Science in dramatic fashion, when Fred’s school-aged sister was roused from her deathbed by a young Christian Science practitioner. While this inspired Bart to become a teacher, Fred practiced Christian Science from the board room.
Mark Tousey recalls a contentious board meeting of Cordstrap BV, the company van Eck bequeathed to Principia: “The deputy managing director had locked us out of the company. Fred slid a piece of paper to me that said ‘God is in absolute control.’
Indeed, Fred was not one for material trappings. Famously frugal, he once sat down to lunch in Manhattan’s elite Harvard Club and pulled a tuna sandwich from a paper bag. The waiter asked, “Your usual, Mr. van Eck?” and provided a glass of water and an empty plate.
Most notable, though, is how he adhered to this fiscal conservatism in business. “Fred didn’t like debt,” Tousey told the Purpose. “If he didn’t have money for something, he didn’t buy it.”
Cordstrap CEO Jan Andriessen once said, “When I tell people that we grew this company without talking to one single bank about borrowing, they look at me like I’m from the moon.” Growth like Cordstrap experienced without taking on debt is nearly unheard of, but it’s a testimony to van Eck’s preternaturally patient leadership.
This care with his business was complemented by a largesse that is the stuff of legend. Though van Eck never married and had no children, he bequeathed substantial amounts to educational institutions, with Principia joined by Purdue and Cambridge as beneficiaries of van Eck’s generosity.
“Fred’s idiosyncrasies are lovingly talked about,” laughs longtime Cordstrap board member Tuck Spaulding. Adds Tousey, “Fred was the most unbelievably generous person.”
Mark Tousey (US’77) starts, sustains, and saves companies for a living. The venture capitalist, philanthropist, and entrepreneur has been involved with over two dozen and counting; but when it comes to lessons learned, one company stands out: “My business is owning companies and I have never seen growth on the scale of Cordstrap,” Tousey recounts.
In characteristically humble terms, Tousey, like his fellow Principians on Cordstrap’s board–Willard Hanzlik and Tuck Spaulding–credits Cordstrap’s hockey-stick growth to the dynamic board chair, Gert Jan van der Hoeven: “Gert Jan has tremendous vision. He is a mentor to me.”
So, how did van der Hoeven, Tousey, Hanzlik, Spaulding, and co. help this small company increase in value 15x in less than two decades? Here are Tousey’s four lessons:
1. Get close to your customers. Approximately 80% of Cordstrap’s sales came through distributors. According to Tousey, “Gert Jan came along and said, ‘How can you understand what your customers need if you only know 20% of them?’” In short order, they shifted to a direct-sales model that flipped this ratio on its head.
2. Understand the applications. Knowing your customers facilitates a deeper comprehension of their needs. Like movies or songs, a product in the market belongs to the consumers, not the creators. Stop thinking like the maker, and think like a user: “Think outside of the box,” Tousey counsels. “Who else could use this product? What other industry could it serve? … When you have a creative team, you come up with new ways your products can be used.”
3. Prioritize customer service. “Cordstrap was the highest-priced supplier in the market, but we backed it up with tremendous customer support,” Tousey says. “Our customers who left for something cheaper would be back within a year. They were happy to pay a premium price for superior customer service.”
4. Expand product lines. With an attentive sales team and nimble research & development, Cordstrap had two effective weapons at the ready. Before long, they had a dunnage bag, corner protectors, and inflatable packing materials. “We became a one-stop shop for load securing,” Tousey recalls. “The sharp R&D team kept coming up with new applications … this was the secret sauce of Cordstrap.”
Reflecting on his involvement with Cordstrap, Tousey counts it as a transformative experience. “It was great innovation, in terms of how you make and market a commodity.” And it paid off: “Cordstrap is the fastest growing company I’ve ever been involved with.”