A (2:35)

He was proper stoked. I remember, remember the excitement on your little face.

B (2:40)

The reality is that I wasn't really. I was a bit. I knew it wasn't quite the right fit but I was telling myself and everyone else it was going to be a great fit. So I walked into the role and it was a nightmare from day one. Privately owned company losing about £70,000amonth. So if that was coming out of your pocket, you're going to feel it. So the owner was kind of not really enjoying the whole thing. We managed to raise 5 million in venture capital and that was the first lesson. I wish I'd known then. It's just, in my opinion, don't get venture capital. Basically what happens is someone just owns you. And the problem is it was an absolute mystery to me how it was done and I learned that basically I would go in and I was coached for six months how to do this. There was a huge spreadsheet we had with lots and lots of different tabs and there were numbers on each of these tabs and they were justification of why we deserved getting 5 million pounds. And basically what we learned is that if they went G4, G7 and I could tell them the number and I could recall exactly where the number came from, people were very persuaded that number really could have been plucked out of thin air to some extent. So you get very cynical about the whole process. But we put some real numbers in and it was great and we built it up and we got lots of money in and the business actually did very well. We were making a big loss to making lots of profit. It was great. It was the most horrific year of my life and actually I learned probably more in that year than I'd ever learned before. But I decided it wasn't for me so I left. At that point I thought I'm going to go and do my own thing. And I had this idea at the back of my mind that we were going to do this digital marketing training, elearning online kind of platform business. And it happened to be that we had a previous client and they said, could you build us this thing? We were thinking about doing that Anyway, so how long have we got? They said two weeks. So we had to build an entire E learning digital marketing training skills platform, a very, very basic kind of platform, in about two weeks. And it was buggy and terrible, but it kind of worked. And no one else had done it. So that gave us the impetus to get going at that point. And I was very determined at that point that actually getting money raised in was not a good way of doing it. I wanted to bootstrap things from then on in and build things from cash flow, which has its own kind of challenges as well.

A (4:47)

It does. Why did you do the podcast, Daniel?

B (4:51)

So this comes to another point as well. So one of the things I'd also say is if you're building a business with an exit in mind from the very, very outset, it might be the wrong way of going about it, because one of the things that happened with the podcast was that we did it because it was fun. We kind of enjoyed doing it. And actually, for the first six months, we didn't really have an audience. And you're putting a podcast out there and it's a bit of a thankless task. No one's really listening, but you've got to build the numbers up. We now were top 10, top 29 iTunes in the business podcast. We beat Harvard Business Review and lots of others as well. 50,000 listeners a month at least. But it's a bit thankless. But the reality was we did it because there was a passion behind it. And actually, if you're passionate about what you're doing, it will get you through that stuff where actually it's painful and it's unpleasant and actually it's difficult and you're not making the money you thought, and all those kind of things as well. So I've always thought if you're building a business from the outset because you can see a good exit value, the problem is it's not necessarily a great way of doing it. Now I've got this real thing about building from cash flow and kind of bootstrapping, doing things on the cheap and trying not to get money in, basically, because if you come to an exit, it's very nice owning 100% of the shares at the end of the day, but also very much because the fact that actually you can do things your way, it's great to get outside opinion, but actually if someone owns you pretty much it's a more challenging way to do it. Now, there are lots of scenarios where that's the wrong advice. So if you are starting a business that you have to scale incredibly quickly, then the reality is that actually you're going to probably need that money. But what we said was we'll make a sacrifice. We'll sacrifice between the speed of growth, but actually growing completely, owning all the kind of share ownership and meaning that we can make our own decisions, we can make our own mistakes. But also what it means is that when we exit, we own 100% of the shares. Now that was kind of seven years ago. The ideas kind of started five years ago, really, the business came about and we're now at the point where we're getting offers for people to buy the business. We're at that kind of exit stage as well. And we're not going to do that for a good period of time yet because there's a few other things you kind of realize at that point as well, which is in our business. And I wish I'd done this at the time basically for software as a service in the area that we're doing. So it's quite particular what we're doing. The way that you're exiting, it's 10 to 12 times at the moment. Profit is what people are really quite happy to buy companies for in that area at the moment. Now that would differ wildly, but a very, an easy kind of exit. So what you suddenly get is your competitors that are slightly bigger than you or do similar things would quite like to swallow you up. There's a bit of gap in what they do. They could say, well, flat money, it's not a lot of money for us at all. We could buy the company and that's great. But if you're getting 10, 12 times your profit and you know you're growing, you kind of think, well, why would I sell now? Because actually I know I can keep growing the profit for this period of time. And then there's a step change and that step change is one I hadn't realized and we nearly made mistakes about, which is once you get to a million profit, very different people start to look at you. Because the reality is that a million pounds profit makes a significant impact on a lot of companies bottom line, or very large companies, but on a lot of companies bottom line, a million pounds of actual profit is great, especially if you're very, very lean. So we are. Everything's kind of heading in the right direction, but we're still seven people as a company, so we're tiny from that point of view. But we have global contracts with Mercedes, Vodafone, the BBC, and it kind of goes on and on because the way the platform delivers is that it's very, very scalable. We don't actually need huge amounts of stuff to do that. So you'll get to a point where actually your multiplier, if you sell, you get to kind of million profit point, suddenly the multiplier starts up because different people are really considering you and it becomes more interesting to a wider range of companies. And none of this stuff was transparent to us at all at the beginning. It was all a bit of kind of hidden away from us now. Not to say that you shouldn't get VC funding, not to say you shouldn't get lots of money to the company to scale it more quickly. Not to say some companies don't need thousands of staff. But we're in a situation where actually work life balance as well. We talk about entrepreneurs doing ridiculous hours and I do do quite a lot of hours but actually I take quite a lot of time off as well actually. And actually I don't have to work on days if I don't want to. So we've got good flexibility in there as well which helps prefer the whole kind of stop the burnout thing. So I think we've taken a particular route but there are a couple of other myths that we wanted to kind of touch on as well. This whole thing of getting funding, everyone wants to get an office. We advise lots of startups and one of the things they always go on is go right, we're going to get this funding in and the costs are for staff, for marketing and sales and those kind of things. And we need this shiny office and it's going to be beautiful and it's very Google esque and all these kind of things as well. We don't have an office anymore at all. No office whatsoever. Now I was very concerned about that. Everyone works from home and we do meetups. So what will happen is that we'll go off somewhere, we'll get together for a few days and meet up. So our kind of marketing people went off and our admin team went off to Barcelona. Recently we've just been on a. Which is kindly slightly odd way of doing things. We've just had a two week tour of the Highlands of Scotland but it was a speaking toy, it was kind of work but it kind of wasn't at the same time as well. So we get to do this kind of fun stuff. We don't have the cost of an office involved now. I was concerned when we walked into Tesco and said we will be great at doing this. They Said, where's your office? Yeah, we haven't got one. That it was going to go down very badly. What actually happened? Oh, we're a distributed company. People love that. That sounds really kind of startupish. That sounds brilliant. That sounds really modern. So actually you've just got to learn to be confident about what those kind of weaknesses are. If you're a seven person company, people go, that sounds a bit small. Yeah. But we scale this much, we make this much revenue and we work for all these big brands. They go, that must be quite clever then. So actually you've got to not be too concerned about those things. And actually having the shiny office, very often when you bring clients in, they'll go, right, I see where my money's going. And actually it can be a little bit off putting for them at times as well. So actually we haven't concerned ourselves with that and the aim is now we won't have an office. We don't need an office. We won't need an office. And we'll continue kind of growing in that way. And if someone that works with us wants shared working space, that we'll pay for that. If they want a home office, you work.

A (10:39)

So, no, I'm proud of this.

B (10:42)

Yeah, you sound it, I can tell.

A (10:43)

I work in my garden shed.

B (10:46)

Glamorous life. Right.

A (10:47)

It's a lovely space. Do you know there's six gallons of wine bubbling away alongside my desk as I work? Because that's my space. That's what I'm comfortable now. I don't drink while I'm at work. That's bad, doesn't it? It sounds like I'm an alcoholic, but. Yeah, no, I work from the garden shed and it's good. I've insulated it. I've got WI fi, I've got a coffee machine. You have everything you need in a garden shed. I'm not sure I'd bring clients.

B (11:13)

No, I'm definitely sure we wouldn't.

A (11:15)

And it raises a few eyebrows at the odd Skype interview that we do. And I turn the camera on.

B (11:19)

Hello, what is that behind you? Yeah, it's not good. But anyway, the other thing is this whole bootstrapping thing, some of the things that we've done have been quite fun along the way is we started doing the podcast and where we actually record it from. Now there's a recording studio in Sussex that we use, but it's a band rehearsal studio and there's lots of very dodgy rock band memorabilia everywhere in this place as well. So it's not the most glamorous, but it works very. It's beautifully acoustically dampened. We also have something in the office we call Narnia and I say the office, that's my home office. It's literally a cupboard. And you open the cupboard, there's nothing in it and it's just full of soundproofing tiles and there's a thing that goes up top and I go and sit in a cupboard to record. Okay. It doesn't sound very glamorous, but yet it's a world beating podcast in that point of view. So just kind of shows you our most glamorous moment recently.

A (12:05)

Yeah, we got to record in the car park outside a Premier Inn.

B (12:10)

I think we should clarify this. It was in a Skoda in a Premier at car park as well and it actually worked pretty well. So that was pretty good.

A (12:17)

So we've got a good recording space. Cars are great because they're acoustically dampened.

B (12:20)

Right.

A (12:21)

Unless it's a very old car, which I've got Land Rover, that's quite echoey.

B (12:26)

So the key thing with all this is that we've been doing this for a number of years. It's built really nicely, very profitable business. But you'll be told this a million times and a lot of you will know this as well already. This cash flow will kill you. You can do phenomenally well. You can have loads of business coming in, everything's going the right direction, and then three or four people decide not to pay you at the same time. So one of the things that when you do cash flow projections, a lot of the time you're doing them for a bank or you're doing them for a business plan or something else like that as well. That's fine. And they're always going to be fairly optimistic. Do your own one. That is the most pessimistic, depressing cash flow that you could ever possibly do. And literally month by month trying to work out what's going in, what's going out, and then you can start to model. What happens if they don't pay us on time? What happens if they don't pay us on time as well? We're fairly lucky. We work with a lot of big brands, they're all PLCs, and most of them pay immaculately on 30 days. We have a direct to consumer business that goes in the credit card. We pay kind of immediate upfront for that. That's absolutely fine. But now and again, very large client of ours, probably talking about a 20, 30,000 pound contract. So not huge. They Owed us the money, we're expecting the money in. And then suddenly they change their accounting system. It's going to be 90 days. You go, that's not on contractually, there's not much you can do. So you end up just sitting there and arguing about it for the next 60 days. At the same time as that happens, someone else decides not to pay you at the same time and then you have a massive expense that goes at the same time and you suddenly go, that has completely scaffold our cash flow. And actually we've projected out and gone, yeah, we're going to be bankrupt in three months. What do we do about it? And you go around, you work it out and you find a solution to it. And it's happened a number of times and then you gradually build up your defenses to kind of make sure you can do that. The other thing that we found, and this is one that upset me more than anything else, we have an overdraft with our bank, with our ex bank, who I'll name with you in a moment. And it was literally a 20,000 pound overdraft. It wasn't huge when it was going to stretch. But we went in and they said, oh, we forgot to contact you. It was a change of account manager, you need to do your annual review. So. Okay, fine. So we went in for annual review and they said, yeah, you know this overdraft we gave you pay for every month you've been using it? We were like, yeah, we have used it. And they said, we've used it seven months out of 12. Yeah, yeah, we're dipping that. He said, well, yeah, we don't like that. Okay, so we pay an annual fee for this and interest on it. But you don't want us to use it? No, not really. It worries us. Okay. So I'm afraid we're going to withdraw it. Oh, okay, that's a bit depressing. So when are you going to do that? It's the day after tomorrow, I'm afraid. So I've got to go and find £20,000 by day after tomorrow. Yes, please, if that would be okay. And I say, oh, but there is an alternative if you want. We'll give you a £20,000 loan if you like. And the interest rate's a bit higher, but we'll do that if you fancy. And we're like, no, we're right, thanks. We'll go and get it from somewhere else. So we beg border and style and got the kind of money, but that kind of stuff can happen. And this is A big high street bank, which I'm not going to lay for legal reasons because we're arguing with them again at the moment. But this kind of stuff happens and that's the kind of thing that will really scuttle you. And if you can't pay your staff, that's not on. You know, you have to make your kind of staff bill. So that's things we've learned the hard way. But cash flow, I couldn't, I couldn't. Planning out really depressing cash flows is a good way to it.

A (15:29)

It is. And you know, when you first start out, it's the toughest, right, because you are so much more living a feast or famine existence. Best advice I could give was advice we followed when I started a web design agency. And actually our plan was to make sure we had six months of salaries in the bank as quickly as we could to cover these events. And actually that was one of the wisest moves that we made. It's hard, really, really hard because you have to keep piling in the work and working long hours to get there. But that is your jet fuel, right? And if suddenly you find your business needs to fly to a further destination that you weren't expecting, you know, if you do that without enough fuel in the tanks, you're just going to crash and burn. So cash flow is everything when you first start out. And you really need as robust a plan as you can get or you're just not going to make it to those exciting places that actually, given the right financial backing, your ideas will get you to. Now, for us, it's been particularly relevant because we've been bootstrapping and that gives us, puts us at a slight disadvantage, but also gives us the advantage of complete freedom of direction and what we focus our time on. There really isn't anybody else interfering with it.

B (16:42)

Hindsight as well. We've got to a couple of pinch points like that before and we thought we need to get the outside investment. This is crazy. It's a great business, it's growing. We don't want to end up in these situations. And now if I look back and say we were going to part with so many shares for what's relatively a small amount of money now, it would have been an absolute shocker to have done that. So it's great. But don't take the advice to the point of actually killing yourself and not getting any money in. But I'd avoid it if you possibly can. The other thing is, partnerships for us has been huge. So we've managed to go off and build partnerships with large organizations to get us in places we'll be able to get to. So the Chartered Institute of Marketing, well drafted marketing body, they're catching up a little bit digitally now. They're a bit behind the curve digitally and they're trying to do much better digital qualifications, things like that. Now they wanted to offer digital marketing, E learning, which is the kind of stuff that we offer. So they resell our stuff. Now, they hadn't ever done a reseller before, so we gave them a percentage we would never give anyone normally. But a lot of these clients, these are people we couldn't get in the door with in the first place. And by the fact that Charter Institute Marketing knocked on the door, they could get in the door for us as well. Similarly with Thomson Reuters. So Thomson Reuters resell our stuff and now McKinsey use our stuff to train their staff. And that's because it was kind of partnered with Thomson Reuters, which is, even if you're not making that much money on those kind of deals, and it was actually a good deal, just be able to say, yeah, well, McKinsey used our stuff. So it's good enough for McKinsey. I can pretty much assure you it's going to be good enough for most people. So it's those kind of partnerships that made a big difference. And actually a lot of that is on personal relationships and just building up over a period of time. And I don't know what any of you are like. I'm not a good networker, generally speaking, so I don't particularly enjoy it. I don't go to networking events. I kind of stand on the side, look a bit awkward and it's not really my specialty. However, I've kind of bullied myself into doing it. And actually now I'll go with a bit of a plan, right, what are the three people I'm going to speak to? And I give myself a bit of a list that I say, right, once you've spoken to five people, you can stop and I go in there and I'll speak to people, feel really socially awkward about the whole thing, do it, and then actually find that I'm quite enjoying it. I probably had a couple of glasses of wine at that point as well, which makes it slightly easier. My confidence is going through the roof, but it does make a difference. And actually there's been lots of things I thought, why are we bothering to do this? We're speaking at this thing and I'm not sure if it's worth doing. And Then something great will come out of it. So I'll give you an example. It was a local CIM event and I went along and it was the same five faces that I'd seen at every one of these events before. And I thought speaking to the same people again and actually there happened to be someone there that I didn't know and I got a phone call a week later and said, do you want to come and lecture at Imperial College? Yeah, that sounds fantastic. And then I went on to kind of work on the MBA program and the Master's program and it was just from being in the right place at.

A (19:18)

The right time and each of those things is an extra feather in your cap. So each relationship that we've been able to build like that becomes a shortcut to your 30 second elevator pitch. Who are you? What do you do? And look how Daniel started today. Well, I lecture at Imperial College. That came out of that. And you know, actually these things aren't complicated really. You've really just got to reach out in your space and find people that you can help and go help them. Because do you know, that's a great way of building a relationship. That's what we've always done, found ways of making it work and found ways of making getting that help across. And actually those little badges, they open so many doors for you. So partnerships are really, really important. I don't think we'd be speaking to you here today with that one.

B (20:00)

No, it's one thing I was going to say about the book writing thing as well. In the kind of business books that we write, they're kind of pretty niche digital marketing books. There's no money in it really, it's fine. I mean, it's kind of beer money and it might pay for a holiday once a year, something. It's quite nice like that. And you'll get a check now again, which is great, but realistically you're not going to make a living unless you've written 20 books. Now there's other people making millions of books, don't get me wrong, it's because my ones are niche and don't sell. Many maybe, but the reality is actually it's just a calling card. Published author, Imperial College lecturer, CIM Fellow and it's that kind of stuff that just gets people to go, tick, tick, tick, right? And then we also found that once you've got a list of companies like Vodafone and Mercedes and so on and so forth as well, once you've got those, everyone goes, well, just get Enough lamb if we get enough rice. So there's a bit of. It gets you in the door in the first place. So some of those first clients, what we would do, we would go in and do the work literally for nothing, just do it for free. So, look, we've got this thing, we want you to do it, but we need someone to use it. If you can pay our cost on this, we'll do the project for you. And then we would learn through that as well. And actually, we had to deliver a great service still, but it just got us in the door for the next businesses as well. And then it just starts to snowball from that point.

A (21:08)

If you look at the podcast that we do, I think we're up 165 episodes now. So we've been doing it for seven years. But again, that's. That sort of happened by accident, actually. We weren't planning on helping as many people for free as we did. But it's good because we've got this massive following of people who we helped. And it's amazing to me how many people, when we just put a question out and ask for help, how much help comes back, the responses that we get. And it's all simply down to trying to put out the best information and most straightforward information that we could do. And we do it in the niche of digital marketing, but there are lots of other niches and there are plenty of other podcasts that you can listen to. And I think they all miss a bit of a trick in that they're doing it to make money and to monetize it. We've never done that with our podcast. And yet it still, I think, is one of the most effective mediums that we use. Do you know what, as a networking tool, podcasting is incredible. I've reached out to complete strangers, arranged to do an interview with them, and over 20 stressful minutes on Skype, you build a rapport with those people like nothing else, literally. You can have them on speed dial to just phone and have a chat with her at any time. Once you've done that, there's not many things that can achieve that in 20 minutes. But it's a giving thing, right? Because if I say to somebody, actually, I think what you do is really interesting and I want to feature you to my audience. Almost doesn't matter how big that audience is. It's a really flattering things. You get off on a really great, great foot. So I definitely recommend for any of you who are interested in explore podcasting, because I think it's amazingly underutilized. There's lots and lots of untapped opportunity out there. Lots of people doing it, not many people doing it really, really well, and in a form that the audience absolutely love. And that's what you've got to kind of try and work out.

B (23:00)

Two practical tips from it, actually, one of the key things we're finding is you have search optimization, getting yourself to the top of Google, people pointing at your content, linking to your content is still essential to that. Fundamentally, creating a podcast actually drives huge amounts of links through to the show notes, the stuff you put on the website. So from an SEO tool point of view, it actually works hugely effectively, which is an interesting outcome from this. The other thing as well is that it's one of those channels that when you go to a website or a social media website, you go for three minutes and you kind of listen three minutes. When you listen to a podcast, you listen for 20 or 30 minutes, and you do it when you're traveling. So you get completely different media time. And actually what ends up happening is people subscribe and they listen again and again, and you build a bit of a relationship with those people. They know your voice and they'll come up and say hi. And actually it works very, very well from that point of view, especially when you get into kind of big numbers as well. So we won't say too much more podcast, but it's worth exploring. Even if you're not going to do it yourself. Getting featured on someone else's can make a massive impact because it just drives a lot of awareness. So we must get 50 emails a week, people saying, can I be on the podcast? And we selectively go through those and try and reply to everyone, but it works from that kind of point of view as well. One of the things we've learned from digital marketing, I think is really, really worth understanding is that analytics and web analytics will get you so far with this, but you're missing a massive chunk of something. So we would look at our web analytics, try and work out why people are purchasing, why they're not purchasing, what they're doing, and so on as well. But what it doesn't tell you is the intent behind why they did the search in the first place, why they clicked, where they click, and what's actually bothering them as well. And there's a lot of opportunity for finding out more about that intent as well. So speaking to people is obviously massively important from this point of view as well. But there's a couple of tools that.

A (24:35)

We use yeah, so there's a very good one, I'm sure some of you will have come across it called Answer the Public. So you know when you do a Google search and you start typing your question or query and different answers pop up underneath those kind of instant answers, what answer the public do is they pull all of those from Google for lots and lots of related terms and also from Bing as well. They kind of map it out into a diagram. So it's brilliant. So you actually get to see around any given topic what questions are people answering. And that's fantastic for understanding a particular keyword space. The other one that we use a lot is Google Trends, which is just brilliant, really. It's a goldmine of information.

B (25:17)

The Google Trends, if you're not familiar, will tell you what search terms are trending in Google at the moment. But the newer data in there will show you literally what's trending in the last couple years of, of hours. Now, if you take some of that data and you take some data from some social media monitoring tools, and there's a lot of social media monitoring tools out there, I take a look at something called Brand Watch, if you get the opportunity to, which is a bit of a higher, higher end kind of tool, but you can start to see the conversations that are starting to trend. So if you're trying to get cut through like everyone's, everyone's doing content marketing, everyone's blogging, and if you want to do some content marketing that actually cuts through, you're the first person to really be answering a question that people are asking loads online. It can make a huge impact. So real quick example, we worked out that lots of people were searching. What is Google Preferred? Google Preferred is a Google Advertising kind of package that they do. And we kind of suddenly saw there's this big uplift in people asking that question. We said, right quick, write a 400 word blog post and get that up onto the website. And if you now go into Google and search, what is Google Preferred? We're number one in the definition post and we're number one in the bit underneath it. We're beating Google, who's at number three, oddly enough. So what it shows, if you can get in there early, you can actually solve people's problems and answer those questions. There's a huge opportunity for engaging with people, get them through to the website. And then by the way, we're offering this kind of stuff.

A (26:30)

And it all interestingly comes back to that thing that we touched on earlier. Be helpful, be helpful. All of this networking relates to that.

B (26:38)

Yeah. And I think that it's a good finishing point before we take any questions, if there are any, which is one of the problems you're going to find if you are going off and doing your own thing. You've got a business startup, whatever it is, is that time is always going to be the problem. You're never going to have enough time to do anything, and actually prioritizing that time is going to be your key thing. And what I've really found is that we'll have a meeting with the rest of the team and we'll come out with like 80 actions. They've got fantastic ideas, and then actually walking away going, I'm never going to get all this stuff done. If you focus on the stuff that has the impact on your client and your target audience is what really matters. And I think a lot of you are kind of techs, and I come in from a kind of development point of view quite often as well. And we want to refine this, we want to make this perfect, and that needs to be a bit faster and we can smooth that out a little bit. That's all great. But the reality is there's probably fundamentals that you could change that are going to have a much bigger impact on your target audience. So thinking about what you approach next, think about it purely from a customer point of view. What actually makes a difference to them and actually what do they care about? Yes, it does need to be faster and it needs to be those things as well. But just try and think about actually fixing those problems and kind of scratching those itches, and that makes the world of difference for us as well. So we're kind of getting toward the end of our time.

A (27:45)

Yeah, yeah. I guess that's it from us. We can take some questions, but I feel that we should end this as we began with wild, unabandoned applause.

B (28:01)

I think it's generally better if that happens spontaneously, but that's fine. Okay, we'll go for that. We'll edit the bit out in between so it won't matter. Anyway.

A (28:14)

Thanks for listening to the Digital Marketing podcast brought to you by Target Internet. If you're investing in your digital marketing skills, take a look at our free benchmark skills test and look at the wealth of online learning we provide. To help marketers get up to speed and stay up to date, just visit targetinternet.combenchmark.