Sometimes it takes a bit more than a spark to jumpstart a business. Putting your idea in action takes time, effort, and money – but there’s a few more tools at your disposal to get your startup started.
Ben Cohn in a Co-Founder of TAXIBOX, the mobile self-storage solution that brings yellow cubes of joy to your front door. Ben did a lot of on-the-ground research to jumpstart his business. He explains his approach to making sure TAXIBOX customers always have a remarkable experience.
Ben Stickland is the Founder of Alliance Software and has spent a lot of time and money in the startup space. Ben says the first three years of business are like walking up a see-saw, then things start to level out and become a bit easier. He says he loves running experiments to see what’s going to work in his business.
Disclaimer: Transcripts may contain a few typos. Similar sounding words can lead to them being deciphered wrongly and hence transcribed likewise.
Serpil Senelmis: Hi guys, I’m from the podcast network Written and Recorded. We do the master series podcast. Can I ask you a few questions? What was the spark that got your business started?
Interviewing Public: I was sick for living in the matrix. I like freedom.
Serpil Senelmis: And how’s it going?
Interviewing Public: I’m not making any money, but I just started three weeks ago, so I’m fine.
Interviewing Public: Okay, the spark was maybe about four or five years ago, I had my own business idea, man. And I joined silicon beach to find the app developers, but I really couldn’t get it started. Even though I joined this big community, there was no support, there was no way to find the right people. So I thought this organization needs help. And I stepped up to help the organizer. And four years later here I am the lead organizer, and we have 10,200 members in Melbourne, the largest silicon beach community in Australia.
Serpil Senelmis: Now what is the one thing that you’re waiting for to start your business?
Interviewing Public: I haven’t finished my studies yet. I’m just waiting for my studies to finish and just have more experience in those who like I’m studying accounting at the Romans. So I would love to just stay home and just work
Serpil Senelmis: And why do you want to work at home?
Interviewing Public: It’s easier like you’re just wasting a lot of time just by traveling rather than spending much time with my family.
Serpil Senelmis: For WeTeachMe this is the Masters Series where industry professionals share their secrets to business success. I’m Serpil Senelmis from Written and Recorded. You know, I can remember the exact moment that I decided to become an entrepreneur, and all it took was one spark to jumpstart my business. If you’re still waiting for ignition, we’ve got two jumper leads ready to rev up your startup. Ben Cohn is co-founder of Taxibox the mobile self-storage company responsible for yellow boxes up and down the East Coast.
Ben Cohn: I love shopping the customer’s experience. So people think storage, they’re like, man, that storage because it’s so boring. But when you book a Taxibox along the way, you get jolted by these random things that just come out of the blue. For example, the Taxibox starts talking to you on emails and starts having an affair with you. You’ve got to find an edge. Use your brain to think of doing things in creative ways that people are just not thinking about.
Serpil Senelmis: We’ll hear more from Ben Cohn from Taxibox soon, but first, let me introduce you to another Ben, Ben Stickland, founder of Alliance Software. In 1999. Ben topped his graduating year of uni and was inundated with enticing offers, but he decided to jumpstart his own business instead. Ben says sell your idea before you build it to test the market and make sure it wants what you’re offering.
Ben Stickland: So the question that I want to challenge you with is how much time would you invest to dramatically increase the odds of your business success? I think that a lot of people, if they would do one week of good research, they would move their odds of success from 20%, which is, in general business about the success rate of new businesses, which is about 20%. In tech startups. It’s between five and 10%. So it’s like, most people fail, that in one week of work that could move it from 20 to 40%. If they did a month of research that can move at 50%. If I did three months, they could move it to 70%. It’s not just doing the research, it’s having the humility to listen to your market and actually hear what they have to say. We had a product in the aged care space that was a unique platform for publishing content onto the TVs of aged care residence. We had a large number of customers and our attrition rate was almost zero. Once clients got it in they loved it, but because it was weird, it was really hard to sell because it wasn’t locked. We were replacing x with y, we actually invented a thing. I just remember the frustration of going, it ticks me off that I have to actually get in front of somebody and educate them to what the hell this thing actually does before I can get them to consider whether or not to buy it. And that was our greatest constraint. It’s nice to be able to compete against the market and go we are this and customers get it and then you just go well, where this but our reason for buying is why. Every business in fact, I think is hardest at the start. My observation and I have a lot of good friends who run businesses is typically three years, I used this analogy of walking up a seesaw, it’s been three years walking out the seesaw. And then one day you’re doing the same thing. You’re actually just still walking. But it just feels like it just gets easier because all the background work you’ve done of building contacts and building systems and building this and building that they all still exist and all of a sudden one day the momentum ships over and you keep walking, you’re going crap and making money for the first time and it’s not hard to find employees. It’s not hard to find this and that kind of walking down the other side. Have the seesaw and so all the business owners that I know. And I know a lot of them would generally tell the story of it being hard for the first two to three years. In my experience, I came from a very academic family, and I performed academically very well, I was the top of my university class both in my two undergraduate degrees and my postgraduate degree. And it sucked being in a position where the people that you went through university with were racing up the corporate careers of the big consulting firms, and you’re making 25 grand a year and living off your wife’s income, trying to get this damn business to work and feeling like a loser. So, in every business, I would say to you brace yourself for the first little while because it can be tough to sell. So how to be smart and I reckon you can do this in about a month. One is keep your overheads low. So we rent in a space above a barbecues galore store. After a little while, when we got some money, we spent a bunch of money to deck it out and it’s really cool and funky inside but the rent is actually low and I love the low rent because it’s allowed me to experiment. It’s allowed me to try things and actually lose some money. And because my overheads didn’t eat me, I didn’t go and rent an expensive office upfront. Every business owner should be how to answer this question. If you can’t answer this question, you’d count play? Who is my customer? How will they discover me? And why will they buy from me? Why would I switch if you haven’t got those three answers, you’re not in the game. In a standard business, there are three skills you’ve got to have, you got to be able to sell. And I made a lot of professionals who are actually afraid of selling or don’t know any successful business people who can’t sell. You’ve got to understand operations, and you got to understand finance. They’re the three things you gotta be able to do. And I’m gonna give you one book on each of those topics that I think is the best book to read on each of those topics. So ready fire aim is a great book on business in general, but it’s got a lot of really good marketing smarts in it. It’s probably one of the best business books I’ve read. Traction is an operations book. traction is a book that I read, coming out three years ago now whilst I was spending a couple of months in the US. We’ve almost followed it religiously. We’ve just said to our group, we’re going to do everything in this book and simple numbers straight talk big profits is the best finance book for nonaccountants that I can recommend.
Ben Stickland: We’re going to talk about tech businesses in a second. Just to give you a little bit of background, we built a product called Market Samurai. And it had incredible success. We had launched it and we had 10s of thousands of customers. And we were convinced we were technical gods who could do anything. And we had this big list of email providers, and we hated all the email software because I kept doing all this nasty stuff to us. And we knew our thoughts were built in WordPress and everyone else’s walls and integration with WordPress was a mongrel. And we knew that if we just build something great in that space that did really good, intelligent, integrated marketing inside WordPress and handled big lists and didn’t find me for everything stupid, and it was going to be great. And so we just said, we’re gonna eat our own dog food, we’re gonna build this product, it’s gonna be amazing. And we did, and we took it to one customer, and another, and another. And after we took a 12th and I owe you on datas and said, We don’t have a big list, that integration into WordPress, that’s what we pay web design, they’re cheap, why do we care, and it’s not just a big problem, and bla bla bla bla bla bla bla bla bla, and we threw the product in the beam, it was a very painful experience to come home to your wife and say, you know, that thing that was gonna be awesome. We spent all that money on, it didn’t work out. What we did find was that when we started doing those customer interviews, there was a couple of things in there that people really liked. We had this tool that helps people write copy, and I said that it’s pretty cool. And so we came across a book. The book is called running lean. And running lean is a script that basically is like the idiot’s guide to starting a tech business. And it’s literally just here is a set of interviews, go and ring your customers and ask them these questions now ring them and ask them these questions. And we started following through this thing. And we’ve done like, at least 100 interviews Now when we started out in the business, we went through this process, and the second business did a lot better, to the point where I didn’t want to spend that kind of money again and so We did always interviews to confirm people would like it. And they look really good. But I was still nervous. And I learned to be humble. And so what we did is we said, okay, we’re going to sell it before we build it. And so we put up pages, and we made these videos that pretended that the product existed. And we sent traffic to these things. And we asked people to buy a thing that didn’t exist. And then when they got to the page that said, Do you want to actually buy it, we said, it doesn’t exist. But thanks for getting here. And when it comes, we’ll give it to you for free. And we got no blowback. But we discovered that people were going to buy it. I knew that I interviewed individual humans who liked it and gave us feedback on features and whatever else. But it also sold it at a good conversion rate to the market. I kind of knew I could sell it on you individuals liked it, and it gave me the courage of my convictions to go after it. So starting a startup, you can have incredible potential to scale. So our product it’s now called click video our online content video platform, it turns written content into videos almost instantly. People spend between 30 and $50 us a month to access it, it probably costs me five cents a month to add a new customer to that. Like if a customer comes in buys the actual infrastructure costs, maybe slightly above that, but just trivial. You’ve got this huge capacity of overheads that actually have to exist before you can sell to one customer. And then beyond that, it’s very scalable. Rech startups have really high failure rates, they are often trying to change the world in some way. And the failure rate in tech startups is depending on what stat to read 90 or 95%. And generally, you’re going to require capital and or technical skill to get going. My observation has been in the tech startup space people have done well with Goldilocks sized businesses. So you want to solve a problem that’s big enough to make some real money from. But there are some businesses when somebody comes to me and says, I’m going to set up an event platform that anyone in the world can use to set up their own events until it friends about it, and I can all share it. It’s like a case that’s a global business and you’re competing directly with Facebook, and that’s okay. That’s not so that it can’t be done, but you’re trying to change the behavior of the whole world. I’ve got other clients who work in a niche, like aged care in Australia, I can tell you because I know that niche is only, I think three and a half thousand facilities and 7000 retirement villages. It’s big enough to make money from that’s a serious enterprise. But if you have a killer offering in that space, it’s a Goldilocks sized business. It’s small enough that Microsoft is not building a specialist product. But it’s big enough that you can make millions of dollars. Just think about that. I’ve seen good success in Goldilocks-sized niches two harder in lessons and I’ll wrap it up. Lesson One, just get out of the building run problem and solution interviews, getting out of the building. That’s a common tech startup phrase. It means go and talk to people. Don’t just say I’ve got a great idea. I know my market and I’m going to be determined.
Ben Stickland: That little phrase is highly correlated to losing lots of money. I’ve seen it just from my experience. It’s my observation. I’ve got a great idea. I’m going to work really hard and be determined. Just get out of the building. Literally going and talking to five customers with problem solution interviews, will in most cases, change your idea. Run low-cost experiments. I love running experiments, I will try anything if I can try it for under five grand. If I can try a marketing idea I can try any endeavor. Let’s try paid spots in Instagram. Okay, under five grand, great, let’s try it out. So this is how I see a lot of people spend their money in a tech startup environment. They consciously spend their money over time, and they get to a moment of truth, and they get one opportunity to be right or to be wrong. I think most people are wrong most of the time. The way you want to spend money is to get lots of moments of truth I spent some money on didn’t really look like it. I’ll spend a little bit more I’ll try something, spent a bit more. It didn’t quite work. It’s been a little bit more. Actually. I hit a moment of truth. I’ve got enough market validation that it is now worth spending the money and I’ll pile the money on. I will spin that speed because I’ve done the background work to get the validation. So smart spending, just some ideas for low-cost experiments, demonstrate mock-ups, and prototypes. I can think of two sisters we’ve worked with in our software firm who have a great business tech startup in the childcare space. whoever sent them to me, had pumped up our tires. They had really crappy experience with their previous developers. And that would just desperate to give me the check. It was like all the ethics in the world for me to say to them, could we just test this market first because they’re like, oh, this is going to be great. Let me just give you the money. And it’s someone who likes taking money for services. That’s okay. I was so tempted, it was insane. I said, can we please just spend a few thousand bucks, draw some pictures, do some interviews. I came back. The idea is complete crap. Two weeks later all we figured out a new way. We’re going to do this. We’re just going to go for can we please spend a little bit of time and by the second time now we’ll happy to do it. The second idea was crap. The third idea turned out to have a lot of traction. They’ve spent hundreds of thousands of dollars now and they are just at the point now where they’re about to become cashflow positive, so they’re just starting to nicely get traction in the market. I suspect that their business, they should sell it for at least 5 million bucks. Like it’s got good traction in the market. It solves a genuine problem. But I had to go through a few rounds to kind of get there. Secondly, test marketing. That’s what we did before selling it before you built it. There’s nothing like asking someone for money to stop people being nice to you. I think it’s a killer because people feel sorry for people starting businesses because I know will the pain you’re going to go through. And so they want to say that your idea is great. And so you just say to them great, would you love to be a foundation investor? You know, it’s gonna be $20,000 a year to use his product for only $1,000 a year, I’ll give you the first three years of membership. I just want to know that you’re serious. People who loved your idea will not part with one 20th of the value to actually buy it. You can get them all to part with the money. That’s a really strong indicator and build minimum viable products, build small things build half-assed products that you’re not proud of. Do the small thing get it to the market have high customer churn, get real market feedback. I know in our video product the things that I thought were critical when they are years down the track. Our retentions going from crap to really good. And the things that I thought were critical that I’d be embarrassed not to launch with still haven’t been built. But we got something really basic into the market and our customer feedback. And every time someone left us, we got to figure out what they didn’t like, and what really drove their decision making. But for a long time, I wouldn’t give accounts to family and friends because it was like we built this thing and it serves this niche market, but you’re gonna look at it and think it looks a bit crap and whatever else but we’re in the market, we’re getting real feedback, not pretend feedback. A concierge service is a concept I’d encourage you to think about. So the classic concierge services, you’re going to build a platform to help people order food from the supermarket in line with their dietary requirements and what they’ve got in the cupboard. All they have to do is take a photo of their cupboard once a week and artificial intelligence is going to suck at all the things they’ve got. And your plan is to have these huge logistics warehouse with machines moving stuff around and doing all this stuff so that you can be really slick on the food delivery side. The concierge service And if it would be put up a website, send me a photograph a human’s going to figure out what you want. A human is going to walk into Kohl’s and buy it for you. And we’re going to lose 100 bucks on every order, we ship out the door. And we’re going to do that for the first 500 orders. But we’re going to figure out what people actually want and how this whole thing works before we invest in the warehouse and we invest in the artificial intelligence, we invest in the blah, blah, blah, blah, blah. That’s it. And I think we’re done. Thank you very much for listening. I appreciate the time.
Serpil Senelmis: So what stuck with me is the idea of getting out of the building. Run problem and solution interviews. And while you’re at it, run some low-cost experiments. Thanks all those ideas Ben. Next up, we’ll meet the man behind those yellow cubes in Ben Cohn of Taxibox.
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Serpil Senelmis: Thanks Ad Guy, Ben Cohn is co-founder of Taxibox which got a jumpstart when he was traveling in the United States and saw a similar business. In this fireside chat with WeTeachMe’s Wayne Lewis, Ben says he shocks and surprises his customers. So they have a remarkable experience to be a successful business, Ben’s advice is to find your edge and think of doing things in creative ways.
Ben Cohn: I ended up quitting my job to go buy property. And I renovated property for about a year and I did really well from that. And I just decided to sell that. And then I had a fair bit of cash. I’ve got a business partner in the business who I met in consulting, and we decided to sell the business together. So I mean, the hurdles were, realistically, I really wanted to make this business fairly unique from the start. And I knew that one of the biggest issues in the business was the capital costs because for us, capital costs are a big thing. We had to basically buy all of our taxiboxes, which are the storage units. And so the biggest hurdle was finding creative way to buy them at a really good price. And so we spent months in China, finding factories and basically manufacturing these box services. So capital was a constraint at the start. I had some money saved up, borrowed from family. Yeah, the rest was just actually I hate to say it because it’s just actually a lot of fun. The experience was great traveling around China meeting factories being 25 years old, kind of acting like we knew we were doing, working out of backpackers. The taxibox cover that you see driving around today was designed to the backpackers by myself. But when I was 25, on illustrator, it just kind of oldest work. I don’t know, it was just a good experience.
Wayne Lewis: And after what Ben said in that first talk, how much research did you do?
Ben Cohn: I didn’t know anything about trucks of forklifts or warehouses. I had to get my forklift license. So there’s a bunch of researching of the industry of things that we just didn’t know. Probably spent three, four or five months realistically researching the United States market. The industry is massive over there. Yeah, and then just baby steps along the way. Nothing in the last seven years we’ve been running has been one major step. Everything’s been tiny, tiny steps. For some of you that are sort of in your mid-20s. I was there six, seven years ago in the exact same position. That’s amazing. I just suddenly wake up and I look in I’m running a business and everything has just been incremental steps along the way. It hasn’t been this monumentous shift this epiphany that happened to me.
Wayne Lewis: Ben’s analogy of the seesaw as well and that tipping point of becoming cashflow positive. Do you remember that moment for yourself as well?
Ben Cohn: Yeah, we became cashflow positive, probably within a break-even probably six months to a year into the business. We didn’t take out a salary for the first year and a half. It was just myself, my business partner for the first year and a half doing all the work. And then from there, it just gradually grew. I would say, though, that I don’t necessarily feel like it gets easier and easier with time. The first year and a half or two years was actually quite easy for me because I just knew how to work really hard and it was just dependent on myself and my business partner. But as the business grows, we’ve got staff, we operate in three cities. We’ve got 49 full-time team members. With that there you’ve got, as humans, people have things that happen in their lives, you kind of carry a lot of that load. So the interpersonal stuff that happens with dealing with people and dynamics at work, I actually find really challenging. It’s a complex decision, you know, trucks breaking down, we’ve got a fleet of trucks that have accidents, or they break down and they need servicing. It’s just stuff they never thought about. So, for me, as time goes on, the odds and the stakes are much much higher than they were, I still find ways to really challenge myself and enjoy things, but I don’t to be frank, I don’t find that it gets easier with time, we probably make more money. That’s true. But the emotional drain is pretty heavy in running a business.
Wayne Lewis: From a leadership perspective, how do you nurture your own leadership skills?
Ben Cohn: It sounds are really, really a bit odd. But I think that a lot of the best stuff that comes to me creatively in my mind, or my views in the business is when I’m really on my own. I sometimes I’ve been known to go and hire a cabin over in Hillsville. And I just go there on my own for two days. And I just literally spend time reading and just thinking And that gives me some great ideas for the business.
Wayne Lewis: In terms of the relationships in your life, is there any been any times where it’s affected your marriage and things like that, as you’ve got too much fears have been any points where you thought, this is enough for me, I want to give up and walk away?
Ben Cohn: It is an absolute lie if a business owner tells you that they haven’t thought of it, because every business owner goes through this and has these days where they’re like, Oh, my God, this is just horrific. It happens. I definitely thought of that. I never really got close to really acting on it, to be honest, like, as much as I’ve thought of it. If someone said to me, Hey, I’m going to buy your business. I probably wouldn’t do it because I really love what I’m doing at the moment. But I’ve definitely you know, there’s tough times, and then the impact on relationships. If my wife was sitting here, she would tell you that it’s had a massive impact on things. I come home and I share things with her that she doesn’t want to hear about. She can’t stand the word taxibox anymore, but c’est a la vie, she married me so she stuck with it to be honest. Yeah. One thing is, as a personality, I like to be fairly relaxed. I do find, though, that in running a business and having staff that report to you, I’ve almost become a bit like in my conversations are very much really focusing on everything they’re saying. And I’m just very engaged. And I find that happening in my social life as well. And people like to feel like I’m being interviewed. Yeah, man, honestly, the information, just tell me and we can act on it. You know?
Wayne Lewis: Do you have an exit plan? Does every founder have an exit plan, do you think?
Ben Cohn: When we started our business, we did not think of an exit plan at all. And that really shaped the way we’ve grown our business. I think actually starting the business with a view as to who will eventually buy that business or what industry is going to buy that business is a really important point, because it actually shapes the way you’re going to develop that business to eventually have a buyer. We didn’t do that. And we’ve created an incredibly unique business that whilst it is very saleable to paypal at the moment, it’s not built by us to sell so I actually don’t have any desires to sell the business for the long term. I can see the view of how big the market can be. I’m doing things that creatively really challenge me in the business. I’m not necessarily driven by money, as much as challenging myself creatively, or doing things that are really different or challenging the status quo. So in this business, I’ve got plenty of scope to be able to do that.
Wayne Lewis: And what does drive you then?
Ben Cohn: I love shocking the customer’s experience. So people think storage, they’re like, Man, it’s storage because it’s so boring. But when you book a taxibox along the way, you get jolted by these random things that just come out of the blue. For example, the taxibox starts talking to your emails and starts having an affair with you. If you get a quote on our website, and you actually get the quote, email to yourself, you can click a random button that goes into this Tetris look-alike game where you play. And depending on your score, you actually get discounts off your taxibox so it lures you back into the process and our business is absolutely littered with surprises along the way. That’s the stuff that just absolutely I love and people book a taxibox and like, man, I was getting storage and holy crap I’m never going to any other storage company again, because the experience was completely, radically different. I can talk about the stuff for hours, or businesses just fill with these things.
Wayne Lewis: They’re the kind of ideas that you pick up when you’re in this cabin in Hillsville is not the more operational strategic side, but more of these creative Mario type things?
Ben Cohn: Yeah, yeah, yeah, yeah, it’s true. It actually happens over weird dinners with friends when they’re like, Man, you should do something. And I’m like, we doing it. We’re just gonna do these ideas come out of really random places, the team around me, I feel like they kind of feel the culture. And they’ve started suggesting things that normally most feels weird saying bosses, but most bosses would be like, there’s no chance we’re doing that. We’re kind of like, let’s just try. Let’s just see. So it’s kind of similar to Ben’s concept of, because less than $5,000 Why not do it? From my perspective, if you do something like everyone else, you’ve got to find an edge. Either got to be really good at it. You’ve got to have a hell of a lot of money. That for me far easier is to actually use your brain to think of doing things in creative ways that people are just not thinking about that corporates that are focused on money and necessarily engage in their minds. And, you know, that gives you a unique edge.
Wayne Lewis: Thank you very much, Ben, can we have a round of applause for Ben Cohn of Taxibox?
Serpil Senelmis: How funny that Ben’s wife is sick of hearing the word taxi box. Good thing he’s got a strong belief in himself and his business. Thanks, Ben. That’s officially the first time we’ve had two founders with the same first name on this podcast. Next time on Masters Series, family business primer. If you thought starting a business was hard, try doing it with your family. But in all seriousness, right now, I’m talking into a recorder being operated by my husband and I wouldn’t have it any other way. We’ll meet two family-based founders and find out the benefits and disadvantages of working with your loved ones. Until then, I’m Serpil Senelmis from Written and Recorded and for WeTeachMe, this is the Masters Series.
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