Business is Boring is a weekly podcast series presented by The Spinoff in association with Callaghan Innovation. Host Simon Pound speaks with innovators and commentators focused on the future of New Zealand, with the interview available as both audio and a transcribed excerpt. Today Simon talks to tech investor Rowan Simpson.
Rowan Simpson has made his name about ten times and he’s not done yet. He’s had a large hand in the product and growth in some of New Zealand’s greatest tech exports, he was head of product for Trademe and that worked out pretty well. He did a similar role in the early days for Xero and that has worked out amazingly, it’s a global leader in software as a service.
He was an early investor and board chair for Vend, where I first got to know him and work with him and see how much he did to help us grow.
Then there’s Timely, where he’s an investor and director, and that company just announced a seven million dollar funding round to take their profitable company in scale. And those are just some of the greatest hits – we haven’t mentioned his latest work. Rowan is one of those people who could’ve stopped long ago, but uses his social and financial capital to bolster the next wave of tech companies. And through his charitable foundation is also giving back in more traditional ways. This might make him seem finished up and out of the game, but he’s not. His blog is required reading in tech, with great takes on start-up and product, and he’s active with the next big companies too, like Melodics, who we’ve had on here.
To chat the methodology of the start-up, what product is, the through-line of these companies, and what’s next, Rowan joined Simon at Spinoff Towers.
How did you learn how to be a director and be an adviser and take those kinds of roles when you’re quite involved in the company but also you’re not on the payroll?. What kind of relationship do you have with those companies, using the example of Vend?
Yeah, I’m still learning. I think I’d be lying if I thought I had the answer to that. You learn by doing, it’s kind of the way that it’s worked out for me. The thing I latched onto really early and I’m really pleased that I’ve realised it is that the best founders pick their investors and they pick their advisers, so if you’re kind of sitting back and waiting for founders to pitch you, you’re self-selecting for those who have taken a different approach. The best founder that I’ve found can go out and shoulder tap the people they want involved in their venture, so I’ve worked really hard to be that. So I’ve taken a very founder-centric view of being a director and an adviser, my job isn’t there to go there and beat them up or be the nasty chairperson or anything like that, but to really get alongside in the early stages there’s always a lot more to be done than there is people or time or money to do it, so there’s always plenty of opportunities to get involved if you are prepared and willing and able to help, so those are the sorts of – that’s the sort of approach I’ve taken.
And then it evolves quickly too so, Vend, when I first got involved it was Vaughan [Rowsell], and then shortly after that a couple of other people, but there wasn’t a lot to point to that you could say, “There is Vend.” We were building the original financial model in a Google spreadsheet, we were trying to work out what the shareholders agreement should be, whereas five years later, it was much more about what’s the right structure for the board, and you know, a lot of the more grown up company questions.
One of the cool things about the way that Vend exploded and their journey there was it ended up being one of the biggest – the second biggest investment round – ended up being one of the biggest private investments in New Zealand history. That’s a pretty amazing journey from starting out with a couple of people and a dream, to bringing in quite a significant bit of international capital.
People talk a lot in New Zealand about how short of capital we are but the evidence just doesn’t back that up. When good companies have come along, the execution is there to back that up, you can paint the future for investors and the money comes – and so you know we’re able to do that at multiple rounds at the end and they all built on each other.
Tell me about a little bit of a different approach to that. Vend came up in that first wave of ‘there’s lot of money go and find the users!’ Tell me about the approach with Timely, which was a different one where you people as a company took it to profitability. That was a bit ahead of that curve as well.
That’s right, Timely, beat both Xero and Vend to profitability, and I think that goes back to what I was saying before, it’s a founder-centric approach, so the approach that Timely’s taken really reflects the values and mindset of the founders, so that they have retained a decent percentage of the ownership themselves by not raising a lot of money, they have taken a very sensible and managed approach to how they’ve spent it, they haven’t chased growth at any cost, and built a really great business from that. You know, they have in common with Vend a really strong culture view of how the team should be built and different, they’re not the same, but with a strong founder-driven view of what the teams should be and how they want to work, really.