Wouldn’t it be great if you could go back in time to tell yourself the things you know now! If you’re at the beginning of your startup journey, this podcast gives you the benefit of experience from two top founders.
Alex Louey is the founder of Appscore, the team behind Yarra Trams’ famous Tram Tracker app. Alex knew nothing about building apps when he went into business, but he knew all about project management. He recommends working with your strengths and surrounding yourself with people who can do things that you can’t.
Shan Manickam is the MD and owner of warehouse solutions business Cross Docks Australia. Shan tried to go into business through a management buyout which failed, but it pushed up the price for the buyer, so they sacked him. That was enough to put a fire in his belly to form his own company. He recommends hiring for culture rather than skills.
Disclaimer: Transcripts may contain a few typos. Similar sounding words that can lead to them being deciphered wrongly and hence transcribed likewise.
Serpil Senelmis: For WeTeachMe, this is the Master Series where industry professionals share their secrets to business success. I’m Serpil Senelmis from Written and Recorded. In this final episode of Season 2 of Master Series, we’re seeking an answer to the question “If I had known then what I know now, what would I do differently?” Part of the excitement of starting anything for the first time is the unknown-unknown. The things that you don’t know that you don’t know.
Shan Manickam: I work for a company that was up for sale. And I’ve tried to put together a management buyout, and I failed. Someone else bought the business and because I basically jacked up the price for them because I was in competition, I lost my job. My girlfriend and I were six months pregnant with our first child. So I went back to some of the people I knew and I went, you know what? I reckon we might be able to go up in competition against these people and we’ll give it a crack.
Serpil Senelmis: That’s Shan Manickam, managing director and owner of Cross Docks Australia. We’ll hear more from Shan shortly. First up, Alex Louie is the founder of digital services company Appscore. Now, if you’ve ever caught a tram in Melbourne, you’ve probably seen Alex’s work in the tram tracker app, which Appscore developed in 2012. In this fireside chat with WeTeachMe’s, Wayne Lewis, Alex says things in business won’t always be good. So you can’t afford to take your eye off the ball.
Alex Louey: Starting 2010 I used to be a project manager worked all the corporate gigs and it just sort of got boring for me. I just moved from bank to bank. It was a good life work probably eight months a year and took three months off. I think that it goes 12 and then in 2010, I was actually living with my now business partner, Nick Bell and He’s always been an entrepreneur, and we just sat down and thought, let’s just do something and just do something other than work for other people. And I was like, f*** you, let’s do that sounds cool. And so we brainstorm a few ideas, everything from like that we’ve installed laundry because we were pretty lazy. So we want to be able to dry clean stuff for us. And we didn’t even want to leave the house. And we sort of went through a ton of ideas. And we sort of worked out that the easiest way for us to do something and the fastest way was for a service business, a service business, you can start quickly now a product business, a lot more time and effort required into it. So at the time, Apple released their iPhone, and everybody was building apps. And I was like, geez, let’s just start an app development company. And we started with $3,000 a website and rolled out from there. I can’t design, I can’t do anything required to actually build the app itself. But what I did have is I had a great business partner that was entrepreneurial. Was a great marketer. I had project management skills, I can run organizations I can execute. So the only gap is how do you start an app company with two guys that know nothing about software development, you hire. So back in the day, we couldn’t advertise and find an iPhone developer. So we went to uni’s, the only place that you find people that actually touch new technology at the time. So I ran around doing posters, putting them up looking for iPhone developers, and it was through uni’s that we found out as developer from them, all we need was sales. So Nick had a digital marketing company at the time. And funnily enough, our first app was a guy that wanted to grow his business, and he sold fertilizer. So the fertilizer that this guy made, was very specifically targeted at growing weed. So he had a ton of money. And it was like, let’s just build a weed growing app, which today is not that silly, given that the cannabis industry. So that was our first step. And we sort of worked in the startup space. For a very long time for maybe about three years, dealing with everybody with ideas, I’ve heard everything under the sun. And I’ve heard them multiple times.
Wayne Lewis: So some of those early days and some of the challenges that you faced, obviously trying to win that new business and those new clients, can you talk a little bit about that first?
Alex Louey: We did a lot of online marketing, which at the time was very new PPC, SEO and all that sort of jazz. We got a lot of clients because the market was right. Everybody wanted to build an app. And we cater to that market and we pick that market. At the time I did everything I had to sell, to project manage. I had to hire, I had to do the finances. We had to find it and do it but I had to oversee it. So I I had to do absolutely everything required to start and run this business. And it was tough. I paid myself no salary for three years. So absolute doughnuts. Every last cent was invested back into the business. My first salary check that I gave myself. I paid myself 60 grand a year after three years through that entire time. I lived off, I had a few rental properties and stuff like that, but I had no liability. So I could completely fail and walk away. And it not be an issue or walk back into a contracting job and just do that. But at the same time, I wanted it to succeed. So that’s why for three years, I didn’t live off nothing, but I was on a pretty shitty salary, that I was putting myself through other investments that are built up over time.
Wayne Lewis: And what was the feeling like when you won your first major client? What was that like and who was it?
Alex Louey: It’s awesome. Our first corporate client was Yarra Trams. It was amazing. It was like you’re working with all these startup companies with founders that are really passionate, but at the same time, the difference when you land a company that you know can sustain a business model. It’s just a different level. You know that when you deal with an enterprise company, right? They are skewed a little bit, but they’re not restricted by really tight budgets, which means you can get the team to do better work. They can spend more time on the design, they can spend more time on the development. We went out, we celebrated It was amazing. And you know, every time when a big deal, I love it just as much as my first deal.
Wayne Lewis: Yeah, some of the constraints then, which been the red tape and get into the right person. And obviously that decision-making process. Can you talk a little bit of that for us?
Alex Louey: So you talked about dealing with corporates?
Wayne Lewis: Yeah.
Alex Louey: Dealing with corporates, even medium size and up, it’s often challenging. We have companies that want to work with us, or people inside that want to work with us, because we’re agile because we deliver something different, but they can’t because they’re restricted by that same procurement panel. But the attitude we take is there’s always an angle, if you’re good at selling with a good solid product, you will find a way in. It might not be the next week and might not be the week after. But you’ve got to constantly persevere to try to win those big clients. So we’ve been working on like the banks for a long time. They need companies to help them innovate. They’ve got big budgets, which means you can do some awesome stuff with them. But they can be tough to work with because there’s a lot of red tape especially in a bank or even government. But what happens is keep on persevering. So we’ve been working on for about five years. And literally by continuous networking, we hit the right people. And now we’re getting further with them than we previously would. And it’s just finding the right people finding the right angle. I’ve forgotten the number of phone calls I’ve made to ANZ and speaking to the number of GM’s and speaking to this and getting brushed off and yeah, now but not really, and then even doing work. And they loving it, and then suddenly get stopped by red tape. The number of times that’s happened to us is amazing.
Wayne Lewis: What some of the processes that you go through internally to drive that forward?
Alex Louey: So processes are critical. If you want to scale a company as a business, we’re very labor-intensive. And one of our biggest challenges at the moment is that there’s actually not enough good talent in Australia to support the amount of innovation and creative and digital that’s going on. And when you look at scale, you got to look at all facets from what are the key success drivers, right, so sales is one thing, right? But assuming we can do the sales, we still need to deliver, we’re going to work out if you think about supply chain, we’ve got to work out how we’re going to get that many days, hypothetically from overseas. That’s my biggest challenge is my I can’t find enough people to do the work that I’m being asked to do. So we’re looking overseas in Ireland, we’re looking overseas in South America, we’re looking over in Asia, and various different places. But other key thing is, as your company grows, I think it goes from where everybody is having fun and just getting the right shit done because you’ve got a small team, to suddenly you need to manage a ton of people and everybody works differently. People like different stuff. Not everybody reacts to the same sort of team events. Some people don’t like it, some people do. And what happens is, as you grow you need processes in place, so that everybody’s driving in the right direction, right. You could be an A-team player in a five-person team, but when you stick him in a culture of 50 to 80 people is suddenly like a loose cannon. So these processes keeps teams in place. But you don’t want too much process that it stifles innovation you want closes the framework, so people know where the boundaries are. You don’t want to say to somebody, you need to design this way. ABCD because we’ve done it for five years, you will just give them a framework, give them a goal, and help them move forward.
Wayne Lewis: Can we talk a little bit about some of the difficult moments you had? So project management is something that you’re very skilled at. Is there any times you’ve been working with these large corporates, and that project management side has maybe not worked out too well?
Alex Louey: Happens all the time. If I told you every project that we did, went as planned. Anybody in software there would probably know that online because it doesn’t, right. But some of the challenging times that we have and we have more than time is we agree on something. And then the stakeholders want something different for political reasons. It just happens and I understand that it happens because you know this GM thinks that the app should go this way and do this but someone else thinks and we get stuck in the middle. Rather than talking specifically about a client some of the challenging times I had back in the day when the company was growing really quickly in a particular spurt. And you can argue to be complacent. Things were awesome. deals were coming in sales have been done. People being paid paying up big commission checks, Nick and I had this like corner office. I was like, awesome, right? What are we doing there? We’ve f*** around for so much. Like, we’d be on Google. We’d be like finding out shit to do on the weekend, right? Because we got complacent. And then what happened was one day, the finance kill comes in and we’re not going to be able to pay people salaries in about a month time. And that was like, yeah, that’s a serious issue, man. So Nick and I sort of looked at each other’s eye and we got to fix this and it’s not hard. Nothing in business is ever that hard. You just need the motivation to find it and fix it. So what we did, scrapped, the corner office went outside and looked at what the sales process was. So we had a sales process at the time where between the customer signing up and giving us a yes. And us getting the paperwork done and took about a week. In between then in sales terms a week is a very long time. Because customers get cold, they changed their mind. So we had a lot of deals dropping off, even though customer said yes. So my sales guys were booking all these deals that never came through. We’ll look into the numbers. Oh, yeah, we’re getting good sales, but the cash flow wasn’t reflective of that. So we scrapped the corner office, we moved in with all our sales data. And we spent 24 hours looking at where things were going wrong. And that process is what we looked at fixing, right? If you get a yes, that means somebody wants and then likes you. They want your service and they see that yeah, add value. How do we get that conversion done? Right. So back in the day before things like digital signing, we looked down I was like we’re going to get a lawyer to loosely review it. And the second that somebody said, yes, sending them emails with high-level terms and conditions, and then it would be written in basic English rather than legal jargon. And then all they need to do was return to us and say, yes, we agree. For us, that was enough for us to lock in the deal, which means that you’ve got customers whilst they want your solution. They excited about it, they genuinely feel the need, and they’ll give you their credit card to build. So that changed the seven day process into literally, I think it was about eight hours. That’s how sales came back up. And probably within three weeks, we were profitable again. Things won’t be good for a long time if you take your eye off the ball.
Wayne Lewis: And thinking about tonight’s topic, so if you knew them what you know now, can you touch a little bit on that for us?
Alex Louey: Probably the biggest thing is to never give up. The word entrepreneur actually sucks, but you’re not very is not cool, building something successful is cool. Back in the day, I thought it was all about just going to work and creating stuff. And I didn’t know what I was creating, right. But I knew it was hard. But I didn’t know how hard it was like, initially, I was like, yeah, I’m an entrepreneur and I’m building apps. How cool is this man, everybody’s talking to me. I’m a business owner. That’s not f****ing cool man, because you’re not doing anything. You’ve got no money. It’s a struggle. It’s hard. But if you continue to persevere, and keep on pushing and find the angles, you will succeed. The reason that Nick and I work together well, is because we’re not precious about the idea in a business sense. There is no place for egos like there is no place “I’m right because I’m the MD because I’m the boss”. You can still make mistakes. That’s probably the biggest one.
Wayne Lewis: Guys can have a round of applause for Alex Louey of Appscore. Thank you very much, Alex.
Serpil Senelmis: For finding out that he may not be able to pay off his staff for a month was a big wake up call for Alex. The key takeaway, don’t waste time in the corner office. Thanks, Alex. In just a moment, we’ll meet Sean Manickam, managing director and owner of Cross Docks Australia.
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Serpil Senelmis: Thanks Ad Guy. Sean Manickam is managing director and owner of Cross Docks Australia. His company provides warehouse services and management to a wide variety of businesses. In this fireside chat with WeTeachMe’s Wayne Lewis. Sean says he doesn’t think the customer is always right. He believes that’s a very fast way to go broke.
Shan Manickam: Back in 2004, I worked for a company that was up for sale. And I tried to put together a management buyout, and I failed. Someone else bought the business and because I basically jacked up the price for them because I was in competition, I lost my job. At the same time, my girlfriend and I were six months pregnant with our first child, and I didn’t have a job. And I did have four investment properties. And I was just about to become a parent. So I went back to some other people I knew and I went, you know what, I reckon we might be able to go up in competition against these people and we’ll give it a crack. So we gave it a crack.
Wayne Lewis: Obviously, it’s a stressful time, six months into a pregnancy. What was going through your thoughts at that time, if it didn’t work out?
Shan Manickam: Holy shit, that’s all it was holy shit. Do you know what, for me it was that survival mode that I went into. And you know, I knew we had some good ideas. I knew we had some great connections. So my business partners were well connected. They certainly gave me better connections than I’d ever had before. So from that point of view, I had the backing, we put enough money in the bank for me to live off for about a year. And so really, it was just all about meddling.
Wayne Lewis: And was it the connections that mainly contributed to this success?
Shan Manickam: Do you know what that was the interesting point. So these guys were all connected to large multinationals. So they were very well connected into organizations like Mobil, Caltex, Shell, BP, and you know what they open the doors and these people just loved hearing from us. But they weren’t interested in buying from us.
Wayne Lewis: So how did you make people interested in buying?
Shan Manickam: We went out and we canvass more the SME market. And we found organizations, that growth was stifled. And their growth was stifled because they were trying to be everything to everybody. They had a great product range, and I had an office up the front, and at the back there this warehouse and I had no idea how to run a warehouse. So we went to him and said, you know what, we can take that headache off your hands, and we will let you focus on what you do best. And it’s not running away house. And we slowly grew from there.
Wayne Lewis: Can you talk a little bit about that management system then and what went into building that?
Shan Manickam: So we actually invested in a warehouse management system. I’m not a big believer in luck. I certainly haven’t seen a lot of it in my life. But I can tell you one very lucky story in business, we needed to get this warehouse management system because what we needed to do, and the complexity of the clients that we’re dealing with, we need to get some serious software. So you know, we couldn’t build it. So we had to go buy it, and it was gonna cost us about 200 grand, we couldn’t fund it. So we went to the bank, and we said, you know what, we’d like to borrow the money for software, not hardware, for software. We’d sort of analyze and procrastinated and you know, we’d gone through the process and we build business cases and put a model together and you know, we’ve done all those exciting things. And somewhere along the way, we just went, you know what, we’re just gonna do it, right. We don’t think we can pay it off just yet, but we’re just gonna do it. So we sign up the documents, and we got the funding and we put the system in April 2008. They all remember what happened at the end of 2008. JFC, second I’d say if we procrastinate at another 10 months, we would never have got the funding, or would never be sitting here talking to you about logistics.
Wayne Lewis: Were there any kind of pitfalls in that dev company that you use for that? What was kind of the relationship like with those guys? Was it plain sailing over the headaches along the way when using this?
Shan Manickam: I mean, there’s pitfalls in every relationship, right? So it doesn’t matter what relationship you’ve got, there’s always going to be a pitfall. I suppose it’s how you manage them, that’s the key. One of the things that we did with them. And you know, it was partly by design, partly by default, but we became the guinea pigs for any new functionality they wanted in the system. And in addition to that, we also became the key site where they bring new clients to show them how the system worked. So we, in effect, formed a very strong relationship with this software company. And like any software company that always under resourced, always had a lot of great ideas. But getting things done could be tough. But you know what, it was less tough for us because of the relationship that we’d formed with them, because of the fact that they could ring us up and say, You know what, we’ve got a new client, we just like to bring him through your site, show them how the system works, are you open to it? So, I would spend probably three times a month sometimes helping them canvass their product in our warehouse, which ultimately got us a leg up, because when we did need that new functionality, or we need to get it pushed to the front of the queue, we had a little bit of leverage. So it definitely helped us, for sure.
Wayne Lewis: So being the guinea pig then, did that help with the innovation side?
Shan Manickam: Absolutely and you know, they were kind of smart, because they realized that we were kind of smart, and they went you know what if we actually listen to these people, and we take what they’re saying on board, we could get some of these things. in place. So yeah, we definitely contributed to their growth for sure.
Wayne Lewis: Yeah. So that feedback loop. Are you listening at the same time from your customers, the warehouses that you’re managing? And then feeding that back up? How does that work?
Shan Manickam: Yeah, absolutely. So our best relationships are collaborative relationships. We are an integral part of everything that they do. And they are an integral part of everything that we do. With most of our larger clients. We have weekly operational meetings, we go through the constraints that we’re creating, we talk about the constraints that they’re creating. And we work out what are we going to do to minimize those constraints for both of us, because at the end of the day, if we’re doing something that’s slowing them down, that’s a problem. But conversely, if they’re doing the same for us, that’s a problem. We’re just an extension of what they do, or what they used to do in house. So it becomes a pretty easy relationship. As long as we remember where the grass roots were.
Wayne Lewis: Can you talk a little bit about your values, maybe and where those grass roots lie for you guys?
Shan Manickam: Yeah, sure. I mean, our core values, we do like to keep things very simple. We’re a service business, we’re there to serve. And we’re there to make sure that we can help our customers grow. We don’t always believe that our customer’s always right. That’s a very fast way to go broke sometimes, we’re ultimately there to serve, and to listen to our customers. So you know, as long as we can instill that into our staff, then it helps us go a long way.
Wayne Lewis: And how do you manage them effectively? Assuming that you do now?
Shan Manickam: That’s a very good point there, Wayne. That’s a very good point. I think it all starts at the recruitment process. There’s probably two key things. It’s that recruitment process, so get them right on the way in, but to get the ride on the way in, you gotta know what you’re looking for, right? That’s definitely the key. You’ve got to really clearly define what it is that you’re looking for. We really look for skills, you know, skills isn’t the core component that we’re looking for. We’re looking for core values and fit. That’s the key thing, at the end of the day I didn’t want to pop in before was a very technical term for those people that you didn’t want in your business. And they’re called competent assholes. So they’re really f***ing good at their job, but they piss off everybody around them. That’s a very painful experience, right? And the problem is you get lewd into the sense of security of can’t do without them because they’re so good at their job. But it doesn’t help anybody. So I think the key thing is, you’ve got to understand what are you looking for first, and that’s where those core values come into it. Now, putting together a bunch of core values. That’s a piece of cake, right? Like that’s really easy. You get a whiteboard, you get everyone to put up their concepts. You pick the most famous ones or the most regular ones, and you put a few emojis up and bang you’re done, right? That’s easy. But the next thing you’ve got to do is you’ve got up believe in them and getting them instilled so that they’re being used on a daily basis to make decisions within your business. And once that happens, it then becomes a lot easier.
Wayne Lewis: What is it that makes you proud and your biggest achievement so far?
Shan Manickam: You know our business, it’s a service business. And when we do it right, we exist to help our customers grow. So one of my largest customers, when we first started with them, they were turning over just on $5 million, last year $65 million, and he sold his business for $50 million. Now, he openly states that one of the keys to his success was partnering with somebody at sourcing a factor of his business to somebody who could do it better. So I would say when you work with a client to help them grow and succeed that for me is a very proud moment. But I would say conversely though, when you can do that genuinely with your staff, and get your staff from this level, to that level, that’s an amazing sense of achievement. And then to top it off, to get that staff member to come up to you and go, you know what, couldn’t have done it without you. That’s again, an amazing achievement.
Wayne Lewis: Tonight’s topic, if you knew then what you know now, what would that be
Shan Manickam: Yeah, look, there would be a few but for me now, I’m on a mission with myself and also with my key senior leadership team, about managing people and setting clear expectations and making sure that with everything that we’re doing, we are making it very clear exactly what it is we expect. And that extends to customers, extends to suppliers, it extends to staff. It extends to you know, the people above you and the people below you. Because if you haven’t made that expectation clear, and that can be just as easily with a customer just because a customer says, I want this done, and I want it done by then, if we can’t achieve that for them, if we can’t create that experience for them, we’re going to make expectations clear. So the hardest thing to do is actually saying no, for too long. I surrounded by a whole lot of people saying yes Shan, yes Shan, yes Shan. That didn’t help. It may strike your ego, temporarily but that didn’t help. The best thing that I’m looking for is now those people go You know what, it’s not gonna fly. Not today. I’d be able to do it next week, but not today. So I think the key for us is, if I knew how to manage people better, back then. I’d be in a different situation now.
Wayne Lewis: Guys, come and have a round of applause for Shan Manickam. Thank you very much, Sean.
Serpil Senelmis: So for business, managing staff, finding the right people starts at the recruitment process. That’s a hot tip from Shan there. Thanks, Shan. And thanks, Alex as well. And that’s a rap, the final episode of Master Series for 2018. Thank you to everyone who shared their story and thank you for listening. I’m Serpil Senelmis, from Written and Recorded, and for WeTeachMe, this was the Master Series.
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