PODCAST EP 64
Simon chats with Petar Lackovic, Director of Sales and Entrepreneur Development at the Entourage.Listen Now
Andrew Birt from Mosaic Labs is a product developer famous for his work on the LifX brand (https://www.lifx.com/) of wi-fi connected bulbs sold through Apple stores worldwide. He’s now building new products through his Mosaic venture in Brisbane including GoSave, a financial saving tool aimed at children.
You can contact Andrew Birt here: https://www.linkedin.com/in/andrewbirt/
Simon Dell: I’m lucky enough to be joined by Andrew Birt today. He is based here in Brisbane like me. He’s got a pretty long CV, so I’m just going to pick up some of the highlights. He’s currently the founder of a company called GoSave. We’ll hear about that a little bit later. He’s also the founder of Mosaic Labs. He’s been the CMO of CliniCloud. He’s been the founder and CEO of LIFX.
He was the founder and MD of AngelCube down in Melbourne, the Managing Partner of Startup Marketing, all sorts of other bits and pieces. Welcome to the show, Andrew.
Andrew Birt: Thanks so much, Simon.
Simon Dell: And recently a dad for the second time three weeks ago.
Andrew Birt: Exactly. Luckily, she’s a pretty good sleeper this time so I feel pretty good.
Simon Dell: Is it bringing back all those horrible memories from the previous one?
Andrew Birt: I do. It’s funny. It’s amazing how much you forget. It’s like we’re doing it all again for the first time. It’s a lot of fun.
Simon Dell: First question. What was your first job? When did you first get actually paid money to do something?
Andrew Birt: Like, outside of a school job?
Simon Dell: Anything. Mine was delivering newspapers, the horrible job that that was, but what did you do?
Andrew Birt: A lot of entrepreneurs seem to have this really good origin story of they collected golf balls and sold them. My first job was basically stocking shelves at Target. I think I was about 15, and dad said — a lot of my friends actually worked in fast food, so McDonald’s, or KFC, and dad wanted me to do the same thing. I wasn’t too keen on that idea, but Target wasn’t a bad compromise. I kind of used to walk around and stock.
Simon Dell: What put you off the fast food?
Andrew Birt: I didn’t like the idea of standing at a deep fryer for hours on end. I was pretty clumsy at the best of times, there would’ve been a workplace accident waiting to happen.
Simon Dell: Right. Personal safety was paramount at that point.
Andrew Birt: Exactly.
Simon Dell: I’m just going to get a bit of an overview, because we’ve had a few emails backwards and forwards. Your profile basically is littered with what looks like you creating things. Would that be a fair assumption? I won’t generalize about everything you’ve done, but it seems you’ve created a lot of things.
Andrew Birt: Yeah, that’s probably a fairly good summary. I guess throughout my career, I’ve been good at starting things. And I think in the later part of my career, I want to get better at finishing things. It’s a really interesting thing for people who are entrepreneurial. Starting things is definitely a challenge, but the really successful entrepreneurs go on to really stick at a particular project for a number of years, turn into a big company. I haven’t necessarily been able to do that just yet.
I’m kind of hoping my latest project, GoSave, want to tie up a heap of the learnings from previous projects and hopefully really make this one a long-term one that we can build into a big company.
Simon Dell: When did you first sit there and go, that you realized you wanted to make things or create things? Was there some sort of triggering moment that wasn’t stacking a shelf in Target that you suddenly went, “You know what? I’m pretty good at creating these things or coming up with these ideas.”
Andrew Birt: I guess my first professional job after uni was working for RMIT University. They’ve actually got a commercialization and commercial offshoot down there in Melbourne called RMIT Training. I worked in like a business development role there for a few years, and we used to commercialize new products internally. So I kind of always used to gravitate toward those new products, and was always keen on what was going on, and wanted to help people build things. We had this awesome product development guy called Laki Sedaris who I used to really look up to.
Simon Dell: That’s a good name.
Andrew Birt: Great name, isn’t it, Laki? I was always fascinated by Laki. He was so innovative and always had new ideas, and just being able to pull them out of nowhere, so to speak. I always enjoyed working with him. I think him and I got along really well, and the more and more we talked… I think I had this natural creative streak, anyway.
My dad’s an artist and then become a lecturer in Fine Arts, so I guess he’s the real creative. But yeah, I think I’ve definitely got that innate sense to want to build things and make things. That’s how I describe myself in some respects, too. I’m kind of a marketer turn maker. Most of my professional career has been marketing, but now, particularly after LIFX and now GoSave, I came up with the idea, sketch the initial designs, prototyped it all, done a lot of the development in-house with one other business partner. This is probably the first project I’ve actually gone through the full life cycle as a maker. Kind of starting to see myself a bit differently in terms of my career going forward.
Simon Dell: Back in those days at the RMIT, was this something that you sort of think back and remember fondly that you created, or at least you worked on with other people that was created?
Andrew Birt: Yeah. Laki and my boss at the time Paul created this really good product called TV news. It sounds a bit archaic nowadays, but this was 10 years ago. They found out through a bunch of research that they did that every single library in Australia, particularly every university library, has the ability to record things on TV. They’re legally allowed to do it because they can show it in class, and they pay a big licensing fee to do that to copyright and licensing Australia.
The RMIT guys basically determined that, “Okay, the universities are paying this fee. They’re allowed to record things and show them to their students, but they never do.” At RMIT, we actually started typing all of this TV news content, and archiving it, and then making that searchable. So, lecturers could type in any particular topic, maybe it’s a marketing subject, and then pull that up and show the students.
They could do that entirely within their licensing conditions, and we just productized that for them. We used to charge $30,000 annual subscription for that, or even more. And Laki just came up with that idea just over beers with a number of the team members one day, and it turned into a million dollar product for the actual business. It was one of the first commercializations of a new product that I had seen up close and personal.
Simon Dell: When you look at those kind of products back in those days, and your next role after that was actually in a marketing company, what are some of the things that you saw the businesses do badly? Those new product businesses, those startup businesses. What did you generally find that they did badly back then?
Andrew Birt: That’s a good question. I created my own marketing consultancy because I was very interested in helping startups. But I think at that point, my skill set was entirely marketing. So, I didn’t really have the ability. I’m not a developer by trade. I didn’t really know how to make any products. I was interested in new ideas but didn’t really see myself as the ideas person at that point. And so, I thought a marketing company would be really interesting because, obviously, that’s my skill set, and I’m interested in and helping new ideas grow.
And so, I basically set up shop as a marketing consultancy and started working with different entrepreneurs of all kinds, really, before moving and eventually specializing in technology. But in terms of mistakes, it’s the classic things, and we all do it. I think people getting too grandiose, so people thinking they could take over the world overnight and on a shoestring budget. I think probably people not thinking through their product market fit as well.
It’s very easy to think an idea sounds good, but then to really go out there and test it in the market and make sure people actually want what you’re building is super important. I think that’s a really easy mistake to make as an entrepreneur, that kind of confirmation bias that we all when we come up with an idea and we think it’s good. It’s always good to stress test it.
And then being under resourced was the other big challenge. When we first started the marketing consultancy, people used to say, “Oh, startups have got no money. How are you guys going to make any money by providing consulting fees?” It’s not a great model to provide consulting fees to start up.
Simon Dell: If you don’t have any money, yeah.
Andrew Birt: Exactly. And so, that led me onto my next company as well, which has a different model, which was AngelCube.
Simon Dell: Did you ever manage to overcome that? Because that’s a challenge that I’ve had, and a colleague I work with now is having, that these startups often need expert advice but can’t pay for expert advice. They sometimes need the expert advice but they need the lower paid implementation, if that makes sense.
Andrew Birt: Yeah, exactly. It’s a really tough one too, because you want to help the startup as much as you can. Some service providers, and particularly I’m talking ten years ago, the web development companies used to be quite predatory. I remember we had a client that was paying $100,000 to build their website. It wasn’t a complex piece of software. It was really almost a LinkedIn clone. They really shouldn’t have been paying anywhere near that.
Simon Dell: I’ve seen when startups go to creative agencies, and the creative agencies says, “What you need is a big idea to launch your product into the marketplace” when that’s desperately what they don’t need. I’ve had a previous guest that’s said that that’s one of the problems with marketing agencies. They sell what they want to sell. They don’t necessarily sell what the client actually needs irrespective of whether it’s a startup or a multi-million-dollar business.
Andrew Birt: That’s so true. I found that as a marketing consultancy myself, I used to struggle with that. I’ve always had this problem with being too honest. And so, to the detriment of my marketing company, I was always talking potential customers out of spending too much.
Simon Dell: That’s not a good idea.
Andrew Birt: Yeah, but that whole thing where you know that they shouldn’t be spending that, I always prefer to be much more direct with them. In terms of building a sustainable consulting company… It’s funny. I do quite a bit of consulting nowadays. It’s really just a side project to keep me fresh and keep me interested in different things.
But I found that moving to a retainer model works really well. In Startup Marketing, we used to do project by project work. But nowadays, usually I work with pretty well-funded startups that have usually got seed, or series A, or they’re self-funded but to a fairly significant amount, and then usually just work with them on a capacity where I say, “Let’s try a retainer in place” that’s less than what they’d be paying for a full-time staff member, but then it gives me the ability to come in a day a week or less. I think I can add a lot of value, but not necessarily being a full-time part of the business, just kind of helping them get from where they need to go. And not always for a long period of time, either. It might be 12 months and then they can hire a full-time CMO from there.
Simon Dell: I’ve been trying to move to that model in the last 12 months. I’m building a team behind me that I can say to a client, “Well, you could spend $5,000 a month on a marketing executive, or you can spend less on having a team of marketing advisors who can come in your business and help you every month.” And most people see the benefit of that. We still get pushed back where people go, “Oh, we want someone in the business.”
We were joking in the last podcast about people who recruit marketing/admin people, because you only ever get one of those two, you never get both. You either get an admin person or you get a marketing person. One part of that job description tends to fail. Trying to build that retainer model is tough. How do you sell that? When you’re going out talking consulting, what sort of language, what sort of ideas are you saying to people why they should have someone in one day a week rather than a full-time person?
Andrew Birt: To be honest, I don’t really go out there and seek that kind of work. I found over the years that it tends to come to me just based on projects that I’ve been involved in the past, particularly my experience with hardware. I’ve probably worked with about seven or eight hardware companies now over the last few years, and it’s probably mainly from the experience from LIFX.
We turned LIFX into a reasonably decent success story. I left sooner than I would like to. We can talk about that as well. I think it’s people that have seen what we did at LIFX and then ended up seeking me out and saying, “We’re building something similar” or “We want to take this particular product to retail.” And so often me, it’s been just leveraging that experience that we gained through that particular product, whether it’s launching it on Kickstarter, or raising series A, or setting up retail and distribution channels. I’ve ended up doing that at LIFX and then repeating that with a number of other companies since.
Simon Dell: Before we talk about LIFX, I just want to touch on Angel Cube because you highlight that it was one of one of Australia’s first accelerator programs. What took you to that from a marketing company? What was the thought pattern in that sort of step? Yeah.
Andrew Birt: That’s a really good question. I really like the model. I think I was struggling with having the marketing consultancy and that reluctance to send people a fee proposal, and then work on project-based work that I was talking about earlier. I remember I picked up… I still go to Borders all the time and read the magazines. This is showing my age. I don’t think Borders even exists anymore, it certainly doesn’t in Australia.
I used to go and just browse the magazines all the time. I think it was the cover of Ink or Fortune had Paul Graham from Y Combinator on one of the covers. I remember leafing through that and reading about Y Combination. It was probably in its second class at the time, so I think this is 2007. I don’t know the dates exactly, but I was reading about this model that this guy is actually giving startups. And we all know the model now, but $18,000 of the time, and taking a small percentage of their business, and giving them mentorship, and creating a pool of experts.
I just read that, I thought, “Wow, that’s so much better than my consulting company. That’s a really superior model.” And it really stayed with me for about a year. I used to think about it. I wrote business plans. I talked to the Techstars guys early on about potentially bringing it to Australia years before they eventually did. They didn’t want to bring it to Australia at the time. They were early in their life cycle as well.
I had that interest in doing it. And then it was funny. We had an approach from a particular client who had this idea for an online contest. A wealthy guy, good entrepreneur, had sold his previous company, approached our marketing company about building this online contest software. And he said to me, “What do you think of the idea?”
I heard him out for about an hour or so. And probably again, the honesty factor. You know, he’s sitting there excited, really wealthy guy, he said, “Do you like this idea?” And I said, “To be honest, I don’t. I think it’s a shocker.” I just wasn’t interested in at all, couldn’t see the merit in it. Smart guy, but an older guy, and sometimes… I think we don’t see it as much now, but I think we used to see people pitch technical ideas that couldn’t necessarily be built.
I think all of us have a better understanding now of what can and can’t be built, but in 2010, that might not have been as much. And it was funny, I thought, “Oh, this is going to be the end of that relationship.” But to his credit, he said to me, “Well, what would you do if you had $100,000 to spend on a new product? Because I’m more interested in working with you than necessarily working on this particular software.”
Because we had been in a few conversations, so we built up the relationship by that point in time. And then I mentioned what I’d read about Y Combinator, and how I talked to Techstars, and what I was interested in there. He loved the idea as well. So, he got it instantly and really liked it, and went away and did his own homework, and came back and said, “Right, I’m going to put the first $100,000 in. Let’s write a business plan and go and show that to other, and let’s see who else likes it, too.”
That’s what we ended up doing. We put the AngelCube business plan or the IM together, shopped that around over a period of three or four months, and eventually raised just under a million dollars to launch that accelerator in 2011.
Simon Dell: What did you do to get that name out there? Because obviously, there’s accelerator programs early days of those in Australia. How did you build awareness of that?
Andrew Birt: Yeah, it’s funny. I’ve been asked that question a lot over the years. The answer is pretty simple. If you’re giving away money, and no one was at the time, people will beat a path to your door. There’s only Startmate that existed before that, and then we came along. And the VC scene in Australia’s pretty vast at that state. It’s matured a lot recently, got some amazing funds now, but there wasn’t many early stage technology funds back in 2011.
And so, we did a meet-up. I used to run this meetup group called The Lean Startup Melbourne, and we had about 700-800 members in that group. We did an event specifically around AngelCube to that group, and it was completely full of those 200 people there in the room, all had come along to hear about it, and what we’d planned to do, and then we got quite a bit of press, and a lot of inbound interest through just email and social media.
I think we had 150-160 applicants in that first year. It really wasn’t a huge challenge to get that kind of deal flow. Not that I really like that with deal flow, but…
Simon Dell: I know what you mean.
Andrew Birt: But I’d imagine it’s harder now. There’s a lot of accelerators now. But yeah, in those days, it was a hell of a lot easier.
Simon Dell: It’s one of those stories, when you look at the time that you did that, which is 2010-2012, that echoes other stories that people have told on this podcast; that that sort of time from roundabout 2008-2013, those sort of five-year block there was when there was the early days of things like smartphones, the iPhones, early days of Facebook, Twitter, et cetera.
And some people have said that back in that day, if you just did the basics right, if you just produce good content, if you just had a lot of people following you on Facebook, you could pretty much achieve anything. It was just that it was those channels were in such early stage that anybody doing something right on those channels was scoring goals easily.
Andrew Birt: Yeah, isn’t that interesting? The startup market was tiny in those days. I remember I used to tell people I work in startups or with startups, and people would always say, “What are startups?”
Whereas nowadays we have the Turnbull government banging the drum as the innovation agenda. It’s a really kind of well-known word now and very mainstream. I’d never really predicted that. I just gravitated to it because I was interested in it. I found it cool. Who knew it was going to get as big as it has?
But I guess amount of wealth that’s been created by the smartphone, and all the apps, and the opportunities that that’s opened, it’s just drawn so many people in.
Simon Dell: LIFX then, it says founder and CMO. Talk to me more about the founder bit first. How much of a founder were you? Was it all your idea? Was it a group of people? How did it happen?
Andrew Birt: It’s a funny origin story, LIFX, because it was really a bit of a side project. Phil Bosua was the inventor. He came up with the idea. He was the real instigator. There’s actually nine LIFX co-founders. It’s funny to explain the story, but if you were to talk to someone and say, “That was the LIFX founder”, you’d point to Phil because he really came up with the idea himself, kind of drew the idea on the back of a napkin and started pulling the team together.
And the strange thing was that he was going through AngelCube at the same time he came up with the idea for LIFX. Niki Scevak from Blackbird actually introduced me to Phil initially and said, “Look, this guy applied to Startmate. Really smart. Have a million ideas. He didn’t come into Startmate. We weren’t sure which idea he wanted to do, but he’s worth chatting to if you want to interview someone for your Melbourne cohorts.” This is our second cohort in 2012.
And so, I sat down with Phil. And sure enough, Niki was right. Phil had a million and one ideas, and not necessarily all of them were good, but we brought them into the AngelCube program. He’s such a creative force. And him and I worked really well together, got along really well. And I think there’s a bit of good dynamic between us. I was kind of a straight man to his kind of crazy inventive type. And so, we hit it off really well in that regard.
And then he was going through AngelCube with a different idea. And when he said to me, “Oh, bloody, I’ve got another idea for a Wi-Fi light bulb. Do you want to work on it together?” And I thought, “Gee, that’s a really good idea.” And it’s very rare. I’ve been working with startups for maybe seven or eight years, maybe about four or five years by that point. And that idea just flowed to me. I hadn’t really been flowed by an idea so quickly like that.
So, it was almost one of those drop everything moments, “Let’s just work on this.” And so, he and myself, and Guy King and a few others worked around a really solid block for about three months, and Andy Gelman and a few others as well building a prototype. And Phil and I did all the business stuff. We wrote the Kickstarter script. We shot that. We’ve filmed that. We edited that, and really planned the Kickstarter campaign. We did a couple of others as well, while Andy, and Phil’s dad, and a few others built the prototype.
It was this really interesting… And this is why we end up with so many founders, because we had the business team and the tech team really early on, which is kind of rare in a startup. But it worked for us in the respect that we had a decent-sized team that could actually pull that off, and we ended up successfully delivering. But long story short, having so many founders at the early stages, there’s always factions.
Simon Dell: I was going to say, if you’re saying there’s nine founders, there’s 100% equity split in nine ways. I can imagine that was a challenge.
Andrew Birt: Definitely, and it was all different amounts, as well. Phil obviously had the largest holding and I had the second-largest. I think I had probably bred a lot of infighting and jealousy. And not that many people would admit that now, I don’t think, but I think naturally, particularly when things are going well, there’s a lot of money on the table because we sold nearly $10 million worth of product in our first 12 months. We did $1.3 million on Kickstarter and then a bunch in pre-sales and distribution shortly after.
If we had got the cap table better-positioned and made sure people were more comfortable with their holdings earlier on, I think it would have been more harmonious. Our culture wasn’t great. I think it’s pretty good nowadays. They’ve got a pretty good team now, and the business is thriving.
Simon Dell: I want to take a step back there. When you did the Kickstarter campaign, because that’s one of those things that… I think a lot of people like the idea of doing Kickstarter campaigns and then suddenly go, “How do I actually draw attention to this product on Kickstarter?” I think a lot of people assume that once you put it on Kickstarter, Kickstarter’s going to do the work for you.
And that just by being on Kickstarter, hundreds of thousands of people are going to get to see it, and that solves all your problems. But it’s not quite like that, is it?
Andrew Birt: Not now. But it’s similar to the point you raised earlier about getting in early.
Simon Dell: So, it was back then, you think?
Andrew Birt: Yeah. It’s funny, in 2012, our marketing campaign for LIFX wasn’t very sophisticated, and it didn’t even kick in because we got everything ready, and we put a lot of effort into the video, and the page, and getting all the design looking as good as we could. We thought we had a good story. And we launched, and it did something $250,000 on the first day, another $500,000 on the next day, and then another $600,000-700,000 on the following day.
Simon Dell: What were you thinking when you saw those numbers coming in?
Andrew Birt: It was kind of surreal, to be honest. And to make matters even stranger, we were in New York at the time. AngelCube, we were basically taking all our startups around, we did our US trip at the end of the year, went to San Francisco and then went to New York. And we launched this Kickstarter as a side project as Phil and I obviously pulled the trigger on it when we were in the US just thinking, “Oh, this would be fun. Let’s see how it goes.”
And yeah, I didn’t know what to think. It was a really surreal feeling just to watch the numbers continue to go up, and people congratulating us on social media, and Phil’s on the front page of The Age one day, and then I had a big write-up in the Sydney Morning Herald a few days later. I was probably 28 or 29 at the time, and I think naively I thought, “Oh, yeah. We’ve made it.”
Simon Dell: We’re rich!
Andrew Birt: That kind of mentality probably kicked in for the team too early. It was a lot of fun.
Simon Dell: You mentioned that ended earlier than you wanted it to end or and earlier than it should have ended. Dare I ask, how and why?
Andrew Birt: I’m kind of an open book on this stuff. When I was mentioning earlier, probably because we didn’t have the team dynamics set in really well in place early on… And so, naturally, there was always a bit of conflict, bit of infighting as we went along. And I was with the company for about two years, and Phil and I were really, usually the front people like, “Yes, we had nine founders.” But often, they do a write up and then say “The founders, Phil and Andrew.” And we do all the VC meetings together, and a lot of the press together, and things like that.
So him and I had a particularly intense relationship because we were just always traveling together on the road together. And both pretty headstrong, and so, with just kind of relationship towards like the end of two years was kind of naturally fraying a bit, like just kind of at each other a bit, like about silly things that we shouldn’t have necessarily been, and we should have been able to… If we had a board where it was just him and I were the board, we would have kind of reached this loggerheads moment, and I think we would have been big enough to kind of give each other credit, and then talk our positions around.
But we had a third board member, so long story short, and Phil doesn’t allow me retelling this. We’ve since actually made up. We’re good friends again, which is great. But basically, even though I fell out of that particular stressful circumstance around the business, mainly around cash flow type stuff.
We got home from a particular trip. He worded up this board member who you would think would be neutral, but it was really a two-on-one situation. So, I got on the day later fronting up with the board meeting and it was kind of them against me type scenario. So, it wasn’t particularly fund. I had some points as well. I was pretty hot-headed, and I could have handled some things better, and I could have been more diplomatic where I tried to rein in the spending and things like that.
But you get older and wiser in business and you learn these things over time. I ended up resigning, but there would’ve been ways and means to fire me. I got out trying to preserve the relationship as well as I could at that point, which didn’t necessarily eventuate but touched up things with most of the team since. It’s funny Phil left six months later, in his own kind of acrimonious split as well.
The whole company was a bit of a revolving door at one point, but the new leadership kind of stabilized it and it had a very solid team in place for a number of years now.
Simon Dell: Do you still own a share of it?
Andrew Birt: Yes. I still have a reasonable size position on the cap table, and so does Phil and a number of other people. Hopefully, all going well, it really should be a $300 million dollar company. The revenues are really high. It’s probably number two in this category globally. Really deep integrations, good retail distribution.
Simon Dell: Is that the one that you see available in Apple Stores, or is that a competitor?
Andrew Birt: It is. We’re in Apple right throughout the US. So, you can walk into any Apple store and pick up a LIFX in the US. But Phillips Hue is also there, so they’re our main rival. In Australia, I don’t think they carry LIFX at Apple
Simon Dell: The problem with you is there’s about a thousand questions I could ask you here. Generally, people set the switch off after about an hour of me and you talking. I want to get to the juicy bits, the interesting bits. I want to touch on CliniCloud because you were the CMO there. You weren’t a founder. That wasn’t your idea or anything like that.
Andrew Birt: No, exactly.
Simon Dell: Was that just a job opportunity that you saw in the classified ads, or did someone approach you, or something like that?
Andrew Birt: Yeah. It’s a good question though. I didn’t really expect to leave LIFX, and particularly so suddenly. Everything was going brilliantly in December of 2013, and then by January 2014, it wasn’t so good, and then I left early-Feb. It was a really unexpected departure and that classic moment where you scratch your head and you think, “Gee, what am I going to do now?” I had a little bit of money behind by that point, but not a hell of a lot.
And so, I really had to either determine whether I wanted to find another company or take a job. I started off by doing a bunch of consulting. I was working with a few other product-related companies, and CliniCloud was one of them. They were a client, and we all got along really well. There’s two great founders, both doctors, met at university at med school. One of them came up with the idea, the other one is a business guy, but they didn’t have a lot of marketing experience.
I had a lot of retail and go-to-market kind of relationships that we needed. And so, the more and more I worked with them, I thought — because with my consulting, I was thinking I was treading water. I didn’t want to continue to do consulting solely forever. But the more and more I talked to the guys, I kind of thought, “Yeah, I really like the mission behind what we’re doing because the stethoscope…” To cut a long story short, the original vision of the CliniCloud stethoscope was to be able to auto detect pneumonia.
In theory, we could give that to a doctor in a regional village in Kenya, for example. They can detect if someone had pneumonia or not, which would mean they could actually intervene and save that person’s life. I like the combination of tech, the team, and the mission. And the more and more I thought about it, I thought — I couldn’t stop thinking about that particular idea.
So, rather than found something, I joined as the CMO. Essentially, I was almost like a founder in a lot of respects because it wasn’t necessarily a job. And you know, the guys were like, “Do you want to be a founder?” But they had such a great story already, two doctors, met at med school, and there’s one guy who founded a lighting company. The better story was the two of them. And I think my LIFX experience was, the less founders, the better. I kind of used to enjoy just, if they had to sort something out, they did a really good job of sorting it out between themselves.
Simon Dell: Have a punch on in a room somewhere where you never get involved.
Andrew Birt: Yeah. Well, doctors are pretty intelligent, pretty diplomatic, so there’s no punching. Intellectual punches; they’re both intelligent guys.
Simon Dell: I want to touch at this point about actual marketing. When you see other businesses, when you see startups, when you go into your local retail stores and things like that, what are some of the principles of marketing for you that you sort of focus on every time or think are really important for businesses to focus on?
Andrew Birt: I’m a real branding guy. I see myself as much more a strategic marketer than a tactical marketer. I like to zone in on a branding. Because if you can get your brand strategy right, and your positioning in the market, and you know your value proposition, and you can really articulate that clearly, you’re head and shoulders above so many other businesses and so many other startups as well.
Because a lot of startup founders are great at the tech side, but not so many are good at really carving out a unique identity and a brand in the market. So, that’s usually where I like to start. And then I love getting into the positioning, and strangely, copywriting. I think copywriting is an underrated part of startups. Because if you can write really good copy on your website, and on your packaging, and other materials, that just leaps off the page and succinctly and clearly talks about what you’re doing.
You get to hold people’s attention. There’s no point getting a ton of PR, and press, and everything like that, and having bad messaging. Good branding, positioning, value prop, strategy, and that messaging right early on. And then if you do and that tests well, then growth starts to happen. And then you can always accelerate that growth through ways and means.
Simon Dell: On CliniCloud, that’s a fairly challenging target market, doctors, because they’re sometimes perhaps less responsive to sales and marketing messages. Not that I know many doctors, but that’s the impression I get. Would that be the case, that they’re a little bit of a harder ass to sell to?
Andrew Birt: Yeah. I mean, we were targeting consumers predominately. Our strap line was bringing healthcare home, which worked really well for the investment market. We ended up raising $5 million inbound for that business, partly off the tech, but also, I think our positioning played a big role. We had that promise to consumers, bringing healthcare home.
When we’re targeting to doctors, it’s fascinating. They fell into two really different camps. You had the really early adopter-type doctor, which was honestly, they’re almost like a 50/50 split. We had the tech-savvy doctor and the not-so-tech-savvy doctor. And the not-so-tech-savvy doctor was always sceptical of not just us but of any new tech that goes into the doctor’s office.
They don’t even like EMRs and things like that, but they have to use by law in the US. Really interesting, the two camps of different types of positions that we dealt with. It wasn’t a big deal because if people weren’t interested, it became self selected so they just didn’t talk to us. So yeah, for years, we were having a great conversations with doctors who were really fascinated about what we were doing.
Simon Dell: I want to move on to some of the stuff you’re doing at the moment, and we’ll probably touch on GoSave last. I want to talk to you about the Internet of Things, because that seems to be another sort of prevailing theme in your career. We’ve heard a lot about the Internet of Things in the past three or four years, but it doesn’t feel that we’ve perhaps got anywhere. Do you think that’s the case, or am I missing it?
Andrew Birt: It’s funny. I didn’t even know the term Internet of Things until we started doing LIFX. We thought it was a cool product, and connected to the smartphone, and then we got invited to speak at a conference called The Web. And they said, “Oh, this year’s theme is the Internet of Things.” We had to Google it and look it up on Wikipedia to look at what it was.
The broad umbrella term Internet of Things is really challenging because there’s so many sub-disciplines within the Internet of Things that you can look at. I like to break it up in particular categories. LIFX, for example, we were in the smartphone category, essentially all the products like Alexa, or Google Home, and Ring, and any other smart lights, or door locks, or garage door openers all fit under that smart home category.
It’s a big market, but it’s like the early majority stage at the moment. I wouldn’t say it’s a mass market yet, but there’s been a few billion-dollar acquisitions in that space, of Nest, and Ring.com got bought by Amazon recently. There’s still a lot of opportunity in that market. But then you look at different sub-sectors of IoT like agtech. It’s a really big market.
You look at energy as another one. There’s a lot of smart energy companies doing some really interesting things. I think IoT is definitely booming within particular categories, but the broad umbrella term IoT is almost like saying ‘internet.’ It’s just such a generic term that is not particularly informative.
Simon Dell: What I find challenging is that, 3-5 years ago, people said, “Oh, we’re going to have connected fridges, and the fridge is going to know when you’re out of eggs, and milk, and all those kind of things, and it’s going to order it for you.” And everyone went, “That’s great.” And everyone sort of went, “Do I really need a connected fridge?”
And you know, connected washing machines. I could turn a washing machine on when I’m at work, or the dishwasher, and all those kind of things. Don’t get me wrong. I’m as tech-friendly as the next person, but I think there’s a point now where some people are going, “Is it tech for the sake of tech, versus is it actually going to make a difference or a discernible difference to my life?” And I think fridges fall into that. It’s tech for the sake of tech thing.
Andrew Birt: Totally, absolutely. We used to think that with LIFX, too. It was probably more good luck than good planning, but light is one of the parts of IoT that are actually quite helpful. Yes, it’s a bit of a gimmick to kind of turn the light on and off on your phone, but the voice control with things like Alexa and Google Home, being able to change the colour of the lights, and a lot of people… We have customers that were mobility-impaired in wheelchairs and couldn’t reach switches and things like that.
There’s these big sub-sectors out there that get a lot of value from IoT. Lighting’s one of the ones. Security is another one that IoT has done a good job. Ring.com has been massively successful for that reason because they’ve created this mesh network, almost like the old neighbourhood watch program but brought into the 21st century.
There’s IoT for the sake of just connecting something to the internet. Not a good thing. But if that IoT capability brings a new capability to the product that’s really valuable and customers like, then I think you’re using it in the correct way. There’s a lot of companies we don’t even necessarily think of as IoT as well. There’s these bike sharing companies and things that have distributed bikes all around the place. They are IoT companies when you think about it. It’s an interesting space in itself. It’s got its own challenges, but pretty massive market in some respects.
Simon Dell: Where do you sit on blockchain and its usefulness with IoT? Are you a blockchain fan or you a naysayer?
Andrew Birt: We could be here all day. Intellectually, it’s super interesting. It’s really easy to look at all the ICO’s and see the crazy amount of money being raised. It’s easy to turn to an eyebrow for that and think it’s all a fad and a scam. The massive rise of Bitcoin, and the incredible prices. It was just eye-watering. 2017 was unbelievable.
And so, obviously, the market’s cooled a bit this year, and I don’t think that’s necessarily a bad thing. I think blockchain in and of itself, we’re at the super nasid stages. It’s almost like the internet in 1994, it’s kind of tipping into this mainstream era, but the tech, there’s a lot of performance issues. There’s so much that people promise you can do with blockchain that you just can’t do yet.
Long-term, I’m really bullish on it because I really like the smart contract concept and this idea of being able to facilitate… and this is in IoT, being able to facilitate transactions without a person involved. I think that’s really interesting. But yeah. I mean, the use cases for blockchain, we could almost be here all day. Nearly every startup that I talk to now, they’ll ask me, “Could we use blockchain in our model?” And the answer for a lot of them is, a SQL database will do most of the things that people want to do with it.
A lot of them are doing it cynically with the view of raising money. But I think if you look at the actual technology itself, and you want to build something interesting, and create a decentralized service, I think we’re going to be amazed by the things that will come out within the next 10 years.
Simon Dell: I kind of feel blockchain has the same trouble as Internet of Things, in the fact that there’s certain things that probably don’t need to be on the Internet of Things, and there’s certain things that don’t necessarily need to be on blockchain. But because it’s a fad or it’s exciting new technology that people just gravitate towards that because it’s an easy buck, or it’s an easy way to raise money, and all those kind of things.
I think it’ll settle down gradually over the next two or three years, and I think all blockchain really needs is a killer app, is a use case that everyone suddenly goes, “That’s it. That’s the one we were all looking for.” And I think then it cascades from there. But I don’t think anyone’s sat there and looked at a perfect example of a blockchain technology that everybody uses day in, day out and gone, “This, I understand.” It’s still such early days for a lot of them.
Andrew Birt: Yeah. It’s a really interesting comparison between the two. I remember there’s a meme that used to go around saying, “Connect all the things!” The early days of IoT was exactly like that. It’s just, you know, as you say, connecting the fridge without any thought or regard for why. But yeah, it’s kind of blockchain, all the things now. But yeah, I think there’s going to be a lot of ones that’ll crash and burn, but there’ll be some interesting use cases that will be around long term that will emerge.
I think smart contracts are that killer use case. And obviously, it’s a big part of Ethereum and a number of others as well. I think the ICO in and of itself, regardless of all its problems with securities, laws, and jurisdictions, and utility versus security tokens, there’s a lot of grey area in that. But the actual smart contract itself, you’re writing a piece of code that can be representational of equity, or creating a will, or executing a will, all these kinds of things that I think the legal profession is one of the ones that’s going to change the most in the next 10 years because of the smart contract.
Simon Dell: Yeah. I was listening to a Tim Ferriss podcast this week, and he was talking to the ex-CEO of Home Depot in the US. He was a lawyer before he was a CEO, and he said the legal industry is one of those that is geared towards inefficiency. The whole purpose of a law firm is to be inefficient as possible, because the more inefficient you are, the more you charge the client. That I think is an opportunity for blockchain to step in and go, “Well, actually, the time for making, ridiculously fees on repeating the same contract that you’ve done, you know, 200 times before, you know, maybe those times are over.”
Andrew Birt: Yeah, exactly. Worked with some very good lawyers of the years, and then definitely worked with some ones that will sell you as many types of documents that they can convince you that you need.
Simon Dell: Just before we get down towards the end of this chat, talk to me about GoSave. It sounds like a really interesting prospect. Give us a quick pitch, the elevator pitch for that.
Andrew Birt: GoSave is my third IT company now, and the idea came about… My son’s three and a half now. He’s got a little money box at home. I’ve just been teaching him a little bit about savings and trying to reward good behaviour. We had a star chart at home as well, we add that up on the fridge, and we’d give him a star if he would brush his teeth and would go to bed on time.
And so, I’m really interested in different ways and means to motivate kids and to do it in a way that’s age-appropriate. And so, the more I looked at it, I started to think, there wasn’t really a good digital startup or a good digital money box out there in the marketplace for the kids and for parents. I liked that as an idea. And sorry, this is not an elevator pitch at all anymore.
Simon Dell: It’s a very long ride. We’re going up a long, tall building. But no, keep going.
Andrew Birt: And I used to run an accelerator and I can’t do a 60-second pitch. I started researching more and more about how bad as adults, we are ourselves, at saving. I never, until I was about 30, was a particularly good saver. And the stats in the US are horrendous. It’s something like 47% of US adults have less than $100 in savings.
Simon Dell: So many people live pay check to pay check in the US. I think just as many live in Australia as well, but it’s horrific. And I’ll be honest, I was terrible. I was shocking at controlling money, and it’s something I’ve become much better at in the last two or three years. I wish I’d had something like that when I was younger.
Andrew Birt: It’s really interesting, isn’t it? That’s how I feel as well. I grew up in a really middle-class household. Dad’s a lecturer, mom’s a physio, both really smart people. But the middle class, we don’t really talk about money at home or around the dinner table. Entrepreneurs do and investors do. And so, they grow up in that type of environment, you move out of home, and then you get a credit card, and it’s kind of baptism by fire stuff. Your financial literacy is really poor.
So, I’m kind of thinking, “Yeah, I really want to make this product.” Obviously, it gets people on the habit of saving early. If you save on average $5 a day from when a kid’s born to when they’re 18, that’s $32,500 without any interest, or compounding, or anything, or even investments. Just the habit of regular savings in small amounts is pretty powerful. I’m thinking GoSave can help parents teach kids how to save. I don’t even think I explained what it is.
Simon Dell: What sort of age group is it says it targeted?
Andrew Birt: They actually are digital money boxes. We have three of them. We have a pig, an astronaut, and a unicorn. They have a little 4 1/2″ screen in them, and the parents have an app. So, the parents transfer onto the device. Kids aged 3 to about 12 is the primary target market. And a lot of research says that kids learn from their parents’ financial habits, but a lot of their savings habits are set by age 7. There’s a Cambridge study on that in the late 90s.
I want our products to be a visual representation of savings that are cute and fun, and kids under 7 can learn how to save. And as they get a little bit older, they can continue to save. And you can do things like delegate chores onto the device as well. I can put a notification to my son, “Dad wants you to clean your room for two dollars.” That pops up on his toy.
He gets a notification of that, and he can click ‘Done’. I’ll get a notification on my phone to click ‘Verify’, and the money goes into his account. It’s this little savings, chore management reward system in the form of a money box.
Simon Dell: You’re going to turn thousands of kids into mini hustlers who are going to be looking for more chores and looking for more jobs around the house in order to pick up another dollar and two dollars here.
Andrew Birt: Yeah. When you look at the research around pocket money and allowances in US coin. But there are, there’s two distinct schools of thought that’s like, “No, kids should not get money for doing their chores. That should be something they innately do.” And then another big camp says, “No, it’s important to tie financial literacy, the effort and reward.”
We’re smack bang in the middle of that. We will have stars as well. If you’re the type of person that’s like, “No, I don’t want my kid to be too money-oriented.” And that could be a real thing. You can allocate them a star for doing a particular chore, and then eventually, they get five stars. They get a reward that you and the child determine together. We want to be able to cater to both sets of the market, but we do want to encourage parents that saving is important. And you don’t have to tie it to chores, but you should be saving a small and regular amount for the kids as they grow up.
Simon Dell: Where can people go and buy one of those if they want to go and buy one?
Andrew Birt: Good question. We’re set to launch on Kickstarter. I actually submitted today. So, I think it takes three or four days to get approved. I’m assuming that all goes through, and so, hopefully we launch early next week.
Simon Dell: My final three questions. Number one, what are some of the brands out there that you admire? Is there something that you buy all the time, that you look at all the time? You talked about you being a brand person earlier on. What brands attract you?
Andrew Birt: I’ve always loved the Virgin Group. Richard Branson’s such a great living brand in and of himself, and the company that he’s created over the years, just that fun and irreverent challenger brand. I just always identified really well with that brand. He does a really good job of going and being the underdog in every market, and you can’t help but barrick for him, at least, I can’t. I’ve always been a massive admirer of Virgin.
I particularly like a brand in the US I’ve been following in the last few years called Shinola. I don’t know if you’ve seen those guys. They’re a Detroit-based… They started as a watch company, and now they’ve become this fashion and lifestyle company. They got started in Detroit when all the automakers started moving out and went bankrupt in 2007-2008, just around the GFC, and Shinola positioned themselves as, “We’re rebooting Detroit, where these watches are made in Detroit.”
And they hire a bunch of people who used to be mechanical engineers at Ford, and wherever else, and retrain them as watchmakers. They’re diversifying into bikes, and clothes, and leather goods, and all this other stuff. They’re doing a hotel now in the US. They’re up over $100 million in revenue, so it’s been a fascinating journey to watch them. In the space of less than 10 years, they’ve created this really powerful and quite meaningful brand in a short period of time.
Simon Dell: Yeah, it looks stunning for anyone that wants to go and have a look. Beautiful brand, actually.
Andrew Birt: Yeah, I think they’ve done a cracking job, and there’s such a great story behind it. I really like brands that have a bit of a social good to them as well. I really admire social entrepreneurs. I’ve never played in that space myself, but a brand that I’ve been following over the last few years, they’re not particularly well-known, but I think eventually they will be, is BioLite.
They make these camp stoves, and about something like 2 billion people still cook on wood fire stoves every night in their homes. Millions of people obviously get really sick from carbon dioxide poisoning, and carbon monoxide poison as well by cooking with fire in their homes. I can’t remember exactly how they work, but they’ve created these safe cooktops that people in the developing world can use. And they sell it in camping stores all around the Western world, and then they massively subsidized and almost give it out in the developing world.
And so, they’re really tackling this problem head-on, and having some really good inroads. They’re getting quite widely adopted in the developing world. I really like products that can do that and brands that can do that.
Simon Dell: I was going to say, looking at both these brands, the BioLite and the Shinola, it’s evident that that that design inspiration for you is something that attracts you. Because these look like beautifully-designed brands. They’re from the heart of some product manager who designed this and really spent a lot of time doing that.
Andrew Birt: Yeah, totally. It’s that really nice intersection of craftsmanship about building the actual brand and the brand story, and then going out and living those values. Actually, Patagonia is another great example. It’s such a beautiful brand in and of itself, but then they’re really socially active and aware. They kind of go out there and stick the middle finger after the establishment and say, “You shouldn’t be cutting down these forests.”
They do a whole bunch of really interesting stuff. I do like brands that combine that artistry with integrity of getting out there and hopefully making a dent in the world.
Simon Dell: Second to last question: What’s next for you? You’ve got a lot of money boxes to sell on Kickstarter. What else have you got in the pipeline? Anything that we can know about?
Andrew Birt: I’m working with a handful of clients that are building different things at the moment. One of them is building a really interesting robot for kids. I don’t know if you’ve seen Jibo, which is a robot that was launched in the US last year, I think late last year. It ended up being on the cover of Time Magazine. These personal robotics is going to be a really interesting market in the next 10 years. It just so happens, there’s a team in Melbourne building a really awesome kind of robot for kids.
Simon Dell: I saw Jeff Bezos taking the robot dog for a walk, which scares the living shit out of me. There’s a Black Mirror episode with robot dogs in it. I don’t know if you’ve watched any Black Mirror.
Andrew Birt: I haven’t seen that episode.
Simon Dell: Watch that, then go watch Jeff Bezos walk that dog, and then tell me that that’s not the end of humanity right there. Once the artificial intelligence and robot dogs meet head on, that is the end of us. Yes, that that scares me. Final question: If anybody wants to find you, they want to talk to you, they want to ask you a question, for God’s sake, don’t put your number on here, but where can they get a hold of you?
Andrew Birt: The consulting company is mosaiciot.com. It’s consulting, but it’s also my product development company. It’s my umbrella brand where I develop my own ideas and then help other people with their ideas. That’s that based up here in Brisbane. We’re actually in Little Tokyo, too in the Capital building. We’re up on level four there.
GoSave is probably going to be my major project in the next few years. With any luck, I think we got an opportunity to build a really big business in that space. That’s gosavehq.com. I think Kickstarter, you should be able to find it on there in the next week or so.
Simon Dell: Cool. Wonderful. Thank you very much for your time, Andrew. It’s been an absolute pleasure. So many ideas. It’s fantastic to hear the thought pattern that you go through with these kind of things. I think there’s a lot of entrepreneurs out there, there’s a lot of business owners who have the same sort of challenges we often refer to on this show as entrepreneurial ADHD.
One minute, you’re doing one thing, the next minute, you see something else. It’s that, “Oh, look. There’s a dog.” It’s very dangerous. And a quote I always use is — I can never remember who this quote is attributed to but it goes something like, “The best way to make a lot of money is to have a really good idea and then never have another one.”
Andrew Birt: Yeah. That’s very true. That’s a good balance.
Simon Dell: Yeah, but mate, once again, thank you very much for your time. I really appreciate you coming on the show.
Andrew Birt: Yeah. Thanks very much, Simon.