I recently had a conversation with Charlie Gunningham, currently the Director of Innovation for the state government in WA and former head of The Property Tribune, Business News, REIWA and also aussiehome.com.
During the chat, Charlie told me some of his secret sauce to building and exiting so many successful businesses.
The quote that stood out to me was “If you build something great, it shouldn’t need you!”
Which is so true. At the end of the day, if we’re working towards quality of life, more time with our families or even selling your business at some point down the track, all of these things require you to step out of the business more and more over time.
So, I really loved hearing Charlie express that so clearly and succinctly. Essentially, a business can be boiled down to a set of systems and processes that either help it to run well or not so well. Obviously, the people involved with the business have a large influence over its
success, but assuming you’ve hired well and are a good judge of character, it’s the systems and processes that you build and then, hopefully, hand over, that will determine the value of a business.
All right, so if you build something great, it shouldn’t need you. Good. Now, how do I do that?
Charlie had some advice to offer in this regard:
1. PLAN YOUR EXIT AND Be TRANSPARENT
When Charlie was leaving The Property Tribune, he had a plan in place about when and how he was going to do that.
His 2IC and management team also knew the plan and they could work together towards making it a reality.
2. DOCUMENT EVERYTHING ABOUT YOUR BUSINESS
The team at The Property Tribune use Atlassian’s Confluence platform as a kind of internal Wikipedia to document systems and processes and ensure everyone is across how things should be done. This enables instant knowledge sharing across the organisation and a one-stop-shop for how-to guides.
3. CHALLENGE NEW HIRES AND SEE WHAT THEY’RE CAPABLE OF
Charlie hired two new journalists just before leaving The Property Tribune and on their first day they had both written and published three new stories on the website. An amazing demonstration of agility and scalability.
So, some awesome tips there from Charlie as to how to grow a business and then make yourself redundant. I find it super inspiring that Charlie has built so many terrific businesses and also exited and gone on to other ventures, because it serves as hard evidence that it’s possible and you can make it happen yourself if you work hard enough at it and put the right things in place.
If you’re interested in checking out the full conversation between Charlie and myself, watch the video below:
Full transcript from the video:
Maitreya Speering 00:03
All right and welcome to Episode One of The Growth Trajectory podcast where we meet the people behind the innovation. First guest today on episode one, what a privilege!
Charlie Gunningham 00:18
Oh, I’m honoured to be your number one, then again, will you have a number two?
Maitreya Speering 00:22
Will I? Might be a one hit wonder. Yeah. Is Charlie Gunningham. So welcome, Charlie!
Charlie Gunningham 00:30
Thanks Maitreya. Thank you very much for having me. Lovely to see you again.
Maitreya Speering 00:33
Yeah, no worries. So, I basically want to just kick off and ask you a bit about your experience in innovation. So you’ve been involved in a lot of different kinds of innovation. I mean, you founded aussiehome.com. Back in the day and grew that business. Yeah. Back in the day.
Charlie Gunningham 00:56
22 years, this month actually coming up! 5th of December, 99.
Maitreya Speering 01:00
There you go. Hey, that’s awesome. And then, yeah, yeah. And then ended up exiting that business and selling to rework, which was a great, great success. You then were involved with business news for a while when it was, as far as I understand it was mainly an analog kind of distribution. And then you your strategy was to take it online and go digital.
Charlie Gunningham 01:27
Yeah, I mean, we’ll get into more detail. But basically, I thought, having psaltery or I’d be at the river for the rest of my life running river.com or my team got jobs or river river, a superb Institute incredibly well run. Neville PASI, who will be retiring next year as CEO has been there since 1977. awesome guy. He was the CFO. When they made the acquisition of Ozzie home.com, and an honor but the CEO, she’s since retired, two excellent. People really looked after me and my team, I thought I’d be there forever. But then the owner of business units came over. And I just thought, well, I’d done 13 years of online real estate. I was passionate about media and, you know, things are afraid of only got worse with false news and fake news. Yeah, rubbish. And people in the little bubbles, just getting the information they want. But I admired business news, I think as a high quality publication when I was facing invited to help them with their digital strategy, but they didn’t have a digital person. I thought, well, there’s an opportunity. Maybe that’s my next challenge. Yeah, Matt, and was in there for four years.
Maitreya Speering 02:33
Yeah. Excellent. Thanks.
Charlie Gunningham 02:35
For your story. I then went to the federal government worked on a fund, which which fund startups because no doubt, we’ll talk about that there’s a very, very low level of capital ends up in the early stage tech. And yeah, before a federal fund allowed me to ensure or at least tried hard to ensure there were more deals done here. And who more good early stage tech companies funded?
Maitreya Speering 02:58
Yeah, yeah. As an IC grant advisor, accelerating commercialization. Yeah. And we had many, many dealings together in that space as well. Yeah, for sure. Start? Well, actually, let’s start there. Let’s start in terms of AC grants. So I mentioned you know, in that space, you would have come across lots of ideas, and people are very enthusiastic about their ideas. But it takes a lot of work to take an idea through to commercialization. And I imagine you would have picked up some wisdom around how to do that successfully. So what would be your biggest tip for, for a company that has, you know, an innovation heavy strategy and is trying to bring new technology or new products into the market?
Charlie Gunningham 03:45
Yeah, well, first, it’s really hard. So that make no, you know, no, just versions on, on if it doesn’t work, because it’s the most likely thing as I tell people, it’s not gonna work. But don’t worry, don’t don’t do it, and then just fail. But I mean, the most likely outcome is going to fail, or not quite what you think now, you’re probably going to change it. Even with Aussie home.com. We thought, as soon as we put up our website, people will just put down the newspaper. Why do we need to advertise in this thing, of course, it’s the internet. We’re gonna look for property online. And of course, that was incredibly naive. And one thing I learned is the greatest changes happen slowly. In fact, I write for business news, still a startup column, and my latest article is exactly that. The greatest changes happen slowly. And that’s good. Because the slowest changes are the ones that stick the ones that hold. And that’s how you create a great company. Because after all, what we’re trying to do here is create great companies, right? Great companies. Yeah, and some only a little bit of rocket fuel to help them on their way. Someone needs to raise money to build the thing. Some, most don’t deserve any money. And some will get money like a hand, they get money, you know, and then some one thinking should be back, don’t get back to you and the markets not perfect. And that’s maybe where there’s a role for government to help. Just where I liked, you know, back the ones that deserve funding. That might not have got it. But your question was more about what makes us successful or what? Yeah, tips. Yeah. So what I looked for, and I still, I’ve left the federal government program now as the my contract was three years and came to an end. And I’m now sort of a lone gun, and I meet tech companies all day long. And there’s pretty much one thing I want to hear from them. And often, I don’t hear it from them. But it’s the one thing I want to hear from them. And it before people fall asleep, this is the most important thing I’m going to say is, I want to know who their customer is, that’s the person paying the money, not necessarily the user. But their customer, we got that wrong. And Ozzie home, and I can explain that in a sec. The person is paying the money. And I want to know what problem that startup or tech business is solving for that customer. So why the customer is going to pay, solve that problem. So what problem does the customer currently have? And I want to I want to see a big global problem, or one that wakes them up at three o’clock in the morning. And they go, who’s gonna solve me this problem? Right? That problem. So only I think business, you can make business very complicated. We can make it very simple. I like low hanging fruit. I like to make things simple, let’s not make it complicated. I’ve got an MBA, I can, you know, put a suit on and mix it with everybody up and down the terrorists. But really, that you don’t need much management speak, it’s pretty simple. You solve a problem for your customer. Because then you’re creating value for them. If you create value for them, they will pay you and then they pay you. Maybe you’ve got a business bing bang, bang, that’s it. Yeah, brilliant. I don’t hear it. Yeah, I see a startup who wants to open up her laptop and show me their slide deck and give me a demo. And I go, please put that thing away. I want to hear about you while you’re doing. And tell me about your customer and how you’re solving a problem for them.
Maitreya Speering 07:17
Yeah, beautiful. I love that. I love the simplicity of that. And it is yeah, it is very important to really define your problem very well and define your ideal customer very well, for sure. Sure. So I’m interested in the difference you see between customer and user and Ron how that came about in the home.
Charlie Gunningham 07:37
Right. So when Nick and I met on the MBA program at UWA. So Nick’s a Swiss guy grew up in America, I’m obviously English and tell by the accent, although I don’t know what my ex is now, English people think I sound very Ozzie and Ozzie people think I sound slimy English. But anyway, so I’m rejected wherever I am. Nick and I met and we hit it off. And we were both not from here. But we bought a property here. Recently, back in 9798, we’re doing our MBA, and we were sort of talking about how ridiculously inefficient the market was for property and how you had to wait for the paper on Saturday and trawl around the home opens. And, you know, that whole process took months and months months, and then was just like a very inefficient way of collecting the information about what properties for sale and what the price should be, and all that sort of stuff. And you know, is 99 It was the year of the.com Has everyone had an MBA and a pulse tonight. And the.com idea people threw money at you. So we thought wouldn’t it be good if there was a map based property website where you could actually see where the properties for sale or rent were, you know, color coded one color for sale, one color for rent, you could have filters, you could you could zoom in on a suburb and see where the schools are and the shops are and the beaches or the river is or the the main transport routes or whatever. And then you could just click and open the properties. How good would that be? Now, this you got to imagine this is six years for Google Maps, right? So we’re used to maps now in a wound, you know, zoom in all the property sites have maps. We’re actually the world’s first map based property site, but he probably went and found technology that been used in the mining industry. And maybe by you know, big logistics companies like toll and maybe Transperth, you know, but this was desktop, heavy duty mapping. It hadn’t really been applied on the net. And that’s why we need to raise money. So we built a site for ourselves property searches. But as I tell many people in talks, who was our customer, our customer was not the user of the website, the user the website was looking for a property or rent looking for property to sell or buy sorry. So they were home searches like we had before. But we didn’t make money from there. Yeah. Who was our customer?
Maitreya Speering 10:06
Are you asking me? Oh, the people that are trying to sell or rent houses are your customer who
Charlie Gunningham 10:12
are? Who are they?
Maitreya Speering 10:14
Well, real estate agents
Charlie Gunningham 10:16
is it. I mean, there are some private sellers, but it’s a small part of the market, right? It’s about 3% of the market. So 97% of the market is, is real estate agents. And when we decided we weren’t going to compete with real estate agents, we’re going to help them sell properties, when pretty obviously, they were our customer, they were going to pay us a monthly fee to put all their properties on our side. And so they became our customer. Now, what problem? Does the real estate agents have predominantly what wakes them up at three in the morning?
Maitreya Speering 10:48
Trying to get as a global problem? Well, I would say one of their problems is trying to get as many people through the homes that they’re selling as they as they can.
Charlie Gunningham 10:58
Not so much. No, they don’t really care about buyers and renters as much because that’s not their customer, who’s their customer? I mean, obviously, they want to do a deal course they need buyers, of course, any tenants, I’m sure that delightful and lovely with them, but they don’t make money from them. Who’s their customer,
Maitreya Speering 11:17
their customers, the people selling houses, the people that own houses, the owners,
Charlie Gunningham 11:21
the vendors, yeah, they take a commission from Yeah, whether in property management, they charge a percentage of the rent, or whether they sell a property for their vendor. They’ll take a commission of the purchase price, right? So therefore, they need vendors. They need customer, their customers. Since they sign up a listing, they know that if they price are presented correctly, it’ll sell in 30 days. If it hasn’t sold in 30 days, they probably haven’t priced or presented correctly. They can’t control the market. But they can’t control how they’re presented. And the price a little bit around the negotiation and all that now some of them very good negotiators can make a deal happen. That’s really their job. Right. And their brokers. Yep. So their customers or vendors, they need vendors, because as soon as they’ve signed up a vendor itself, they need more. Yeah, you talk to any real estate agent right now, they will tell you how many listings. There’s a saying in real estate list. And last. Now, sadly, we didn’t know this at the time. So we built a site for home buyers and renters. And we fell in love with that product. The worst mistake entrepreneurs make or one of the worst. Yeah, so I’ve got the badge, I’ve got the t shirt, I’ve made all the mistakes. This is why I try and tell startups focus with laser like precision precision on your customer as the person paying the money and the problem you’re solving. So we suddenly realize it took us about a year after launch, during which we almost died a couple of times. To realize that it’s all about listing, we must give them listing tools. We started doing websites for them to make them look good. Yeah, we started doing Would you believe Magazine’s list in our magazine? And, you know, list with me and you could be in this magazine. Yeah, right. It’s a listing tool, helps them get the listing gives them an edge over the other real estate agents. What knows we were doing Printful, we were supposed to be anti print. But once we did print, which became about a third of our business for the first five years websites, which became half the business. And then we had the subscription model of you know, being on the portal, yeah, behind on those three revenue streams, that that then put, like a solid plank beneath our business. And I think then we were then we were a business. But up until then we were sort of searching for a business model, which is what startups do, right? You start out lean and mean, and you go, well, that’s not working. Let’s do this. Oh, yeah, that’s working. Let’s do more of that. And you find your way. And I think that’s but you find your way by listening to your customers. Best thing we did was get customers into our office and give them glasses of wine. So tell us your problems. Yeah. But I think it’s better if startups find this out sooner rather than later. We didn’t find out till a year. Yeah. Yeah. After we’d started, and I look back at our business plan now. And it’s a joke, really, because what we thought we’d make money on we didn’t. Yeah. And what we ended up making money on was not even mentioned in our business plan.
Maitreya Speering 14:34
Yeah, yeah. That’s brilliant. I love the fact that your revenue breakdown ended up being well, a half on doing websites, a third on a magazine and then a tiny sliver on what you originally intended. That’s, yeah, that’s the story of pivoting and changing and adapting till you find product market fit and figuring out who your actual customer is, as opposed to who you think it is originally. I mean, yeah, you That’s a great story of, of transitioning as you needed to, and then finding what works and making that happen, which is great by
Charlie Gunningham 15:08
focusing on the customer problem, which was listening. So later we did social media, when that came along. Later, we did apps. And after a while, no prints not very profitable. So after five years, we actually dropped print altogether. I mean, it saved us. But that’s when we became super profitable. So when we dropped a print completely could drop the magazine, and just do websites and subscriptions and social media and apps. Yeah, it’s all digital. Yeah. And that’s very profitable. Because every new client you add is almost 99%. Profit, you know, yeah. Just drops to the bottom line. Yeah, the extra costs you’re adding. That’s why I like text tech startups that are scalable. Yeah, totally. I would keep banging on about startups. I say, well, a couple of reasons. But one of them, I love the business model, once you get scale. It’s a super fantastic glorious business model. I mean, every new customer drops to the bottom line, you know, we would give real estate agents who came on board, a username and password, they upload all the properties because we didn’t know what the properties were. They uploaded them all on our system, fed through to their websites fed through the realestate.com domain rewear all those other sites through our system, and we sent them an invoice and we drank coffee. Yeah. It’s not quite as easy as that. But that’s right. Yeah. And it’s nice, no surprise that on year five, we started paying dividends to shareholders because we were so super profitable to our shareholders and said, Would it be alright, if we pay you a dividend? Nick and I are the biggest shareholders, but you haven’t had any money back in five years? Would you like to do that? And they all said yes. Okay. Yeah. Yeah. Always you don’t need the money for your growth plan. So that national budget, this is spare money. And every year we paid a bigger dividend as it scaled. I mean, the second five years it was he was fantastic. Love that. And then the eventual exits are real.
Maitreya Speering 17:01
Yeah. Perfect. So I want to ask you about a venture in real estate that you’ve been involved in recently, which is the property Tribune. Okay. Yeah. And what, how did that opportunity come about for you? And you know, what were you looking to do going into that?
Charlie Gunningham 17:17
That’s my good friend, Evan cutting Dunlop, who is the owner and Managing Director of living online. So I knew ever in the late 2000s through something called a group. A group was a group and still means to this day, first Tuesday of the month, is a group of internet entrepreneurs. We’re not for profit association that’s giving each other emotional support. Yeah. the.com survivors of the early 2000s. There weren’t many of us around. This is before spacecubed. No co working spaces, no angel groups, no accelerator programs, there was really no startup scene until about 2012 and spacecubed, lightened in the first startup weekend, which I remember going to September 2012, and then Perth angels in 2013, and founder Institute’s and, and then a few Ric seed, Spark and a few accelerators. But back into that early 2000s, mid 2000s. No such group. So we formed a group. And Evan was an early member of that in the late 2000s. And I always got on well with him. He’s a great guy. He’s six foot nine. And he’s so he’s the tallest, smartest, greatest guy I’ve ever met. Superga. And I actually used living online when I was a business news. So I would say business news from 2015 to 2017, three years, and even before that I was CEO and GM of digital. So we put up a paywall business news, and I traffic collapsed, obviously. And then I used all the tricks I learned at home and everywhere to get the traffic back up. And that took about a year. And then I rang up Evan and went help. He runs a digital marketing agency in a very good one called living online. Last year, they actually won the top agency in the country. Wow award. Very impressive. So we grew the traffic rather heated. He told us what to do. We just Yep, we’ll do that. Yeah, we grew the traffic from behind the paywall from 40,000 unique visitors a month to 170,000 unique visitors a month, over a few years. And on the back of that we grew digital subscriptions grew digital advertising from zero and we transformed the business so I knew Evan not only a good guy, he was good at what he did. Yeah. So last year, when I exited the AC grant federal government program Now, so what am I gonna do now? Okay, I am fortunate I want to do I want to work with tech companies that I really admire and people I admire and companies I can help startups tech companies of all shapes and sizes, ASX listed private, small, like single person operators, big team, whatever. And I don’t want to have a staff. I don’t have a boss, I don’t have an office. Here I am in my study at home. And I just want to I sort of had a list of companies and I rang them up and, and had coffees with them. And before too long, you know, within a month I was busy with work. Yeah, yeah. As one of these coffee meetings, the city arco I saw a nearby Taiwan iron. And he goes, Oh, we should catch up, you know, like you do? Yep. Yep. And we did actually catch up. And it was at this catch up. About a year ago, he pitched the idea to me a property tree and said, Look, I’ve always I run a digital marketing agency, very successful, you know, from 11, staff to 25, during COVID. Because probably a lot of businesses woke up and went, Oh, yeah, absolutely. Meet. So he was already very successful business, and been doing it 10 years and COVID on he just accelerated things for companies like that. Um, and he said, You know, I run a very successful agency consulting agency, but I want to build an asset, a property news size. And I’ve got the name in my head, I’ve got how to do it. But I haven’t got time to do. But I’ve got the funds to do it. And if you’re available, I’d love you to come and do it with me. So he pitched to me and said, You know, I’m probably sitting across the room from the one person perfect can do this. You’ve got media experience, business news, got property experience, Tech experience, startup experience. I’ve got a few ideas. I’ll send them to you. A few ideas. So he sends me a series of emails when I cut and paste them into a Word documents. 17 pages. Wow. Usually laid out in chapters. Typical Evan, yeah, really well thought through. Yeah. Okay. It’s just not just an idea. He’s pulled out of thin air. He’s been thinking about this. Yeah. And the more I thought about it, the more I wanted to do it. So I said, Yeah, I mean, and it was in November, last year, so almost a year ago, that I went into his office and syriaca and started planning for the launch of the property, Tribune. Now, I thought, I will start in WA, and then we’ll get going. And then we’ll grow to the other states, you know, day one, February, the first, we’re going to be national. Yeah, I want 100 stories on the site before we launch. And then when we launch on 20 stories a day, I mean, how much when I went 20 stories a day, because only if we create that sort of content are going to make an impact. And then of course, I one thing I knew about living online, and I knew that it would be built well, and I knew that he’d get traffic to it. So my job was to get the content on the 20 stories a day, and then commercialize it. Yeah. And those are the bits I could do. Yeah, I couldn’t build a site and I couldn’t get the traffic. But that was taken care of no show. In a way. This is like a dream startup. Yeah, I’m being paid to go in, create a business from scratch. I don’t have to build the thing. I have to worry about the traffic. How good’s that? So I spent a few months thinking about how am I going to get this 20 stories a day. And I’ve been running startup news, as you know, for a few years I took over I love this. So I already had some riders that were really good. So I picked my best, most reliable and productive riders out of solid news if you want to work with me on this property trip up. And for them, it’s fantastic that they’re either Curtin uni media journalism students or their recent graduates. So perfect job for them. Like how, how many journalism jobs are that around? I mean, if anything, they’ve been cut. So that was I knew that I could with my internal team, we could bash out some stories, how we’re going to get to 20 a day. So okay, what would be really good if we could get some real estate agents around the country? Because obviously, based on who we’re going to measure around the country, we’ll need real estate agents or people in the industry around the country who can right now you got real estate agents. Imagine a Venn diagram. And then you’ve got people who can write, show there’s a little sliver of overlap. Yeah. Real estate agents who can write well, I’d like to write we’ll see seriousness that’s it’s it’s a difficult skill, right? A good punchy, concise, interesting 350 700 word piece. So I look for people who are already writing in the industry. And I contacted them. And I said, Would you like to be a contributor? I can’t pay you anything. But you’re going to get free exposure on a national website, which we’re going to get behind and before too long had 30 or 40 signed up. So if they publish, you know, at one piece a week or one piece a month, plus my internal team, I know I can get the content on so yes, off. We went in February in lockdown. Remember that first week of February? Yeah. Yeah. And we by the second week, we were bashing out 20 stories a day. Wow. That’s no. And I’ve actually just handed over the property into my team. I got to the stage where by July, I was sort of gone down to halftime. But ultimately, my objective was to make myself redundant, because if it relies on me, I haven’t built anything. Yes. All I’ve done is got myself in a job myself a job. And I don’t want to build myself a job. I want to build a business system, a process that makes money and is an interesting service. And I can maybe keep a grandfatherly eye on it, but I don’t need to be in there doing it every day. So the end of September, I actually accident and hand it over completely to my fantastic team and ever. Job done and the thing continues to grow. Yeah. And in fact, that is my most proudest moment. You know, what business news is done? After I’m left? I am immensely proud of smashing amps and properly tribute in the same and re were the same. I don’t have to be there. Yeah. Yeah, maybe this is my lesson for other people is, you know, if you build something great, it what it shouldn’t need you. Yeah. You. You haven’t built a business, you’ve built a practice, which you can then sell to another practice. Yep. But it’s not a business if it relies on you. Yeah, if you can sell it to another business or another business person doesn’t rely on you. And that ultimately, I think it’s what startups should try and think about how can you build something that another business will want to take over, and then you can go off and do something else? Or maybe you can go back and help recycle your skills and capital into other startups? Yeah, which is what I’ve tried to be doing 10 years, exited to real.
Maitreya Speering 27:25
Yeah, so that makes sense. To me, the idea of building a business and the systems and processes to run the business. It’s almost like a McDonald’s, they they work out really good ways to make burgers and anyone can do it, once they have their system in place. Anyone can do it. So I sort of get that. The part that I struggle with, and a lot of clients and people that I talked to struggle with is organically growing someone in your own business to replace yourself from the inside out. And having the ability to trust them to do a good job to the standard that you’ve been doing it. And then to let go as they take more and more responsibility. Do you have any tips around how to do that? Well, yeah, so
Charlie Gunningham 28:09
I did that with with, you know, guy, I won’t name him but he knows who he is. And the ladies also at the team. Things September, I knew who was going to take over from me and running. And I knew he could do a great job. And I’d sort of been coaching him to do so. And so when we made the decision in September, he has taken over brilliantly and he’s been in contact with me irregularly every now and again, I popped in say hi, he doesn’t need me there. You know, and what was also good we, in September, we appointed two new lady journalists straight out of Curtin Media School. And one thing Evans really good at is systems and processes. I’ve never seen a guy. So on top of system of process, they use Confluence. So it’s like an internal Wikipedia. Everything in living online. And in the property Tribune has a confluence guide. Everything I mean, right down to how you change the toilet paper. How do you clean the coffee machine? I mean, everything. But how brilliant it is, because so I haven’t seen companies do this, this sort of documentation. And because it’s not printed and forgotten in a file. It’s a living breathing, you’ve got a link on your desktop can open up the confluence start guide, and if you change something, just update it, do a screenshot, do a little guide, publish done. Right. And we plugged in two new reporters in September, and on the day they started. I said, Well, here’s the confluence guides, it’s got some videos and blah, blah, blah. Within an hour or two. They’re already writing stories. Yeah, and they published three stories each on their first day. Yeah, and I hardly had to do anything. I thought I’m not needed. The system now has and that’s good. Yeah, totally ultimate job is to make myself redundant. Totally, totally. Yeah. That is the system itself and process being understandable and efficient, so that you can plug people in and immediately productive on day one.
Maitreya Speering 30:21
Yeah. Yeah. Brilliant. Yeah. Fantastic. So I want to change tack a little bit and ask you about your typical work week. So what’s your what’s your normal work week, like these days?
Charlie Gunningham 30:35
There is no typical. Today, I’m recording three podcasts that I did one yesterday, someone from a guest with you now. I have a podcast called Startup west where I interview startup founders,
Maitreya Speering 30:50
which is a great podcast. That one Yeah, blog
Charlie Gunningham 30:52
for startup West. Yeah, wherever you get your podcasts started with. So we interview startup founders of all different shapes and sizes. And one thing I’m very proud about that one is 50% of our founders are thinner. I think it’s very important not to have a series of men. I think if you’re having a panel or an event, you know, just if it’s just men, that to me is an anathema. No. I love what they do. Women in Technology, WA they have the saying if you can see her you can be her. It’s very important that we see different types of startup founders that inspire others. And I’m also on trend fest considers Perth property podcast today as a guest and yesterday, I’m a co host of the Perth prop tech radio show with with the amazing Callum Ashton ash as he’s known who set up a prop tech hub. So yeah, lots of as it happens, a lot of podcasts this week. Yeah. But typically, I’d be meeting a startup in a coffee shop, or working with a tech company, or maybe doing an event I sit on a few boards, sort of preparing Board Papers, reading Board Papers or committees. So it’s a nice mixture, I suppose you’d call it a portfolio of Korea, having a variety of different clients. I do paid work for sit on boards do events, of course, we’ve got West tech fest coming up. And I run them one of those events called Freo startup fest, which I think is sold out already. And that’s great fun. That’s a couple of weeks battle to speed that whole window to see what’s best 13 events in five days, I can’t go to 13 events. But it’s the best week of the year. Yeah. So yeah, a really eclectic mixture of as I suppose I’m a single employee consultant business, although I call myself advisor because it sounds more grown up than consultants. I am working with a variety of tech companies.
Maitreya Speering 32:53
Very cool. Now, I love that. I mean, the idea of a portfolio career appeals to me because you never really get bored in that way. You’re always doing something new, meeting new people and broadening your horizons of skills.
Charlie Gunningham 33:08
Now, that’s not to say, because I’m not over the hill quite yet. That if an exact role comes up, I wouldn’t grab it. If it really appeals to me, if I think can add value, and it’s something that is in my lane, you know, startups technology innovation, where I can make a big difference. Yes. That’s not to say that I wouldn’t, but I can do that. Because I could, you know, close my other work off, and then go and do that. Sure. Sure. Yeah. It doesn’t work out. I can go back and do Yeah, no. So yeah,
Maitreya Speering 33:43
yeah, you’ve got flexibility. It’s a nice position to be in to be able to pick and choose what you want to be involved in, and what speaks to you. So that what I’m interested then is what drives you What do you care about deeply?
Charlie Gunningham 33:58
Well, obviously, apart from my family, and my wife and my friends and stuff, and taking time out, which is very important and keeping yourself healthy and fit and eating well and laugh. Because that because work is just work. It’s not the most important thing. It is shouldn’t be. People say, Oh, it would have worked but work life balance. No, it isn’t. That’s a choice. You make. Yeah, make choices in life and no one’s no one’s telling you, you have to answer email at 837 on the couch, put the friggin phone away. Talk to your partner, go out for a meal, go out for a walk, walk the dog, whatever it is. Go and play squash whatever it is. You’ve got. Your life is like a three legged stool. Right? You got to have time for your family and your partner. Yes, there’s time for work. And there’s time for you. And you’ve got to, you know, equal that three legged stool. Don’t falls over. So then if that answered your question, but if you if your question is more about work, what motivated me and work? Yes. Then what motivation work is helping the startup taxing, helped develop more great tech companies in Western Australia because we are being invaded. And we have been now over the last 10 or 1520 years by very well backed digital Vikings. And I use them all. I’m a sucker for them. All right. I’m an absolute sucker for them all. You know, I’ve got my iPhone. I’ve got my Facebook, and I got my Google. And I’ve got my Spotify, and they’ve got my Netflix, and I don’t drive a Tesla. But you know, pretty much all of those well backed, overseas owned, scalable tech companies. I’m sad to say I love them all i usable. But the problem is, they are why tanking all these industries, almost, again, invisibly, because great things happen slowly. And they have slowly been taken over Facebook and Google now account for about 90% of digital marketing in Australia. You know, billions and billions of dollars, they don’t pay much tax. And they don’t employ many people. And as we’ve seen this year, with Google News, they wield a lot of political power, such that they could one day I remember we were only a few weeks old, the property Tribune, but it can wipe, wipe our Facebook page. Facebook could wipe our page of all our news like that. Yeah. And then could be on a phone call to the Prime Minister and the treasurer. negotiating terms. Mm hmm. I asked the question, Where are the West Australian? And where are the Australian tech companies? Because they’re out there. They just need more support and help. But we’re actually quite good at it. But whenever I ask if I’m doing a keynote speech, or whatever, and I asked the audience, right, namely an Australian tech company, they can go Canva. Go. Last year. Okay. So I want anyone that was like cricket,
Maitreya Speering 37:35
and we get to claim zero. Are they New Zealand? Found?
Charlie Gunningham 37:41
Canadian mining company, your property company? Yeah, sure. So nothing wrong with property companies, mining companies. But, you know, we’ve got to be more than one trick pony. And I’m an old economics teacher. And if you look at the economy of WA, it’s broadly $250 billion, right? 72 billion is mining. 30 billion is government we like government. 25 is billion is property. 20 billion is construction. So if you add though property, government and mining, it’s about two thirds of the economy. So every thing else, medical, education, tourism, technology, everything else financial. It’s in that little third, and we’re relying too much on too little. And mining goes in a boom and we’re all off to the races. We go on all prices touring. And then we’re off to the races again, and we forget about the rest economy really should diversify. And then we go in along because mining is like it’s good for a while. And then it’s quite bad for a long time. It’s good for a while. Yeah. And in the bad for a long time ago. Why did we do boost the economy? And then mining takes off again, we forget it. Races again. It’s like come on. I see what we’re doing long term. Yeah. So I like the fact that you know, there’s more talk now about diversification of the economy. See more action. So in a long winded answer your question that’s what motivates me getting more scalable wa tech companies up and running that create you know, great jobs in ag world sold $300 million out of West Leederville I interviewed him on the podcast just last week on solid waste Doug Fitch great story, you know, health engine about to go to an IPO worth hundreds of millions of dollars. Sector sold for you know, 10s of 10s of if not more than $50 million educational technology all perfect. Campbell was originally from Perth, you know and skipped over Sydney and and off they went and now worth 55 billion I mean, what amazing wealth creation in just sort of eight or nine years as sort of Twilight skin tech companies, you know, you’re not gonna hit a camera every time. But if you do, wow, or anything approaching it on a health engine or an ag world or a sector, and you’re gonna create a tremendous amount of income and wealth, and it’s Australian jobs, Australian income, Australian tax being paid, right? This is all good for the community. And these are good, well paid decent clean jobs of the future. Yeah, that’s what we should be trying to generate. Yep. Yeah,
Maitreya Speering 40:28
absolutely. Yeah, brilliant. I absolutely agree with you in terms of WA creating its own successful tech sector. And I’ve been involved in innovation NWA for about 11 years now. And it’s always the same story, you know, we, we need more. angel funds, we need more success stories of Western Australian tech companies being successful, we need more this, we need more than that. And seems to me like we kind of have, you know, to a, to a large degree, a lot of the resources in place now. And it’s just a matter of the the, the growth over time, as you say, like, great changes happen slowly. So it’s not like we’re going to all of a sudden, you know, turn out next year to be generating 100 billion in our economy through the tech sector, but hopefully, 10 years, we can aim at that, you know, or 20 years, it happens. But I agree with you wholeheartedly on that front.
Charlie Gunningham 41:33
Every startup should be funded, as I said earlier, and not every seller should even be looking for funding, I’d say, Forget about your funding, get your first customer on board, work out what problem you’re solving for them, get them paying you something and try and repeat that. Ben, if you need funding, it’s going to be easier to get funding because investors can say, Oh, they’ve got a good product customers using it testimonials. Good. I can see the invoices, it’s scaling, they need a little bit of help now a little bit of rocket fuel to to go wash. But that’s what you need to do. Absolutely, totally. But when you look at I’m afraid and why this is what we need to change. Only point 4% of capital that went to web companies last year went to early stage tech, Pete Frandsen, right? I looked on business news and I got them to add up for me all the capital raisings last financial years $11.3 billion. Right, Bernie point 4% of that went to early stage tech. Sounds good enough point 4%. And good enough, that’s just not enough support. Right. So in a way, we need to educate investors, how to invest in early stage tech, the more I speak to investors, they’d like to be able to do so I just don’t know quite how. And there are. There isn’t much venture capital to speak of him, who there’s some angels doing great stuff, but most of them have already invested. They haven’t got much more money to invest. They need more angels to join Earth Angels and southwest angels in the lab to do care to do more deals they need to get in more angel. I celebrate what they’re doing and hope more people get behind them. And I know that carbon group are great supporters of both angels. Fantastic. Jamie, Jamie and Nathan are great supporters. But we also need venture to do the sort of follow on funds. And we only have one venture fund at the moment. That’s better labs $23 million fund seeded by Ric fantastic. And however we need, we need two or three others of similar size. So they can collaborate on deals do no big follow on series A type rounds of several million type things. That’s what we need. Yeah. And maybe a little bit of competitive tension competing with each other because they want to invest in the next best thing. Yeah, yeah. That being one. Sure.
Maitreya Speering 44:01
Sure. Yeah, absolutely. Well, worse.
Charlie Gunningham 44:03
We leave, we lose them. And they go. They go over East. Well, that’s all they give up. Yes. Because of lack of support.
Maitreya Speering 44:15
Yeah, there’s been quite a few Perth startups head over to Silicon Valley recently and start making their mark on the world over there.
Charlie Gunningham 44:22
Good. Good. Yeah. So Olivia from canopy canopy with a K. I remember meeting her before she went to Silicon Valley. And she didn’t go there for funding. She went there because in the States, there’s four and a half 1000 universities and her customers University. Yes, any 39 universities in Australia, so she had to go to the state. Now her husband looked at each other and we just said we don’t want to have any regrets here that we didn’t go yeah, let’s go. They went with like a new baby and everything. Yeah. And they went over there and an amazing success story. She became like the Netflix for universities. She became the number one Streaming video for universities and then libraries. And what’s great about Olivia is just before COVID, very well timed, she exited out of canopy and came back to Perth. Do we have someone like that? Who’s been there and done it, and then come back. So I don’t really I don’t mind if they go offshore or go elsewhere be great. Then when they’re successful. They bring their capital, their experience and their know how, and they recycle that back into our
Maitreya Speering 45:28
totally, totally 100%. So last question, our last series of questions that way. What’s your experience been with the R&D tax incentive over that
Charlie Gunningham 45:42
big fan? And this was, I mean, I remember when the r&d tax incentive came in a, I know it sort of has its germination in the 80s. But I think it was John Howard who, who really changed the game in the early 2000s. And it became this big sort of was it 125% offset thing or 100%? Off sales?
Maitreya Speering 46:04
Charlie Gunningham 46:05
refundable, right means you got tax back from this, you got cash back from the ATO if you’re making losses, yes. Now as an early stage startup making losses. We couldn’t believe it. And I was told by two accountants that I wasn’t eligible for. And I was at a
Maitreya Speering 46:24
was that with Ozzy home that you were told you were ineligible?
Charlie Gunningham 46:27
Early, early days early to say he first came in tell that? Yeah, I was told by two accountants, my existing one who obviously I didn’t use after that, and another one. And then the third, I thought, Oh, well, it’s not for us. It’s not for I happen to be at a sundowner. And I bumped into a former NBA colleague, and he said to me, no, no, you, I’m pretty sure you. You’d be right for this. And moreover, this is year two, I should be able to get you the refund for last year, because you didn’t apply for last year. Last year it came in so I should be able to get you two years worth. Yeah. I said really? What’s the catch? There’s no catch. I just take a percentage of what you get. So this is like, I went, Okay, let’s do it then. And we ended up getting I was like, teary eyes. At the time. I was like, This is not a big deal. We got like $110,000 cash, we got to lots of 55,000.
Maitreya Speering 47:23
And so what you’re changing, what was your total expenses for the year just for some context in that,
Charlie Gunningham 47:30
so you get about 43 foot back then 45% of your eligible r&d, tax spending back. So our spending must have been around about 100,000
Maitreya Speering 47:43
on r&d, specifically, what over just over actually, on r&d, what was your total company spend?
Charlie Gunningham 47:49
I see just r&d. I think our turnover was ran about half a million. Okay. Okay. Yeah, most of it. And yeah,
Maitreya Speering 47:57
there may be a fifth of your budget was spent on r&d? Probably, yeah,
Charlie Gunningham 48:01
yeah. And we got through developing this mapping technology members before Google Maps, who we had three to three or four different mapping providers before Google came along in 2005. And pretty much gave maps away for free. Hundreds of 1000s of dollars on mapping and other things we were developing. So that was amazing. Of course, that was good. Because what it’s doing is it’s encouraging people doing r&d to keep doing it. Yeah. Yeah. But that to us was demonstrating life and death. I mean, that that allowed us to go that was another salary. Painful. Yeah. And I remember getting that check for 110,000. It was on Melbourne Cup day, which is always very quiet because everyone’s off getting drunk, you know, various long lunches. We never did that. Not only the horse racing. Not into it. I don’t like the fact They Shoot Horses because they fall over. Yeah. Doesn’t I’ve never been into it. Right. So we never had a Melbourne Cup much. ever win this one. So I’m going to the bank with checkins. Very hot day and it was mancha decided. We wanted to put this check in the bank. Couldn’t believe it? So yeah, r&d tax. I mean, I was amazed the number of people I’ve met over the last 20 years, you still don’t know exists? Yeah, it’s
Maitreya Speering 49:20
got very bad public relations. It doesn’t nobody knows about it. And it’s amazing that it’s so helpful, so financially to so many early stage businesses, and yet still, you talk to a lot of even tax agents and accountants today, they don’t know what it is, or if they do know what it is they don’t want to touch it because it’s like this risky thing. And it’s not really something that I want to be involved in. So the easiest thing to do is to give you the advice that you got from two accountants, which is you’re not eligible, you know.
Charlie Gunningham 49:54
And when I went to business news, they weren’t using it and we used it. Yep. And we got quite a bit of money. back to doing a lot of development there. Now, obviously not at rework in the startups I’ve been in since we’ve used it yet, but I’ll tell you another thing people don’t know about that one and even less known than r&d. It’s been 2016 When he Tsipras came in. Yes, absolutely. Probably the best thing Malcolm Turnbull did, right. 36, early stage investor company or innovation company animation company, where you can get 20% back of your investment into a startup
Maitreya Speering 50:26
and capital gains free for 10 years and then 10
Charlie Gunningham 50:28
years capital gains exemption. With no upside with no, no ceiling engine, if
Maitreya Speering 50:33
you had invested 100 million into Canva early days and then got
Charlie Gunningham 50:37
50 grand into Canva. Hundreds of millions now, tax free. Yeah, yeah. Again, financial advisors don’t know about it. accountants don’t know about it high net worth talking about. I can tell you who does know about it, all the Perth angels know about it. Yeah, of course, two startups that I’ve invested in, in the last year or so. I have claimed he said successfully on both. Yeah, my accountant knows about it. Like the thing with that one. And I’m more about it.
Maitreya Speering 51:07
Yeah, the thing with that one is it’s even more difficult because it doesn’t directly help the companies themselves. So it may be worth mentioning in a pitch deck to just tagline like we are ASIC eligible. So ask because you’re going to get a tax break. Other than that, the companies don’t have a lot of incentive to get the word out. So it has to come from the angel
Charlie Gunningham 51:29
do because it’ll help them go investment, which is the whole point raising, if they’re raising, but they’re raising, they’re not necessarily all raised. They’re not always at risk. Correct. Yeah. Normally people pitching pitching for money, but yes. And it was from a very successful system came in the UK. Now in the UK, pretty much. Only people invest in the equivalent. Yeah. Early stage investor scheme. Yeah. Over there, and it, it hasn’t really made an impact. Sadly, people don’t know about it. Again, you think the r&d tax is badly promoted? He’s sick is
Maitreya Speering 52:05
neither. Yeah. Agreed. Agreed. And, you know, it’s difficult to know what to do about it, other than to just tell every man and his dog that Oh, listen, that’s, that’s what I do. But, you know, the small splashing, there are
Charlie Gunningham 52:20
things there is a lot of little bits of place. It just needs to be coordinated. Maybe that’s a role for government. Or someone to just keep this you know, I keep banging on about it. But I’m just a lone voice in the wilderness. Yeah, on top of my Hill, barking to the moon. But yeah, more people need to know about it. And then add to that, hey, look, I think I mean, a lot of high net worths and corporates like I have some fun. Help some startups. Yeah. Worst case. It’s something to talk about over the summer barbecue. Show off about a dinner parties in the chattering classes of the western suburbs. Yeah, worst case is your topic conversation. And they don’t need a lot of money. 10 grand 20 grand 50 grand goes a long way. Yeah. And you’re not an early stage entrepreneur, get up on their feet and get going and maybe get to customer. Because MVP says minimum viable product might only cost 10 or 20. Grand, you can get customers and see if they’ll pay. Yep, totally. My last two investments were both like that they were 1520 grand enough to get building a product, get customer. And I said guys, we’re worth nothing until customers are paying us money. Yeah, customers are paying us money. Maybe we’ve got something. And when we get there, then we’ll go and raise some serious money.
Maitreya Speering 53:41
Yeah, absolutely. Absolutely. Brilliant.
Charlie Gunningham 53:46
I’ll play my Usik Thank you very much. Yeah,
Maitreya Speering 53:48
exactly. Right. Exactly. Why wouldn’t you buy Charlie? Well, thank you so much for joining me on Episode One. And hopefully, there will be an episode today. That remains to be seen. I appreciate your your time and your wisdom and the experience you’ve had in, in WA and in the innovation scene. And I wish you you know more power to you and everything you’re involved in. Because I think you the more people doing it, the better. So yeah.
Charlie Gunningham 54:15
Thanks for having me. And what’s the name of the podcast? How do we find it?
Maitreya Speering 54:20
Yeah, so the podcast will be The Growth Trajectory, and it will be on just YouTube initially, but we’ll see how we go. If we get a bit of traction, we might, you know, move over to Spotify and Apple podcasts and all the rest of it, but just just YouTube to start with and start small. I might get my first customer first before I invest further in it. You know what I mean?
Charlie Gunningham 54:40
Someone’s been listening to good advice. I’ll give you a shout out at the next Startup West recording, “Go look for The Growth Trajectory on Youtube!”
Maitreya Speering 54:50
Brilliant! Thanks so much, Charlie. Take care my friend. See ya!