Podcast Transcript

[00:00:28] Sean: G’day everyone, and welcome to the ScaleUps Podcast where we help first-time Founders learn the secrets of scaling so they can fulfill the potential of their businesses, make bigger decisions with greater confidence and maximise the value in the impact they can create in the world. I'm your host, Sean Steele. And I'm joined today by John Katzman, current Founder and CEO of Noodle. Founder and former CEO of 2U, and Founder and former CEO and chairman of the Princeton review. How are you today, John?  

[00:00:56] John: I'm great. How are you, Sean?

[00:00:57] Sean: Excellent, mate. I'm very pleased that we're on the phone, on zoom or whatever you want to call it. Those who are listening might remember, I interviewed Richard Katzman back in episode two, whose last name may sound familiar, who scaled Kaz.com from 5 mil to 500 mil over 32 years. And we were introduced because you guys are brothers. So, clearly entrepreneurial-ism really runs in the family.

[00:01:23] John: It's something that our dad taught us right from the start that it's just the funniest thing you could do. And he's been on my board and I've been on his board pretty much right along.  

[00:01:36] Sean: Oh cool, nice. And are there other Katzman's running around in the wings that are also scaling unicorns and things?

[00:01:44] John: We have a younger sister who went to law school and clerked and has been practicing a kind of legal things for forever. And clearly the smart one, but not the entrepreneur.  

[00:01:59] Sean: Didn’t want to be at the home. Got it. No worries. Well, look, for those who aren't familiar with some of the brands, I might just give a quick overview. So, Princeton Review, you founded in 1991, scaled that over 25 years to 2007, and that business was about sort of helping students deal with the college grad, school admissions, processes, and that's still going today and that's north of 1500 employees and still north of a hundred million revenue. 2U you then found it in 2008, scale rapidly over the four years to 2012, more than 3000 employees today, helped bring the universities online, which was a really, really critical period in education globally in doing that. And then you started Noodle later in that a year of 2012, which is still running today, 340 full-time equivalent employees. And you're helping universities and schools use tech to lower costs and a raise that sort of student to faculty engagement. And five years ago, you were actually pre-revenue. So, you at 0 revenue five years ago, and the business is now already… This will be the third company that you've taken to north of a hundred mil in revenue. Is that right?  

[00:03:13] John: It's pretty right. When I left 2U, I actually started a studio called The Noodle Companies. And I had a whole theory that I could find start-up CEOs and coach them and help them solve different problems in education. A couple of years later I found Noodle around 2015 and what has become Noodle and ran that one myself. So, it was pre-revenue because it was really gleam in my eye. Yeah.  

[00:03:46] Sean: Well, I want to come back to the studio concept later on, I know we had a bit of a chat about that offline. I think that's a really interesting stage in your journey, but maybe,

[00:04:00] John: It’s a terrible idea.

[00:04:00] Sean: And those are good fun to unpack I think because they're always great in hindsight. What led you to start this business, from my understanding you were studying architecture at Princeton around the time that you started Princeton Review, is that right? Can you tell me about kind of what the genesis was for Princeton Review?

[00:04:17] John: It is. I majored in engineering for a couple years and then switched to architecture and I never really intended to be an architect. I'm really actually pretty excited about urban planning and still am. But an architectural training was fascinating in terms of what it teaches you about iteration and about kind of an openness to sharing ideas and loving the criticism, loving the feeling that people are picking at it, and that you have to defend ideas. It might be something you don't like, and I do like, but there's a reason I did it. It's not random. So, I think it was a good training and sort of design thinking to be an entrepreneur, but it was never the plan to be an architect.  

[00:05:12] Sean: Were you thinking about that business whilst you were doing your architecture degree? What was the moment where you went, I'm going to start this thing?

[00:05:19] John: Tutored when I was in college and just loved it. In the U S, the big test is the SAT, the college admissions tests, and what makes teaching for tests like that so different from teaching in a school, is you spend 0% of your time motivating anybody. They are wildly motivated. And so now it's just a matter of focusing their energy and calming them down, and then doing your job as a teacher and I…oh, the other good thing about it is that people are willing to pay you well. So, I just thought it was a fun job and that it would be fun to start a tutoring company in New York and make a little bit of money and use that money to start a software company. And then Princeton Review kind of took off and I went with it.  

[00:06:10] Sean: Cool. I'm conscious that in the amount of time that we've got and the illustrious career you've had, we're going to have a real difficulty in unpacking every single one of those journeys, because each one of them was distinct in and of itself. But some of the things I'd love to draw out from you today were some of them, in hindsight, you've got the real opportunity to look at these three distinct chapters and go, okay, what were some of the themes or what were some of the learnings that actually I can draw across that as a whole chapter. And one of the things I'd love to start with is actually funding, because funding is always a hot topic for the people who are looking to scale. Fundamentally, some of them are still bootstrapping it, some of them are using funding, someone of them don’t know what kind of funding might be available to them or how best to leverage it. And I believe you bootstrapped Princeton, but you became more sophisticated in your understanding of funding and how to leverage other people's capital over time. Can you talk to me a bit about how you thought about funding over the course of these journeys and what you've learned through that?

[00:07:13] John: Sure. Princeton review, it was really started in 1981 and the VC community was still pretty small back then, and I didn't know about it. And it didn't even occur to me to raise significant money from outside. So, we did bootstrap it the whole way, and that's a long road. So, it did take 20 years to get public. The 2U, I raised about a hundred million dollars prior to the IPO and we were public within, I don't know, Six years of launch, maybe seven.

[00:08:05] Sean: How many rounds of funding were in that hundred mil?  

[00:08:08] John: There was four rounds. And at noodle we just finished a series C round that we'll announce, I think tomorrow of 50 million. So, total funding with that will be 120, and hopefully that is the last round pre-IPO on that one. So, the ability to access capital, I think is a huge accelerant to growth. And I always take more than I want. I don't want dilution, but I also don't want to be back fundraising 30 minutes from now.

[00:08:51] Sean: Yeah, right. So, what would be a typical length between those funding rounds. So, if we maybe go back to 2U, how much time would have been between those funding rounds?  

[00:09:00] John: So, when I'm doing it right, I look at around in the following way; first, I know it's going to take three or four months to get it done. So, don't do it when you're running out of money, do it when you still got some runway. The second, we're trying to raise enough money to take us 18 months, but our projections are always optimistic. So, we're really mean somewhere between, you know, 13-15 months. Third, you do it in stages. A serious research phase, who are the funds that are interested in your sector are not already funding a competitor, are early enough in their fund that they're doing something early stage, right? Because late in a fund, you're really just doing a follow-on investment for the most part, so it's too late for those guys. And funds, you hear good things about that you think they'd be a real addition to your board. So, finding those guys, like just creating a list of who are the 30 or 40 funds I want to go after and what are their email addresses, and other contact information. And then when you're kicking off, you're ready to cast the right size net. I think one of the big mistakes people make is they go after too few funds and then just the usual winnowing, and all of a sudden, you've got one guy who, he better invest or you're in trouble.  

[00:10:45] Sean: Yeah, no options. And so, do you find… and is it always been the case that or did it change over time that you are proactively doing that sort of… are you doing that diagnostic every time you're about to think about a round, are you sort of re-cutting it, or is it more like; hey, this is the funds that we want to be on this whole journey?

[00:11:06] John: Well, the over time there are people who I'd love to invest because they know my industry, they're smart, they're honest, they're great to work with. You can feel them trying to help you scale your business versus a kind of deadwood. But at the same time, every time you raise, your company is in a different place to say, you might be going after somebody who's later staged instead of earlier stage. And again, some of the funds that were at the right time, now within their fund they're at the wrong time or they invested in the meantime and a competitor. So, it's worth refreshing your list each time.  

[00:11:47] Sean: Got it. And so, are you thinking when you… I mean, how often are these funds adding more to their investment in each round and how often are they sort of getting off the carousel at each round?  

[00:12:01] John: No one's ever gotten off. They may pass, there’re times that there are limits to how big a part of a fund you can, any one investment can be. But generally, they've gone in on the next round and certainly no one's sold and I think it would be weird to sell, it would be quite a terrible message. So, that is not often done.  

[00:12:30] Sean: Yep. Okay. And so, in that process, what else do you feel like you've learned about funding? because it sounds like you've maybe had a more concentrate period or maybe it's similar to 2U to Noodle is the amount that you've raised. It sounds like you've might be raised a little bit more in the Noodle, did you do it in a more concentrated period, like is the growth trajectory different?  

[00:12:52] John: No, the growth trajectories are actually pretty similar. And this round, we haven't spent any of it yet. So, a couple things that I think are important, it's what documents you need to have in your pocket before you start. The first is your exact summary, like a page or two. This is who we are. This is what we're doing. And that's what you're sending out originally to the VCs. And the point of that document is simply to get you a phone call. The point of the phone call is simply to get you a meeting. No one is going to invest on that document. The second is the leave behind deck. And the leave behind deck is the wordy one, is the one that's talking a lot. And each slide has to explain itself because when the partner gives it to another partner, someone else has to understand it. But the third which you create from the leave behind deck is the one with no words, which is the presentation deck. And I saw a great Ted talk with David Rose where he talks about raising money from VCs, and the biggest insight…I mean, it's an amazing talk. But the biggest insight was, look, you're the preacher and it's the choir. Like the deck can't do the talking, you don't want them to say boy, that company has a good deck. You want them to say that company has a great CEO. So you are giving the insight and it is singing hallelujah. And so, the leave-behind deck is the wordy thing that you can give them afterwards, but the presentation deck, it's really just images that reinforce what you're saying, graphs, charts, or just a picture. And then finally…and obviously you've got a proforma that makes sense, and it's clear. And then finally, your FAQ and we think about before we go out, what are the questions people are going to ask, and what's a two-sentence answer. And every time I give a presentation and I can't give a two sentence answer to a question, I know I've lost them. Like, and we go back, we think about what's the answer to that question. And then we are ready for it the next time, because pretty much people ask the same questions. So, it's an iterative thing. Every, so often someone asks a question and actually you don't have an answer. It's a flaw. There's a problem in your model. And that takes more iteration.  

[00:15:32] Sean: And I think people will be curious when you're doing this much rising and that kind of rising of capital is critical in a business that's scaling so fast, how much of your time, if you thought about it just on a percentage basis, would you spend thinking about funding, going after funding? You've obviously got other people in the business and CFO might be helping you and so on, but how much of your time do you think gets invested on an annual basis in thinking about the rising and the financial side, not the operating side.  

[00:16:02] John: I've had spectacular CFOs for both of these businesses. Rob Cohen, who wasn't even a finance guy, never finished college. But brilliant operator and just a compelling person. And now a Meredith Ruble and both of them do the heavy lift in terms of helping create the list and then getting that first thing, if we want to bring in a banker for a later round, picking the banker, generally I'm doing the presentation and investor wants to see the CEO. And the later the stage, the more involved I am, but you're pretty involved. I'll tell you, in both of my last two companies, before we raised, it was my money and I don't perform as well when it's my money. [Cross Talk] Well, first of all, you're just more disciplined. Someone is looking over your shoulder. You don't want to spend it stupidly. Whereas, you get lazy sometimes. But second, and more importantly, I think it's if you've got the right kind of investors or even the right kind of non-investors, the funds that you're talking to who are smart, they're banging on your model. Tell me about your Tam. No, that's bullsh#t. Like, you know, look over here, what do you think of that competitor? What do you think of that a change coming in regulation or something and it's that back and forth that just starts focusing the business in a completely terrific way. So, I'd like to think I'm involved, not just to present, but to do the back and forth, that really helps me steer the business.  

[00:18:01] Sean: I love that. Well, I can imagine, because sometimes when Founders are thinking about that first rising, it can be quite an intimidating process for them. They're sort of worried about what those investors are going to be saying, or that they might not have the answer, but to your point, actually the quality of those questions can really help to sharpen the way that you think about the market, because you might get some real insights through what it is that you need to respond to.

[00:18:28] John: I think so. I think of all the documents I mentioned, the FAQ is the most important one that you're really thinking what, because even just preparing for questions, if you're with the right team, it forces you to think a little bit deeper.  

[00:18:45] Sean: If we shift away from funding and think about strategy, when you think about the strategies you put in place to win, fundamentally in those businesses to take market share, to be the leader and have the right products and services. When you think back on it, which is some of those strategies that you think, wow, that decision actually really changed the dial on our ability to grow either because that stimulated a lot of demand or it captured demand better or it did a much better job in providing service. So, when you think back on strategies, which are the ones that you really feel like made a big difference in your ability to grow?  

[00:19:21] John: At Princeton review, I came up with a thought of; here's the curve of the market, there are people who aim at the super expensive part, small, but very profitable. And there are people who aim in the middle, where the most of the people are. And I've tended to aim starting at Princeton review about one click south of the right flank. So, the Acura kind of BMW, not the Maserati. And for the people in the middle, it's aspirational for the people at the extreme who are actually cost conscious at all. It's a really good product and it's not stupid expensive. And thinking about who your client actually is, I think has been an important part of each one of these companies. Who are the schools I want to get in bed with, the original name of 2U was 2Tor, a number two TOR. After my old dog tour, it was like a toast to this dog who came into the office with me at Princeton review was literally six feet away from me for 15 years. We was running together. People would say, well, why are you naming this company after a dog? And I'd say, well, I could name it, dog sh#t. The brands I'm dealing with, the USC UNC chapel hill Georgetown, they're 300 year old or several hundred year old global institution. I mean, these are incredible brands, billion, billion, dollar, multiple billion-dollar brands. There's no Intel inside. This is no, like people want to know who I am. We are there to support them. We are not a brand. And the feeling of being humble about your brand, especially as a start-up, is also a part of that. But working with the schools, those are schools that are like just at the cusp of being Harvard. But a little bit more approachable, a little bit more accessible.

[00:21:40] Sean: I like that. Well, I can see how that would have made a big difference. And just going back to brands, what was the genesis for Noodle as a name?  

[00:21:51] John: I don't know if that word is used as much in Australia, but it means to think, to think creatively is to Noodle on something. Your brain is called… some people call it an ear noodle. But it's like thinking but more fun.  

[00:22:14] Sean: Got it. Yeah. I'm interested, John, I understand the passion for the sector, but what makes you come alive in business and how do you feel like that sort of shown up in these companies that you've built?  

[00:22:32] John: I love building a good team and there are moments where you just look around and you're just so happy to be part of this team. Like he's really good at that. She's great at that. And everybody knows their position. They know their lane and they're good at it. And there's that comradery that builds says that team kind of fleshes out. And as you start understanding the job better and the business better, that's really rewarding. We just were named a best place to work in New York by Cranes. And I think we had the same kind of award at 2U and at Princeton review at some articles about it. At Princeton review, we had over a hundred marriages, and it wasn't that big a company, because you're finding great people. And bring them together towards a mission and that is a killer.

[00:23:43] Sean: That lights you up. Yeah, I like that. What about…  

[00:23:47] John: I’ll say one more thing. I'm giving you very long answers and I apologise. I'm personally motivated by saving a princess and by killing a dragon and one or the other is not really enough. Like there's got to be something I'm doing, something that company's doing to make the world better and something we're doing to make the world less bad.  

[00:24:15] Sean: By kind of eradicating poor quality competition, is that?  

[00:24:17] John: That's right. And everybody gets motivated differently and some people pick more up on the first and a couple of us also are motivated by the second, but the mission of the company is important too. And it's part of what gets me excited.  

[00:24:35] Sean: You'd probably agree with me. I talked to private clients a lot about the idea that if you have the best product or service, like, you know, you seen all, everything that competitors got, you know what the feedback is on them, and you've got the best product or service. it's absolutely incumbent upon you to scale because to the extent that you don't, you are just rubbing the world of value. And those potential customer of value and they end up taking inferior products and services, having a terrible time of it, not getting what it is they were looking for. And a lot of value sort of being diminished, it’s tarnishing the industry. It really kills me. And some of those, the thing that is like; well, some of those Founders are just, they may not have a better product or service, but they're sort of out business-ing you. They're actually out competing you, they're out there doing a better job in customer acquisition. They may or may not be doing a better job in retention, but fundamentally they're going to gain market share because you don't have the game of business sort of lucked up yet.  

[00:25:24] John: I couldn't agree more like, you know, people think of selling, they think of like used car salesman, we're all selling all the time. You're selling the concept, you're selling an idea, you're selling as a service or product. And if you believe it's great and if you're not full of crap, what's wrong with that. Like, if you have a great idea about how we can solve this problem and you don't talk up, you've made the world worse. You're totally right.  

[00:25:58] Sean: Yeah. I agree. When you think back on, maybe I might know the answer to this because we talked a bit about the Noodle companies, the studio scenario, talk to me about your biggest mistake and what you learned from that?

[00:26:12] John: So, my mantra, and I can see it really clearly in other companies and other people and sometimes I just miss it of my own is that the plural of focus is lack of focus. There's no such thing as being focused on several things. So, the idea of starting a studio is you're going to have these great companies and that you can just like touch each one every once a week or once a month or once a quarter and it will spring to life. And actually start-ups are hard and the kind of people who are great, kind of guns for hire, who can take a company that's ongoing and 10x it over time, are not really the same kind of people who can start something from scratch, where there is nothing to grow. Everything you do is kind of wrong. It sounded good in the business plan, and then you get into it and you're like, okay, this has to change this way. And this has changed this way. And one by one, you're kind of knocking down all of your errors, all the preconceptions that were wrong and sculpting, and by the way, changing your team, because again, you brought together a bunch of people and some of them turned out to be not the right people for those positions. So, there's an awful lot of twisting and turning. And I wouldn't call it pivoting because my businesses ended up looking very much like to an outside eye, like what we said we would do. But nothing is the same. And so I had the studio and just none of them went anywhere and it was the most frustrating thing, and, God being a VC would probably kill me.  

[00:28:05] Sean: Better to be on your side of the table with your skillset. Yeah, I think that's so true. I think you even see that in a start-up community, when they're looking for great talent and they often pull in great talent from big companies into a really start-up environment. Many of them just massively struggled because they used to structure and order and things that work and process, and then it's like, oh no, no, you got to do all those things. All of them yourself all the time. And it's just relentless and ongoing and 24/7. And sometimes that's a really difficult fit to make. And like, I can say that the people who are good at scaling are not necessarily the people who are good at finding product market fit in the first place and getting off the ground.

[00:28:45] John: And by the way, I totally respect that skillset. It's just a different skill set. So, if you're a start-up pitcher and you can take the team into the fifth or sixth inning, it's a US metaphor and I apologise. And you hand the ball to the next guy and that's an important role also. When I'm talking to kids right out of school about joining a start-up versus joining an established company. A great established company has great systems and they're going to teach you those systems and you're going to get it. You're going to understand why the system exists and that they're good. And you're going to be able to implement them anywhere you go. A start-up is going to teach you to figure it out. Like it's all f#cked up, go and hopefully you're going to have to bleep out what I'm saying and I apologise, but you're going to learn how to solve problems and that's valuable too.  

[00:29:50] Sean: Yeah, I agree. When you think back on your most challenging time in any of these companies, what would you say that what’s the first one that springs to mind?

[00:30:02] John: There's been a bunch. The one that comes to mind, I had this super MBA CFO at Princeton review. Great guy, again, refugee from in that case wall street, which is, I think an even tougher fit than a larger company. And everything was going well. And we're working, getting ready for an IPO and he comes in one day at five o'clock he says, well, I've got some bad news, like we're out of cash and we're missing a couple million dollars and I think it was stolen, we just counted wrong. And I don't know what to do. And therefore the financing is probably going to be really hard, because our accounting systems are clearly all in disarray. And then I made the problem worse because I let them go. And that feeling of your first job as CEO is not to run out of cash. That's when they take away the football, and understanding your metrics and understanding your financial metrics and understanding your cash and your runway, and having a CFO focused on those things. We can all get all caught up in product and sales and growth, in your team. But the biggest mistakes I've made are all around that, just take my eye off the cash.  

[00:31:38] Sean: And it's interesting, isn't it? Because some people go, yeah, but that's, your job to delegate to them out. They supposed to be responsible for it. And I always think, you need to know enough about each of those functional jobs, those direct reports, particularly finance to know what it is that you're looking for to make sure as you said that, that individual is focused on it, that you can say those metrics, that's not micro-managing, that's just sort of expectation management's like; Hey, I know these things are important. Let's make sure they're part of our game plan.  

[00:32:07] John: What do you think about being a parent of a little kid and you know, what are the metrics for kids' health, things like, your temperature and your reflexes or whatever, but you can walks in the room and from across the room, he'd say, he's got a cold, right? Like there's certain things you just know, you don't need to measure them, you know them and then not many things, but when you talk to managers and it's like, what are the numbers that you just know intuitively? You don't have to look at the latest report, you know how much we're going to grow, you’re head of sales, you know how much we're going to grow this month, this quarter, and you might bullsh#t me, but you know what it is. And if you don't, you're not very good at sales, right. And if you’re the accountant, if you're the CFO, you know your cash, you know your runway, you know your profit margins, and within any division of any company within any stage of the company, they're going to be different metrics that you should know like that, but they're never more than like three of them for any one person. It's like, what are the things that I just should be able to answer like that, I don't have to look it up.

[00:33:30] Sean: Yeah. I agree. Let me ask you, when you think back on your time that you've had in these three companies, is there something that you would do differently, which is always such an easy question to ask when you're on the other side of that. But is there anything particular that sort of jumps out to you, like, actually, I really would have taken a different approach there had I had my time over again knowing what I know.  

[00:33:57] John: My biggest flaw at Princeton review, I think was we were scaling nicely and then as the market got more competitive and as we had scaled. we had offices and I don't know, 20 countries and a bunch of states, I started a little bit crawling into…We sort of crawling into our own butts, like you've got a business it's like this, and you start thinking about incremental sales to existing clients, taking a 6 sale, making it a 7 sale, versus how is this as a platform and how do we really solve somebody's next problem. That's a 60 problem, right? So, problem number one is just lifting up your eyes sometimes. And that again is where VCs are really good that they can help you see, because they're challenging you and they're up there in the atmosphere looking at things, and you're down on the ground a lot of times. And so, it's really helpful to have people to help you see around the corner. Switching metaphors, sorry. The second one I think is a problem, probably a lot that you've probably had and that a lot of entrepreneurs have, when someone's the wrong person, private equity guys will fire him way too soon, and entrepreneurs will fire them way too late. And part of building loyalty is being loyal. But as someone's really struggling in a job, it's not necessarily loyal to the company or loyal to the person to let them twist in the wind and give someone some support. Donald Burr once said to me, he founded People Express in New York, the incredible entrepreneur, in the U S rather, he said, you've got to give your people unconditional love. And when you can’t. Then you have to fire them like that middle ground is just horrible.  

[00:36:09] Sean: And I always think when this struggling, they're not having any fun either. And there is a job, there is a company, there is a condition in which that person is really going to fly. And if they are massively struggling and you've given them good quality feedback, and you're shown them the way, and you've given the support and you're giving them a chance and it's still not there. And they're the hardest ones, of course, are the ones that do just sort of good enough, just good enough. They're like; oh, I really don't want to let them go, but they're just not quite there that their opportunity to actually feel successful is being limited by staying.

[00:36:42] John: That's right. And it's the people who are really good people. Because it's easy, we've had at all my companies kind of a no assholes role, and we take it seriously. There are the high-performing person who is not a good person, we have no problem letting go. And everybody talks about that problem. To me, it's a simple one. But a good person who's struggling, and it's like, wow, that's killer, but you're totally right. Like in the end, they're going to be happier and more successful and you just got to help them find that. And the way I end up making it okay for myself to do it is just paying too much severance, because it's a choice, I can either overpay on severance or I can hold onto the person an extra six months and that's not good either.  

[00:37:34] Sean: Yeah, I like that. That's an interesting strategy. So, if you were to now go out into the future, what does Noodle look like three years from now?

[00:37:47] John: So, the first stage of the company was to help schools use technology to build online programs of quality and scale and to help them understand kind of the digital world. The second stage is to do that, not just for degree programs, but for non-degrees certificates and courses. And we're launching that in January. The stage behind those is if you look at every other sector of the economy, we moved from online and on ground to just a fluid. Business, home-depot doesn't care if you buy this hammer in the store or you buy it online and pick it up at the store or they deliver it, it's all one system, the ads are for home-depot. And the universities aren't there yet. They're still thinking about online as a silo and helping them see it as a fluid. These are all just my students. This is my faculty, and this course is online and it was on ground, except there's a storm coming, or this professor is sick and so, it's on ground online where there's…any number of opportunity to get transferred. So, I'd like to see us as more profoundly connected to the school, not just supporting their online efforts, but supporting their efforts.  

[00:39:29] Sean: Yeah. I really liked that. And I think in education, that's so true. I think that's so true globally. It's certainly true in Australia, in Australian universities and many private institutions, still very much online versus on campus. And we all know that actually the best student outcomes are actually achieved in blended a scenarios, every bit of data points to that, finding ways to create the right experiences in the face-to-face albeit virtual, or be it with people's and I'm kind of social learning experience and finding the ways to teach the boring stuff that people can do in their own time, in a way that's convenient to them. All that makes sense. So, I think that that's an exciting future. I've got one last question for you. And I ask this to each of the Founders I interview, and this is it's a little segment called ‘Above all Else’. So, I want you to think much further out now to your, let's call them your yearning years. I don't know how many more businesses you're going to build, but probably a few. Let’s assume you've done with the business building, maybe you've lost a little bit of energy, you've still got a lot of wisdom in your head, faculty is working very well. And the global CEO of the world's largest community of first-time Founders calls you and says; John, I've got tens of millions of first time Founders around the world who are hungry for information about how to scale their businesses and I want to give you a sort of once in a lifetime opportunity to crystallise your three above all else's, which would be to finish this sentence. Above all else, the three things you must get, right as a Founder if you want to scale are what, what would be your three above all else’s?

[00:41:05] John: First is Tam. There are an awful lot of Founders who really don't understand their addressable market. And you lead off almost in a deck and they're saying, this is like 6 billion opportunity or addressable market. You're like, you're just wrong. You're just making it up. And to some degree, they know that it has to be fairly large because otherwise they're not investible. It's kind of a lifestyle business, which could be a great business, but it's not a professional capital. And so, they have every incentive to jack that number up beyond reason.

So, the first thing is, pick a business that has truly a significant Tam, at least a billion US and be hard on that number. Like, know it, understand it, and don't bullsh#t yourself much more importantly than sh#tting investors. The second is team. I'm not big on partners, and I look at a lot of businesses that, it's two people, somebody is a really good engineer or somebody else is really good at sales and they get together and say, let's do something together. And we'll just split equity. And there's so many problems with that. A company has somebody who runs it, and giving people options. I'm all for equity, even some Founders stock, but who's the person whose business this is. I think there's got to be real clarity. It can't be the one, there's a hard conversation, a difficult topic. We're just going to look mean at each other until we agree. Like somebody's got to make a decision. So, the notion of finding great teammates who aren't necessarily partners, but who are co-Founders in a very real way. Like they're part of the founding team and loving them and building together, but in kind of a constitutional monarchy, somebody is making decisions, but it's not a vote, but everybody's involved. And the third one, life is short and you're working an awful lot of it as a start-up CEO, you really have to… like, I've heard people say this is just a business. To me, the why, the fact that you're pulling together this team to solve a problem, the quality of that problem, this is really a problem I want to solve, I ache to solve. And the quality of the team, these are people that want to go drink with, these are people I want to hang with, because they're going to be with them a lot. To me, is really important. And it's not just a job. A start-up is a mission, and you'd really like to pick a good mission and pick a mission and pick teammates for that mission that everybody's going to be watching each other's back because there are a lot of snipers out there.

[00:44:51] Sean: Wow. That is absolute gold. I really appreciate that, John. And I think those are really wise and thanks for really thinking about that. I think that's super instructive. I'd really like to acknowledge the way that… I would love to chat to you just all day about these businesses. And I've really enjoyed interviewing you. And I'd like to acknowledge the way you built these businesses. I mean, you have just a tremendous amount of energy as an individual to have tackled. I love the fact that you're staying in education and that you are finding different ways because to your point, you understand what the tam is. You really good at building a team and you've got a really clear personal drive around solving some of these problems because clearly things that irritate you or that you can see coming down the line that are problems for your clients that you're like, that just has to be solved. It has to be solved in a better way than somebody else is willing to stake their claim to doing it. And I just love the way that you have infused that in your team. And I'm sure people are really finding it challenging and really enjoyable working in your businesses. How do people get in contact with you or follow along with what you're doing?  

[00:45:58] John: I wish I were better at social media and I'm not, but those were very kind words, and thanks. I'm just [email protected].

[00:46:10] Sean: Awesome. And then Noodle.com who wants to follow them, which I'm sure is on all the socials. Well, folks, I hope you really enjoyed the show today. It's been an absolute pleasure interviewing you, John. Huge thanks to you. Folks, if you've enjoyed what you’ve heard, obviously, we'd love if you leave a review really helps the algorithms, help the podcast find more people. You can jump on ScaleUpsPodcast.com. You can leave your email there and we'll let you know when episodes are about to drop all free tools and resources provided by Founders. If you love the socials, you can jump on @scaleupspodcast on all the usual socials. But remember that you've heard from someone today who's really had some pretty significant effort and investment in, I reckon, John’s faced some pretty tough times over that journey. And there's probably times where John's felt like getting off the bus. But the only thing that's going to guarantee that you won't scale, there's no guarantees that you will scale, but the only thing that's guarantee that you won't scale, is actually giving up, so you have to stay on shakeable in your faith that you're going to get there, and you have to remind flexible in your approach. And when you need help, ask for help. You'd been listening to the ScaleUps Podcast. I'm Sean Steele. I look forward to speaking to you again very soon. Thanks so much, John.  

[00:47:15] John: Thank you, Sean. Totally fun.

[00:47:21] Sean: G’day everyone, just a couple of quick things before you go. If you have questions that you'd love myself or an upcoming guest to tackle about challenges that you're facing in scaling your business, please just jump straight on the website. Scaleupspodcast.com. You can record your message straight from your mobile by hitting the button on the right-hand side of the page, or you can just email them the old-fashioned way, [email protected]. And just a quick reminder, nothing we spoke about today constitutes financial business advice. If you are considering making big decisions in your business, seek out a professional who can look at your situation in detail and make sure you're getting sound personalised advice. Thanks for listening. Look forward to being back in your podcast feed next week.