Rank #1: Episode 18: What Exactly is a Backdoor Listing?
Chris: Welcome to The Tech Lowdown show, where each episode will be discussing opportunities in the tech space with entrepreneurs from the US and around the world. I’m your host, Chris Jones.
Any entrepreneur knows that raising funds to start and grow business can be extremely difficult. Despite all the stories we read about businesses raising millions of dollars from VCs, a recent study that I read found that to be in the top 50 per cent of start-ups who raise capital, the start-up will have to raise about 1.75 million Dollars. That’s definitely a fair bit of money, but in the grand scheme of building a business, trying to deliver a 10x return for investors, it’s really just a drop in the bucket.
Today we’re going to hear from an entrepreneur who went a different route to raise capital for his venture – accessing the public markets in Australia, via a reverse takeover. Dave Whitaker is the co-founder and larger shareholder of Thred Limited, a publicly listed company on the Australian Stock Exchange, which is built on messaging app. It brings all your contacts together in a single place making it easier for you to share stories, photos and videos with the people important to you. Originally from Australia, Dave spent a decade in Hong Kong, starting and building tech businesses. Dave is an entrepreneur, several times over and brought me in to co-found Thred with him, almost two and a half years ago. Dave I’ve been looking forward to this conversation; welcome to the show, my man. What’s the lowdown?
Dave: Thanks, Jonesy, great; glad to be talking to you about Thred at last.
Chris: Awesome; so first, congratulations on the launch of Thred this week. It’s an exciting time for the company.
Dave: Whoo, yes, tell me about it. I’m mean you were there along with us. It’s been an amazing journey. It’s taken us across a couple of different continents, three actually, and we’ve been you know, we’ve been really fortunate just to have some great people with us, and just to get such a great result.
Chris: Great, so we’re going to dive into the details around how a back-door listing or a reverse takeover takes place. But first, I want the listeners to learn a bit about your background, what took you to Hong Kong and what brought you into the crazy world of entrepreneurship?
Dave: No problems, so I mean I think every entrepreneur out there knows you know, right from the time to start grade school, but that’s probably what they are. It’s a way of looking at the world and so no matter what you do is a job or profession or when you go to college and so forth, you just always seem to be pushing yourself to try and do new things, and to start things from a business context. My background originally was trained as a systems analyst, so I understand tech and architecture and they’re not got into IT recruitment back in the late 90s, and that gave me a fantastic you know broad view of the IT industry. I just realized immediately, how much I didn’t know about IT. So it’s fantastic here you know, it’s just one of those things. Everybody thinks they know everything until late they have that Mike Tyson moment. So that was great, and that was a career that I stayed with for a long time and ultimately I was managing and starting recruiting businesses all around Australia and [unclear 03:44] region. And how I got to Hong Kong was that I was headhunted, believe it or not, headhunted by company to go out there and run their IT business in 2005.
Chris: Awesome, really interesting. I want to get into the backdoor listing because this is one of those areas that frankly a lot of people just don’t know about or even understand. Most of us have heard the term, but let’s start off with the basics. At least for me, I didn’t know what it was. So what exactly is a reverse takeover?
Dave: Right, so there’s several different levels and some of it little technical steps to keep with. I’ll start with the straight-up version. Basically when a company that is already listed on a stock exchange has decided to either change direction or they’re winding down, then they put the company into a particular situation that allows them to go and seek another project. And they go out and look for what they call a vendor. And that vendor is usually a private company that has a project that would suit to go into that listed vehicle. So once they identify the right project and the right people to come in, then a transaction takes place. And because the listed company is looking for a project, and the project is looking usually to raise capital, and it’s much easier in some instances to raise capital into a company that’s already on the stock exchange because it gives investors liquidity, which means that they have shares that they could trade in, it’s a bit easier to value. So you strike an arrangement between the company and the listed company and the exchange takes place where the project goes into the listed vehicle and they basically handover shares. That is usually the controlling interest of their company, and that’s the reverse part. So it’s called reverse takeover because even though the listed company is purchasing the project into themselves, they’re doing it by giving control to that company.
Chris: That’s a great way, that’s an excellent explanation. What does control mean in a publicly held company?
Chris: So by doing this backdoor listing, these tech companies come in or any company comes in; they take over a publicly listed shell and then they’re able to go out and raise capital at this new public entity.
Dave: Yeah just like your earlier point. I mean it’s not always if you won 60 or 70 percent. Sometimes it’s less than that because you can have effective control of a listed company with less than 51%. But if you want to get things done, you need to automate decisions, you need to have 51% of the shares voting your way. But yeah, it’s a really interesting way to raise capital. It means that you can then go to the market, do road shows and increase you remember, you know we’ve done a lot of meet and greets going around Australia and up to Hong Kong and other places and you know just meeting some really interesting folks in the capital markets again. And telling them what we did.
Chris: Great and what are the benefits for an entrepreneur of this particular process for raising capital and funding your business?
Dave: Well first things first. Listing a company is not that easy; it depends on the stock exchange that you go to in the listing rules. For example to list a company on the Hong Kong exchange on the secondary board; not the main board; with the secondary board. You have to have all positive accounts showing 20 million Hong Kong Dollar profit over three years. And for start-ups, I mean most start-ups are in earning a near profit territory and if they are, it’s certainly not anywhere near there. So going into an already listed company, that company has already complied with the listing regulations and rules. And this also means that they have existing shareholders that meet the compliance regulations for whichever brought that on. So all of that is done. Also it means that when you’re going out and raising money in the capital markets, you’re able to show people that if they invest at a particular price then the shares can be traded and they have the opportunities, the same opportunities that share market offers to everybody.
Chris: Wonderful. And then when you’re going through this process of a reverse takeover, who are the key parties that are involved in this process and what are the important things for an entrepreneur to be aware of if they’re going to go into this process?
Dave: Get your own lawyer. Absolutely, start with your own lawyer and make sure that they’ve got experience doing this, particularly for the exchange that you’re going to list in. Secondly, go out there and talk to some different brokers you know. Don’t just speak to one person; don’t think that they are the only source of income, or only good road. You know, there’s a competitive market; there are a lot of people out there. Try and find the people that are a good fit for your business, who understand it, who see the potential and who are going to stick by you because it’s a longer road than you think. So no matter how long people tell you in the first instance, it’s going to take you three months; it’s going to take you six months; my friends, it will not. I assure you, it always takes longer. And you know, it’s bumpy. There’s a lot of compliance. There are a lot of things that you know first time, second time, third time entrepreneurs may not have ever come across before. So you know if you’re keen to learn then this is a great thing to do, because there’s a lot of learning. And get good advice; make sure you surrounded by good people and you know stick to your guns. If you got a good project and you believe in it, then don’t let people shake that belief because they’re trying to get you for a better price. You know stick the things that you believe in and you’ll see it through.
Chris: Great, so I want to go a little bit inside baseball issue, a little bit deeper in the understanding the process. So I know you mentioned the brokers, you mentioned the lawyers; you mentioned actually filing some paperwork. What I know, you’ve got to deal with a prospectus. You’ve got to deal with audits; you’ve got to deal with the Securities Investment Commission of whatever market that you’re in. Can you just talk a little bit about how that all comes together?
Dave: Yep, well, comes together, that’s great optimistic. It all arrives at the same time, hopefully. There’s, look, it’s a regulated market, so there’s very strict guidelines that you have to follow and you know those regulations are there for a very good reason. To understand how it works, you know really, there’s a lot of different moving parts, so you’ve got the existing company, you’ve got the board, the controls, the management of the company, we’ve got the shareholders that the board answer to; so that’s just in that listed vehicle. Then you’ve got your legal counsel, then you have your brokers and the brokers exist on many levels. They could be small firms, they can be large global firms and they are basically the people who make the investment decisions on behalf of their clients. So they’re a very important piece to this whole back to listing experience, because they have to go out and help you sell your story out to the market. So once you’ve got all of those pieces in place and you’ve got your team, so you like in managing all of this. You’ve got to pull together a prospectus that describes and fits the compliance rules for the listing, and that can take a lot of work because every single statement in a prospectus has to be checked and verified and fact checked. So you’ve got to have a team of lawyers and by the way make this sound super hard. You know if this gets done every day by companies out there doing it all the time. So you don’t let this scare you off. This is just you sort of making sure everybody knows what goes on right.
Chris: This is what we want.
Dave: This is yeah, so you’ve got to have every single statement in the prospectus and the perspectives typically for a listing could be a hundred and twenty pages, maybe more. You’ve got to have all of the audited financials done and there every quarter up until the listing time takes place. You have to have submitted notice of meeting for the shareholders so that the shareholders can come and vote on the transaction, and that’s got to get through. And then you submit it all to the Regulatory Commission wherever you are in Australia. It’s classic and it has to comply with the existing regulations, and it has to go to the ASX or the NSX which is the secondary board depending on which way you’re going, and it has to be approved there. So that’s the easy part, getting all right done.
Chris: And tell us what the road show is like. You’re meeting with potential investors, who are these people? What’s it like presenting to those folks?
Dave: Well you know that’s the fun part, depending whether or not you as an entrepreneur like getting up and speaking to people. If again like I said before, if you really believe in your product and you came and got that enthusiasm; as long as you can temper that with sufficient business understanding of how your idea is going to turn into a real business, then you know you get the opportunity to stand in front of the room for the people and tell them how you’re going to change the world, or how you’re going to disrupt a particular area. So road shows are usually held in boardrooms, although I’ve done road shows and you have to’ in coffee shops, restaurants around lunches, it can it can really vary. I’ve seen road shows done in pubs that were quite effective. At the end of the day, it’s a gathering of people who are influential and able to make investment decisions either on behalf of themselves on behalf of their clients. And so you get up and you have to have a depth that describes the business and describes what your Road-show is, and what your vision is and you’ve got to be able to communicate that. And I really suggest that your entrepreneurs out there, if you don’t have co-founders, get them, because doing road shows by yourself, I mean I could not imagine doing what we did as a one-man band. It was gruelling enough.
Chris: It was brutal absolutely, so then after the lifting takes place, funds are raised. What are the requirements as a public company that is different from those as a private start-up, that an entrepreneur should be aware of?
Dave: Have you ever seen one of those shows you know where they have somebody who I know either for a bit or for you know to raise money for charity. They put them in a glass box and make them live in that glass box; you know 20 feet off the ground for a week. Yes, that’s public company life because every single thing has to be disclosed the minute that it becomes known to you. So that’s called continuous disclosure. You have to make announcements constantly. There are on-going regulatory reporting requirements and again as I said those regulations are there. A very good reason to protect shareholders and to make sure that everybody behaves themselves. And so it’s quite different from being you know say a typical bootstrap entrepreneur who then picks up private equity or obviously in funding, because it’s almost impossible to maintain some works style development. You know we need to be telling people what we’re doing, why we’re doing it, what the money’s been spent on and all the rest of it. Now there are carve out rules that give you exceptions, particularly if there are things that are patentable or that are considered to be trade secrets. So it’s not that bad, but yes I mean it’s just basically you’re always public facing, you’re always talking to shareholders and you’re constantly speaking to the brokerage community so that they can explain, so that they can do an analysis actually of your company and help to value your stock. Because your product is no longer your product; is also your stock.
Chris: That’s a great description. So first of, that was phenomenon, explaining the whole backdoor
listing and RTO process. So I want to move now to the real lowdown segment of show when normally here we get into the nitty-gritty behind ins and outs and some of the more interesting details. But what I want to do is, I want to give you a chance to talk about Thred. I want to hear your thoughts on Thred. So if you can start by just telling the audience; tell us about the product, tell us about the original vision and what you like about the newly released version of Thred.
Dave: Absolutely well, I mean how long would we go? Because you know this is, has been such a fantastic journey, from some start to where we are now. You know, the original concepts like a lot of innovative ideas, came about because of environmental reason in tech that had just developed organically. So in other words, with the rise of social media and Facebook and Twitter and LinkedIn you know, and all of the other ways of communicating, it just became very obvious that each of those very fine companies was trying very hard to silo themselves or to know to create a walled garden, to provide everything that everybody needed within their properties. But the reality is that, that’s not really how people are, is not how to communicate. So what was becoming evident is that you know, I’m speaking to my family on Skype, I’m doing Whatsapp. I’ve got contacts in Facebook, I’ve got business contacts in LinkedIn and you know, then of course I’ve got my Microsoft Office 365. I’ve got a Google account. I mean it’s just like everybody would register all over the place. And this was becoming really unwieldy, and so we sat around the door. Well there must be a way to actually you know, to share content in a more unified or a more logical fashion. So that was the genesis of Thred.. It was actually about how we could share content more easily. And so we prototyped originally, joining together your LinkedIn, Facebook accounts and a couple of others, and doing a button in a browser. So that if you’re on a particular webpage, you wanted to share that, then you would click on the sharing button. It would open up with your contacts from your different social accounts. You could choose who you’re going to share it with and it’s in. So that evolved as you know from a simple browser button to a full messaging app and then a messaging platform and we realize as the journey continued, and as our thinking evolved, and as the whole space evolved, that it just made sense not only to aggregate contacts, but to aggregate content and news feeds. So we’ve got you know more than 75 channels that we’ve launched. We’ve just in the channel section for written media and every single thing that you connect, you can start a Thred about. So the idea is that communication is constant. It’s contextual and you just want to be able to do things the way that we would do things if we were sitting around a coffee shop table talking. So you know, you and I talking about football, sorry soccer and that’s because that’s how you talk about. And then when you talk about soccer, you’re talking about Arsenal, because that’s what you talk about. And then you say hey, the guns match is on do you want to go see it? You know we want to go see it. So yeah, let’s organize some tickets, and so that’s a natural conversation. But if you put that in the context of a chat app, there’s no way that you could order a coffee, you know order transport, buy a ticket and have that conversation back and forth in one place. That would take four or five or six different apps and a phone call. So raise their thinking, oh yes so that was our thinking, is like well how do we communicate naturally as best friends, as people? Let’s get all of that information in one place, let’s bring some third party services. So we deep link input, we deep integrate into Ticketmaster as well. And as a heat, more of those that are coming down the pipe and just make it easy for folks.
Chris: Makes a lot of sense. So obviously, the next few months are important. I was checking the Play Store today and so far it’s at a four point six dollars in the Play Store. Amen. Where do you see the product going from here?
Dave: Well, you know we we’ve had a lot of organic growth, really quickly affirming dates of the actual launch. We’ve got some new release stuff coming out. We’ve got a very solid tech team behind us, so our delivery cadence is very quick. You know we’re looking at weekly updates and you know adding additional features and functionality. But you know, because the most important thing per se, and I talk about this all the time. The most important thing is that we sort of be patient and open, and listen to our users because we built you know the platform because we thought it was a good idea. But how that platform evolves is now going to be a collaborative process between us and all of the good folks that are using it. So we’ve got a lot more stuff in the pipe that’s coming. We’re going to be bringing music, we’re going to be bringing streaming video. You know the heap of other things that we’ll bring to the platform. But yeah, it’s really going to come down to you know ultimately the users telling us how they use Thred and you know what they get the most out of.
Chris: Great, makes a lot of sense. I’ve got two more questions for you and then I will let you go, because I know it’s an extremely busy time for you. The Thred is not, was not a simple product to build and the funds raised enabled you to create a much better infrastructure, leveraging our partners Lateral in order to do that, than you would have been able to do if we’d been bootstrapping this. Tell us about that underlying infrastructure and architecture that we’re building Thred on top of.
Dave: Yeah that’s a really good point. One of the questions we get asked a lot of is you know, can other people build Thred? And of course, of course they can absolutely. But it hasn’t taken us two years for no reason, it’s incredibly complex. There’s you know, we’ve got a large development team of really skilled people who come from all sorts of backgrounds. You know, one champ ran, you know, one of our systems for one of the police departments here. You know someone else has come from London through the financial tech industry. It’s a really complex architecture because anything that might look simple as you know, has just got so much work and so many hours that have gone into it. Fortunately as you said, we have been able to raise the money and that’s why I would encourage any entrepreneurs listening to this; get out there if you can. If you really believe in your idea, then go raise the money. If the idea is that good, the money will come eventually. You know this did not happen overnight, there’s no such thing as overnight. And so the remaining thing is that we’ve been fortunate to raise the money and be able to build the platform out. So we haven’t just built an app, we’ve built a full platform and we’ll be opening that up to developers to build, you know widgets and other things against that platform. Because we now provide what we’re calling messaging as a service and multi app, where if you think about the Thred identity because you’ve already connected your other identity systems to it, a single thread identity is potentially more powerful, more accurate than any of any other one out there. So there are a lot of places that Thred can go, but you know we wouldn’t have been able to do it without lateral and without the great team that we’ve got behind us.
Chris: Great and last question for you. There’ve only been a handful of consumer apps, global consumer apps launched from Australia. What does Thred launch mean for the Aussie tech scene?
Dave: You know, I’ve always been a great believer in every local tech scene. When I was in Hong Kong, I was you know, really supportive of the of the start-up scene there, which is just boomed in the last few years and good friends of mine who is in Singapore, and I saw the same thing there. When I left Australia 11 years ago, It was quieter and you know there wasn’t the availability of capital that there is today. Hopefully, what the successive Thred will do though is, it will champion the tech industry, and that’s what every local tech seem needs. It needs standout systems or standout successes that raise the awareness in the investment community and just in the community in general, that there is a lot of innovation in your local scene, in the local tech scenes, because Australian innovation is incredible considering the size of the population and where we are in the world and so on. The innovation that’s come out of Australia is absolutely incredible, and it’s very sad to see it go overseas because it’s got to raise money there. So what I’m hoping is that Thred will stand out as an example, and that it will attract capital into the wider market.
Chris: Great! Dave, thanks for your time during this extremely busy period. Tell our listeners how they can find out more about you and more about Thred.
Dave: Well, you can go to LinkedIn, David Whitaker, 1 “t”, and you can find my profile there; or our website which is www.thred.im.
Chris: Wonderful. I’ll have links to Thred in the show notes, folks. And as always if you like the show, please download all the episodes and leave us a 5-star rating on iTunes. You can find show notes at Techlowdownshow.com and of course follow me on Twitter @cjones2002.
May 13 2017
Rank #2: Episode 17: Timing When to Jump into A New Industry – An Entrepreneur’s Dilemma
Welcome to the Tech Lowdown Show where each episode we’ll be discussing opportunities in the tech space with entrepreneurs from the US & around the world. I’m your host Chris Jones – What happens when you’re on the cutting edge of a new industry? How do you decide when to jump into your own venture in a still immature space? I remember the early days of mobile marketing and how year after year I heard “this was the year of mobile” yet dollars flowing into mobile marketing were scarce. Depending on your perspective the entrepreneurs building businesses at this time were either too far ahead of the curve or developing the knowledge to be successful once the dollars started flowing. Today we’re going to speak with an entrepreneur who found himself in just that situation.
Rory Mudie is the Founder and CEO of Redbox Mobile, a leading Appstore Optimization Company with offices in London and New York. Rory has been on the cutting edge of digital marketing for over a decade now. He’s held executive roles with the BBC and Vodafone among others before starting Redbox Mobile in 2013. Rory, welcome to the show – What’s the Lowdown?
– Rory, I want to start by learning a bit more about your background – tell us your story and then what led you to start Redbox Mobile?
– Like you I worked for a carrier previously – what were you seeing taking place during that time that piqued your interest in the still nascent app space?
– Can you take us through your thought process regarding the opportunity and your risk assessment at the time that you made the decision to give it a go?
– When you started Redbox you weren’t focused just on ASO – talk me through how you were trying to build a product in the early days. How did you figure out what was most viable for you to build a business on?
– I believe that you bootstrapped the business correct? Walk me through the turning point for the business – what was going on and what gave you the confidence to pursue ASO and now Search Ads as your primary products?
– Okay, let’s get into ASO now. Briefly tell us exactly what ASO is and why it’s important for app marketers?
– Do we know how big ASO is right now as an industry? Where is the ASO space in regard to it’s maturity as an industry?
The Real Lowdown Segment
– What was your lowest point when you were building Redbox Mobile?
– What are the challenges that the business still faces today?
– So it appears that you timed it right. Did you and was it by luck or design?
– Finally, what advice would you give to someone trying to figure out when to jump into a immature industry?
– Finally, what personal sacrifices have you had to make for the business and has it been worth it?
Rory- this has been so much fun. Please tell our listeners how they can find out more about you and Redbox Mobile? If you liked the show, please download all the episodes and leave us a 5 star rating on iTunes! You can find show notes at techlowdownshow.com and follow me on Twitter at cjones2002.
Apr 18 2017
Rank #3: Episode 16: Beating Google at its Own Game: Search for the 21st Century
Chris: Welcome to The Tech Lowdown show where each episode will be discussing opportunities in the tech space with entrepreneurs from the US and around the world. I’m your host Chris Jones. I remember arriving at business school many years ago. And meeting people whose brains were just wired to handle and process lots of complex information. While I consider myself to be intelligent these people had what I like to call mental horsepower.
Today’s guest falls into that same category in my mind. Hamish Ogilvy is founder of Sajari. Sajari is a real-time cloud based search and recommendation engine. It’s designed to work with very large queries like documents people profiles stuff like that. I can promise you that you’ve never seen a faster search product in your life. Frankly it’s amazing and I want to understand how Sajari is turning how search, something we all use every day, on his proverbial head. Hamish received a PhD in physics and lasers and still found time to captain the basketball team at Macquarie University in Sydney. A new father to a beautiful baby girl – Hamish welcome to the show, what’s that lowdown?
Hamish: Chris what’s up man it’s been a while man I hope you’re well.
Chris: I’m doing well man thank you it’s great to have you on the show. I’m going to jump right in you’re a rare combination of an athlete, geek. High level rugby and basketball player and you’ve got three patents to your name. Tell us a bit about your background and we’re just interested I technology and data came from.
Hamish: Yeah it’s interesting I said I think I was always interested in technology growing up. And always interested in sports as well so I kind of ran down both those paths. And ended up in University doing physics wanted to go and learn a lot about lasers which were interesting at the time. I think I don’t think many people realize but the whole internet is powered with lasers. You know all the over communication fiber running around the world. So laser pretty critical to the world that we have today. I was pretty interested in that and then that just led on to data and other worlds. And to where I am today.
Chris: interesting so before we jump into Sajari. You once told me a great story about your first little side project which is still ongoing. Go petition tell us about that business how it got started what you guys were doing.
Hamish: yeah that was really interesting I was at university in the time and living in a shared house. Didn’t have a lot of money and we had a one of our house mates that live with. Actually he spends a lot of money gambling and it was hard to get the rent of him. And we were sitting there sitting there one day and thinking you know we shouldn’t have slot machines in Basel. I think it’s a bad idea we should petition about it and then nobody had really done that in the online space. At least in Australia but it was starting to happen in overseas. But we thought we could do it better, so a couple of us got together and decided to start that. And many, many years on it’s grown over I think there’s over 20 million registered members now. So it got pretty big and been involved in some massive pieces of change around the world. I think from my perspective though that was just a great experience to learn how to build an online business from zero up to millions of views yeah.
Chris: Yeah you guys really grabbed a tiger by the tail on that one. Most people when they think of search immediately think Google. And maybe secondary how they think about Bing or maybe the old Yahoo search. I was lucky enough to see an early version of Sajari in action a few years ago and we were looking at searching within the US Patent archives and frankly I was blown away. Tell us about Sajari and how you identify search as an opportunity.
Hamish: Yes I think the interesting thing that we see is that the world’s drowning in information I think as you know I think there’s 40 or 50 times more information every couple of years. Than what there was previously and there’s some of those crazy stats that you know in 2003. There was more data created than all of the other years combined. So the way that information is growing is you know absolutely crazy but then from a human perspective. How we actually interact with that information has to get become easier. Because we’re being forced to digest more and more information. And so search is one of those critical information bridges between humans and data. and so we kind of saw that as more than just keywords so search is really thought of like Google.
And being we’re going in typing some keywords and you go and find information. And what we wanted to actually get to was to think about if you had a lot more information and you had more idea about what you want. Could you run a search that was more would give you results as if you had read every single document in the collection? And so that was the initial goal for what we’re doing which is one of the reasons we tested it on the Paton archives. Because it’s a big highly complex data set of information. but we see that opportunity everywhere to be honest I mean anywhere there’s information that humans trying to read it. And make sense of it, then we see ourselves in that space.
Chris: Alright that makes a lot of sense. So I know you guys have built search from the ground up. You didn’t start with hey this is what Google is doing this is what Yahoo’s doing or anyone else. So yes in layman’s terms tell us how Sajari built its search engines fundamentally different from how it’s been done in the past. And what the benefits are for web and app owners as well as end users.
Hamish: yeah so I think when you think back to web the origins of most search that’s available today. And I mean forget Google they’ve got a lot of smart people inside and some of the other big companies as well turn their own thing. But the technology that’s available for website owners or for apps to use is actually a lot more simplistic in terms of the way that it stores data. And that comes about because most of that technology was actually first developed back in the late 90s. And in the late 90s it cost you a lot more for a CPU. Cost you a lot more for disk and memory. And so they made trade-offs which made a lot of sense at the time to store information in very static fixed ways. Which made it reasonably quick to query. But the downside of that in today’s world is that information is moving a lot faster. And so one of the things that we wanted to do is to be able to adapt to that in real time much more like a database would. rather than writing up you know these big long indexes that never change. So that’s kind of the first difference and then the second difference was that we wanted to make it very flexible. In terms of what machine learning can be used to drive the ranking as well. So we’ve spent a lot of time and on machine learning for different verticals to actually become a lot smarter in the way that the search works. And the idea is that it will be able to teach itself to become smarter over time. So that’s our other core goal.
Chris: Got it and the benefits for say end users.
Hamish: yeah sort of the benefits of the end users is that they get something that actually works is high performance. But it improves itself over time. And not only does it improve itself over time but it will tell you in different ways that it’s improved. And that’s been really interesting particularly for some of the website owners using for site search. Because they don’t realize that they have issues with content. And then suddenly you know that they’ll have content drop in their search rankings we tell them these are the things that have dropped. Here are the areas that have gone up. And then from that they can tell that they have content issues with the way they’re talking to their customers. So we’re seeing that there’s a lot of benefits in terms of performance which people want. And they don’t want to spend a lot of time on it so the other aspect there is that most companies that do really well with search. They actually have several full-time engineers actually working on the problem. And that’s fine for companies who can afford several expensive people but most companies can’t so that’s kind of where we come in.
Chris: Got it so you’re a bit more turnkey for these companies and they don’t have to worry about having engineers on-site. And dealing with some of the intricacies of optimizing search performance.
Hamish: That’s right yep it’s normally a very manual process for most.
Chris: so what are some of the competing technologies and is your advantage by building from the ground up it is significant enough for you to scale that business over time? What’s the key to scaling this business?
Hamish: Yeah so we’ve seen really interesting things over the past few years. Has been some great products like elastic search has done really well just putting a nice API around we’ve seen. Which is the technologies from back in the 90s. It’s gone incredibly quickly, so they’ve shown how if you can create a really simple API that the developers are happy to use then. You have a real advantage in the market we’ve seen the same thing with Algalia has grown like a Light speed.
But they’re more focused on the structured data web more leading towards the unstructured data sets. But we’ve seen in this market that one of the most important things is speed. Which we have and another important thing is the simplicity to the end-user. And I think that in the past a lot of the products have been sitting in that too complex space. And that force companies to have engineers to mind them. And so what we’re trying to do is to simplify that complexity but give you high performance. And we think that’s a huge, huge, huge opportunity to stay on yeah.
Chris: Yeah that actually makes a lot of sense tell me about the machine learning aspect. You mentioned that and what I’m wondering is are you building your own machine learning algorithms. And is that how you’re doing that or are you leveraging some existing technologies out there to use that for the machine learning piece.
Hamish: Yes we do both actually so we have our own internal stuff and we also use various libraries and other things externally other techniques. The aim of will be getting to those to be very pluggable. So what we actually want to have is in the background to be able to plug in different pieces of machine learning. And we already have processing pipelines that will go back over the historical data look at performance. And then see that if we had have used some different learning in the past with that have positively impacted the performance. And if it would then we know that that’s technology that we want to add for the future. So we’re really data heavy business and really constantly looking at performance opportunities. And so the machine learning is a big part of that. Eventually we don’t use or what we use some newer networks to a big degree. But we’re trying to set things up in a way that will be very easy to plug in. Newer networks are some of the other new algorithms that are coming up down the track so that’s the goal.
Chris: Do you see a place for Sajari in the voice app space?
Hamish: You know that’s actually really interesting we have one project now where we’re search is being used for in a chat sense. So which is more like the voice conversational style usage. and it’s been phenomenally interesting for us because the queries are totally different. If you go to a search box you know and you want to you want to buy a bookcase you just say bookcase. If you go into a conversational or a voice search interface you’ll say I want to buy a bookcase. And so the amount of information in the context that you have from a voice based interface is far greater than what you would get from a search bar. And that’s really suited to what we do more information in the query is Better. So yeah it’s definitely something that we’re looking at we do have active experiments in that in the space.
Chris: That one is personally intriguing to me I’m a big fan of what Amazon is doing with Alexa. What Microsoft is doing and Google is doing with their, what Google is doing with their home product. And I’m seeing lots of voice-based opportunities particularly out of here where lots of IOT devices are connecting to voice based platforms. And so that added context that you guys it’s important for you guys search engine seems to be a really natural fit. And that could be particularly if you think about things like cars automobile based applications voice based applications. Can see some real interesting synergies there.
Hamish: Yea I guys totally agree.
Chris: So what’s the opportunity in the future for search and how are these changes with machine learning and AI and predictive analytics impacting what the future searches going to look like for us?
Hamish: yeah well I think some people will talk about the future plugging search into your brain. And you think of a query and get an answer, so I guess it depends it depends out for them it down the track you want to go. But I think we’re seeing that convergence of you know the information is going to get closer and closer and closer to what you want as a desire. Whether you think it or how you communicate it whether it’s voice and voice is a really interesting one. Because voice is one step back from having to type something into a keyboard. So again it’s getting closer and closer to that just think about something and you are able to get it. And so I think we’re going to see an advancement where search is just going to get increasingly more intelligent. And it’s going to get increasingly closer and easier for humans to use. So you get to a point where you almost be getting results before you actually want them if you know what I mean.
Chris: so very much predictive.
Hamish: Very much predictive it yeah.
Chris: and in terms of your core architecture are you guys the only ones that are going down the particular architectural path that you have laid out? or there others who are going down a similar are you part of a movement or you guys out on your own?
Hamish: I think from the machine learning perspectives definitely there’s others that are going down the same path. I think there’s advantages and disadvantages to you know the other approaches. And we’ve taken a very specific path so we know will be very pluggable and very real time. Which we think is important for where the future is going. Which is different to everybody else and we think about a lot of advantages in terms of laying in this machine learning and predictive analytics.
Chris: for a company like Sajari for technology that you built. what’s a exit candidate look like if you wanted to sell this two years from now next week, five years from now. What are the types of companies that would be attracted to this type of technology?
Hamish: That’s a good question I mean with we’ve had people companies that have big problems that we can solve very, very well. And I think that they would love to have us in as know-how at the moment we have no intention or no desires to sell. We actually really we think this could be a massive business and our goals to actually build that up. But how the use cases are way too many so the plenty of people who would be interested I’m sure.
Chris: Absolutely wonderful so I want to jump into what I like to call the real lowdown segment of the show. And here the aim is to try and get beneath the surface a bit the stuff down don’t find on the glossy brochures. And find out how things are really going with the business. You guys are built and unquestionably amazing technology, but what if it challenges that the business faces today.
Hamish: Yeah so I think when we started out we didn’t we didn’t fully comprehend how complicated it would be to rebuild a search engine from scratch. And I think I the amount of manpower that’s actually needed to do that and do it well is unbelievable. and so that’s taken us longer than what we thought and when you take longer the what you think then that obviously comes with challenges in terms of funding. And do you try to self-fund the look for external funding. And if you do then do your metrics actually warrant a decent round of funding. So I mean those challenges and particularly coming in Australia a few years ago that there wasn’t the same degree of funding that there is today. So for us I think the biggest challenges have been how do you do something really complicated with a lack of resources. If you know what I mean.
Chris: Yes, yes have you guys gone out and raised money already, do how much have you raised, what do you need to raise now to get to the next level?
Hamish: Yeah so we raised 600K a couple of years ago which is enough to get us to where we are today. And we’re basically breakeven now so not under a lot of pressure to rise except to the fact that we really want to move a lot faster than we have been. So we will be raising capital soon and that’s part of the short-term plans. In terms of how much we need to get where we want to go I mean that’s a that’s an open-ended question at the moment. Yeah I can’t give you an answer on that am not sure.
Chris: Totally makes sense been there done that skied that jump that. What’s the ecosystem like for your industry in Sydney? Like I know when I was there and I’m very much in app marketing space working with app owners it was challenging. Because there weren’t a lot of international or global apps being developed out of us out of Sydney or out of Australia in general. What about for you in your industry, what’s that ecosystem like?
Hamish: Yes this this hits us from two thoughts is the fact that we have customers in five countries now and we try to support that from Sydney. And that’s difficult when you have users in Europe and the US and we go to sleep so how do we deal with that.
Chris: You’re not sleeping you got a new born.
Hamish: That’s true that’s true, but yeah we will be opening the US office this year. Because we need to have a better spread across the globe in terms of our support and other things. From an ecosystem perspective Sydney’s a really interesting place I think there’s a ramping of technology here. But in terms of search and you know people who build things like databases.
There’s not a lot that’s a little bit that some groups out of Canberra that have done some very interesting stuff. I’m hoping to meet some of those guys soon we just in the last few days and that a bunch of people from Melbourne. RMIT has a huge information retrieval section down there at the University so there’s plenty of study going on down. And part of those connections have been people who’ve worked at eBay and Google and other places have come out of down in Melbourne. Obviously that’s not Sydney but it’s reasonably close but I think the people in our industry and mainly moreover in the US and in certain parts of Europe. So that is challenging and we would like to be considered some of those people because I think you do you improve things a lot faster when you have like-minded people around. And good meet ups and other things to help fuel industry of the you’re in.
Chris: yeah that makes sense would you guys consider relocating the headquarters elsewhere do you want to keep that in Sydney?
Hamish: yeah we’re considering now and the other in the US office we’ll probably run to in parallel and then see. See how we how we go with that whether the US becomes to the headquarters or not we’ll work that out as we go.
Chris: And as you looked around for money in Sydney. And you’re looking at valuations are you seeing some challenges from a valuation perspective in Sydney versus what you might be shopping for in the US?
Chris: Not really I mean I think you see wherever you are to investors who would love to beat evaluation down for whatever reason. I think you get that anywhere I think it’s been interesting for us we’ve met some investors who really don’t get what we’re trying to do. And for those you know if you don’t understand what somebody’s doing and what they’re trying to achieve. Then obviously the valuation is going to seem too high. But then we’ve had others and totally get what we’re doing I understand where we want to take it and they’ve seen other businesses in parallel. Or worked on other businesses that are similar that have done what we want to do. And they can see the potential there and they don’t blanket an evaluation we put in front. So I think it’s a mix and I think that’s a challenge anywhere you go at the moment that just happens to be. A couple of billion dollars of venture capital in Australia that was basically nothing a few years ago. Even 2 billion that could probably more but yeah it’s definitely a lot healthier than what it was a few years back when you’re living down here.
Chris: yeah definitely it’s wonderful to hear finally what personal sacrifices have you had to make for the business and in your opinion has it been worth it?
Hamish: yeah that’s a really good question I mean you as a business side of you would know this as well. But it takes a toll from a never switching off perspective I think that’s one thing so from the family you wake up on a Saturday morning and you still have things you need to get done. You wake up on a Sunday morning and you still have things to get done and Sunday evening you’re still thinking about what the rest of the staff and everything you need to do on the Monday. And it’s one of those things you never walk away and I think from a personal aspect that the biggest thing to me. has been I really missed that working in a job knowing that somebody else would deal with all the admin around me you know. Everything and I could go away on a Friday night and have a few beers that everybody else. And wake up on a Saturday morning and do whatever I wanted to do. And even if you do that now you still have a sort of cloud hanging over the back of your head. Thinking that there’s other things that I really should be doing so that’s probably one of the big sacrifices. And it doesn’t active family. And then I think the other one is that from the financial aspect. If you if I was sustain a job I would be earning a significantly more than what I am now and if you do that over a period of years then obviously that that stacks up. So the trade-off is you know if you if you do that and you fail then obviously you shot yourself in the foot financially. But if you do that and succeed then you have the other side where you can potentially do incredibly well.
Chris: High risk, high reward.
Hamish: High risk High reward, it’s a calculated gamble and when you see you know a big opportunity and you know that you have the ability to do it. It’s not it’s not so bad and I don’t really worry about that we’re kind of past the point where we’re like successful failure. It’s more about how big we’re going to get. So that’s not too bad but yeah in the short term it would be nice to have has more cash.
Chris: A little extra coin. I know exactly what you’re saying Hamish I want to thank you tremendously for your time. Can you please tell our listeners how they can find out more about you and Sajari.
Chris: awesome folks as always if you like the show please download all of our episodes and leave us a 5-star rating on iTunes. You can find show notes at Tech lowdownshow.com and follow me on twitter @CJones2002.
Apr 10 2017
Rank #4: Blockchain & Chartercoin with Timothy Fletcher
Welcome to the Tech Lowdown Show where each episode we’ll be discussing opportunities in the tech space with entrepreneurs from the US & around the world
I’m your host Chris Jones – Two of the hottest words in tech are Bitcoin and blockchain. I’ve been dying to do an episode on this emerging technology area as I believe it’s something that anyone with an interest in technology and the future of technology should know about. Bitcoin was created by the pseudonymous Satoshi Nakamoto and is the most valuable cryptocurrency in the world today. It is also the first application of blockchain technology. Earlier this year I went down the blockchain rabbit hole and eventually came upon today’s guest who I’ve been working with.
Dec 04 2017
Rank #5: Professional Manager to Entrepreneur to Investor
Most of us, when we think about entrepreneurship today, we envision founders who’ve built businesses from the ground up and taken them to new heights. People like Gates, Jobs or Zuckerberg often spring to mind. We watch shows like Shark Tank and envision unknown founders getting their big break by getting investment from famous founders who’ve already made it big. But in reality, entrepreneurs and entrepreneurship comes in a wide range of forms. Some entrepreneurs buy established businesses, some, like today’s guest are brought in by the owners to take a business to the next level and in the process become owners themselves.– Will Daly is currently the Operating Partner at Periscope Equity and a Founding Partner at Flanner Hall Partners, both private equity investment firms investing in high growth ventures. Prior to becoming an investor Will served as Co-President, COO and CFO for Barcodes Inc, N. America’s leading provider of barcode, mobile computing and RFID technologies.
– Will is a graduate of the University of Notre Dame and Northwestern University’s Kellogg School of Business.
– Will…Thrill, welcome to the show – What’s the Lowdown?
– First, give us a quick couple of minutes on your background and how that lead you down the path towards Barcodes.
– I want to do a deep dive into how private investment firms in this space operate. Can you start by giving us an overview of how firms like yours identify businesses and then go about placing executives in those businesses?
– Tell us about Barcodes and exactly where the business was at the time that you got involved. What was the negotiation like and what were the key points that were important to you? What kind of stake is typical for a manager coming into a situation like this?
– Did the business require additional investment when you came on board? If so, how did you get the firm to stump up the cash?
– You were at Barcodes and during that time the company went through 2 exits where you and the management team stayed in place. What was that experience like and what did you learn during the 1st exit that you were able to apply during the next one?
– What role did the different PE firms play while you and Dan were growing the business? Were there opportunities you were able to take advantage of or constraints that held the business back at times as a result of this structure?
– How does one even get on the radar screen of PE firms to be considered for this opportunities like this?
The Real Lowdown Segment
– Did you have any sway or influence during the exit process or was that completely outside of your control?
– How might you have run the business differently if you and Dan had full control of the business?
– What mistake or mistakes did you make that stood out to you during this process?
– You’re now on the other side of the fence investing in businesses and people – what are you looking for in the businesses and the people you want to run the companies?
Oct 03 2017