David Richards is the co-founder and CEO of WANdisco which enables the replication of continuously changing data to different environments. The company has raised $120M by going public early without the need for traditional funding sources used by early-stage companies. He is a serial entrepreneur that has previously built, scaled, and exited multiple companies.
In this episode you will learn:
- How to grow and scale a business
- Ways to manage a board effectively
- Raising capital avoiding VCs
- Identifying great opportunities by removing traditional barriers
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
ACCESS THE PITCH DECK TEMPLATE
About David Richards:
He was born in Sheffield, England in 1970, where his father worked in the steel industry. Graduating with a degree in computer science from the University of Huddersfield in 1992, he became an early member of the team at Druid Group.
In the mid-1990s, Richards formed an SAP consulting company, which he sold in late 1998 and moved to Silicon Valley. Raising $25m from venture capital, he founded business software company Insevo before creating Librados, which was acquired by Netmanage in 2004.
WANdisco was incorporated in 2005 after a chance meeting between Richards and WANdisco chief scientist, Dr. Yeturu Aahlad. Richards recognized the potential of Aahlad’s invention, and the two decided to create a company without the use of venture capital or angel investors.
In June 2012, the company was floated on the London Stock Exchange
Connect with David Richards:
* * *
FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we’re going to have the battle of accents here, the UK accent and the Spanglish that you’re probably used to while you listen to all these episodes. I think our guest today, we’re going to learn quite a bit. He’s going to share with us the untraditional method that he has used to raise over 120 million dollars. Without further ado, let’s welcome our guest today, David Richards. Welcome to the show.
David Richards: Alejandro, it’s an absolute pleasure to be here.
Alejandro: So born in Sheffield to a family involved in the steel business. How was life growing up there?
David Richards: It was interesting. I was born in 1970, which was right about the time that steel was beginning to decline. At one point, Sheffield was sort of the Silicon Valley of the third phase of the Industrial Revolution. My family moved to the area in the 1850s when some new manufacturing processes were invented. That was called the Bessemer converter. Henry Bessemer came up from London to Sheffield, and the steel industry just exploded. At one point, 80% of European steel was manufactured in the town, so it’s got a long heritage in history. Actually, three generations of my family were steel owners. My grandfather’s company employed over 200,000 people. Ironically, that’s now a shopping center. It’s called Meadowhall, which is on the outskirts of the city. It was interesting. I saw, obviously, areas that were once in great prosperity; think Silicon Valley and computing and tech. That’s what Sheffield was like. Then, it just declined, and Sheffield failed really to take advantage of the next phase of the Industrial Revolution, which was driven by technology, computers, and stuff that we know very well here in the U.S. It failed to participate in the next generation. We saw people plunged into great poverty, so the town was really in decline. If you remember the movie, The Full Monty about the former steelworkers in those derelict steel plants, that’s where that was actually filmed. So, The Full Monty is actually from my hometown.
Alejandro: That’s amazing. Well, you’re going to have a laugh out of this, but my first kiss was during watching at the movie theater, The Full Monty. Can you believe it?
David Richards: It’s a romantic movie, and it would [laughter].
Alejandro: Absolutely. Absolutely, David. Let’s talk about you going to University. You went to Huddersfield. Is that right?
David Richards: Yeah, which is a university in the northern part of the UK just out of Sheffield. I went there because they were teaching this new thing called UNIX. The guy who was teaching one of the classes was actually writing a book. It was a great place to study, and we got access to a lot of the Nouveau techniques, where some of my friends that were doing computer science in the UK were using very ethereal computer science. Thought in the UK, I have to say, tends to be very ethereal, tends to focus on deep binomial logic, and all those things. I wanted a much more practical hands-on approach that would give me a skill and teach me how to write code, how to structure programs, and so on. I had a great experience, and I met some great people.
Alejandro: Then, one of your first gigs was with a company called Druid. What were you doing there?
David Richards: As you’ll see, as we go through this podcast, I’m not very keen on taking the traditional path. Some might say the easy path. Post-university, most people back in the mid-to-late ’80s, the traditional thinking was, you go and work for IBM, or you go and work for Unisys or one of the big mainframe computing guys who were in control of the industry, and going on management training programs, and they’d do all these tests. I used to get bored senseless in these elongated interviews and aptitude tests and so on that they used to do back in those days. I just could not see myself ever working for one of those companies. It was mind-numbingly boring, I thought. In the back of one of the career magazines, I saw a little advertisement for a tiny company called Druid System. Druid was, basically, doing this new thing called ERP and SAP, in particular. I went to interview, and I was actually interviewed by the managing director, by the CEO, by the founder and CEO of the company. He was from up north, as well. He was from New Castle. We completed the interview in a pub. I thought, “Wow. This is the kind of company that I want to work for.” It turned out to be a bloody good choice because I was in the first few employees in the company. I managed a team of people straight away. Then the company grew like weeds. We went from 10, 20 people to 300 people in the blink of an eye, and listed on the London Stock Exchange.
Alejandro: In two years, literally in less than two years. Wow!
David Richards: In less than two years, and it was amazing. The culture was completely different to those big tech companies. It was all about going down to the pub and working hard until the early hours of the morning and getting things done. I was in the board room talking to people, everybody from Cadbury’s and Philip Morris while we were doing big implementations. It was like doing an MBA program in a couple of months. We listed, as I said, and I just assumed that’s how it worked, that you went to a startup company. You were bound to be successful, and that’s just how the world worked, that you became a big company overnight. That’s really what tech enables you to do, of course. It removes all those traditional barriers, especially new tech, as we see today, and things work very quickly in dog years, as we like to say.
Alejandro: Obviously, this gave you the entrepreneurial bug, so now this gives you the full 30,000-foot view, and perhaps it gave you that confidence and understanding on the dynamics and for you to understand that you could do yourself, too.
David Richards: Yeah. Alejandro, I think that’s a very fair point, but obviously, people that are entrepreneurs always have it in their blood somehow. They’re always optimists. We always feel like we can achieve it no matter what the naysayers might say. It becomes a lot easier if you actually see it happen with your own two eyes. I saw guys that were good guys grow this business very quickly. I knew, therefore, that it was feasible. I knew the things that it took to create a successful company: hard work, togetherness, teamwork, skill, different people in the team with different skills. I really, really enjoyed it. As I said, it was like doing an MBA program very, very quickly. It lit the fuse for me into entrepreneurship.
Alejandro: What happened next?
David Richards: I looked at it and said, “This is great.” I remember the day I went down to — this is the day. Some of your listeners won’t remember actually buying a newspaper, but back in the ’80s, we used to have to buy newspapers. I was reading about this movement in Silicon Valley. The number of companies that were listing and going through the roof, and the interest around tech and eCommerce was just phenomenal. I can still remember the day, and I remember what I was doing when I read these stories in the newspaper. It was a feature about Silicon Valley. At that moment, I said, “That’s where we need to be.” I had just met my girlfriend, who’s now my wife. This is going back to ’97. We figured out a way to move to Silicon Valley. So without understanding what the job was going to be, without understanding where I was going to live, two suitcases, and the girlfriend, we got on a plane and came to the U.S.
Alejandro: That’s unbelievable. So, basically, you landed in Silicon Valley, and here you are, someone with a UK accent, without plans. What did you do?
David Richards: First of all, and you probably know this as well, Alejandro is that having a UK accent, people think you’re a lot smarter than you actually are.
David Richards: Brits are either the mad scientists or the bad guy, the lunatic in movies that goes around killing people. So I took advantage of obviously having a British accent and created a company over here called Insevo. It was venture-backed. This was the late ’90s when you could raise capital. There was such great demand for anything in tech, and Insevo was taking EOP systems and web-enabling them, which is now take for granted. But back then, you had these colossal enterprise resource planning systems like SAP that couldn’t find their way onto the web, so they were using traditional commerce. We were building applications and systems to enable them to take part in eCommerce. The time was good. We raised funding and met some great people that are still involved with me today and created a business and successfully exited it.
Alejandro: You guys raised 25 million bucks for that, so not bad at all. Tell us about the exit. What was the exit like?
David Richards: It was a traditional venture exit. The venture capital companies wanted to merge together two or three of their assets and create a business out of it. A handful of us, five of us left and started a business called Librados, which meant the freed men, as you well know. We created Librados, and Librados was acquired in six months by a public company for just over 10 million dollars, which was phenomenal.
Alejandro: In six months.
David Richards: In six months.
Alejandro: How do you get your company acquired in six months? Come on. What’s the secret sauce in there?
David Richards: You know, we sold too early. We went from basically zero to 50 customers overnight. We realized the problem that we had in licensing previously, and we changed the licensing in go-to-market strategy, and it was a better, faster, cheaper version. The customer acceleration was just phenomenal. Even today, from Librados, the ERP connectors that we built, I think we still have 2.5 thousand customers in Japan today, believe it or not, because we did a license agreement with the Japanese distributor. I discovered only a few weeks ago, actually, that there are still 2.5 thousand companies using our product today. Six months seems like it’s really short, but we just got it right. We got product/market fit sorted out, and the rest, as they say, was history. A public company NetManage came knocking on the door, and six months in, you’ve got to look at that deal. There was no venture capital in the industry, so it was 100% owned by three of us, and you have to do that deal.
Alejandro: That’s amazing. What did you learn from product/market fit because it seems there, you really hit it out of the park? So what did you get from product/market fit?
David Richards: Very good question. When you’re doing something in a company, we’re all stubborn. We all want to make a notion work even if it’s wrong sometimes. As you can see, it’s wrong. It’s like turning an oil tanker sometimes when you’ve got a bigger company. Even in startup stage, when you’ve told your investors, you’ve told your board that you think this is the go-to-market strategy, it’s very hard to make a change. When we started Librados, we realized all the mistakes we had made, so we were able to correct them very quickly because we didn’t have any of those problems. The product/market fit was perfect. What was interesting was, we knew it all along. We just couldn’t do anything about it. That gave us almost the license to make the necessary changes to fix it, and it was fixed in three months, literally. The licensing model, the product, making it more embeddable, and all of those things that companies were asking for. You’ve got to listen to that small inner voice that you have, and we’ve all got it. I learned a lot from that. We fixed it, and the rest is history. The company was acquired very quickly, and the company is very successful.
Alejandro: You’re talking about listening to that inner voice. How do you listen to that voice?
David Richards: It’s hard, and we’ll come to a story a little later. You need almost an out-of-body experience to really listen to it. You need to be faced with something that forces you to do it. It’s difficult to replicate, sometimes. You need to just go and take some time off, and you need to look critically within yourself. It sounds easy to do. It’s really hard. What you’re doing, all entrepreneurs have to do this seven days a week, 360 days a year. The holidays don’t exist because we’re always thinking about the same thing. How do I make this work? How do I make this work? You have to sometimes just take some time off. Go to Antarctica. I did that recently. Go to the Antarctic and switch off completely. Try and do that because the benefit is far, far greater. Not everybody has the fortitude to actually have that forcing function of being forced out of the company or having failure. At the end of the ride, everybody will say, “You know what? I should have done this.” Can you bring that I should have done this forward to the moment when you actually really need to do it? That’s hard.
Alejandro: David, after this incredible experience of getting the company acquired in six months, now you’re faced with, “What am I going to do next?” I understand that you were thinking about perhaps really going on the investor side rather than on the operator side. So, I’m sure there was a big change and something that wasn’t expected. What was that?
David Richards: I have a big passion for creating companies and some of the expertise that I’ve acquired over time, and giving that expertise to other people, and allowing them to create companies, and providing equity and finance for those companies, and I will do this eventually. That’s what we were going to do. The people that started Librados, we said, “Okay. Let’s go and try to invest in the uninvestable. Technologists with brilliant ideas, the venture can’t touch because there’s not a management team, there’s not a go-to-market strategy, there aren’t any of the things that they’re looking for. It makes it very hard to invest in them, and we all know there are lots of examples and situations where that’s taken place. One of the first people I got introduced to was a computing guru called Dr. Yeturu Aahlad. Dr. Lad had been working. He was the distribution systems architect at Sun Microsystems, and before that, IBM Labs. The guy’s a total genius. Think Einstein and computer science, and he even looks like Einstein. This guy from the Indian continent, from Madras, came to see me. He was dressed in a tradeshow tee-shirt that was probably from ten years prior, a pair of shorts, and flipflops, classical Silicon Valley. He talked me through what he had done, which is, he gave up his job in 2000, sat at home with a laptop, and figured out how you achieve something called Active/Active one-scope data application, which traditional thinking says this is impossible for a variety of reason. I won’t go into them on this podcast. I don’t want to bore you with that, but we couldn’t believe what we were listening too. He’d been to Venture, and Venture said, “No.” Four or five venture funds had turned him down, so he was desperate to start a company. Initially, we looked at it as could this be a core-key investment, but this was actually creating a company. So it wasn’t feasible to look at this as just an investment because it would require a great deal of time from everybody. We actually had to build a company. That was the beginning of WANdisco. WANdisco was his name. It stands for Wide Area Network Distributing Computing. We couldn’t believe the depth of intellectual property. It’s highly unusual that you would get somebody to take five years of their life to work on the mathematical problem and then build algorithms on the back of it. What’s really interesting about the intellectual property at WANdisco, the thing that I was really fascinated by is that typically what you see in most startups is two guys and a coffee pot, hacking code, trying to figure out a problem, and eventually come to a prototype, and initiate on the prototype until you get something that you can show to investors. This was three years of pure math and two years of building the algorithm that would achieve Active/Active data movement, which is absolutely fascinating. It turns out that it has huge use cases, particularly as it pertains to cloud computing and data movement to cloud. That was the beginning of WANdisco. It was a meeting about, “Is this a potential investment?” “No. This is a company, and we’re going to get together and do something special and create the company.
Alejandro: Wow. So, what happened after you’re shocked to the core with this initiative. You guys, obviously, decided to change the course of action. What happened there?
David Richards: I still get goosebumps thinking about it now because I sat with Dr. Lad and said, “The IP, the intellectual property, here, is so strong. We don’t also know when it’s going to be important.” That was the key thing. We all had an inkling it wasn’t very, very important, and had huge use cases, but we don’t know when the inflection point is going to when this becomes very important. What he devised is an alternative — his start point was that the internet is very inefficient. It’s still based on a three-tier client server, and he had invented a better internet. When you have something potentially that big and that important, and when the intellectual property is so strong, I’m not concerned about anybody coming up with an alternative to this because it’s based on such deep, complex mathematics. The chances of it are highly, highly unlikely. So, it created a problem because I didn’t want to sell any piece of the company to anybody. I said to him, “You’re going to have the same equity stake,” which is still the case today. “What I’m going to have, we’re going to be equal partners.” It would be very easy, and this concept of enlightened self-interest is often lost with a lot of investors and a lot of business-focused entrepreneurs. If I benefit, he’s going to benefit, and he’s going to benefit in exactly the same way. Don’t rip people off. Have enlightened self-interest; have the same aligned goals. Just because I can talk business-speak and talk to investors, it doesn’t necessarily mean I get more of the pie than he gets, the guy that actually invented the technology. It was very, very important that I suggested that we become equal partners and created the business together. We decided to go it alone, which was unusual, which meant the first three or four years of the company, we’ve artificially, probably grew slower than we otherwise could have, but I think, in the long run, it was a very good choice; we built a really solid company. The first products were actually in source code management. We said, “Centralized source code repositories, like CVS at the time if you remember that, and subversion probably don’t match the way that companies operate. So we have developers in — everybody’s got developers in India, China, United Kingdom, Europe, United States, Poland, etc. It’s very inefficient for them to be sending source code back and forth to a central repository somewhere. We built Active/Active Distribution repository, so looking at source code in China is exactly the same source code as somebody in the United States, and so on. That was the original product set, which at the time — it’s very different now. Marc Andreessen’s software is eating the world — actually wasn’t that cool to be a source code management company. It’s a lot cooler now, [0:25:15] companies and in and around the space and GitHub. But back in those days, it actually wasn’t that cool, but we always had assumed that the product logically — this is Active/Active data movement — had wider, much more important use cases in enterprise run time. That means looking at data sources, storage systems. We were waiting for a change to happen because everybody said, “Why don’t you just apply the historical database?” When you’re in the right path of data sources, then you’re in the right path of data sources, and you need cooperation from Oracle, Sybase, or whoever. They were never going to help us do this. We were looking for a change to happen in the storage world, particularly around open source, and that happened.
Alejandro: Very nice. Obviously, now, you’ve got the team, the idea, the execution going. You’ve been at it for some time. You’re not growing at the same pace as the venture-backed companies, but at one moment, you decided to do something that is not very traditional, and you decided to raise money in a way that I think many of our listeners are going to hear it for the very first time. So, what was that?
David Richards: Because of my experience earlier in my career with Druid, where I saw a company list in the UK, I knew that the bar was lower than it is in the traditional U.S.-based IPO, listing on Nasdaq where the banks won’t look at you if you’re less than 50 hundred million of revenue. As I said from the outset, we knew that the technology was important, we knew that applying this to runtime, architecture, storage, databases, etc. was where the real money is for this company. We looked at a variety of different options for the company next. We went to talk to Venture. Venture, of course, was really interested. But we didn’t know when the inflection point was going to be. We would be taking a gamble, taking a bet on what was going to happen next. As it turns out, I think, in hindsight, we went down the right path, but that was an inkling anyway. So, in 2011, we could see a change happening in storage that companies were now becoming data-driven companies. We all know the story. Amazon is a data company with a retail arm, essentially, as are a lot of companies, banks, and so on these days. We could see this thing called HYDAC coming over the horizon, and that was the trigger that we needed because we said, “Okay. If you’re going to implement large-scale storage arrays, what used to be a small outage for disaster recovery, when I take a snapshot of data and move it from point A to point B. When I’ve got data sets that are a million times bigger than that, then the outage to move data will be a million times bigger. So it requires something else, and then something else, we said, was us. We looked at different funding options, and we actually settled on listing the company, becoming a public company. On the Aim market, the alternative investment market in the UK, which is interesting because it’s an alternative to Venture. But the quality in investors is very high. If you look at our cap table, there are investment funds like Oppenheimer, Fidelity, T. Rowe, and a whole array of funds that, in some cases, are 100 billion-plus in assets under management. You’re dealing with very, very big long-term capital that is looking for returns over a longer period of time, often in ventures. People often get confused that venture has natural redemptions that happen from limited partners as the fund runs to the end. They have to pay the money back to the investors. Sometimes, that can be over relatively short periods of time. When WANdisco was founded 15 years ago in 2005, one’s never completely certain when the inflection point is going to be, so Aim provides you access to capital that is non-traditional. Yeah, I know a lot of companies are going to go to the Sequoias and the larger venture firms, the famous venture firms that make stuff happen. But it doesn’t always work, especially when you have longer time horizons and when you’ve got deep, intelligent property like we have, without certainty of when that inflection point was going to come, and it’s a good job that we were listed over there because, of course, there were big changes in the marketplace caused by cloud computing.
Alejandro: What happened? How did you guys raise the money? What was the process like?
David Richards: We took the company public in 2012. That was the thesis. The investment thesis was, we’ve got a great business in source code management, but we think we’re going to build technology in the data space. We were oversubscribed by, I think, four times on the original IPO. We raised, initially, around 15 million dollars to go to market and investigate this thesis. That enabled us to grow the company. We made an acquisition of a company called AutoStore that was two of the original creators of Hadoop back at Yahoo. So we instantaneously got the skills into the business that we needed. That was a very good acquisition, and those guys came on as part of the team. We began to build products. We were mid-way through the market. The source code management business was going well. Then we saw, in 2015, 2016, huge changes; huge cavernous changes happening in the market, and it was being disrupted by Cloud. What we’re now seeing today is companies that need to do machine learning, what we call artificial intelligence, but when I was at University, artificial intelligence was what we now call General AI, and what we’re really talking about is machine learning.
David Richards: These huge storage arrays that require CPUs and 2,000, 3,000 CPUs that might be used for an hour a week, they’re not good use cases for on-premise, anything. You can’t build an elastic infrastructure on-premise to cope with these types of ML algorithms that are not running. The light turned on for me when one of the largest retailers in the world that can pretty much buy anything they want, said that they couldn’t do this, that they had to move to Cloud. That was the writing on the wall. For us, it was, “Oh, ****. This is not going to be on-premise. This is going to be in the cloud. How do we play in the cloud?
Alejandro: This is also the same time you’re a publicly-traded company. As you’re thinking and seeing this, you’re like, “We’re probably going to have to explore doing a pivot, and it’s a public type of event.” Is that the case?
David Richards: Oh, my goodness. The yin and the yang, the good thing about being a public company is that you have access to all kinds of long-term, very large capital and that’s great. The bad news is that as a private company, you can go and say, “Everything’s fine. Don’t worry about it. Come see us in 12 months, and we’ll have a story for you.” In the public markets, you can’t do that. So you are trying to pivot a business through massive disruption. We could see the writing firmly on the wall where companies were not going to build-out very large data clusters anymore, and they were going to have to try and move those to the cloud. The good news was that we solved a huge problem. Actually, a much, much more important, much more valuable, much bigger problem in how you move on-premise data lakes and storage systems to the cloud, which I’ll maybe come to later. That was good because we could see light at the end of the tunnel, but we have a long tunnel, and we have to pivot this business with revenue requirements for the public markets, etc. Dealing in that was going to be very hard and not something that is a good idea to play out in the public markets.
Alejandro: For sure. How big was the business at that point?
David Richards: We were 150 people, total employees, with revenues forecast that year for 30-35 million. Then, as we executed the plan, a complete disaster happened, which played out in the press in the UK and was of great interest. It was, I would say, more on the front page than on the business pages where I actually got fired. You talk about near-death experience; this was actually death or a Lazarus-like death experience. We were right in the middle of it. I was taking a flight to London. I had just hired a new CFO, Eric, who’s still my CFO today — great guy! I woke up in the morning at the hotel and got a phone call. It was the chairman. Bear in mind that I had actually hired the chairman, offered him the job myself. I was the chairman and CEO, as I am now. I was the person who made him the chairman, and another non-exec who I appointed took me into the back room, took me into the woodshed if you will, and basically said, “Sign this or else. We want you to resign, and we’re going to put an RNS out in the next hour.” That was, obviously, a huge shock.
Alejandro: Did you see that coming, or not?
David Richards: Out of the blue, completely. We had alignment with shareholders who were investing in this pivot that we were making. They understood completely how Cloud was far more important than on-premise Hadoop, and we’d taken [0:36:55], the business, to enable us to get through this revenue chasm that we were going to experience. So, we were well set. Then, suddenly, that happened. I would say firing a founder, doesn’t matter who it is, you need to be very, very careful. When you start the business, every single person in the business is looking up to the founder, and founders know this. They interview everybody. They hire everybody. They are reassuring everybody, etc.
Alejandro: The book Good to Great, from Jim Collins, is a good one where they measure performance, and obviously, those companies where the founder is still involved leading the business, they tend to outperform those that end up firing the founder.
David Richards: Exactly. My chairman came from a big tech company, Sage, from a very traditional monopolistic perspective. Someone once said that cheese sandwiches can run those kinds of companies. I don’t believe that, but it’s a completely different skillset running a big company, maybe at the end of the production lifecycle, which is cash cowing. You need a completely different skillset. In the place where we are, it requires very specialized, dedicated, 24/7 skills.
Alejandro: So, you’re fired. All of a sudden, you receive this call, and you’re fired. What the *** happened next?
David Richards: It was a sunny day in London. I was walking down the street, and my phone began to ring. It was shareholders saying, “What the bloody *** is going on, David?” We invested in this because you’re going to be around. Why have you resigned?” “I didn’t resign. I was fired.” “Oh.” That was on a Friday, and it was very apparent that this was done unilaterally, without shareholders. Bear in mind that my co-founder and I, at the time, were 20 to 25% of the company. I only needed another 25% of the voting shares to be reinstated. I would say by Friday afternoon, it was very apparent to me that I had enough votes to be reinstated into the company. It wasn’t that simple because while all of this was going on, and we talked about it earlier in the podcast, I began to listen to the little voice, which is, “Should I really have kept that guy in the company? Should we have really assisted with that strategy?” All of those questions, I was beginning to ask myself. On Saturday, I went to see some of my oldest friends up in Sheffield, up in my hometown. We went to a football match. Alejandro, we call it football. They call it soccer in the U.S.
Alejandro: I know. I know. It’s unbelievable.
David Richards: What was really funny is, the chairman at the time, was a Sheffield United supporter, and I’m a Sheffield Wednesday supporter. The rivalry, as you know in European football is intense between them.
David Richards: I sat at the football match, and I can’t even remember anything about it. I just basically thought and, “Yes, I want to go back.” Then, Monday afternoon, I had a meeting with some of the shareholders, and Tuesday, we instigated the plan. It was great interest because typically what happens in a situation like this is that it might be 6 to 12 months, maybe two years before the founder is brought back before they realize, “Oh, no,” as you just said. “We’re underperforming. We need to bring the guy back whose idea this was in the first place and have them run it.” I decided that was what I wanted. I was very grateful for shareholders who, I think, were friends. They trusted me. I told them the truth, regardless of whether the news was good, bad, or indifferent. And we went back. When I went back, it was amazing. I’ve done a TED Talks about this. When I was out of the company — when you’re psychologically out of the company, it’s kind of like looking through the window of a meeting room, and your view of the company changes. For me, it completely changed. It gave me a license to — I probably changed about 20 people in the company.
Alejandro: Why do you think that happened, because of a sudden, the reflection kicked in, and then you were to a certain degree, detached to the business, and that allowed you to do that, or what changed so quickly?
David Richards: It was the reflection. I previously fought against, “Why do people need executive coaches? Why do they need this person to come in and tell them what to do?” That’s precisely why you need it because you can’t reflect. When you’re so far in the weeds and so far in the middle of something, it doesn’t matter who you are, actually having those thoughts is very hard. It’s almost impossible, I think. It was for me, anyway. Other people may be superhuman and can do that, but for me, it really taught me something, which is that, as I said, the little voice and not listening to it. It wasn’t just the voice. It was the license then. “Okay. This guy’s back. I can do, not what I want, but I’m going to make good decisions. I’ve had this near-death experience. I’m going to change things here.” I got the whole company together and said, “This is what we’re going to do. We’re not going to do this any longer. I’m not going to do that any longer. This is how we’re going to behave. I changed engineering and sales. I changed the whole raft of things in the company. But maybe what I would have found very hard to do previously.
Alejandro: Whenever there is a breakdown, there’s always a breakthrough. There you go. Very cool, David. You finally did the pivot successfully. You got back to the business. How big is the business today, David?
David Richards: We’re 170 to 200 people, offices in Santa Monica, California, on the East Bay. Sheffield, my hometown, Belfast in the UK, Chengdu in China, and a big development center in St. Petersburg, which is growing in Russia. We’re targeting 35 to 40 million primarily of cloud revenue. This year, we have a tremendous deal that we announced a month or two ago that we’ve been working on for a long time, which is our technology has been embedded into the Microsoft Azure Cloud, which is fundamental to our go to market. It’s fully integrated with Azure as a first-party service with the Azure stake. Every single Azure customer, of course, has media access, turnkey access to the technology. A fundamentally different company to the one that I was fired from in 2016. So, a pretty big turnaround and fundamental change, and go to market stock has performed very well since we made those announcements. The future looks very bright.
Alejandro: That’s amazing. One of the questions that I typically ask the guests that come on the show is, knowing what you know now — here you are. You’ve done multiple companies. You’ve been on the ups; you’ve been on the downs. You’ve even been fired from your own business and getting back and making things happen. If you had the opportunity to go back in time and have a chat with your younger self, David, perhaps that David that was about to make a switch. Maybe that David that was thinking about going to Silicon Valley to start a business. If you had a chance to have that conversation, what would be that one piece of business advice that you would give to that younger David before launching a business, and why knowing what you know now?
David Richards: Take some time off. Take some time to relax your brain and do things with the family because you only get one opportunity to do that. We don’t get multiple lives, so when the kids are young, and they’re growing up, and you’re shushing them because you’re on a conference call with somebody, don’t do that. There are lots and lots of time. Just plan your life and your time much, much better, and make sure that you take some time off because performance, when you take time off, and the brain relaxes, and you’re not always in the cut and thrust of running the company, the performance of anybody is much, much better. Also, get some independent advice. Don’t try and do it all yourself. Bring somebody on as a coach, as an advisor, somebody that you can talk to, somebody who’s going to ask you objective questions. Bring out the little voice, if you will, in you as opposed to you trying to bring it out yourself, which you can’t do it.
Alejandro: I love it. David, for the folks that are listening, what is the best way for them to reach out and say hi?
David Richards: Twitter is @davidrichards and I do DMs, etc. LinkedIn is David Richards, as well.
Alejandro: Fantastic. David, thank you so much for being on the DealMakers show today.
David Richards: Alejandro, brilliant, and really good questions. Thank you.
* * *
If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at firstname.lastname@example.org.