Matt runs like five different companies.
Now most people can't even run one company so,
I'll have to ask him how he does that.
There are five businesses now, so we have
"freelancer.com", which is a global marketplace
for jobs. "Escrow.com", which is a payments business,
think of it like Paypal but the difference is with
Escrow.com the money sits in trust or bound sheets.
The third business I'm really excited about is a business
I acquired just recently, it's a global freight marketplace
that's like freelancer, but it's for shipping freight.
We've changed the name, it wasn't my idea, but we changed
it to "freightlancer" and this is best
It's a great brand. A great brand.
And then on top of that there's two other businesses
obviously "Warrior Forum" which is the world's biggest
marketing community, 1. 3 million internet marketers.
That's the one we've done some business with.
That's right. That's right.
And then the fifth business is a conference. It's called
"Startcon", it's the largest conference in Australia
for startups and growth in technology and probably
the second biggest in Asia.
So I'm curious with, let's say entrepreneurs right, you
talked about most business that you have right now,
you bought them and you didn't start from scratch.
No
Why do you go with the buy model versus the starting up
like "I have no money, I'm getting started, but can't
afford to buy a business". Like what advice do you give
to entrepreneurs?
Well, it's very difficult. My business before this was
a business I started from scratch, it's called
"Sensory Networks", we built semiconductors or effectively
used FBGIs to build a chip. We do patent matching and
network traffic, a lot as you can tell but it's very very
tough to start a business from scratch and you know after
about six years, we're only doing about two million in
revenue. Ultimately after thirteen years it was sold
and I left about halfway through it.
And the profit margin probably
Yeah no profit. Don't do hardware.
Don't do hardware.
One good piece of advice.
With hardware, I mean if you have too much inventory
it'll just sit on a shelf depreciating, if you
don't have enough you can't sell anything.
And they go out of date too right?
Yes it's like that. So quickly. You got a local
computer store now they won't hold the inventory.
You wanna buy a hard drive, you tell them you want it and
then they go and find it from someone else and they
get it for you, because if you hold on a shelf
it'll depreciate in no time. Very complicated business,
but this time around basically, look, I wanted to get
the market quickly and so I looked around for businesses
that were doing you know revenue that I could get going
with, and it's a very long story about freelancer.
And the last time I interviewed you, you kind of shared
your story.
Yeah, but in this particular case, I just wanted to
get out there and be running a business and growing it
very, very quickly with revenue, and to do that a fair
bit of businesses have revenue.
Where do you look for these companies?
I think is the first question.
Is it through a relationship?
Well you have to look where no one else is looking.
I guess you're not looking online
If you wanna buy it for a cheap price, you can't
look anywhere the venture capitalists are looking
or where institution investors are looking.
So you gotta look for businesses in strange locations
in niches that people overlook.
I was lucky with Escrow, Escrow was in plain sight
Escrow was in California, all the domain
names sold through it. When Evan Spiegel bought, when he set
up Snapchat, he bought the Snapchat domain and used
Escrow to do it. So everyone knew about but no one
really actually knew it was a business that they could
potentially buy. It looked like a big financial institution,
it had a thing on the website saying it done $2,000,000,000
worth of transactions through it. And you know I just kind
of asked them if they wanted to sell and it turns out that
I could but it.
It's funny, when I used to buy like even smaller websites
and you could see the la bases you might think they're not
for sale, cause most business owners, they're not thinking
about selling, but when you say "hey would you be interested
to sell" a lot of them will be like "no, but let's talk"
Right, like what are you thinking?
Yeah like what do you have in mind?
Yeah like show me some of your information and sometimes
they're a bit apprehensive and you go well if you wanna
make an offer I gotta see some numbers and so for a lot
of business owners, after awhile they're curiosity gets
ahold of them. Yeah it's a free option.
Okay show me a number I'll take a look at a number.
Then maybe they think about it.
"I've been running this business for five to ten years,
maybe I want to do something new. If I can cashout, I can
start something new cause I've been doing this for a long
time, and so and so.
Are you always looking to acquire the next company looking
at deals?
I'm always looking at things you know. I'm very patient.
I could take two, three years or more to buy something.
I mean there's a business I really like, it's been six
years.
Oh wow.
And you know every few months I check in with them,
"how're you going? Interested in selling?"
No, not yet, maybe, offer more money. Whatever I don't know.
It can take a long time. Obviously it's gotta be a good fit.
It's very hard, very, very, very hard to run a business,
it's completely different. The great thing is there are
between the business. Freightlancer is basically freelancer
with a niche.
Yeah, yeah exactly.
So I've had some good operators in that particular demand
and you know the rest of it is just freelancer.
In fact we're going to move on top of the freelancer
platform because if you build a home market place on
top of freelancer.
It teaches integration.
You can build over on freelancer, you could build
GrubHub on freelancer, we're moving across freightlancer.
It could use forty-five currencies, it could use all the
payment systems, there are so many different things.
Reputation system and how free back crowd sourcing and
so forth.
So that's great.
When I bought Escrow, that was
a very difficult business to run because it's completely
different space.
It doesn't have a ton of synergy right?
Can you use freelancer.com to grow Escrow.com
Absolutely, there's a lot of synergy with that,
there's fifteen million projects that are being done
on freelancer today.
Four million to five million have been websites and
at least one million are payments built in.
So we're building Escrow into all these different websites .
There's a huge amount of synergies, um but it is just
a completely different business. So it's highly regulated,
you need different types of people, you need compliance
people and so forth. The markets are slightly different
in terms of who you're pitching too and so on.
So with that I had to literally higher sixty people
and have a really solid management team in that business.
Operations had to rebuild everything, from the technology
to the support processes to any other programs and so on,
so that was quite difficult. So I don't like to buy
businesses that are a complete step out because they're
very hard to run.
Just one step maybe?
You need to have synergies or some sort of adjacency where
it really makes sense. But that was a very important
business for a bunch of different reasons. I mean all
the major market places have payments businesses, Amazon,
etc, eBay had PayPal, they should not have split them off
that was a mistake in my opinion. But you know that was
pretty critical for us.