How can a $100M bootstrapped business collapse?

I picked people with credentials. Turns out that he's been scamming people in our name. >> He bootstrapped a company at age 22 to gross $100 million in sales, but then it all fell apart. Like you ended up selling the business at some point. >> I thought that just being massively successful was the ticket. The problem started occurring when we started losing. Hey >> everyone, welcome back to Hundred Million Dollar Exits. Today I'm excited to have Matthew Wyatt on the show with us. Uh Matt, let's just go right into your story. Uh when you had reached out, I learned about you starting a a business at the age of 22. Uh growing a software company to over aggregate over $100 million in sales. Uh which sounds like every founder's dream. You're growing and scaling this business, but it didn't work out the way people would expect. Uh tell us a little bit about that business, how you got to $100 million in in sales, and what happened thereafter. >> Right. So, well, thanks for having me on, Jason. Um so so started the business at 22. So how does somebody start the business at 22? Well, I worked in the industry, you know, I worked for businesses and I saw those people and I thought, you know, I can do this better. And of course, 21, 22 year old Ago says, I can do it better. I'm better, smarter, and faster than everybody else. So, let's go ahead and do that. And so, we did and we started the business. Uh, we started selling software that aggre that um is on the stock market. So, we sold a stock market trading software and we we bought some products from a supplier. Um, we then put a UI on top of it and some training and sold that to the market. And uh we you know we were able to buy those pieces of software for a couple of grand and we then sold it for 10 and then we just got and because I was always a sales and marketing guy. So these businesses they had great tech but they were tech businesses. So we just became very very good at marketing and very good at selling. But of course back in those days in 99 what does marketing and selling what does marketing look like? Well, it was a literally an advert in the newspaper which was one column wide, an inch wide and 5 in long, a couple of inches long and it was just text and people would phone our 1-800 number because we would go really good at copyrighting. I spent a lot of money on copyriters to get the ad tuned perfectly because copyrightiting was, you know, is still very important but back in the day when you the only way to do it, that's how you do it. So, we grew that business. uh we sold that and then we moved into other interesting areas. We had a look at um data sources for horse racing. Uh we looked at a whole range of things and and over time we built this just culture in the business. And I would even though we had developers, we had service, we had finance, we had all that sort of stuff. I would start most of my business meetings, most of my company meetings by reminding everybody we're a sales and marketing organization, we have software, we're not a software company. And that the distinction of that meant that everybody in the business needed to line up behind sales and marketing. And so that was the driving force of because I'm I'm a saleserson, right? So and and I'm in sales and marketing. It's like a you know the uh a band is not a guitar. It's a band. It's you know we're here to produce music. It's not the functions of the music. So it's not the pieces of music. So we grew that over time. We um we I had a really really strong sales culture. um we had uh leads coming in all the time and we made sure that the salesperson were really really well looked after. Of course, everybody in the business was looked after, but sales was the the top of the tree. And so over time we did that and we we continue to grow, create partnerships, we opened offices uh across all of Australia and New Zealand and some into Asia. Uh and we really, you know, grew the business and we started diversifying. Uh we bought real estate agencies cuz I had an idea on a weekend. Uh, I got really crummy service. I was going to buy a couple of houses, one for myself, one for my mother-in-law, one for my uh, mom. And so, we were going to we're going to buy three houses. And I had some really crappy service. And I thought, you know what? This whole industry needs to be shaken up. I'm going to go buy a real estate agency. So, by the end of it, you know, I presented at the board. And, of course, 28-year-old full of ego, making, you know, many, many millions of dollars, says, "We're going to re, you know, we're going to change the world in the um in the uh in the real estate uh sector." We didn't um but we thought we would. So by the end of the next week we owned a real estate agency and then we own you know bought raceh horses and then all of this sort of stuff. All of it came together >> actual horses. >> We owned 15 horses at one stage. It was Yeah. Yeah. We um yeah we >> I got I got the buy in of like you know you're not a software company or sales marketing company but now you're a horse racing company. >> So we were so we were yeah abs. Oh, look, you know, we did so much because it was because I so I was young and I had a very myopic view of the world. We need to just be a sales and marketing organization. And then I took on partners and this is the story. This is part of the story that starts to see the cracks in the organization. I I knew I could sell. I knew I was good at engaging with people. I knew I could motivate and run a sales team. Everybody else was a mystery to me. I I I didn't understand people in finance. Didn't understand people in service. Didn't understand why they would be happy to do those jobs. I just wanted to be in sales. And I loved selling. and I still love selling. And so, um, and I took on partners, we need to diversify. And these partners were in their the late 50s and they were very successful and they're board members. And I listen to them because I thought, well, these guys are older and they know more than I do. So, we started breaking out into other areas. We had a real estate company. We had a horse racing um, a bloodstock business. We imported health products from Hong Kong. And, uh, >> Wait, did you say Bloodtock? >> Bloodstock. Yeah. Yeah. So bloodtock is is owning uh owning animals. >> Oh, okay. Not not like uh like a blood >> not like a vampire. >> Okay. >> Yeah. No, >> I'm going vampire me. I like spy like trading blood. >> Yeah, that's right. It's it's blade six, you know, Matthew on the Gold Coast. No. Um so Bloodstock is the is the name of the is is the type of business where you own um horses. Um there you go. So, so we had all these things going on and uh and then so we and we had about six businesses at one stage. We were sitting at the top. I read Jack Welsh's book and Jack Welsh's book said, "We're either going to be number one or number two or we're going to get out of that space." And we I looked at the businesses and we were selling medical techn I said, "Well, you we've got to really consolidate. We got to make sure." And then I started pairing down the businesses and the cracks started to appear because all of those organizations were feeding off my original business which is bringing in you know millions of dollars a month. And so um so we we started pairing those down and then the crack started appear with those partners who were owned pieces of the business and and so so that's so we grew it by being focused on sales and market and then the problem started occurring when we started to diversify and losing losing focus and then when it started to really fall to bits is where we had business partners who wanted to drive us in certain directions I started to get firm about where we wanted to go how we wanted to be and perceived and how where what direction the business was and then they started getting really quite toxic. So we then had to undertake a a process of over a course of about a year work out various board members so they could you know be offboarded. Uh we had to u you know sell off bits of the business. We had to give away bits. We had I just wanted to clear it out and I I probably I moved pretty quickly. um and not considering the I guess the consequences of those things being you know sub 30 and you know always been the uh the superstar. So I thought I just knew everything. So let's you know other than uh how to run the technical side of a business we employed a CEO because I obviously needed adult supervision and and we were able to manage and work our way through that over that time. >> So yeah so it was it was an interesting uh period of uh of our life. you're seeing them like that's an understatement like with the scope of you know businesses that you're in. So let's unpack a little bit. Um walk walk the audience back in terms of like okay you're 22. What year was this when you launched? >> 1999. >> Okay. So like peak uh you know.com boom but you're in Australia with this business. So you are found a a hitter. You got a business that's working sales and marketing. Uh when was kind of this first bolt-on idea that wasn't core? When when did that come in? How many years in? >> Uh 20 so 2003. So we're about four years in. We're doing really really strong revenue. We started becoming very attractive in the uh to to board members and to advisers. And by that stage, our accountants had said you're this is this is a runaway train. We need some adult supervision basically. So we need to um bring in board members. we need to, you know, start start managing the business properly because we just had a, you know, we did crazy stuff at the end of the financial year. We had to spend money on stuff. So, we bought, you know, photocopers worth $20,000 just to see if we could reduce our tax. Just crazy stuff. Crazy stuff that was un unm I owned Maserati. The company needed to buy me a Maserati like just um and this sort of stuff. So, it was just out of control. >> Needed needed a Maserati. Well, I certainly had I certainly had a hand in >> I certainly had a hand in saying what the company needed and the company needed to buy me a Maserati. >> 100%. Totally justified. >> So, you're uh so at this point you're you're four years in, you're 26. The you're printing money. Um you bring in adult supervision, but it sounds like adult supervision might have failed a little bit in terms of your expansion of scope. Um, when you're at that stage and you bootstrap a business to this level, like I talked to countless founders that have raised tens of millions of dollars and don't get to where you are bootstrapped. So, you found obviously something that was making money and working. Um, when it came to like choosing board members, when you're bootstrapped, like when you're raising money, it's pretty obvious like whoever gives you money kind of brings in the board members. But for you, it's like you kind of have to pick who you want. like how did you go out and pick board members that you know weren't with you in the beginning to to kind of be the adult room as you say? >> Yeah. Um so we got had some help from um people that we knew and trusted and how did we pick? Um I picked people because probably picked poorly. Let's be honest. I picked poorly. Um so so whatever advice I'm going to give we can just do the George Castanza and just do the opposite of that everybody who's listening. Right. So um I thought I picked people with um credentials. Um I picked and credentials as in people that had been who'd been there and done that. So they said I picked people who said they can do a lot. Um and one in particular guy who was quite uh well he was probably you know late 50s. Um so I thought well he knows everything. So I just had a level of trust with people that um that yeah I trusted people too much and uh they were involved in particular industries stock market stuff and and and horse racing stuff and software development stuff uh which that was the three main parts of our business and so I thought well these people have grown reasonable businesses in the past so I guess they know more than me so I'll just u you know they can be they can be part of it and I can and they would say they said they could do certain things and I said I believed you so I allowed them to come on board. >> Okay. And um when it came to you made the decisions and you get them on board um you start reporting to these people. What um what like what was that like kind of having to report up to the people that you hired to to come in and tell you what, you know, kind of keep you in line. >> Difficult. >> Yeah. >> Difficult because it was my way. Well, so it was my wife and I started the business. So, um I at no stage pretend to be anything other than a good sales and marketing person, um a good ideas man, um and lead singer of the band, but other than that, everything else was not for me. So, my wife ran everything else. Um and so, and she's still involved in the business, you know, you know, many many years later through all of our ups and downs. So, um so I've always been reasonably collaborative with her. Um so, what was it like? It was difficult to to deal with these people. It was difficult to report to them. There was difficult when they didn't understand that my vision it was my way or the highway. Um but I also at the same time I never felt like I really reported to them. Um it was certainly still the Matthew show. They they tried they pushed the business in my in certain directions and I believed them but I but I guess I was my ego was was so massive that I just believed it was still my business and I still made all the decisions which you know in you know 10 15 years in hindsight I wasn't making I was being led. >> Oh interesting. They were they were influencing your decisions ultimately. >> Oh definitely. Oh yeah definitely they were. So they were they were you know not subtly but going well this is a direction that's I they were they were more adept at playing the boardroom game than I was in any in every way I I knew where the business I wanted the business to go and the really the every my solution to most problems was just sell more and make more money got a problem make more money we can solve >> good solution >> that was my solve and and these people with MBAs and these people with uh you know 40 years experience or 30 years experience in business They were saying, "Oh, no. We got to do it this way. We have to minimize tax or we have to maximize value or shift our IP to a British Virgin Islands company so we can avoid taxation in the jurisdiction and all these types of things which we did and we said, you know, we we certainly managed it very very interestingly." Um, but overall it was they they were presenting ideas. They were giving me you know do you want you want you want Coke or Fanta? And both companies are owned by Coke, right? So they were giving me a they were they they were giving me two they were giving me options that were but serving them and and not serving the business either one I chose and and you are the lion share owner right like that yeah so it's very interesting dynamic um I I've definitely worked with a lot of founders that you don't maybe have the share economics that you do but maybe that board influence the negative board influence of like self-interested like hey here's this cash cow we're brought in to brow leadership, but I want I want my piece, you know, like I want to make sure I get paid on this as opposed to what's actually best for the founder in the situation. >> Actually, at at the end of the day, I was um so at one stage I was only 50% owner in all the in the in the group. So, I actually I I was able so I sold bits and and allowed people to come on board. Um but yeah, so at one stage I only had 50%. And that's the one of my lessons I learned is either be the majority or the minority. Don't be half >> because if you're half then then you're at stalemate. >> Interesting. >> And stalemate caused issues. I would rather be 49 or 51. >> In all businesses from in the future, I am always either the majority or minority shareholder. It can't be half. >> So, walk us through a stalemate. Was it the the blood what was it called? The blood uh >> blood stock. Um, that's one of them. Yep. Yeah. So, that was one of them. >> I just find this fasinating. You have a software business at your sub and instantly you own horses. So, it's not >> Well, we had horse racing software. So, soul racing software. We wanted to continue to invest in the industry and and that type of stuff. So, >> Got it. So, you had software you were selling to the industry. So, then you got into the industry. >> Yeah. Yeah. Yeah. So, and I knew nothing about horse racing. Um, but I just knew numbers and I knew math and I knew stock market and and we we we had a software product that we sold to the industry. So, um, and so we thought, "Oh, well, this is fun." And I go to the races on the weekend and dress up and drink and they go, "Well, this is fun, so let's go do more of that." And the next next obvious progression is to buy some horses to watch them race. >> And so, what was the stalemate in that business decision of figuring out what to do next with the blood business? >> How to invest the money and and where to invest it with those other businesses like the the the horses uh was was one situation. Another situation is the uh the the person who owned uh the other 50% they were um they went out on a weekend and bought a quarter of a million dollar car uh on the company card just did it without discussing or or you know we we did we we closed a big deal and we we agreed before that we should celebrate in a way we discussed over drinks that maybe we should buy ourselves a car. Nothing was in nothing in writing. Nothing no Yeah. Nothing was uh was said that was a um uh an agreement. But yeah, he comes back on Monday morning with a quarter of a million dollar BMW. >> BMW quarter million. >> This is Australia. So I mean it's a um >> so our our we have a thing luxury car tax in Australia. So they stick so once you're over a certain amount it gets out out of hand. It was a it was a very very nice BMW. It was, you know, it was an outrageous BMW actually, but it was a quart million bucks. >> Yeah, I can't imagine spending a quart million on BMW of all choice, but hey. Um, so, okay. So, this guy just totally >> So, that was one of them. And he also then, you know, demanded to be paid more per sale. So, not only wanted a piece of the business, but also wanted um wanted a cut of the sales cuz I was getting a cut of the sales, right? I was getting every time we made a sale, I my I would get because I was running the selling running the sales part of the business. So he he saw me earning made more than him on a weekly monthly basis. And that of course, you know, stuck in his neck a bit. Didn't like that. So he wants to get paid more even though his contribution was significantly less. Um he wanted a corner office. So we took over another floor of a building. No. So we took over another floor of the building to expand the business. I had one corner of the off. I had one corner office. He of course needed the other corner. Um and and this is just to talk to my personality. Uh, so I sat in that office. We we made it spent hundreds of thousands of dollars fitting this thing out. It was, you know, we had a bar, a boardroom, sliding glass. It was opulent. And um, and I sat in the and this is the um, and we sat I sat there in the corner office looking out going, "Oh, I've made it. Why I'm not why am I not happy? I'm bored." The the the cut and thrust of doing selling. Uh, well, I'm now a floor away from my salespeople. I'm not I don't get it. I don't know what I'm supposed to do now. So, I sit there bored. I go out to lunch and I just I So, and I eventually figured it out and I went downstairs, got a, you know, 3T by two desk, put it that in the corner of the sales room and started competing with my own salespeople. I worked for my worked for the sales manager that I I actually um employed and and had the best time of my life. Dominated top salesperson, earning commissions, having a great time, taking leads like everybody else. That was great fun. And then um there's another example of of uh my odd personality. I love the startup bit. I was running a big business at this time and that wasn't fun for me. Too many people. >> How big was the business just for context? >> 70 people. Like 70 people. So, not huge, but enough people to every single day it was five, six, seven hours of, "Hey, Matt, you got a minute?" Cuz I was the GM, right? Got a minute-minute meetings. Got a minute meetings were the um was a death of me. And it was nonsense. Nonsense. Like, you know, one uh customer service lady comes to me and says, "Oh, Joanne, who was the receptionist, is yelling at me." I said, "Yelling at you?" Well, she's typing in capital letters on the internal chat. Right. What are we doing here? This is just I hate everything about this. Um I've dealt with those like the I'm I'm usually the culprit of like mistyped messages that had don't express my true intent and then everyone's like, "Oh, he's mad at me." No, just I'm fast. Just not being finessing my words. >> So it was just all of that sort of nonsense. So I um so I hired a GM to basically take away the and he was a great he was a German guy and he's absolutely got no time for nonsense. He was fant Oliver. Fantastic guy. Still a very good very good friend of mine. Um he was an excellent GM. He just basically told them to go away and deal with it. That's a good answer. >> So yeah, go away and deal with Well, I'm I'm you know, I'm trying to solve problems because I've been solving problems since we were two people and now we're 70 people. I'm still solving problems. So tell me about that and how's your mom and all this sort of stuff. Like I I tried to and I cared about everybody and I do. But when you're at 70 people and everybody's got their own little thief to build, you know, customer service had managers and finance had managers and programming had managers and so we had we all this hierarchy in the business and everybody needed to, you know, get a cuz I was available. I'd walk around, how you going, you know, how's your brother going with his with the car issue you told me about two weeks ago. You know, I just I knew stuff what was going on with everybody in the business. So of course, everybody felt they needed to come to me and tell me all their problems. >> Yeah. Don't love that part about being CEO. >> No. >> Um, >> when Okay, so you you kind of were alluding to the beginning where you had this realization that like we're in way too much stuff. You know, the Jack Welch, you know, like if you can't be one, number one, number two, get out. Um, so at what age is the business at this point? What year is it? And and kind of when did you start pushing that forward? Yeah. So we we so when so that the the the purchase of the quarter million dollar car was the beginning of the end and then we started meeting with um people to we started meeting with some strategist business strategist to try to figure out how to get out of a 50% shareholder which of course is extraordinarily difficult. So that took a lot of focus and energy from the business. Um I uh we eventually over time we worked out a way and we we moved through the process and you know we s the horses got s I trusted him to sell the horses and you know we got I still think that we might have actually got ripped off on that. I mean I think we think he sold it to a friend for you know cents on the dollar and uh and he and so all of those things just continue to whittle uh the end and dwindle the the trust that I had in the whole thing. So we had to get rid of it. we had to we had to change the organization completely. Um so it was about 10 years in about 10 years into the business uh and we had to really make some serious changes and so we did and uh you know we we we we cancelled not cancel we we we bought our way out of various contracts. Uh we uh we we moved the business to another location. and we we really had to to change the the look and feel and style of the organization um to make sure that we were able to continue to survive because I still had a genuine care for the clients. Um one story it might sort of show you how I cared about my clients is that you know one of my salespeople and they were absolute killers. These guys were murderers. And we came through customer service and one of the customer service guys comes to me in one of those got a minute meetings. He said, "Matt, we sold a software package to trade the stock market to a guy who's a subsistance farmer from Tonga. Um, he sold a tractor to buy the software because he's going to make, you know, unlimited money on the stock market. That's uh that's some red flags." So I had to go in the sales room and had a conversation with the salesperson. He goes, "Oh yeah, you know," then of course we measured them on selling, not on on selling the right thing. So once again, I needed to make a create an example. So I said, "Look, I'm not going to take your commission off you, but I just want to do this." So I got a the wireless headset, stood in the middle of the sales room, told all the sales people to get off the phone and said, "Watch me." So I called that person up and said, "We've made a mistake. We've sold you the product. I need we're going to give you your money back. Um and uh we from this is an example of how we do business around here. So I gave that customer his money back which is 20 grand like not small money. >> Yeah. >> We gave him his money back and I said to the salespeople um you won't be we won't claw back any commission from deals that we've we've had to cancel because we are didn't make it clear that we don't sell to people who can't afford the product. And so you know there's been people who have been you know and before that it was the wild west. It was a bit Jordan Belffort. It was a bit baller. I >> was going to say that's what kind of gave me those vibes. >> There was. And so I had to I had to make the I had to make the the call and said this is the culture and how we operate. Anyway, so so that was important for me to make sure that our clients are being sold to properly. Uh we put a rule in place that nobody would be able to buy our software unless they sat down with an existing customer and watched them actually do trading. So there was a so we had so you had to actually sit down with an existing customer. So if they were buying in Adelaide, there was a customer in Adelaide you can go and see. Um because and that yes that slowed deals down but that it protected us from any sort of blowback. >> Yeah. And yeah especially with that kind of you know farmer selling a tractor situation. I'm sure there'd be substantial blowback. If that happened too many times and you didn't take the the right path on correcting those circumstances. >> Oh that's right. And then of course people got sold and then they said I want my money back. and we look through and they haven't done any training, they haven't done any work, they haven't done any trades, they haven't done anything to actually just, you know, they haven't done the work and we say no and then they go online and start and start um uh canning us with absolutely no evidence, but of course there's no there's no requirement to provide evidence. We there was websites back in those days that would allow people to put up whatever you like and if you wanted to get it taken down because it's false um you had to pay the company like $10,000. So, these were online extortion businesses who you could put up any bad review online and then if the business wanted that taken down, you could pay 10 grand. Terrible business, but great business. So, uh yeah. Well, yeah, that's right. Real quick, if you're a founder doing over 5 million in revenue and want to know what the best hund00 million plus founders are doing to fuel their growth, then make sure to subscribe to our $und00 million exits newsletter. Get the playbooks that are proven on how to fund, grow, and sell your business. I'll even give you a curated list of investors that want to invest in your business. It's totally free. All you have to do is click that link down below. Subscribe. Do it now. I promise it's worth it. You won't regret it. You got nothing to lose. Go ahead, subscribe now. Back to the show. So, I I'll take you through the process of how the business sort of fell a bit fell apart because I think that's that's interesting in the sense that we trusted too many and this might be a through line here is my trust take people at face value. Um because I'm a I see myself as trustworthy. So I judge people upon my own um you know people you know I judge people how I am. I I I believe people I trust people and I I move forward and this is as I said pretty naive back in the day. Um so first of all open up a business in New Zealand. Open up my son was one uh at the time and once again I was bored uh in cuz I was not in the selling. So I went to New Zealand and opened up an office of my own company and started a sales office. I took a literally a box of leads, paper leads, and I started advertising and I had a service office like what I am in now, like a small office and said, "Right, I'm now on the phone." And I made phone calls and I grew, you know, within 6 months we grown that business. Um, employed five people. We're doing about $190,000 a month of revenue. Um, which is pretty good. And then I sold it to one of the sales people there, one of the people that um had I'd sort of deputized as a a person who could take over the business. And so we moved back. So that was a my little sort of mini internal startup, right? And so he then ran the business for a bit and then stopped. Then then we got a phone call after about another 6 months phone call from a client saying, "Where's my software?" I'm like, "Oh, what do you mean?" Because our c we were doing the customer service back in Australia. Anyway, long story short, turns out that he's been selling software without telling us, without telling us who the customer is, just collecting the money. $25,000 New Zealand, ripping people off, just straight up scamming people in our name. Yeah, that was super fun. Um, and so he it worked out to about quart about um $500,000. $450 $500,000 he hadn't paid us. And of course all of those customer service obligation was on us. We then had to play software and retrain and do all this sort of stuff. So about half a million bucks we didn't get paid there. Um we trusted and this is all in a space of 18 months. I'm going to give you the compacted version of of how bits and you know where the where it all really started to fall to bits. Uh and this might be something for the listeners is is I think Reagan said it is is trust but verify. Um but I didn't verify. So um it uh so so that was one thing. Another thing was our internal accountant who we hired when she was 21. Uh grew up through the business. She was you know in her early 30s at the time. She um she was uh put through accountancy. She was trained you know to to run the accounts of the business. I was getting email reports, cash positions, sales, all that sort of stuff because this is when you know our our son was just born. So I took a year off uh the first year of his life. Um so I took a year off the business. We hung I hung out at home with with my wife and new son. And so got these email reports, everything's looking good. We got tons of cash in the bank. I'm going to go buy in the other office building. Sounds good. And the and the deal sort of didn't go through. Um and that's okay. We didn't, you know, didn't go through because of one reason or another, not because we didn't have the money. And then I got a phone call from the accountant saying, "So I just got a call from the ATO, the Australian Tax Office, who probably has the same level of sense of humor as the IRS here. um and saying you haven't paid tax for about 18 months. What's happening? And we have a thing called we have a reporting period of every 3 months you got to pay tax in Australia. Yeah. Business tax. >> Oh wow. So six missed pay periods. >> Wow. >> So um I uh call up her and well Terry Terry um calls her up and and we go through the process. Yeah. So she's basically been ignoring the um letters because she was going through her own stuff. Uh emotional, personal stuff. And of course, that bled over into business. She's been ignoring letters from the ATO because it wasn't and and I've been operating the business as if we had a million bucks and million bucks cash and we didn't. So, um we had to pay the tax department a ton of money uh out of my own pocket because the business didn't have it. Um so, that's the second hit. And the third strike you're out is one of our data suppliers. Um the the TAB, the Australian um uh horse racing Totalizer Agency board. Um uh we done a deal with them to pull data from their servers. All very amicable and we'd met with them and done deals and everybody was happy and high-fiving and um and then we uh uh they're launching a new software product. Then they're launching a new data feed. We've spent months reprogramming our software to collect the data from them. And then on day that it's released, um, uh, phone phones blow up. Uh, nobody's work. None of the data is working. What's going on here? And we found the TAB. Oh, oh, yeah. Didn't we tell you? No, we've changed our programming language a couple of weeks ago or a couple of months ago. Didn't we tell you that? And so, of course, we couldn't sell any software for two months while we recoded the program. We had a bunch of unhappy customers we had to give money back to. Uh, and we had a cash burn of about $400,000 a month. >> That was the the third strike. >> Who paid it? This guy. Um, so uh so and of course, you know, I do the right thing. I make sure my employees are looked after. I I paid everybody uh who needs to be paid. and th those number of those number of hits really um hurt the uh the financial position and the emotional position and and really taught an interesting set of lessons that um that I've carried through to today. >> Did you end up selling the business at some point? >> So we actually So we actually did liquidate the No, we we didn't we we so all of the bits, right? All the stuff that wasn't core, right? So the horse racing, the software development, the the the health tech, the health business, the um uh the yeah, those four businesses we we part we sold all those bits off, bits and pieces off for cents in the dollar. I just needed to get rid of all of that sort of stuff because it was all noise. and then that business there and then when those three strikes hit us in about a period of 12 months or you know many many dollars out of my personal bank account um sold my house all that everything just to try to make sure that my employees and had all their entitlements everybody was looked after. Um we then we we liquidated the business and then I had enough money to buy the database back from the liquidators because once again I didn't want my clients to be left out in the cold. um I have a very strong um moral um obligation compass when it comes to business. So I so and to the to the significant detriment of my own bank account, but I make sure that I if I'm if I say I'm going to do a thing, I do a thing. Um and so I I bought the database back, bought the and then engaged with the developer and we rebuilt and um and then I went, you know what, I'm tired. And I I tried I um we had some we we grew it again a little bit. And then um I thought, you know what, I'm just going to put this into a caretaker mode, not selling any more products. Just going to manage it. Just going to keep, you know, earn the earn the monthly fee that comes with the uh with the data. And then uh I we moved to Bali. We I said I need a year off. So we did. We moved to Indonesia. So that's that's how it all. So we we from the from the boats, the Maseratis, the waterfront houses, all that sort of stuff. And then the through line here is is is this is the lesson here. Trust but verify and stick to stick to your knitting. Stick to what you know and what you're very very good at. Um I think Scott Galloway said, you know, don't necessarily need to find your passion, but find what you're good at and then find what you're good at and do that, make your money, and then you can go have fun. And but I just need to just stick with what what I'm good at. >> Yeah. God, that is there's so many things I like I'm glad I have like a like having like a nervous breakdown listening to like your story. I'm just like it's it's so uh intense. Um it makes me think of that um Adam Sandler movie um where he's in New York as a jeweler or something like that and he's like it's just like the most high intensity just like all these things like no don't do that. Don't do Oh, he's doing it. Ah >> yeah. >> And like >> Yeah. And and I'm sure if somebody was watching the movie of my life at that time, they'd be screaming at the screen. >> Yeah. >> Stop. Stop. Stop. I'm just like, and you know, you have this integrity um you know, to your benefit and detriment probably. But like with these employees, like it sounds like a lot of mistakes that employees are making and yet you're you're making them whole. You're incentivizing them to not learn from their mistake. like that that's >> but the buck stops the buck stops with the owner of the business and the owner if they if you don't if I believe that you are whole you I certainly reaped the most number of rewards from the business but also there's a flip side of that if you're going to blame somebody for all your problems you got to blame somebody for all your benefits as well if if it's um you know there's a uh so I'm very much the sort of person to say I have have ownership and accountability and responsibility for everything in my life because That's the only way to be fully empowered. If you're going to blame the government, are you going to blame external things? You how did how did I cause this? How did I cause my success? How did I cause my failure? And then if you ask those if you operate from within that um that lens then you are then you completely have full 100% agency. That's why you know couple of you know two years ago I went hey I wouldn't mind moving into America. And so, you know, a year later, we did drop me into any situation. I have I have complete agency. Drop me into, you know, the the forest of in the Amazon or in the middle of India. I'll figure it out. I love the attitude and, you know, clearly shows that you leveraged that to a degree until other people maybe started taking advantage of you andor uh not holding up their end of the deal and you >> I just expect people to hold their end of the deal because I always do. Yeah, it's unfortunate, >> but I've learned that. I mean, look, this I was very naive. I was very young. Uh, and of course, I thought that just being massively successful was was the ticket was the it was going to solve any issues that I had. Um, you know, my most successful year, the year I made the most amount of money um was actually the worst year uh emotionally. I had more problems. Um, there was more stress and really it didn't solve any didn't solve anything. >> More money problems people more so and I know that you know that's that's the great line out of you know you know I feel bad for you son I got 99 problems but uh you know the um the the thing is money only makes you more of what you already are so if you're an a-hole when you don't have any money you're going to have lots of money you're just a bigger a-hole >> so um amplify who you really are like that >> it is only an amplifier and really you know I choose to be happy I choose to uh you know how I how I live now and I'm you Not you there and I have a certain expectation of the world and that's what I see. I expect I expect positivity and I do I get it most of the time. It has a wild story from you know hundreds of millions in sales and being able to drive and live this life you know uh lifestyle and then kind of having these cracks in the foundation start to develop and uh watching it all fall apart. But yeah, it sounds like yeah, like you said, you're high agency, drop you in any situation, make anything work. Um, and of course dropping so far with such a successful business. Um, having to to rebuild is no no fun journey. But let's, you know, I think the clear indicator to anyone listening is you're a sales guy. Like you know how how to sell and that's your superpower. What um what makes you so great at sales and like and does that translate into how you manage sales managers? Because that's usually doesn't transcend. Some people are like phenomenal individual contributors as sales people but can't manage where So I'm kind of curious like where do you put yourself and like what are the lessons for either side? >> Yeah. Interesting. Um so I am I'm a great manager of salespeople and that is it. You put me try to manage finance or or service or software and and those and I am terrible manager of those people because sales people are like me and I get what they're on about. So, and and it this was a a boiler room sales room, right? So, this was this was uh a bunch of really strong men and women who are on the who are selling on the phone and I was just really good at that. So, I'm a I'm a really good individual contributor. Um but also I know sales people because they're my people. I am that that's who I that's and I can talk to them with the um with unpolished words and have them understand exactly where I'm coming from. Um, for example, uh, there's a person on the phone who was bottom of the sales board. Um, and I was sort of walking through the sales room and I give these people a script and and the and a process and a structure and said, "Follow this. Follow the bouncing ball and you can do the and you'll make money." And I was listening to him and he's just he was just crapping on. And I walked over and this is the day we actually had to pick up the phone to make a phone call. And I walked over, listened for a second, and just reached over and clicked the clicked the the cradle button and hung it up in mid-sentence. I said, "Um, that was Uh, follow the script. Call him back and apologize for um, do you don't know how you got cut off? Um, and do your job." And took my finger off the uh, off the cradle. He called him back, followed the script, made the sale. Um, and there was absolutely no doubt about who, you know, because I was always the top of the sales board. You can't argue with the person with the points on the board. So, do the job that I I implore you to do. And they're all making really good money. This is back 20 years ago. And these guys are on 250, 300 a year. Um, so, you know, be good, >> do your job. And this is like none of them making any calls. This is all inbound leads. So, easiest telephone sales job in history. Um, if you do the job, if you're good and people literally I had line up of people looking wanting the job and I had a maximum of eight sales people in the room. I didn't want any more. I didn't want I didn't I just knew that that was the number somehow gutwise. I knew that eight sales people was the number including a sales manager. So, seven and the sales manager was expected to compete and sell as many as the sales people. >> So, I got to ask this question. So, this is for audience out here. there's like countless, you know, preede, seed stage, series A companies, founders that are, you know, either maybe doing founder sales at this point. Um, and there's always this like we're going to raise some money and then we're going to hire a salesperson and then everything's just going to work and we're going to magically grow and sell. So, what's your advice to to those founders that, you know, maybe have been pulling off the founder sales but don't really have a system and they're kind of banking on this. I'll have a, you know, $5 million and I can hire the best, you know, salespeople. Like, kind of walk us through that illusion and what's reality and and what should founders kind of be aware of when kind of thinking about their their sales strategy? >> Boy, that's a that's a huge question and exactly what I deal with every day in my consulting business. Now, um, so first of all, you need to start with sales culture. And if you've had a culture of software development and or software of of you know just being really good at your job um and you hire a salesperson, that person has to be able to and it's a very rare person to be able to absorb the entire sales function. you're going to have to pay them a lot of money um to to do that because selling is founderled sales is about passion and and knowledge and excitement and stories. Um soon as you start bringing in salespeople, they don't have any of those things. So that somehow somehow we have to codify that passion, that enthusiasm, those stories and the bit then and often that gets left behind. So you need to be able to foster that environment. And what I would suggest is the step one you should be doing is finding a consultancy or you find a business that can build out the sales process because founders very rarely think about sales process and hiring and bringing in a salesperson. number one, um they don't think about it either because they often they'll hire a person who unless they've been working in the exact industry selling the exact product at that exact um price point, they're new. And if they're new, they're not going to have process, structure, system, script, thinking, you know, CRM, how does that work? How do we engage with the customer? How do we engage with the with the with all of these bits and pieces that make up a selling a sales process? You're going to be in real problems. So the first thing a founder needs to do is start codifying their own process. They need to record every sales call that they've done um for some months. They need to record those calls. They need to record everything about it and start um figuring out exactly what the process is they go through. Then in doing that they start looking at it. They go, "Oh, this is where I'm waffling on. This is where I'm, you know, taking people up the garden path or I'm really not driving towards the issue here." So that's one. The second thing is in 2025 moving into 2026 um marketing is doing most of the work the sales people used to do. So if we think so marketing so so Google's call it the messy middle now. So people become uh product aware or business aware. And back in 1999 to 2010, maybe even longer, people become product aware. They'd make a happily pick up the phone or receive a phone call and then the salesperson would provide the the literature, the case studies, the customer, you know, all of this stuff, right? They would tell the story of the business. Today, marketing is telling the story of the business. Marketing is providing case studies. Marketing is doing all that work. Sales people are the begrudging last step in the process for most people. And so what happens then is that even if they do even if you're making cold calls, even if you're going out there and go, I'm going I'm going to do a bunch of SDR work cold calls, they're still going to Google you and they're going to Google you and going to go find your Insta. They're going to find your, you know, website. They're going to find your blog. They're going to find your LinkedIn post. They're going to find everything about you in between those two calls. Because the thing is most buyers today, unless you're selling to a small business, once you're selling to bid market and above, it's actually not about better, faster, cheaper. If your product provides a benefit of better, faster, cheaper, we got problems. So, um because people, businesses don't buy products, people do. And people are often being measured um again, you know, they're measured on on KPIs and people are looking after themselves. So most products now you have to think about have to reframe it as you have to how does this look to an outside person if it all blows up will they be will they be safe in their job or they get sacked. So covering your ass and looking good are the two things once you go mid-market and beyond. You sell a government, it's never about better, faster, cheaper. Like no government uh and and like the Australian Bureau of Meteorology have just launched a new website. Um and here's a quick a fun game for all the listeners here. Have a guess how much a new website for the Bureau of Meteorology might cost. >> More than it should. Please don't tell me for years. $96 million. This isn't Australia. This is for a country of 25 million people. >> Oh man. >> And the reason it went through is because I'm sure that there was 15,000 cyber security dudes there. Um there was a whole bunch of committee and steering meetings, a whole bunch of change advisory board meetings. There's a whole bunch of stuff that just covered their ass, made them look good, and the actually outcome was a crappy website for $96 million. Nobody will be held accountable because the thing is they'll look at the paperwork and go, "Well, you you you followed all the steps." Look, I I I I really resonate with this and I bring this up to actually in the M&A process because it's very similar. It's like um when selling a company, everyone's like, "Oh, we're sell strategic and we'll make 10x our revenue way, you know, it's better than selling to private equity or whatever." And it's like, "Oh, sounds nice." But they're like they think like we're going to sell to Google. It's like no Google doesn't buy you like a head of product or you know someone like that leads a division a VP that individual makes the conscious decision that they're going to look great if they buy you and that's going to boost their career and their agenda and say has very little to do with you and or you know Google as a whole. >> Yeah. >> Um absolutely. And so many people just don't think about that. I was like, "No, who's the person you're going to convince that you're you're going to make them a rock star at the company?" Cuz you don't make a it won't move the needle at all with Google, you know, unless it's like whiz, you know, it's a $ 32 billion transaction. But even then, that was probably spearheaded by someone in the organization who is now probably a rockstar saying, "I closed this deal." And that's all they care. It's just an ego in the midst between you and an acquisition or in this case, you and a sale. >> It's something you can put you on your LinkedIn and get your next job. Yeah. Uh and so, you know, when when selling to those businesses, you've got to make sure that there's an alignment and you've got to make sure that there's a there's no way that even if it blows up, you don't look bad. >> Mhm. That downside asymmetrical risk on a relationship. It's very much an uh a key essential to any business dealings. Um All right. So, you kind of covered this this narrative, which I appreciate. Like, I think I talked to so many founders who are just like, I'll figure out I sold I'll figure it out. It's like it it it is astronomically different like there there's playbooks or strategies and like when you remove the founder from the sales process sales usually fall off a cliff off a cliff because the thing is also often when they they're doing founder led sales it's because of referrals because of their their their passion their enthusiasm you start getting you you you know Jason Kirby or Matthew Y show up and they've got a level of passion enthusiasm for the product and thing that they're selling and you go you know I trust this guy these guys are these guys but you know when Fred Jones shows up who works for Jason or Matthew and go, "Oh, they've got a, you know, they they they immediately have less stature in the business in in the product and and status in the sale." And low status in selling is that's a whole long conversation about status and selling that is so important that the founder has just by the name. But if you're just you're a BDM, you need to work real hard to get that status in that cell. >> Yeah. It's uh so I guess how how do they do that? How do they um kind of develop that status of it's like all right I'm I'm founder sales maybe I hire an agency to kind of you know build the sales culture but you know maybe make the first hire or two or you know to begin with to kind of like learn the ropes like what actually are what are the attributes of a successful transition to a a sales culture in your mind >> the value occurs in the diagnosis most of the time when it comes to selling so um and and So what I mean by that is you know if we move away from the founder being the the seller to a sales team being the seller. Um the the value then moves from being I'm part of something cool and interesting to being the value existing inside the diagnosis. So the salesperson needs to be firm. The salesperson needs to be confident in their ability to say no to the client. And this is not challenger selling where you tell the client they're wrong and stupid and we need to educate you on a certain thing. That's not what I'm talking about here. Um what I'm talking about is uh for example so I have a client who um I helped them recruit their first salesperson and the saleserson you know we we got them to ask a series of 26 questions before the customer is allowed to see a demonstration. We actually held so they used to so prior to that uh the previous sales so sorry they hired the salesperson that person failed they had no salesperson for a while they wanted to go again and have a sales person they got me to do it the previous salesperson was selling the demo and of course yeah sure I'll see your demo and the demos unless we're we're in a post we're in a postsoftware enthusiasm world I just made those words up but the idea is nobody really cares about your software anymore because software is not that fun anymore like maybe AI thing that does some magical thing. But really, you know, back when I was built and selling software um years ago, I'm about to launch a new product in next year, but you know, we don't talk about features because fe good features and good software is table stakes now. Um being able to connect to stuff and do things, that's table stakes. Like we're talking we're doing a podcast online. This is it's no longer that interesting. So it's the the value sits in the diagnosis and the diagnosis is understanding the customer's um problems. Um so we've measured this in in sales. This is something that um people who are in that early stage selling piece could think about. If your salesperson is speaking more than 30% of the first conversation, you've lost the deal. >> Mhm. >> Ask questions. >> Yeah. Ask questions. >> Yeah. >> And that's it. >> Yeah. Actually, it's very similar. It's just like anything I've ever done and and it's just like ask many like have a have have a script for what are the kind of you know questions that give you open-ended feedback that you can then use those words you know back at them when you kind of conclude like okay it sounds like here are your problems you know here are the things is that correct and they go nah yes and you're like great we should book a meeting for a demo and I'll show you how we're going to solve all your problems >> we actually move it to a we we look at the problem externally to us so this is how I ask my clients to to to close. Well, Jason, it occurs to me that we're we're the right fit. Does that make sense? Or it occurs to us that we're a good fit. What do you think? >> Rather than, you know, it occurs to me like this problem occurs to me as the issue. So rather than saying I think it occurs to me this is right and it gives it it it changes the language. It externalizes the issue and externalizes the um the problem at hand. But of course, that person won't be ready to say yes until they've spent 25, 35 minutes kicking their own bruise. You know, how often does it happen? When does it happen? What are the consequences of it continuing to happen? What have you, how you know, how have you tried to fix that in the past that didn't? And why didn't it work? Like that stack of questions. And the last one, the last sort of nail is why didn't it work exposures so much incredible information. Well, it doesn't work because you know Fred in in procurement or Fred in the warehouse. Yeah. We gave him a new iPad with a new software on it and he's still using bits of paper. Ah, right. So, it tells me it's not a software issue, it's a Fred issue. Right. So, selling them a new bit of software is not going to solve the problem. So, you don't sell them software. What you do is you sell them you sell them a front-end consulting piece. This I'm I'm just using an example from a front end consulting piece. And then you go and in that consulting piece, your job is in the consulting piece is to get Fred on site. Your whole job because he's the blocker. He's the guy that's So we had one lady, we sold, we were in the mining software, but I was consulting to a mining software company. They're trying to sell their enterprise data warehouse thing. Um, you know, many millions of dollars a year and they're like, "Ah, yeah, but" and you just you get to a point where you go, "Oh, this person in the organization is going to be a pain in the butt." So, we sell them a piece of consulting. We go on site, put the hive viz on with the steel caps. We're on site in, you know, in the Bowen basin in in Queensland. And you are talking to this person who wants she loves her Excel spreadsheet. And we had to we had to convince her that she she would look good, her job would be safe, and she would actually be she would be smarter and better and probably get a promotion if she helped us bring the software through. end result we you know that million dollar sale went through that's a million dollars for the first year and then you're about 350 grand a year after that recurring so it was a huge deal and we had to sell them the idea of making sure that Mary was happy even though the CEO is in somewhere else all of this hierarchy everything's lined up but the admin person you need to get to that >> find actual key point of influence on getting that deal done um >> yep cuz in every deal uh Last thing I'll say on this, every single deal that I've done in the last 10 years to large corporates and mid-market and above, there's many, many, many people that can say no. And they can say no by inaction. They can say no by not providing data. They can say no by by oh well, we've got to make sure stock compliance is there. You know, we got to, you know, the the no comes in many languages and many forms, but it's still a no. And there's only a few people that can say yes. So, you don't need to app Yes, you need to appeal to the people that can say yes, but all the all the people that can say no, you need to make sure they're on side. >> Yeah, I love this. Uh, you know, clearly, Matthew, you have a wealth of experience of a wild ride of building and scaling a company, watching it, you know, kind of the crack in the foundation start to evolve and then ultimately picking up the pieces, but still turning around, starting something new and and being able to kind of demonstrate the the sales experience uh across the board. Uh, Matthew, if someone wants to learn more about you, what you're doing at TechTrk, um, you know, what's the best way for them to to learn more and get in touch? >> Well, we've got techtalk.co is the website. Um, find me on LinkedIn, Matthew Wyatt. Um, that's where I put all my ideas. I I don't uh gatekeep to use a modern sort of parliament. I don't gatekeep any IP. I think that sales and marketing is something that is an execution um and an and a performance art rather than a an activity level uh driven art. So, uh, one, you know, I share everything that I know about sales and marketing. Um, for the last 10 years since that episode, I've been helping businesses scale, uh, on board their first salesperson, on board their first sales and marketing people. And also, I've been helping them, you know, drive revenues and and codify their sales processes. And that's really the key. That's where I live now in that piece. For the last 10 years, I've been helping businesses do that. That's what we're doing here in the States. So, just follow me on LinkedIn. um you know follow join one of my webinars see you know see what you can learn because you know there's no you don't I don't think I need to um hold back anything that's not what how I'm built they probably figured that out uh through this conversation I don't hold anything back uh and um and and many people do use my content and they go out and try to do it themselves which is great more power to them >> Matthew really glad I had you on the show and the reason why I wanted you on was to really emphasize this the sales aspect I can't tell you how many founders I talked to on a regular basis that as we were talking about earlier like promise investors that like oh give us your money and then we'll figure out sales and haven't actually had a salesperson or have managed a salesperson and yeah they're a tech culture not a sales culture um and uh when you're selling you 100k ACB plus you know a human really does need to be involved as much as productled sales is great you know people still buy from people and uh you know scaling up those systems is crucial so I really appreciate you coming on the show sharing your insights sharing you know being vulnerable and sharing that wild ride of, you know, hundreds of millions in sales to, you know, having to wind down and, you know, sell for parts and have to buy it back and rebuild again. It's a, you know, wild story. So, appreciate you coming on sharing that. >> Absolute pleasure, Jason. Thanks for having me. >> Awesome. If you were inspired by today's episode, then go ahead, watch this next episode. Promise it's worth it. And if you really enjoyed this last episode and you want to connect with the guest I had on today, make sure to leave a comment down below telling me why you would like an intro to this guest and I'll make it