Podcast Transcript

Sean: [00:00:00] G’day everybody and welcome to the ScaleUps Podcast, where we unpack the secrets and strategies of scaling and business with the Founders who've done it, the industry experts and Advisors that can help on the journey and where we follow a group of first-time Founders on their journey, as they strive to scale. We have got a very clear purpose here on the ScaleUps Podcast and that's to help out the first time Founders who've got businesses, sub 10 million in revenue, learn how to scale fundamentally so they can fulfill the potential of their business, make their decisions with more confidence and in doing so, maximise the value they can create in the world. I'm your host, Sean Steele. And today I'm joined by Steve Grace - Director of Nudge Group. Nudge Group building a pretty disruptive business in the recruitment space, focused on foster growth and start companies, particularly those who need talent after they've raised capital in series A , B or C rounds. Is that right, Steve?
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Steve: [00:01:00] That's all right. Yeah, absolutely. And even a little earlier as well, we tend to try and help them when they're really early stage. And they've got no idea what they're doing as well.
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Sean: [00:01:09] It's a beautiful stage. It's a beautiful stage. Well welcome aboard. We're very much looking forward to hearing about your experiences and learnings as you've been scaling up. Just a little bit of context for our audience today, originally we thought that we might, you and I were chatting offline and thought we might be chatting about Ashdown, you know, a talent management company that you'd scaled from 2 mil to 45 mil in revenue between 2010 and 2019, which of course is an incredible journey and would have had lots of lessons in it. But instead we’re looking to take a bit of a right-hand turn, today we're going to talk about The Nudge Group, which you founded after the Ashdown journey. And from recollection, you kicked that off in 2019. Is that right?
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Steve: [00:01:45] So, yeah, pretty much two-and-a-bit years ago now. So just before we flew into COVID, I had a good six months before we flew into COVID.
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Sean: [00:01:55] Very short down time to regroup. Well look from what we'd spoken about, The Nudge Group is actually growing materially faster and in terms of run rate. But I also sense it's really lights you up in a different way. Is that a fair comment?
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Steve: [00:02:10] Completely. It's growing, I mean, obviously Ashdown grew to 45 mil. So that was an amazing journey. But Nudge, 2 years old, you know, Ashdown was probably 12 or 13 by then. The speed at which it's growing in the last two years is mind blowing, far beyond anything I had really anticipated.
And I think because I'm doing it quite differently, you know, having had two businesses in the past that were very, very similar and scaling and selling both of them, to do something that's in the same industry, but it's really flipping the industry on its head has I guess, the best way to describe is reignited my passion for recruitment. God help me. I really wasn't sure if I wanted to go back into recruitment, I really wasn't. I was like, do I really want to go and do that again? But having had six months off and coming up with a whole bunch of ridiculous ideas of businesses that I wanted to do that I really knew nothing about, you come full circle and you realise that you have actually got an incredible skillset built over 20 years. And it would be a shame to throw that out the window, but how can you do it differently? You know, how can you take what you've learned and maybe apply it to an industry that hasn’t changed at all for a very, very long time, and that's what we did, and we're still doing it. It's still evolving and changing. And that's what I think I love about it so much is it's constantly, it's in this constant state of change. So, it very much ignited me again, as you, you can probably hear my voice.
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Sean: [00:03:34] Oh yeah. I love it. And I think there's something really to that, sometimes when people are making those transitions, whether it's from one business to the next business. So sometimes just people in their own careers, it's very easy to throw away significant networks experience, insight that you have in to industries. It's very easy to throw that away because there's a shiny ball that looks really fascinating that you have no idea about, but it looks great. But actually, you know, one of the greatest ways to be able to create value quickly is a space where you know where the gaps are. And so…
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Steve: [00:04:04] I think you had more value, right? When you know what you're doing.
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Sean: [00:04:06] Yeah. We'll look maybe for the benefit of our audience, Steve, for those who may not know you, can you give us a bit of an overview of the business, the genesis of it, the purpose and ambition, and I guess maybe an easy way for people to want to get their heads around is who's a typical client, what problem do they have and how you're going about solving that?
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Steve: [00:04:25] Okay. Cool. So, I came up with the idea. I think with all my recruitment companies in the past, we'd been very traditional in terms of dealing with government agencies and corporate clients and small and medium class, but traditional companies, traditional recruitment, and towards the end of my journey with Ashdown was the birth of a lot of the start-ups and scale-ups.
You know, Atlassian floated and companies like Canva and SafetyCulture were really being born. And we started to work with them. I loved them. I loved the concept. I love the way they worked, liked the way they thought, I love the speed at which they grew. But as a company, we dealt with them badly, and that's not Ashdown, that's pretty much the industry. And the consultants didn't like working with start-ups for a number of reasons. And I don't think the start-ups liked booking. So it happened as more of a necessity, but it wasn't a marriage made in heaven. So, when I was sitting in my couch trying to work out what I was going to do to turn the industry on his head, I thought, well, need to specialise in something, and we'll come back to that later as to focus on how important that is. But I thought, well, I want to focus on this because I love start-up Founders. I love their unbridled optimism. I love the energy of it. I love beginning and starting companies myself. So, I figured why wouldn't I go and help other companies to do that? So that was what I came up with and I thought, well, we need to look at the problems as to why people don't want to work with them and why they don't want to work with us. And they were really quite simple. The first was very much payment. You know, recruitment is very expensive as I'm sure you're aware. 15-20 grand is your average fee. If you're a start-up, that's a lot of money. If you're hiring five people, it's a really lot of money. So that's the number one problem and we address that. And the other problem was… we tended to charge less. So if you take an average, just for sake of argument say it's 15%, fee across the industry. We're probably charging start-ups 12%. And then you compound that with the fact that you tend to have more people drop out from a role in the first six months in start-ups mainly because they didn't know what it was going to be like working for a start-up. And I still think that's a massive problem. We do a lot of work around trying to educate people on that. So, you had consultants going… “well, why would I want to work a role with a guy who doesn't know what he wants?” He hasn't got a job description. The chances of him dropping out are higher. So I'm going to have to replace it for free and I'm going to get paid less to do it. You know, it's a consultant's job. I don't want to do it. So that compounded with start-ups going, “well, they're putting the same people in front of me that they're putting in front of Commbank and that doesn't work because as the person who's going to work in Commbank is not going to work in a start-up. So, it just didn't really work. And when we did have success, it was more through luck than design. So that was the real problem that I felt existed. So, when we created Nudge we created some very simple changes. We deal with any company that  seed level, two or three people, Founders hiring their first person all the way up through their seed round, all the way up through their series A, B, C, D I’m not sure if anyone understands that but that's just levels of funding through venture capital firms.  Then to even larger more established companies that may have private equity aboard and they're transforming them and changing them.  To finally companies that are IPO’ing, so floating on the stock exchange and we work anyone in that sort of journey. And the reason we've picked that is that's really where they're going through accelerated growth which holds a lot of problems for people hiring a lot of people very quickly.  It’s a very difficult thing to get right. And typically, they don’t have very mature or well-established talent functions. So, you had a lot of people doing the hiring who didn't really know what they were doing and we felt that's where the biggest problem was.  Now, as they do get bigger they do tend to have talent functions now, but they still struggle because they're trying to hire 70 people. And then the final route that it's gone now, and this is relatively new... it might be… I don't know when we last spoke Sean, but we're really doing a lot of helping them to go global. So, we've opened up an office in London. We're about to open one in Singapore and we're about to open one in the US and we've got roles in 9 different countries. And they're all Australian companies going off into 7, 8, 9 countries at the same time. So now we're being that trusted partner so they know what they're getting when they go into a new country. Because again, that's quite difficult going to a new country where you don't have contacts, you don't know anybody, you don't know who to trust, we're going on that journey with them. So, they've got a trusted partner and at the same time we're creating ecosystems in all of these countries.  We have lawyers and accountants and marketing people, again, that understand the nuances of that space to help them grow. So, it's becoming really, I'm not going to use the word partner because everybody says that word and I really hate it. I think we're really immersing ourselves in them and getting a lot more out of individual clients than having multiple clients and doing less with them, if that makes sense.
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Sean: [00:09:21] And those networks that you're talking about, that you're building in these new local ecosystems, that's a function of building your network out to enabled you to succeed in recruiting the right roles or actually to enable them to expand into the region?
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Steve: [00:09:35] Mainly to enable them to expand into the regions. So, you know, we offer a huge amount of ancillary services. We've got website Balance the Grind We've got the Give It a Nudge Show. And then we've got this ecosystem of partners. We do all of that for free and for nothing. And the idea of that is to really help them grow and we just charge them for the recruitment. And it's just… I'm trying not to use the word partner again. It's a real way of working together. I just think it's an awful word. Everybody uses it. It's more overused than I think pivot.
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Sean: [00:10:06] Or journey.
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Steve: [00:10:08] Oh, journey. Yes. Journey.
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Sean: [00:10:10] Yeah. And so, there's quite a few things that you're really doing differently in that space. If you were going to summarise in a couple of bullet point. What are the big differentiators for you from anyone else? I know that there's probably not a myriad of firms actually working or that want to work in the start-up, in this early stage, start-up / scale-up sector, because they are more difficult because of all the things that you explained earlier. But so, in and around those people who are competing in a similar space, how would you summarise those kinds of key differentiators?
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Steve: [00:10:39] That's a good question. There's actually a lot of them in the UK and the US. I've noticed there’s not many here, there’s few here. I think we are almost like a… I guess when we were working with a company, we treat it like a campaign. So, we have a number of different digital assets that we use as you know, it's very difficult to hire people right now. And it's even more difficult if no one knows who you are. And that's the problem, a lot of start-ups and scale-ups struggle with. So, we create almost immediate digital campaign around individuals and the company to create a sense of people wanting to work there because they're suddenly seeing it. It's that marketing trick. And look, I'm not a marketer. I've learned a lot about marketing in this company, which I never knew, and it's quite a fascinating subject, but if you see brands and you see recognition, you become more comfortable with it. And that's how big brands get you comfortable with their brands. So, we took that principle and we said, okay, if we're going to work with a new company, let's say it's 20 people and they want to grow to 60. We'll start out by using a digital asset that we recently acquired called Balance the Grind, which is, I think it's the number one now work-life balance website and we will get key people within the business, the Founders, and maybe key other people on interviews and we'll get them on that side. So, we own that site now. So, we'll do interviews with those people and then we'll promote them talking about how they balance their grind and that's the start of it. Right. We’ll then get the Founder on our video podcast, which I think you've seen, which is, Give it a Nudge and we'll get the Founder to really tell that story. And that's really important because when you're hiring for start-ups and scale-ups, you've got to have people who understand the story and that's another overused word, and align themselves to that story. So, we have to be able to tell them when we, and we do that in a really high-quality video environment. We then use that video all over LinkedIn. We promote it on YouTube. We have subscribers. We have a big following now, if people are interested in start-ups, I think we've got 45,000 people following Nudge now after a couple of years, which is pretty good and that grows, it grows every week, it amazes me. And then we pump out loads of content about whatever it is they're doing as well. So, you kind of have this media storm campaign leading up to when we start recruiting for them. And then when we started recruiting for them, we chop up lots of that little bits and we send it out one way head-hunting. So, we might send video clips out when we're head-hunting. We might send articles like Balance the Grind. So, we have this huge amount of volume of information that we can pump out to individuals to really get them excited about the company before we've even really spoken to them. And I think it's that campaign management almost, and we do all of that for free and we give them all of the content for free as well to use themselves, that is probably the most involved in different part that we do above any other recruiter.  I think that would probably be the biggest change.
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Sean: [00:13:25] Yeah, That's amazing. And what a fascinating way to build an ecosystem around that proposition. I love that. So, can you just give us a sense of growth? I mean, obviously this is a much earlier stage company than the last one, but you know, you talked about the fact that it's probably growing faster on the last one, what would you use as metrics that might give people as an audience a sense of the scale, whether that's the acquisition of customers or employee numbers or revenue, or you know, what metrics do you use to think about how fast the business is growing?
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Steve: [00:13:55] That's a good question too. I'll give you a lot. So, I'll give you them all because it's only two years old, it's real easy. I know them all. So, you know, in the first year I think we turned over half a million dollars roughly, and that was, the first six months of COVID and six months prior to that. So, you know, we're pretty happy with that. We made about 60,000 dollar loss. That was fine. This year, that's just gone, which of course is during COVID as well, we've turned over about 2.2 million, which is obviously four times the growth, we've made a profit of nearly 700,000, which is a lot more than we turned over the previous year, which is astounding. From a staff number point of view, we were two people in the first year, we're now 10, and we've got three open roles and obviously we're going to operating in eight different countries now. And whereas before we would just operate in Sydney. And then if you think from a client acquisition point of view, we have bought on, I think it's something somewhere between 80 and 90 new start-ups in the last 18 months as new clients.
Now that is absolutely enormous, and when you think that nearly all of our clients have somewhere between 10 and 30 people in their office, because they are growing so quickly, the volume of work that is coming out is incredible. And all of those clients have come through referral of some form. We haven't done any business development yet. And I think that really gives you an idea of the size of the market. And that's just the Australian companies, you know, I mean, obviously we were operating with other countries. We haven't even started to hit the start-ups in those countries yet. We're just helping these Australian ones grow into those countries. But that's obviously going to be a growth for us in the future. Now that growth is astronomical, to me in a 12-month period in what is a very uncertain time, and it seems to be accelerating. I would imagine we will grow as fast if not faster this year. So, I'm just holding them at the moment.
But it's the fastest growing business I've had I think in such a short space of time.
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Sean: [00:15:53] Amazing.
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Steve: [00:15:54] Yeah.
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Sean: [00:15:55] Well, can we talk a bit about the strategy side then? You know, some of those kind of key things, we've talked a lot about the value proposition and the elements of differentiation, but I'm interested in a couple of the what might be some of the key things that changed the dial on growth. So, the first question would be, did you actually set out to scale from day one? Like, you know, when you started this company, were you starting in your mind with the intention of scale or was that an afterthought you wanted to just focus on solving a problem and if scale comes then great. How did you think about it?
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Steve: [00:16:24] Yeah, far more the latter. I didn't really have a plan. And I don't mean, ah, that sounds terrible. I wanted to solve that problem with start-ups. I wanted to see how it was going to go. I wanted to see if there was a genuine market there and whether there was actually a business. So, I certainly didn't have dreams of going global. I certainly didn't have dreams of hiring that many people in the first two years. So, no, that has very much evolved. From a strategy point of view. And I think this is really important, particularly for your audience. I'm very much a doer, I like doing. I'm not a thinker if you like, but you have a strategy and it almost has to evolve monthly when you're in a business at this stage, sitting down and creating a three-year strategy is absolute lunacy at this stage of a business, in my opinion, because you have to, I'm not going to use the P word, but you have to change so often, the market changes on you when COVID came. I mean, goodness, who saw that? There are so many things that change. There are so many ideas that come to you, your offering will, will change as well. You know, it will evolve. We had so many other products that I spent months coming up with that no one had any interest. I thought they were genius, right? No one cared. So, we dropped them all and we stuck with the ones that they do. So, this kind of stuff happens very, very frequently when you're growing. And even in the last six months, our strategy has changed drastically to where it was six months ago. And it evolves mainly at night when I'm exhausted. And I start thinking about things, but I think, yes, you have a strategy and yes, you have to execute on it, but you also have to be prepared to throw it out the window at any point when you're in that pre, maybe not pre 10 mil, but pre five mil.
And then as you get more established, then yes, the strategy has to become a little bit more firmer, but again, it still has to be incredibly fluid, I think.
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Sean: [00:18:17] Couldn't agree with you more. And so, when you think back now in the last couple of years, what are maybe one or two of those key decisions when you look back now and go, actually, that was a really important decision because that unlocked X, Y, Z that's really helped us on the scaling side. What are one or two of those moments?
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Steve: [00:18:35] I think there were two things probably that have made a really big thing. When we first started, I had it in my head that we were going to go to all the venture capital firms and all the private equity firms. And they were going to go, hallelujah, someone's here to help us make money. And they were going to give me access to all those portfolio companies. Well, that didn't happen at all. They couldn't understand what I was offering them. They thought I wanted funding myself. You know, it was futile. So, we changed that strategy entirely. And we just started focusing on Founders and that's when we came up with the Balance the Grind and Give it a Nudge and all that stuff, because that was never in the original focus. And we thought, all right, what we've got to do is we've actually got to help these companies create a voice. So that show and that media storm that we create was an absolute game changer. And you know, we have a waiting list to go on that show now. Companies that I never thought would easily come on board… and I didn't necessarily want to do business development because they were so high profile, I assumed they had lots of recruiters already… have come to us and asked to work with us. So that media thing was absolutely a game changer. I think the other thing was the decision to go global. So, we are in London last or nearly 12 months ago now, last September. Again, not something I… I only had two staff I think when we started thinking about this.  I mean, who thinks about going global when you've got two staff? But that decision… because there was so many companies that were series C that we’re going “we want to launch into Singapore, we want to launch into London” and they're like, “do you know any recruiters that do what you do over there?” And I was thinking… well, I could probably find them, but why don't we do it? You know we're in this remote world and I think COVID has changed a lot of people's belief about what you can achieve from your home office. Why don't we do it? And that really, I guess, embeds you in the client because you're part of their growth strategy to such a key point that you become truly embedded within the mix as they like to call it, it makes you very sticky with their plans. And you’re getting the dream right? Which is getting more revenue or more sales out of the clients that you have rather than having to go and acquire new ones which is always a more difficult task. So definitely, the global thing and the media thing are the two biggest and they’re both massive changes in two years. So, yeah… and neither of them were planned at all… they sort of came to me or came to someone in the team.
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Sean: [00:21:03] Evolved and tested and worked. So, yeah, that's incredible. And I couldn't agree more, you know, the earlier stage of the business… it's helpful to you… it's really valuable to have an idea of where you want to go but that level of adaptation and willingness to drop things and try something else is critical.
And then obviously the larger the business gets the more it tends to naturally stabilise. And that's because the momentum is building off the back of those decisions that happened early on and those mini adaptations for want of a better word. Have you had to take on any, or do you expect to take on, any external capital to fund your growth given how quickly you're growing?
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Steve: [00:21:37] So I was chatting about this yesterday. I was doing one of my COVID walks with a friend of mine who is a venture capitalist. I was approached maybe 11 months ago by a firm specialises in private equity with the equipment companies. And at the time I was at that really awful time where we had no money because we were going through immense growth and the profit was great, but there was no cash in the bank. The cash flow was just shocking and it was hindering my ability to grow and I'd already put quite a lot of my own money in and I wasn't really keen to put a lot more in because we were in COVID and I was little worried about the future and all these sorts of things. So it was quite appealing when they first approached me and we had a number of meetings and I really sat around and thought about it. And in the end, I decided not to. And there are two reasons I decided not to, and that was the best decision I made because we don't need it now. And, you know, we've ended up making more profit than they were going to invest in us. So that would have been crazy. But the reason I said no is I don't necessarily think services businesses should take funding. I think in a product-based business it makes a lot of sense because it's very expensive to build product. And I understand why that VC journey exists but I think in services there's ways around it. We came up with some very creative solutions to solve the cashflow. You know I went and approached a number of different finance companies and said you need to build a product for me. And they're looking at me going “why do I need to build a product for a strange man with a kind of company that I've never heard of?” And most of them tell me to get lost but eventually we found one that that said, “yeah, okay, we can do this and that.” And they did, they created a bespoke product for us. And that actually got us through that. But it's very, very tempting, but I decided not to because I also didn't want to have to answer to someone else. I know one of the questions you will probably talk about at some stage is mistakes because it's inevitable and we can touch on why I didn't want to get anyone else involved in the business and it's a learning from some of the mistakes I've had and it just didn't feel right. And I'm really glad that I didn't, I could still do it now. You know it's still tempting now to go and say, “right”. I could probably raise money far easier now because we've got money and that's always the way it is and really scale quickly. But I just think the services businesses, if you do that and you scale that quickly in services you often lose the service because you can't maintain the quality of service when you scale that quickly in a services business. Like I said, product's very different because you're building a product and the product does something. It does it every time. Services you rely on people and to get people to do everything the way you want them to you need systems and processes. And if you scale too quickly, inevitably and I've had it happen to me, that falters and then it hurts your brand and then you're on that bad spiral. So those were the two reasons why we didn't do that. But it was, it's a very tempting decision when someone starts offering you money, I agree.
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Sean: [00:24:29] Yep. Absolutely. Well, when you think about your journey, no journey is possible without people, particularly in a services organisation and those people are both you personally, your leadership, how you show up as well as the key people and the key supporters that have supported you on your journey. From a personal perspective as the CEO, sometimes we're often faced with having to have in an environment that's uncertain.  Having to have an unshakable conviction that we're going to succeed but also retaining at the same time the flexibility, the ability to adapt, the humility to be wrong. How have you experienced that and how do you try to strike a balance?
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Steve: [00:25:08] That's a difficult question. I think the ability to admit you're wrong comes with time. I don't think anyone of a certain age is particularly great at that. I don't think anyone's born with that skill. That is something that comes through experience. That doesn't mean you have to run a business to have learned that. But I think, I mean, for example all those wonderful ideas I had about products and services that I wanted to create, I had to throw those away. It's very hard to do that, right? When you put a lot of time and effort in and admitting your wrong about things is always difficult but it's probably the most important skill in scaling a business because you will be wrong. There's no question, you will be wrong about things. And I think having that, and it's very difficult when you're in this fast growth environment, having the time to sit there and let things sit with you and then understand that you're wrong is probably the best way of doing that because your instant reaction is always I'm not wrong.
Well it's mine anyway. So it takes time for me think about something and admit I'm wrong. So I think it's very important that you give yourself that time each week to think about the things that perhaps haven't gone well and have they not gone well because you’re wrong or have they not gone well because they just haven't gone well, which either is possible, but you need time to actually work that out.  That's a really important thing that I think every Founder should try and do. And time is of course your greatest asset when you're a Founder and also your shortest thing that you have. I think, well, sorry. What else? Remind me of the question. What else did you want to ask? There's the admitting you're wrong and?
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Sean: [00:26:43] I might actually switch to another question because I've got so many questions I'd love to ask you and I know we don’t have unlimited time. Let's actually switch from you to other people that have perhaps made a difference to your success in the company. What advice have you received along the way that's maybe really influenced the way you lead or how you’ve built the organisation and who's given you that advice?
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Steve: [00:27:08] So I saw this question on your prep sheet and I thought long and hard about this today and I've been asked this question before in a slightly different format. I was asked about mentors. I've never had a mentor. It pains me. I really would like one, if there's anyone out there, please call me! I really would like one and it's not… I was trying to work out whether it's because I'm difficult to work with, whether I'm unwilling to accept advice or any of that sort of thing.
And I don't think it is. I get a lot of the advice from my staff and my team. I am extremely lucky at Nudge in that every single person that works for me, even the guys in the UK have worked for me in one of my businesses previously, currently, now that won't be able to maintain that forever unfortunately but having had two businesses over 15-years I've had a lot of recruiters come and go and I've been lucky enough to be able to pick and choose the ones who wanted to come on this journey and they've come on this journey. So I have a lot of trust in them and I ask them a lot of their opinions. There are obviously people I ask different things for. Other than that, I have a lawyer who I talk to a lot who is a competent commercial lawyer and he's also a friend. He gives me a lot of advice on things that I'm not great at. I have accountants that I trust and you know, those kinds of people that really help me make decisions. I'm not particularly what I would say as financially literate. Well, I'll put it this way, when I was managing the accounting for Nudge at the beginning we never had any money. As soon as I outsourced we seem to have money everywhere. So, I don't even understand how that works. So that really annoys me as well that I don't understand it but so having those people that can do the things that you know, you're bad at, I'm highly dyslexic. So attention to detail, legal matters, accounting matters… nightmare. In terms of other kinds of mentors. I'm a member of a club called CUB, Club of United Business, which exists in Sydney and Melbourne people may well know it. I was one of the very early founding members five years ago and it's entrepreneurs and it's younger, typically younger entrepreneurs building businesses just to have a place and a club of people where you can talk to. And I have developed probably 10 or 15 quite close friends out of that who run their own businesses. And I talk to them a lot as well. So, that's, you know, not a mentor in the traditional sense but CUB has probably become my group of mentors.  It’s been an amazing journey and five years member, and I will continue that and the club has changed in so many ways. And I've used the club in different ways. You know, I was running Ashdown, which was turning over 45 mil when I left, then I didn't work for a year and then I had Nudge. So, I've had a lot of life changes during my time there. And I've had a lot of advice from people just in businesses, not relating to recruitment at all. And I think that's good, just having a network of people who kind of get what you're going through is incredibly helpful. So that would be probably where I've got most of my advice.
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Sean: [00:30:03] Yep. I like that.
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Steve: [00:30:05] And of course the wife. I'll never forget the wife, right?
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Sean: [00:30:08] Okay. Well, we'll make sure that does not get edited out! We'll actually put it up the front. That is the right answer. And you know, I find that quite often there's almost virtual mentors. When you think about, the books you've read or the stories that you've heard from somewhere else, they might not be in your life all the time. Sometimes those things stick with you but to your point good advice, additional perspective or questions for you to chew on can come from anywhere and the question of course is which are the ones that really  have the biggest impact. And you've mentioned some of those today. You  alluded briefly before, to the world of mistakes, you know, the fails or the near misses or the catastrophes that we've had along the way and anyone who's of our age and built numerous businesses has got plenty of those but I'm interested from two perspectives; what's one of the most challenging times that you've been through. And what did you learn from that? But also, who did you lean on to get through that period from a personal perspective and what did they do or say that made a difference? So one is like, what happened? What was the learning?
The other side is who else was there? Because those tough times can be incredibly difficult as a Founder and you're often wearing that burden on your own shoulders.
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Steve: [00:31:19] No. I agree with that. I'm going to quickly give you the three things that I think of my biggest mistakes. And then I'm going to get onto your question because I think there's just very key things that I think everybody makes. The first is taking on too much work, and you know, there are times like I did last night, I worked a ridiculous day, but doing that for too long and not effectively enough for looking after yourself, not having enough exercise is very bad as a Founder. So you have to control that. Second is not building process because then you can't scale. So, those are the two things that I think everybody makes as mistakes. Business partners for me have also been a struggle.
They've been a joy and a struggle. Let's put it that way. Having business partners is very difficult, it's incredibly helpful at the beginning because it gives you a sense of comfort, it gives you someone to talk to and so forth. But inevitably with both of my previous businesses, the reasons I'm not in those businesses anymore is because the relationship between us broke down and it didn't break down because one of us was a difficult person.  They broke down because as your business succeeds more you're not the same person and you have different views or different risk profiles and sometimes are in different stages of life. So, my first business partner was quite a bit older than me. So what he wanted out of the business from a lifestyle point of view and from a financial point of view, from a risk point of view was very different to me. And that became a problem. The other one was that I tried to pick someone who was the opposite me, because that's what everyone says to do. But then you reach a point where you just don't agree on anything, and that was probably the… in business… that was the hardest time for me.  That combined with the first GFC when I had to make 20 people redundant. And that was the worst thing I've ever had to do in my life. I hadn't been a CEO long and it was really… I had let people go through no fault of their own. And that was very, very hard. And I leaned on my business partner then because that was my first business. And we were still quite early on in our journey. So that was okay. But the second one, when I split up from Ashdown and I use the word split up because it was a little like a divorce, my business partner, Mark, and I had known each other in London, we'd known each other for 20 years. We had been best men at each other's weddings. Our kids were the same age, we were in a relationship for all intensive purposes. But towards the end I ended up selling my share of the business to him. The relationship broke down completely. And unfortunately, we don't speak particularly favourably of each other now, or maybe that's not true, we just don't speak.  I think it's probably the better way. I don't, you know… like being… it was like getting divorced from marriage and I found it took a huge emotional toll on me and it was no one’s fault. We just had very different views on what we wanted to do with the business and where we want it to go and how much risk we wanted to take. And it was unresolvable, and unfortunately, I had to leave that business. That was really, really difficult. I lean predominantly on my wife to be honest. My wife is an incredibly strong lady. She's got a very kind nature to her and that's what you need when you're going through that kind of emotional toll. I also lost my mother at the same time to cancer. So, it was like a shocker of a year. So, I leaned on her and then actually ironically my lawyer again and my lawyer is a very close friend of mine. So, I leaned on him a lot and being a lawyer he is very matter of fact and practical and brutal, and sometimes you need that as well.
So having two people, you know, one is very understanding and kind, and then having someone who's here just almost un-empathetic and brutal. Having the combination of those two kind of keeps you on the straight and narrow. It's like one’s talking that way, the other one that way and it keeps you going. So… but it was awful. It was an awful time and it was not an enjoyable time. And I would say that exiting any businesses difficult even if you get paid out. When we sold the first one we both sold our business to a listed company and we got paid. That was difficult but going through that kind of divorce of a person is incredibly, incredibly difficult. So, choose your business partner as well. There are no business partners in Nudge and again this was why I probably turned down that money. The thought of having another business partner, even if they were a minority shareholder terrified me. We have an employee share plan. All employees get equity within the business but that's quite different, and I think that's probably the biggest learning I got from that is that I actually, I've done this for 15 years, albeit with different partners. I don't need anyone else. I know what I'm doing. I need to do it my way. And I want to do it my way. And I want to know that I can do it my way. That's the other thing, you know, you never really know when you have business partners. Why are we successful? Is it me? Or is it him or is it both of us? You know that's always in your head is as I'm sure you're aware imposter syndrome sits with every Founder, no matter how much success you have, and it's always popping its head up, and when you're not the one running it, you never really know if it was you or what was the other guy. So, those are probably the two.
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Sean: [00:36:17] Thinking back on that experience though, knowing what you know now, with the benefit of hindsight, is there something that you could have done or didn't do early on in the relationship that would have made it more likely that it would have succeeded or actually fundamentally, was it just wrong choice of a partner? You know, there's nothing I could have done. It probably wouldn't have worked anyway. Like what do you think about that?
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Steve: [00:36:41] Wasn't wrong choice of partner. I mean, we had phenomenal success and we had a lot of fun. So, it was a good time. We built a very good business and we enjoyed it. And it was very rewarding in so many different ways. I think about 18 months prior, I was going to leave the business because I can almost see it coming, and we sat down and we talked about it and we were going to do it and we'd agree to price. And it was all friendly and happy and everyone was going to be okay. And I should have left then at that point, and we wouldn't have lost our personal relationship which is sad that we have, our kids unfortunately don’t talk anymore and our wives don’t talk anymore… so you know  we've lost that part of our lives. If I had left that 18 months prior when I planned, we wouldn't have had this situation. Unfortunately, for some bizarre reason, I decided to stay. We were literally at the point where we were about to agree the split and he said, well, why don't you just stay? And then I don’t know, I said, oh..  we talked about it for about an hour. And then I ended up saying, yeah, and we hugged. And I stayed. And that was the worst decision for me. And he would probably agree. So, yes, I think my gut at that time told me to leave and I should have done that. And I think gut feel is a fascinating thing.  I'm really finding it one of the most interesting things. It's very important in recruitment. Very, very important in recruitment. I always push candidates to make a decision based on their gut, even if it's not my role they choose to take. I think it's so important and there's books on it. I don't know if you've ever read ‘Blink’, Blink is fascinating book that talks about that. That's a great book for anyone to read and it talks about when you should use your gut and when you should use your head and the differences. I think gut is… I don't know what it is. I don't know how it works and I've tried to learn and I still don't know, but I think it's a really, really important thing that people need to listen to more. And yeah, we could have avoided all of that, but… hey, you learn, we will learn. You’re only where you are today because of everything you've done in the past.
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Sean: [00:38:39] Well, that's all right. It's the sum total of all of your conscious and your unconscious decisions that got you to where you are today. So, you can’t love part of it and actually hate the rest of it because all of it's been influential.  All of it led you to where you are, which is means that includes the luck. And it also includes the stuff that you did that you got wrong. And it also includes the stuff that actually you did just purely on intuition that led you to where you are today.
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Steve: [00:39:07] Yeah.
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Sean: [00:39:07] When you think about, if we take a step back and think about forward-looking, what's in store for the next three years, what do you hope the organisation looks like in three years? I know that's actually a really long time given the company is two years old and actually where it is today, it was two years ago where you thought it was going to be, it was probably entirely different.  But on today's basis if we can use this as a bit of a timestamp for the future, what do you think the business is going to look like? It might be, I'll give you 18 months rather than three years, if that's easier, but where do you think it's going to be heading? And what are the big priorities for you?
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Steve: [00:39:37] Yeah. I actually have a really clear picture now.  If you ask me again in six months to probably be different, but right now, I have a very clear vision of what I want it to be. We have this office in Sydney, we are building this office in London. We've got two people that are currently… I'm literally about to open Singapore in October. So, what are we now, we're August or are we July, no we’re July. This is lockdown for you. You don't know where you are. So, Singapore is planned for October and then the US is planned for probably March, Easter time. And that now, where I go in the US we're still debating, but it's most likely going to be either Santa Monica, Austin or New York, we'll come to that later. That's too much head space to think about that now, but it's having these four hubs and the reason those four hubs are it covers all the time zones. It's where most of the companies we're working with want to expand into. And once we have those four hubs I want them to almost be carbon copies of each other. And what I mean by that is I want to have a space, we currently hire a television studio to record, Give it a Nudge. I want each office to have a section for our recruiters. I want it to have a studio within it and I want it to have a coworking space for the early-stage start-ups. So, we often, as I said before, take equity and start-ups rather than payment. I want those guys to have an office space that they can use for free from us. So again it's creating an ecosystem and I want to have one of those in each country. And I would envisage we would sit around the 40 to 50 staff mark. And when we've got that then we'll work out where the hell we go from there. But that's kind of where my head is leaning to and how I see it today. And I communicate this to the staff pretty regularly. You know, we have a weekly catch-up because we're quite… some of us team are remote in different countries. We have a Zoom catch up every week where we don't talk about anything, we just talk rubbish and that's really good. It's really important and then once a month I have a monthly meeting where we also Zoom people who are overseas in, but we all come together. And really the purpose of that is we talk about the values that we have that we created together, are we actually doing them, are we right, are we wrong. We talk about any interesting stories or problems. And I talk about the future and things that are happening. So, you know where we're going with, Give it a Nudge, who the guests are coming on, the purchasing of Balance the Grind, that kind of stuff. And then I communicate where I see the vision and it does change month to month, maybe not quite drastically but I want to make sure that everyone can see what's inside my head at all times, because then we're moving as one business rather than as me thinking about it and then doing something else. So, I think that's really important.
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Sean: [00:42:15] I think that's incredibly important. I mean, in the context of scaling an organisation, rather than just through the personal effort of the Founder, the only way that can happen as the organisation gets bigger is actually alignment between people's priorities and the priorities of the company. And actually, if everybody else is just doing the best they can within the realms of a job description kind of thing, “well, this is the things that I was responsible for.” It's like, hang on a second, this is actually about direction, especially at this stage of the company when everybody aligned, and understanding their role in that and it allows you that frequency of communication, I think really allows you that opportunity to tell them when it's changing and they signed up for that journey. It's like, hey, we might think it's this today, we might think it's something different tomorrow. The point is that actually you're on the journey with us, and people care about feeling part of something that builds that sense of tribe.
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Steve: [00:43:01] I think opportunities come from that. You know, if they know we're going to expand into the US they might have a conversation with someone that they wouldn't have had that might lend it to happening quicker or a new client or whatever. So you want them to when they're talking to clients and candidates, to be able to say, this is where the company's going, you know, I know exactly what Steve knows, so they're not relying on me to be out there being an ambassador, so to speak. They are all ambassadors at the same time. And the only way… I think that's probably another big, big thing that I have very much learned over the years of running businesses. You need to communicate. And everyone says that, but you do, and you need to structure it into your time and so it happens and you need to be very honest and you need to communicate everything and they need to know what's expected of them. If people don't know what's expected of them, they don't feel a sense of purpose. They don't enjoy their job. If they know what's expected of them, then they can’t do it. And everyone gets a sense of joy out of doing something that they know they were supposed to do. I don't care who you are, that and the ability to have an impact on a business by knowing where you're going and being able to suggest things. Those two things keep people very, very engaged.
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Sean: [00:44:04] I love it. Thanks, Steve. I have got a question I'd like to ask you and I ask everybody, every guest I'll be asking this question, but this segment is called ‘Above All Else’. So, I want you to imagine for a moment that you're in your yearning years, you've achieved all of the things you wanted in your business career, you've created value in the world, you've created the businesses that you wanted to create. You've had a stab at everything that you felt like you had energy for, and you still got a whole wealth of wisdom in that incredible mind of yours. And one day you get a call from the CEO of the largest global community of first-time Founders, you know, there's tens of millions of these hungry, curious individuals. They're just trying to break through that 10 mil level, a 20 people level or something where they are trying to build their company to something that's scaling a bit more, create more value in the world, serve more people. And the CEO, she offers you a single once in a lifetime opportunity to share your wisdom with those small business owners around the world. And she asks you for your three above all else's, she asks you to finish this sentence, “above all else the three things you must get right as a Founder if you want to scale are…?” What would your three above all else be?
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Steve: [00:45:11] I'm sure this question wasn't on the prep sheet. The first one is something that I've only adopted recently and I think has had probably the most profound effect on me in years. And that's do something that scares yourself. And what I mean by that is it's very the self-belief. And we talked about imposter syndrome briefly is a big, big problem. So, you've got to do something that you don't want to do, and that you're scared to do because as you start to do it, it makes you believe in yourself a lot more. I started doing kite surfing, which terrifies me, and I'm still trying to do it right. But I don't know why, but it gives you belief in yourself. So, I think that's the first one is, is definitely keep doing things that scare you because that scare you because that will help you overcome obstacles. The second would be make sure you're really engaged with your team. And I mean, no management, it's all about leadership. I'd really do believe that. And I think that that's the other thing that is often done incorrectly. I mean, everyone in the business, not just your top layer of management as it grows. Three things, one more thing above all else. Look after your health, and again, I think, I recently joined a new gym that is very tailored to me specifically and my needs. And I know that if I keep my fitness up, I just feel better and I feel more positive. And I feel like I can overcome things more than if I don't, if I'm working too hard and I'm sitting here and I'm working all hours and drinking red wine, you know, there's times for that. But if you do too much of that, you actually become less productive. So, looking after yourself, scale yourself and make sure you are a lead, not a manager.
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Sean: [00:46:52] Beautiful. I really appreciate that, Steve. Steve, I'd really like to acknowledge you today for the tenacity that you've shown in this business. And also the humility. I love the fact that you're willing to talk about the fact that you know what, actually I'm not a numbers guy, I don't need to be a numbers guy and I've done a good job in being aware of my strengths and my limitations and surrounding myself with people that can do it. I also really love the fact that you are tackling this in such a different way with really, you can get a sense of the  care for the customer and the care for your Founders at the centre, and that's why that ecosystem is being built in a certain way. Yes, it makes sense for a business perspective, but fundamentally you really care about them actually being able to succeed and that you can see that come through in the way that you're building your strategy. So, I'd like to acknowledge you for that.
Can I ask a question? How do people get in contact with you and what are the social handles or websites? How do people get in contact with you and a little bit more about Nudge Group, if they're interested?
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Steve: [00:47:47] So, LinkedIn is always the easiest, most universal way. Steve Grace of The Nudge Group on there. My email is the most obvious email in the world. It's [email protected]. And, yeah, those are probably the two easiest ways. The website is www.thenudgegroup.com. So it's all very easy, as long as you can remember The Nudge Group, you'll be our find me without any difficulty. We're also building a new website and that we’ll be launching in about two months. And on there, there is going to be a section where you can just book yourself into my calendar for 15 mins or half an hour. Anyone can do that to have a chat to me. And I'm trying to do that to make myself a bit more available. So, if you can wait a couple of months, you can just book in the calendar without even asking me as well. So that's going to be great, I'm looking forward to that.
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Sean: [00:48:30] Yep. It's very handy. Yeah very handy way to get the live diaries happening. Well, I really appreciate your time today, Steve. Thanks so much. And folks, I hope you've enjoyed the show today. Big thanks to guest, Steve Grace from The Nudge Group, make sure you check out his website and social’s links. Anything that we've talked about today of course will be in the show notes. If you got some value from what you heard today, please give us a review on Apple Podcasts. We read every one of them. It means a lot, not only to me, but of course to the unsung heroes, the team behind the podcast who produce it, they get a big kick out of it and that helps us get the podcast into the hands of more people like yourself. If you've got any questions about scaling up in relation to your own business, and you'd like myself or a future guests like Steve to tackle or suggestions for what you'd like to hear about on future episodes. You can send us an email at [email protected] or jump on the website.
www.ScaleUpsPodcast.com. You'll see a Speakpipe button on the right-hand side of the website. Feel free to leave us just an audio message is a lot easier sometimes than writing an email. Make sure of course that you subscribe or follow on your favourite podcasting app so you don't miss any updates about the shows or you can go to the website, pop your email address in there, and we'll always let you know before everybody else does that our show is about to come up. We'd love your feedback. If there's anything that you would like to let us know [email protected], and when you go to the website, you'll also find some free resources. So practical tools and advice. If you'd like to be notified about free downloads tools and templates that have been written by myself or provide by guests or experts, that's where you'll find them up as, so please check out the show notes online and remember…. that the only thing that assures a failure when you're attempting to scale is giving up in the first place. So, believe in yourself, stay unshakeable in the belief that you're going to get there, but remain flexible in your approach. You've been listening to the ScaleUps podcast. I'm Sean Steele. And I look forward to speaking with you next time. Thanks very much, and thanks Steve Grace.

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