EP 348 – What if Your Amazing Startup Idea Isn’t as Amazing as You Think? – Oliver Palmer – DQ Ventures

Read the best-effort transcript below (This technology is still not as good as they say it is…):

Michael Waitze 0:05
Let’s go Hi. This is Michael Waitze, and welcome back to the Asia Tech Podcast. We are joined by the easiest name I will say this week, Oliver Palmer, a co-Founder and General Partner at DQ Ventures. Oliver, thank you so much for coming on the show before we get into the main thing. And let’s actually spend some time on this. Let’s get a little bit of your background for some context. And I want to know where DQ comes from, right, because I think there’s some reason there. Sorry, go ahead. Yeah.

Oliver Palmer 0:57
Cool. So my background, I I grew up in Kenya, in Nairobi, and then went to university, went traveling around the world, and I got to Sydney, Australia, and I never left. So I got here in 98 I did various things when I first got here, but in 2005 myself and business partner and a CTO started a company called Tiger spike, and we were very early in the days of developing mobile software, so we built applications for no gears and Siemens and Motorola handsets, before the iPhone came along or a bunch of developers doing stuff, the iPhone launched in 2007 and that sort of catapulted our company to the next level. We were known as kind of the mobile dev guys, when everybody was wanting an iPhone app, and we just rode the kind of hardware wave of mobile from a software perspective, we were building software and for iPhones and Android devices and then iPads. When they launched in 2010 we we bootstrapped the company for eight years. 2005 2011 we raised Series A round from a strategic investor, a company called Aegis, which was bought by Dentsu in the advertising space. A couple of years later, we raised money from a financial investor with a view that we were kind of at that time, we kind of saw what the saw what the other side of working for a company looked like. And a couple years later, we sold the business. So 2017 we exited spike was bought by a US company called concentrix in 2017 I’d retired. I was just going to play golf, and that was it. But as with many people who who’ve sort of been through that journey, it doesn’t doesn’t last very long. So I joined the VC side. I worked with an Australian venture capital firm called investable. I was the entrepreneur in residence based in Singapore. I was sort of the guy on the ground looking for startups for them to invest in. But I didn’t particularly enjoy that sort of role in life. I found it very difficult to sort of sit down with someone for 45 minutes, hear their wonderful business and where they got to and then 99.9% of the time you have to say no. My feeling at the time was that if I could just sort of work with them for a little bit, if I could help them win two more customers, or I could help them move into a slightly different market, or move to another location or whatever, then they might be ready for investment. But your role as a VC is not to do that. It’s to just get into the next meeting and the next meeting and the next meeting. And I was, I was sort of bemoaning this fact to some friends, and they introduced me to Arjun and James, who had this idea for a slightly different type of call it a venture Studio, you know, venture capital firm. And it was really about helping people start businesses while they still had jobs. So we focus on slightly more mature founders, generally, people who’ve been been working for 1015, 20 years, and we help them explore the possibilities of becoming entrepreneurs and founding businesses. And that’s what DQ is all about. So DQ actually stands for, don’t quit, because the majority of advice we give people is not to quit their corporate job, because startup is hard and uncertain and can be very risky. But ultimately, what we want to do is work alongside them, prove that there is a business there, get some early wins on the board, if we possibly can, and then allow them to make a much more informed decision about whether to leave a relatively safe corporate job and go into the startup world, hopefully with the foundations of a really solid company in place, so they can make a kind of a less risky decision. We’re trying to de risk the entrepreneurial journey. So, so that’s sort of my background in a in a nutshell, and then where the queues at So sort of begin to dive into some of those bits along the way. Yeah. So

Michael Waitze 4:43
I’ve got a bunch of questions. As you can imagine, not very many people are out there that actually build a company, bootstrap it, raise some money and then sell it. So my first two questions are this, right? What made you go out and raise the money like your business was doing? Well. It sounds to me, right, like your business doing super well. So you said strategic. So why did you guys go out and raise the money? Like, what was that conversation like? Because I have this conversation with my found, with my co founder all the time. We’re like, could we grow faster if we had more money, but if we have more money, then we got to answer to that guy about why we’re doing what we’re doing or not doing, and do we like not having to answer to anybody except each other, which is hard as well. Like, why would you guys go out and do that? What was the thought process there? First of all, so the

Oliver Palmer 5:29
the interesting thing from our perspective was, was one we were, we founded in Australia. So we were based in Australia. We opened a London office in 2007 and we opened an office in New New York in 2008 so we had sort of Sydney, London, New York, providing, you know, digital mobile development services and consultation to a number of two range of clients. And in those early days, we were we were sort of at the forefront of innovation. We were leading the way. We’d hired super smart people. We were kind of perceived by some large corporates as the tech company that kind of knew how to navigate this new world of mobile and we were kind of really building some pretty incredible apps. We launched newspapers for the first time ever on the iPad. We worked with the economist to get them onto the iPad. We worked globally with time out to get them onto mobile devices. So some really, really big, big things. And then, you know, a lot of other companies kind of cottoned on to the fact that mobile was, was just software, and it was, it was an interface that was people were going to use, and it was going to get more and more and more popular. And we found that some of the bigger jobs that we knew we could, we could, we were at the table, and we were involved in the conversations, but then they would go to IBM’s mobile team or essentials team. And our feeling was that we were just, you know, there were a few companies out of the states that had raised, you know, hundreds of 10s of millions dollars, even hundreds of millions of dollars. And we felt that if we kind of continued to grow at this organic kind of sort of rate, we would, we pretty much, we pretty we’d lose pretty quickly, and we would no longer be able to kind of maintain a position of doing some of these amazing jobs that we knew we were capable of. And so the rationale at the time was really that we wanted a big brother. We wanted someone who kind of could back us. And so whenever we were sitting at the table with some of these big banks or big media companies, it was sort of a case of, it’s not just Tiger spike, it’s Tiger spike backed by a larger strategic so, so that was really the rationale for us, just because, you know, technical obsolescence is always a challenge in any tech company, you’re worried that somebody else is going to do something better, faster, cheaper. And our feeling was that we were right at the forefront of that, but we didn’t necessarily have the kind of the gravitas to win some of the jobs that we wanted to so, so that was why we went. We went we didn’t just focus on raising money. We didn’t just want investors. It wasn’t about putting an extra ten million in the bank. It was really about getting some cash in to let us grow, but also having the resources of a strategic behind us to kind of move to the next level. And did it change

Michael Waitze 7:55
the way your business was running? Because this is a key question for me, right? Like I said this to you earlier, I talk to my co founder all the time about this, like, should we go out and raise money? Because our income is growing, like, it all looks really great. We feel like we’re super investable, but we just are afraid, I guess is the wrong word. Is concerned. Like, if we do that, then do we lose control over the thing that we’ve built so far? And do we care? Like, what was it like for you guys? Yeah.

Oliver Palmer 8:21
I mean, we had a quite different experience to a lot of companies who take on investment. I mean, we sold, we only sold the 25% stake, so, so it was a minority shareholding, which meant we still had control as but you still have an investment board, you have someone else to answer to. The thing, from our perspective, was that they put a large amount of money. They put 10 million US into our bank accounts and a bank account, and suddenly we went from, you know, a couple of months salary in the bank and covering our costs to having an awful lot of money. We opened offices in San Francisco. We opened an office in Dubai. We opened office in Tokyo, and in San Francisco we we hired. We were, this was 2011 we were, you know, Facebook was four years old. Google was hiring engineers. We were paying a considerable amount of money to have a bunch of employees sitting in a fancy office two blocks down, just next door to the Moscone Center in San Francisco. And it wasn’t making any money. I mean, it was great. It sort of told the this tiger spike story, because we had an office in San Francisco, and it’s all very exciting. And I think one of the challenges we had was our strategic investor. We were a relatively small cog in the in the grand scheme of things for them, and there was, there wasn’t too much oversight over us. So for my business partner, Luke is, he’s a chartered accountant, and he was very focused on all the right things, and all the money got put into the business, but we put it into places that any seasoned investor would have just questioned within the first quarter. Why are you doing? It sounds great, but you know, we should have been in Boston, or we should have been in the places where the media companies and the large organizations were, but we were in. You know, the tech sort of center of the universe. And there are a few other things we had. We had projects which we took on, sort of vanity projects, working in the Middle East with Emirates Airlines, which is amazing, but we put, you know, 30 engineers on this, and the money just wasn’t the imbalance was lost, because we were no longer kind of focused on revenue in and then costs below that, suddenly we had this large pool of money and we could service these jobs. And I think that’s one thing to be aware of when you do take money from VCs, is that, you know, a huge amount of oversight where they’re, you know, counting the pens in the pen cupboard and worrying about how much paper you’re ordering and watching every dollar is traditionally what you think is going to happen. But for us, it was almost the opposite. We actually could really have used sort of a wiser sort of someone who said, guys, if you spend this money here, it’s going to go like this. If you sort of pour it down the drain over here, it’s not going to help. So, so it definitely can be, you know, it’s really difficult from our perspective. We were fortunate in that all the money went into the business. We we didn’t increase our salaries. We didn’t kind of suddenly, kind of drive around in fancy cars, or, as it’s happening, which I think that’s very much to Luke’s credit. He was really focused on, you know, this is, this is where the money’s to be invested. And we were doing the things to the best of our ability. The challenge was, it was the first time we’d been in a position where we could hire five Engineers without worrying about winning three jobs. So I think you know, to answer your question, it’s all these things you have to consider. You know, it’s where you want to end up as well. From our perspective, we felt that if we carried on organically, we get outpaced by other, by competitors in the marketplace and by larger organizations who’d kind of cottoned on to mobile. They realized it was going to be a big thing. So we were losing that sort of first mover advantage. We got the capital, we got the strategic backing, and it helped us win jobs that we wouldn’t necessarily have won otherwise, because we were seen as a much larger organization. But we didn’t. We didn’t really make that money work to its to be, you know, where it could have got to. And we were lucky in that about 18 months down the track, we sort of had that moment and those conversations, and it was somewhat of a challenge. And that was when we kind of really kind of took stock of where we were at and what capital we had and where we wanted to go to. And that was the reason, then to bring on a financial investor, because we thought this is just going to keep happening. Mobile is so massive now, there were a number of companies, sort of big acquisition through, sort of 14, 1516, and we wanted to be a part of that as well. And then that’s when, when the financial investor had a sort of a three to five year horizon, and we thought we sold 10% to them, and they wanted to make a reasonable return on their 10% and that meant that what we owned, obviously would would be a reasonable amount as well. So so those were the decisions we made. We sort of had a plan that we needed not to be outpaced and overtaken by everybody, and then we had a plan that we wanted to kind of get to the point where we’d had an exit and we’d sold the business. It was never our grandfather’s guitar company that we wanted to keep forever and pass on to our children. It was really a tech company that had its moment in time. So

Michael Waitze 13:05
this is the other question for me, because people do ask me this all the time. They’re like, what’s your exit strategy? And I’m thinking to myself, my exit strategy is dying. Like, that’s really and you can ask me, Why, but like, that’s kind of what I feel like it is, right? Because if I look at what a mobile software company was doing, you’re having impact all over the world, right? And you’re continuously having an impact every time you build something new, whether it’s for Financial Times or for some newspaper you’re literally doing the digital transformation that everybody’s kind of squawking about. That’s real. You wake up every day and are having impact. So I get when you bring on a financial advisor, not a financial advisor or financial investor, they’re thinking, Okay, three to five years we exit, we can get our four or five times return that I completely understand, but walk me through the process of building this thing from scratch with your co founders, and then going, I’m done. I’m happy to exit, because I can’t imagine doing that for mine. And then walk me through that process. Because I think everybody dreams about this like, yeah, now I become rich, and then you can have the fancy cars and stuff. But again, I don’t think the mythology around that is the same as the reality of it. So walk me through that too. If you don’t mind, I You’re

Oliver Palmer 14:19
100% correct. I think for us, the technology piece that we started, I mean, I was 28 when we started the company. 41 it sold. So we would we were kind of right in this sort of tech bubble, we were sort of doing the exciting stuff that was happening in technology, I imagine. I mean, I was at university during sort of.com 9798 99 that excitement of building website, of suddenly being able to display something to a global audience, was super exciting. But you get to 2005 and I can knock up a website in 20 minutes, and, you know, I’ve got an email address, and suddenly it’s not as exciting as it was when I’m building a portal or doing something. And certainly as a fact, from a founder perspective, that was my my role. I was head of innovation. And my job was to be at the forefront of what was happening in mobile I remember used to tell people we worked on color screen phones, and they’re like, Wow, a color screen phone, right? Like you would know that Nokia 3210 when you place snake on that blue screen, and then suddenly they’ve started releasing and then, and then cameras on phones. We my business partner sailed in the Sydney to Hobart yacht race, and he was live blogging with the first one megapixel camera phone from Siemens. So we were getting quality images remotely from a yacht and sending them back, and it was being published live on the front page of a newspaper in Australia. So they were really kind of exciting and innovative projects. And then as we as technology evolved as the sort of the space we were involved the exciting stuff, yes, it was digital transformation. It was amazing, but there were other people doing it, and we weren’t, weren’t in that space anymore. So we started, we had an innovation lab, and we looked at new types of we looked at cryptography. We focused really heavily on kind of privacy and security around mobiles and little projects like that. But it was kind of not what the core of Tiger spike was doing. We had 400 engineers, 400 people, big UI, UX team was creating great experiences. And as as founders, I felt that that it had grown beyond what I really wanted to be part of. I didn’t want to build a 10,000 person company. It wasn’t going to get there. And the excitement was sort of, we actually had a conversation talking about taking it full circle. Like the actual excitement of exit, of selling the business really appealed to us. We thought, not not just whether you make lots of money or not so much money, but really just having gone from conception to building to, you know, bootstrapping, to getting investment and getting all that done, and then actually selling the business felt like the sort of experience that that Luke and I particularly would have been just really enjoy. And so I remember having this conversation. We talked about it, and then as soon as that kind of seed gets planted, it’s then when, you know, okay, there’s my exit plan. And I’d say, prior to that, we didn’t, I mean, when we first put our ESOP together, I remember, you know, when we were talking about what it would mean to kind of the share, the staff in the share options program that we had the numbers going up to a sale for a billion dollars, right? This is what the staff would get. Wow, the chef, the chef is going to be a millionaire. And so, you know that that was definitely our mindset was, you know, an IPO was a possibility, you know, get to that. It wasn’t so much a term back in those days, but that kind of unicorn status. And then when we sort of really sat down and thought about it, and looked at where our business was, what we wanted out of it. It wasn’t to be kind of constantly, kind of just driving this big organization forward. It was to sort of take things full circle, gain that experience, and then look at what was next. And then we all felt the tiger spike had, kind of had this complete life cycle, and that was time for us to do something else. And from what you’ve said, not not to offer any advice, but I think you’re you know when you know that,

the best way to think about it, I think anybody who starts a business with a very clear idea on how they’re going to get out is setting themselves up to fail. I just think that’s just not why you should get into a company in the first

Michael Waitze 18:15
place. Yeah, no, I don’t. I don’t. I don’t disagree with you at all. I think this idea of like starting a business and then saying I know what my exit strategy is right at the beginning, I think is really beginning. I think it’s really silly. Why are you starting a business anyway? And I believe again, you tell me if you think I’m wrong. But like, I think if you’re starting a business just to make money, I know that sounds weird, you’re probably starting the wrong business right. Remember, you we talked about this on the prep call. I said to you, yeah, any hard working person can do anything really, really well, but to be great at something, you have to care about it. And if you don’t care, you’re not going to build something big like some because somebody else is going to out execute you because they do care. And if you’re operating in vertical X, whatever it is, the guy or the gal that’s operating there because they care, is just going to destroy you anyway,

Oliver Palmer 18:56
every time, every time that that passion and that kind of drive can’t possibly be because you’re going to make a million dollars at the end of it. And that’s one of the big things we talked about with DQ. We talked to executives or on, you know, 300,000 a year, plus a bonus. And we say, if you started today, and we built a great company, and you worked for 10 years, you know, and then exited, which is, you know, that would be pretty good achievement, seven to 10 years. It took us 12, you know, your your return, whatever you end up with has to be more than, like, 4 million bucks, because you could not do it and still have $4 million that’s what you’re going to earn over 10 years. And you know, 25% of a 4 million, $4 million whatever you might own of a business after tax. You know this the numbers, the numbers just don’t stack up. Yeah. So unless you really feel like you’re passionately involved in solving a problem, or, you know, you know, changing people’s lives, whatever it might be that gets you into the startup in the first place, the overriding, the overriding reason definitely can’t be money, because, you know, the it’s like, you know, might as well go and buy a lottery ticket and stay in your corporate job. It just doesn’t make sense. So

Michael Waitze 19:59
I. Me two things about this. And again, I’m curious about your opinion. One is, I say everyone’s an overnight success 10 years later, I picked 10 just because it feels like it’s really far away, right? They’re like, Oh my God, look at this guy. He’s just he’s just come out of nowhere. Yeah, he came out of nowhere. He came out a hole. He dug for himself 10 years ago. First thing, and I forgot what my second point was going to be. But the other thing is, you’re never going to make as much money as you do, like you said in your job, and you have to build. This is the thing, right? You’re going to want to build the thing you have to build, right? I feel like, in my business, I don’t want to build this business. I have to do it right. And when I talk to entrepreneurs, the best ones are the ones that are just like their whole life has been like this funnel that’s dropped them down to building this thing, and they’re kind of like the only person that could do it and do it well, and that’s how I know they’re going to succeed. Does that make sense? And

Oliver Palmer 20:52
100% and that kind of almost though that you’ve got to get those blinkers on. You’ve got to be able to say, you know, this is where I’m going, and this is what I’m building. And you’ll you’ll pivot, and you’ll you’ll pivot, and you’ll move, and you go in different directions and all that sort of thing. But that drive, and I think also that that passion for, like you said, not bringing on investor, gives you the freedom to choose what you want to do. I mean, you know, and I think that that’s very true. And even though, if you’re in a corporate job, and no matter how soon you might be, you’ve always got boards to answer, what have you, and whether you feel constrained. And our sort of contention is that if you, if you do a startup, you’re still going to have those you’ve still got a partner, you’ve still got to make the payroll at the end of each month, and that’s something but you feel like every time you’re doing something, you’re you’re creating something that’s bigger than you are. And I think there’s a lot of people we speak to, particularly in corporates, who kind of don’t necessarily feel that they’re able to do they’re making that much of a difference. So they get it, and it’s all cool, and they’re doing the job to the best of their ability, and what have you. But there is something to be said for, you know, that passion and that kind of that drive, and all the different hats you have to wear when you start a business, and then you find the ones that fit the best, and you go down that path, and you’re still talking about it on a Saturday night and on a Sunday morning. And it not that it needs to take over your life completely, but those tend to be, certainly, from my experience, the founders that are, they’re not. They’re never selling, they’re never trying to get you to do sign up for anything, but they’re just so enthusiastic and passionate about it that they want to tell you and they want to involve you in the conversation. And that’s that, to me, is sort of the essence of a founder. Yeah,

Michael Waitze 22:19
I was on the phone with somebody earlier today doing a prep call, right? And this woman was so great at asking me questions. I just said to her, you should have your own show. And again, I wasn’t selling to her, but I’m so passionate about this way to get information out there and to do the things that, like a podcast allows you to do that. I just started talking about it, and she was like, Well, I am kind of thinking about it, and it’s not selling per se. It’s just me telling you why I’m so excited about the stuff that I do and and why it works so well. I want to talk a little bit about dq, because I think this idea of don’t quit is anti mythology, right? It’s like you have to spend 80 hours a week doing this thing or you’re never going to build anything that matters, right? And I read a book once, it must have been 15 years ago, I think, called Little Bets. I wonder if you’ve read this book. If you haven’t, if you haven’t, you’re living it, right, so maybe you don’t need it.

Oliver Palmer 23:12
I should be there.

Michael Waitze 23:14
But the idea was that even a guy like Chris Rock right, who does 45 minute specials on Netflix, he has a joke in mind, and he’ll go out with like, two or three of these jokes and just like, test them little bets, just make little tiny bets on these things and then accumulate it over a six or nine month period of time. He’ll then come up with a 45 or an hour long set based on crowd reactions, and just testing, like, what it feels like to tell those jokes. And, you know, I think that this is true in the startup world too. And again, tell me where I’m wrong here. But like, you do just a bunch of little things that you think are gonna work, and when it does, then we used to say this on the trading desk, let your winners run and cut your losses, like, really fast. And also, no, this is another thing I think that people don’t understand about wagering and making bets, and I’m putting that in quotes, is that you need to know before you make the bet, what does success look like, and where do I get out? Right? We used to say this. Don’t ever enter a position when you’re making a trade, whether it’s an equity trade or a fixed income trade, it doesn’t matter until you know, where am I going to get out, right? And where am I going to exit if it goes the wrong way? Right? And those two things can’t be balanced, like you can’t say it’s going to go either 10% up or 10% down. It’s got to be 10% up or 2% down, because your winner has to succeed more than you lose anyway. These little bet things. What do you think about this? Yeah, 100% correct.

Oliver Palmer 24:36
And that’s exactly where DQ sits. I mean, if you’re, if you’re, you know, 45 you’ve got a mortgage, and, you know, you’re in a pretty good space, and you got the next 1015, years sort of mapped out. And you decide, I’ve got this brilliant idea, I’m going to revolutionize the, you know, legal industry with this wonderful idea. And you, you quit your job, and you kind of, you know, your wife has to pick up the slack. You’ve got a year’s worth of savings, and if. Throw yourself into 80 hours a week, that’s a big bet, right? You’re bet. You’re pretty much betting your future, and you’re putting it all out there. You’re putting it all on not even on black. You’re probably putting it all on 16, and you’re just hoping that 16 comes in. And I think, I just think, fundamentally, that’s just too risky, and that’s why the argument is that not many people do that, not many people at 40 or whatever, throw in, throw in their corporate job and do it. And the contention for DQ at the beginning was that that’s a huge missed opportunity. That’s a huge number of people who potentially have incredible world changing ideas that literally will never see the light of day because they can’t make that big bet. And so where DQ sits is to come in and help them explore the idea in a little bit kind of way, by by, you know, understanding what the competitive landscape looks like while they still carry on doing what they’re doing. Understand, is there a market for what their particular what their idea might be, you know, and we see our success at DQ sometimes, as you we work, might work with someone for for a month or so, and then they go, this is a crazy idea. Like this is never going to fly. There’s five other people doing the same thing, like, I’m not going to make any difference, and they stay in their job. And that is brilliant. That’s That’s brilliant. And that’s kind of what DQ exists to do. It’s to help you really understand what it is you’re getting yourself into, both from the experiences that we’ve had, but also the nature of the industry and the type of business that you want to build. We’ve got a bunch of people that we draw on to kind of really try and understand what the landscape might look like, to help you kind of incrementally move into a position where that business could stand on its own and talk to investors about whether this is something they might want to put money into, whether we think it could be bootstrapped. All of those kind of options are on the table, but, but really, fundamentally, it’s to help you kind of de risk that that journey towards being a founder by by taking small steps, rather than this big bang explosion. I quit my job, I, you know, remortgage my house, or I put my life savings into building a platform. I mean, that’s just a very, a really, really risky way of approaching startups,

Michael Waitze 27:02
yeah. And also, considering the the average age of a successful entrepreneur is, like, 40 something years old, right? So that’s

Oliver Palmer 27:08
exactly yeah. All the research we have at the beginning is, is all around is kind of all the founders and and helping support that, that kind of process is where DQ sits, yeah. I mean,

Michael Waitze 27:18
I don’t want to get into this whole thing of like, I feel like, I know, like the world is so much clearer to me today than it was when I was 25 and I think, like, when you’re 25 what is going on out there, and now you’re just like, I got it kind of thing, right? At least, you feel more comfortable. I want to ask you this, though, a traditional venture capitalist, right? Everybody understands what they’re doing and why they’re doing it. So if you’re a founder already, you know who the VCs are that you can potentially attempt to go to for funding. Yeah, right. But DQ is like, on a different street, right? You’re not in the same place as a typical venture capitalist person, not even per se at all, right? No. So where do you find the people to actually help. And I don’t know what other word to use, advise, right? How do they find you know what I mean? Because if I’m sitting at my job, it’s weird, if I go out and find someone to help me quit my job in six months or nine months, like, if my company finds out about it, they’re gonna fire me, kind of thing. Yeah, they’re not trying to do that. Or you’re not trying to ruin stuff. You’re trying to build stuff. Yeah, stuff, yeah? But like, yeah, how do you find the people that you want to help? And can I ask you this too, because this is tricky. What characteristics do you think make a great founder? So first of all, source. And then, and then, what are you looking for, to be fair, yeah?

Oliver Palmer 28:36
So from a source perspective, I mean, at the moment, it’s, it’s predominantly word of mouth. We, you know, we get involved at a very early stage in a business, like you said, the seven to 10 year horizon, and for the first, you know, one or two years, you know, six, six to 18 months, where we your co founder as a service. We do everything. We’re talking kind of twice weekly, or whatever it might be. And then ultimately, we take a more advisory role. We get more involved in fundraising, that sort of thing, but we want to set the foundation, and then you’re off to run your business. So, so we kind of recognize that the kind of people we want to, we want to get involved with are people we’re going to have to stay in touch with for a long time. So we’re, when we’re interviewing people, we want to be sure that, you know, she’s someone we can actually have a conversation with in six months time, and try and understand that there’s a dynamic between us. So, so we’re a relative. It’s not a sort of a broadcast advertising, you know, throw as your CVs and tell us why you want to start a business. It’s a moment. It’s a lot more word of mouth, lot more referral sort of stuff. So people will hear about us because sort of conversations, a lot of LinkedIn, a lot of people are sort of looking on LinkedIn. They’ve got their job profile up there, but they look at other things. And if they’re interested, or they’ve got an idea around a business, our typical founder is someone who’s probably had their idea for this company for the last two or three years. They’ve spoken to their friends at the pub, they’ve chatted over glasses of champagne about how they should be doing this and then how great it is. And their friends have all said, it sounds brilliant. You know, you’ve got to do it. You’ve got to quit your job. It sounds wonderful. But. On a good gig, and then they start to sort of think, well, what could I do in this space? And that’s where sort of DQ comes up. I mean, we sort of position ourselves around the sort of kind of venture Studio business accelerator, but we’re very much trying to kind of do things in the background. So we’re very conscious of kind of non compete clauses and all the IP associated with employment agreements, that kind of thing. But really, what we’re about is, is trying to establish, is, is there something in your idea? You’ve spoken to your friends about it, all of your friends have said, brilliant, go for it. But is, you know, what’s the reality? How can we help so, so it’s, it’s sort of a, it’s definitely not a mass market broadcast. Can come and start your company with us. It’s much more, you know, if you’ve had this idea and you’re sort of a bit curious about where you might start, often we crop up in kind of searches on LinkedIn and that kind of stuff. Or we’ll speak to people if you’re ready for VC and you want to start talking to VCs. We’ve like DQs. Value is kind of, you’ve missed the boat with us, right? The value we add is before you get to that point. And we want to help you understand the right kind of seed capital or venture you go to, or a route that doesn’t involve them, right? We’re all about sort of rational startups as well. How do we get to a point that you can start to be, you know, see a path to a profitable company like, exactly where I guess you’ve managed to get to? I feel like,

Michael Waitze 31:15
I feel like you and I could talk about this for hours. So how do you finally tell somebody? Because if you’re, if you’re working with somebody, you meet this you meet this gal, right? She’s got a great idea. You’re working with her. She’s got, like, you said, a $300,000 a year job. Her husband has a good job, or whatever they’re doing really well. And you’re like, wait a second, though, we’ve been working with you now for like, six to nine months. This thing is a thing now you actually need to quit, kind of like, when do you get to that point where you tell somebody, I’m not telling you how to live your life? To live your life? This is a great idea. And now that we’ve been working with you for, let’s just say, a year, it doesn’t really matter to me, right? But if you really want to build this into something big, we think this could work. What is that? So

Oliver Palmer 31:54
you get there, it’s interesting. It definitely isn’t, you know, after module six of the program, or three, three months down the track, right? Like I wish it was, I wish it was as formulaic as that. So, I mean, we’ve started 1818, companies in the two and a half years we’ve been going. We’ve had six people quit their jobs and join we’ve had about 20 or 30 where, you know, outside of that 18, where we decided it’s not the right thing. So that’s sort of our ratio, and it’s different for different people. So two, three of the companies have raised external capital from from Angel networks. One raised 750,000 the other raised 450,000 pounds. So that’s the point where, you know, it’s not just it’s not just us. I mean, we try and be as realistic as possible, but we’re obviously invested in the idea, and we’re very pro, and it’s great, but really, we look for external kind of validation of the idea. So, so the other one, they’d actually, they actually won three clients through, through us and through what they were doing. And that was, that was enough to say people are paying for this service. And it was relatively straightforward. The decision is, has actually been relatively easy, because the business is either going to be a success or it’s going to it’s going to fail there, because you’re way. You’re not weighing it up against, you know, your back’s not to the wall, right? You’re not kind of, it’s not make or break, which is good and bad. We like it because, you know, I think it’s difficult to raise money if you still have a job. VCs will always tell you, until you’ve mortgaged your house and your life’s not the line. And we fully understand that, but we also understand that if we can set the environment and the foundation for you to be doing it and be all in on this thing, then it’s successful. You’ve got a much, much better chance of raising capital from a VC than if you just quit and have a bit of an idea and a couple of PowerPoint slides and you try and raise money. So we’re really about trying to move people along the path so that they’re ready for for capital, or they’re ready to win another 10 customers, or to open up in the new market and see the fruits of their labor grow organically at the start. Because, you know, not all businesses need, need, need venture capital. Yeah,

Michael Waitze 33:56
we’re struggling with this anyway.

Oliver Palmer 34:00
The only other thing, the one, the one question you asked as well, was just the traits, you know, what sort of traits do we look for? And I think that’s, that’s really interesting point, because I think, you know, a key thing is a supportive partner you mentioned, you know, husband’s got a good job or whatever, that gives you the freedom to do it. And I think that’s true of almost any venture you might want to try in life, but, but it does help if, if you’re the sole bread winner, and, you know, you’re putting a family at risk and that sort of thing, then the kind of the hurdles to jump and move across to running your own thing are definitely higher. So we find that, you know, it’s trying to get an understanding of what do you want to do if you if you want to give this a shot and kind of make a go of it, if you’re in your, you know, mid to late 40s, you and you’re out of corporate life for two or three years, be aware that it might actually be quite difficult to get back in. So you’ve just got over really difficult today. But if you you know, and so even though the startup might be going really well and everything’s wonderful, it’s really trying to kind of weigh up those that kind of future potential, because you just don’t want to be in a position where you. Startups gone bust. You’ve been five years out of the workforce, and, you know, you got to get a job at 58 or something, and so, so those are some of the risks, I guess, associated with this. But we’re fully transparent. And you know, the other thing people are weighing up is, if you’re if you’re 50 and you’ve got a brilliant idea, and you know that, you know, working for another 10 years probably isn’t going to get you to the point where your 501, K is enough to support you, or whatever else it is. What else do you want to do? And so, you know, it might be that a startup can be that passion project that will that you can go through till you’re 75 right? And you love it, and you enjoy it, and it’s great fun. So those are another, sort of, some of the traits of the founders. It’s trying to understand the position they’re in, the kind of, kind of where they want to get to with it. And often they’re people who are a little bit jaded with what they’re doing, right? They’re a bit kind of, they’re ready to go, Yeah, and if that’s the case, it’s often with one of the people we worked with, they realized that the idea they’d been talking about for five years was just not going to fly, and we just couldn’t see any real path to sort of monetization, what have you. And they got this renewed passion, and suddenly they were kind of all in on their job, and they were focused. And she reached out to us a couple of weeks ago, and was just off, she’d got a promotion, and it was all good. And we were like, Okay, that’s fantastic, right? That’s great. We’ve had another one who it was terrible idea as well, and we knew it was a bad idea from the start, but they were just desperate to quit the job, and they came back to us three months later. Three months later with a completely different idea. And now that they’ve just hired their third employee, they’re based in an office out of Singapore. They’re doing sort of corporate secretarial and stuff in a different way in the Asian market, and it’s a huge success. We’re like, this is amazing, like, great stuff. So, so those are some of the kind of the traits and the things we look for, and the kind of personality types that kind of kind of we’re interested in.

Michael Waitze 36:44
So you exited a company, and you must have made some money to do that. Hopefully you made a lot of money. Like, that’s the whole real hope. And I mean that sincerely, right? I’m not joking around. So do you take your own money and invest as well? Like, do you have, does DQ have a fund, or do you syndicate? Or do you do both? Yeah,

Oliver Palmer 37:04
so kind of both. So we initially, we had an investment fund, and we were, we were putting money into startups as well, alongside external investors, but we found that there was a, there’s a little bit of a sort of a conflict of interest, because we had sort of a vested interest in our little fund, putting money into startups to attract others. And it kind of, there were some companies where, you know, we just wanted to be completely objective, so we actually folded the fund into dq, and we now spend a lot more money on the startups themselves. So we will build MVPs. We’ll kind of put a lot more time and effort and sort of financial contribution into the startup, and then we seek external, so external investment from Angel Network. So we do think that that that kind of 500,000 to a million is often what a startup needs to really get it to that next level. If we can grow organically and we can see a part to customers and revenue quite quickly then, then that’s brilliant as well. But we’ve got a fairly sort of close network across the globe, UK, Australia, Europe, and sort of some links in the US of people who kind of understand the DQ model. They’ve seen it work with the likes of antler entrepreneur first. They’re in this similar sort of space, I guess they, you know, zero to one investors, whatever it might be, but, but they’re, they’re more focused about you want to be an entrepreneur. You You know, you’ve quit your job. Here you are. You’re thrown together with a bunch of other people and a bunch of ideas, and you’re going to make it work no matter what. Yeah, yeah. And we sort of, we’re, sort of, the alternative is, hey, don’t make that big bet just yet. You know, what’s the little bit? What’s, what can you do today to really establish that there’s something to something there, and then ultimately, kind of run, run, run, a business.

Michael Waitze 38:45
Does DQ feel like it has a, what’s the right word? Like a vertical focus, where, if somebody comes in in a specific space, you’re like, This is our bread and butter. We know this thing inside and out, and that’s going to work, or this is not going to work. Like, what would what would you say the vertical focus is, and I’m not saying you just invest in that, but like, that thing comes in and you’re like, Yeah, we know this space. What would that be?

Oliver Palmer 39:06
Yeah, it’s interesting. I mean, we’re basically tech entrepreneurs, so our background is tech. Jane James has sort of 90 startup investments, predominantly sector agnostic, but very much focused on it, on a technology side of things kind of fundamental business processes and technologies, where we add value. So SAS, at the moment, SAS is kind of in this topsy turvy world of everybody’s got 22 different things they’re paying 799 a month for, and nobody really knows where they come from. And I think there’s gonna be a lot of consolidation in that space people are gonna but so we very much sit in what, what can we do to add value? How can we help so it is, it is a little bit sort of a technology focus. I mean, there’s been some really interesting stuff happening in kind of med tech and sort of medical space, and people building clinics, particularly in the US, trying to understand how to kind of put that sort of thing together. Had two or three really interesting conversations around that. And again, from our perspective, it’s how can we use technology to help someone who might not be that technically minded to create a sort of a platform and then the foundations of a business that scales and that kind of goes forward? I mean, if it’s a farming in Wyoming or in your Northern Australia, then that’s kind of thing we might struggle with, but, but fundamentally, it’s Yeah, technology companies that we can, we can help you kind of grow and scale. We’ve got sort of expertise in kind of taking things outside of initial place and then expanding across the world as well. So that’s that’s a big part of how we view the future, and help founders See, see what the possibilities are.

Michael Waitze 40:42
So one of the things you said earlier was, you know, you joined a venture capitalist, investable. Everybody knows, like, it’s a company that I’ve definitely heard of. I think I’ve probably had some of their portfolio companies on my show as well. So it’s a well known thing. And this is a comment, not just on them, but on VC at scale. You said you were working there, and you’re like, do I really want to say no, 99 times, like, is that how I want to live my life? Right? It’s like, if you have kids, like, you have a daughter, right? So you have kids, and you want to say yes to them, right? You want to be happy. You want to create. You want to help them. Your daughter comes and says, Hey, Dad, can I do this? You want to be like, no, no, no. You want to be the guy that says, yes, at least I’ve got a daughter as well. So that’s why I said that. But the model that they have is very, very different from your model, right? And you to get to a point where you can say, Yes, you also want to be in a place where you feel like there’s an end goal and an end purpose to what you’re doing, right, like they’re investing other people’s money to get a five times return and then just go home. Like, that’s their only thing. But what you’re trying to do is different, because you’re trying to change people’s lives. And I’m wondering if there’s, like, No, but that’s what it feels like to me, right? And yeah, I always say, like you said before, like, if you’re 58, years old and your company doesn’t work, going back and getting a job is going to be hard. I would make the case that you are and people like you are completely unhireable, not because you’re not. You don’t work hard. Built something yourself, and it’s very hard for someone to come in and go, Okay, Oliver, today I want you to work on this thing, and I want the report by Friday, just like, that’s not the way this is meant to work, and that’s not the way I want to work. Does it feel like you have purpose again, in the same way that, like when you first started your company, like, Oh, I love this. I cannot wait to write this code or do this thing. Do you have that feeling again,

Oliver Palmer 42:31
100% I mean, that’s exactly my the passion for DQ. It was interesting because, like you said, we sold the business in 2017 I took a year off. My kids were still young, so my wife was still working, played a bit of golf and stuff, and I wasn’t bored. But, you know, you kind of it’s hard. You’re in the office. Every day you build something, you’ve got 400 people who know, who know what your name is, and know your email address and that kind of stuff. And then all of a sudden you don’t anymore, and you’re back to your Gmail account. It’s interesting, I mean, and and I think one of the challenges with with any VC at the moment is not necessarily kind of that they say no over and over again. It’s that the type of companies, or the types of entrepreneurs that are asking for funding or and will put anything on a form to get to that first kind of conversation with me, as the as the guy on the ground, you know, within the first couple of minutes, that if they’d spent more than two minutes looking at what investables criteria were and what they were looking for, that it was probably going to be a no. And the challenge I have is that I kind of like those conversations, and I like hearing about their businesses, but I would know straight away that they weren’t right. They didn’t have anything that investable wanted, or they were in the wrong space, whatever it might be. And yet, I would still have those conversations with founders, and I’d still love to hear about what they were doing and where the next customer was coming from, and why they needed, you know, a million dollars. And so I think it was more a reflection on me and just my, my lack of fit for that kind of VC thing. But I think the companies that, I mean, I think I met with 160 companies in nine months, and two of them actually got investment out of Singapore. And that’s not a bad ratio. I mean, most VCs will meet three or 4000 in a year and probably invest in 10. So, so for me, it was, it was just about, sort of the way in which I approach things. And I mean, investable is something we I mean, like you said, they’re very well known. They’ve got, they’ve hit a really interesting sweet spot that they’re sort of, they’re where we would love to get DQ companies to in order to put in front of investable, that’s, that’s our primary goal, is I know, I know what investable is looking for, and I know that it makes an awful lot of sense, and they’ve backed some fantastic companies, and continue, I’m in their fund. Caveat. So

Michael Waitze 44:33
making a value judgment on No, no, I

Oliver Palmer 44:35
get that. I get Yeah, 100% 100% and I think, I think, No, I totally agree. But I still think that no matter what you’re saying, any VC, 99.9% of the time, the answer is no, and that for whatever reason it might be and 100% agree with you. I think the interesting thing is, what can we do to be in that point 1% How can we we don’t even want to be putting ourselves putting up portfolio companies. In touch with anyone until we’re pretty you know, we’re 100% certain that there’s a good chance they may invest and that still doesn’t mean our hit rates going to be wonderful, but, but we’ve, we’ve kind of understood where we need to get businesses to and what we need to show so that they have this best possible chance and and in doing that, like you said, it’s, it’s it. Often you realize that they, they can sort of bypass that early stage investment opportunity because they’ve, they’ve won the right customers. And like you said, you your revenues growing. You know you’re the business is continuing to expand. You can see where it’s heading. And sometimes the question is, well, why would I take on money at this point? And if there isn’t a valid reason for that, then we’re awful. I mean, we bootstrap Tigers bike for eight years. So when we’re working with these founders who’ve only been doing their companies for sort of nine months or a year, my advice is, you know, hold off on VC for as long as you can. If that’s the way to go, I think. But you know, if it is a path to sort of accelerating the business and getting it to a level where it’s sort of self sustaining. Then, then, then, it makes a lot of sense.

Michael Waitze 46:02
Awesome. Okay, look, I feel like I said this about 20 minutes ago. Keep going for hours. You pick a topic. There’s so much to talk about, yeah, um, but let’s do this. I’m gonna let you go. I’m gonna thank you for doing this, but I’m gonna make an offer to you. You said you invested, or you work with 18 companies. I think you said six of them got no three of them got funding, but six of them, I think you’re still working with, but you turn down 30. So it’s about a third, a little bit more than a third you work with. I’ll offer to you, like, take your best companies, put them on my show, right? I mean, I, frankly, I think you should have your own show where you’re talking to your own because your conversations with them would be way better, right? Because you know them so much better than I do, but yeah, I have a gigantic audience. So what I’m offering you is give me some of your great companies. I’d love to have conversations with them, because it’s a different kind of startup than the startups that I normally talk to, different age groups and also guys and gals that said I have a great job, but I worked with dq, and I got to a place where I could quit. So for a company telling me, don’t quit, but I did quit. I want to talk to those guys and gals, because it must mean something you’re doing is working. And I want to learn how from them, is that cool? Absolutely.

Oliver Palmer 47:13
I mean, just a very brief story on that. So there’s a lady, lady we’ve been working with. She She’s She had three much. She’s a mother. She has three young children, and she was in London and her husband had to leave it, leave, fly back to Australia, sort of super urgently. And she was there for her best friend’s wedding, and she either had to leave with her husband and fly back to Australia or stay but then she wasn’t she had no idea how she was going to get back from London to Sydney with three kids under the age of four. So she put a, she’s put a shout out on Facebook, and it got sort of national coverage and what have you. And actually, she found a brazilian girl who happened to be flying from London to Sydney. Was an Au Pair based in London, and she paid half of her her ticket. And so this lady helped her on the flight and kind of entertained her kids, and she was able to go to a friend’s wedding and then fly back from Sydney to London. And so she came to us and said, I work, you know, this is my experience. I’m doing digital strategy for a company in Australia, but I think this is a great idea, and there must be more people like me. And we loved it. We thought it was great. So we’ve set up. So her company is called Journey, and she so this week, her first journeys are happening. She’s got a bunch of people who are assisting people who need so basically, it’s people who have a need, whether it’s an anxious fly or you need to bring your elderly parents over, or you need help with your kids, whatever it might be, and somebody who’s looking to kind of save costs and maybe get paid half the ticket or paid $500 towards the flight. And it’s kind of a platform that puts them together, basically, and the story, like the stories and the people who are actually meeting each other and flying together and spending eight hours on a plane to Singapore or what have you, is just amazing, like, it’s got this amazing feel good story, because it’s enabling people to travel who couldn’t. It’s helping people out. It’s helping both sides. So there’s just, there’s so many different things, and she is at that kind of inflection point. So she’s got a brilliant idea. She hasn’t, you know, it needs to get to scale in order to monetize it. And there’s, there’s a bunch of challenges associated with the business, but in a little, in a few months time, I would love for you to have a chat with her and just understand that story, because it’s you talk about passion and the the reason of getting into a business, and that’s, she’s someone who just epitomizes the right reasons to start a company. And she’s, we’ve been working with her for almost a year now. And, you know, putting both, you know, it’s a dual sided marketplace, there’s a number of challenges. Put it all together. And I think she would be a wonderful, wonderful person for you to talk to. I

Michael Waitze 49:31
would love to, and I’ll give you some just a free opinion, if you don’t mind, you want to know what’s going to help that business grow like crazy. What’s that? If you do a show about it, you’re laughing, but imagine the conversations that happened on that flight for the first time. You’re a Brazilian au pair, you’re dealing with this Australian lady. You can’t just sit there and do nothing on the flight. You got to play with the kids, or do something like the show could just be called Journey, or what was the flight like, because that conversation would be so cool. Cool. That would be so cool. I’d love to hear that. Anyway. I’d love to meet her. Be great. It was awesome. It was awesome talking to you. Oliver Palmer, a co founder and GQ GP, excuse me at DQ ventures, you were awesome. I cannot thank you enough for doing this awesome.

Oliver Palmer 50:16
Michael, thank you very much. It was a pleasure.