Neil Patel

I hope you enjoy reading this blog post.

If you want help with your fundraising or acquisition, just book a call click here.

Mark Hookey bootstrapped and took one startup through to an exit before raising tens of millions of dollars for his most recent company. A venture which is working to empower businesses to get better data, and be able to use it more efficiently and effectively. DeMyst Data has raised funding from top-tier investors like Notion Capital, Singtel Innov8, MissionOG, and SCB 10X.

In this episode, you will learn:

  • The differences in raising money in and outside the US
  • What investors expect at each fundraising stage
  • What you won’t find out reading TechCrunch
  • Mark Hookey’s top advice for launching your own startup


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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.

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About Mark Hookey:

Mark is the Founder & CEO of DemystData. With a career focus on data technology product development, Mark is an expert in scalable data access and analytics for financial institutions. His deep understanding of the analytics market and his desire to solve the data gap to unlock financial services led him to create DemystData.

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Connect with Mark Hookey:

Read the Full Transcription of the Interview:

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Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. I’m very excited about our guest today. I think that we’re going to be learning quite a bit about building, scaling, financing, and also doing it in other markets outside of the U.S., specifically Australia. So without further ado, let’s welcome our guest today. Mark Hookey, welcome to the show.

Mark Hookey: Thanks, Alejandro. Great to be here.

Alejandro: Originally born in Australia. Tell us about your upbringing, growing up there in Australia.

Mark Hookey: I grew up in the countryside in Australia, and went to the university in Melbourne, and started from there to live my life in various parts of the world. I was involved in a company that took me over to the states to New York and built teams in lots of different parts of the country, as well as building teams in Europe. Since then, we haven’t stopped. We spent some time in Europe, in Spain. We spent some time in China, Hong Kong, back in the states. I’ve been building businesses in lots of parts of the world. Australia is a very international culture, very multicultural, and I think perhaps that’s been helpful.

Alejandro: What about doing the MBA in the U.S.? 

Mark Hookey: I was part of a business in which I was building out the U.S. group. That took me to New York. I had bosses down in Atlanta, and we were building out some great things with insurance companies in the U.S. around pricing and modeling; that was very interesting. I always wanted to spend time in New York. I got the opportunity to go do an MBA in the city while I was there, which was a good chance to put my head above the clouds and look at what other options there are out there in the world, make an incredible network of people, and have some fun after a long time doing a hard slog. 

Alejandro: Now that you find all the education aligned, would you say that’s the purpose of going through a program like this for the people that you get to meet? 

Mark Hookey: Yeah, each to their own. People have a lot of different reasons. For myself, personally, I already had a commerce degree and was self-taught in technology and stats. I had an engineering degree. I wasn’t going to do it to learn the economic content because even back then and 20 years ago, there were plenty of other ways to read a book and learn things pre-Coursera. But I was exhausted. I really put a lot into building a team and building a business. The business that I was involved in was doing something very niche and very deep in one specific vertical, so it became quite narrow in your worldview. You have a group of friends and a group of colleagues. I just wanted to take a bit of a break and meet people and have some fun and learn a few things but mostly just network in the context of interesting content. I was doing it during the financial crisis. There were lots of interesting things going on in the world, and it was a great mixer of people from all walks of life. For me, that certainly was what I got out of it that was the most valuable thing. The other interesting thing about doing an MBA is that a lot of people think it’s also about learning to be an entrepreneur and build a business. I remember one of the professors asking the class, “Who here wants to be an entrepreneur.” I had already been one, so I put my hand up, and so did about 70% of the class. He said, “You’re all wrong because when you were given a chance when you had a spare $200,000 to spend, you didn’t choose to invest it in a startup. You chose to spend it on your education, which is effectively an insurance policy, so most of you, generally by nature, are conservative.” Look, I think that’s a bit tongue-in-cheek, but I don’t think that an MBA is a lesson in how to be an operator. I think it’s a lesson in how to learn things from broad, diverse groups of people that you don’t always get growing up. If you don’t go through that diverse an education, it’s a great way to broaden your viewpoint in the world.

Alejandro: After the MBA, for you, specifically, what you actually went through was the opportunity of operating a company that went through an acquisition, which became part of LexisNexis. Tell us about this journey with this company with Optimal Decisions Group.

Mark Hookey: I was the first employee and became a partner in a business that did pricing technology and insurance. It was a great group of people. It was Ph.D.s and all sorts of interesting domains building really interesting technology for some of the smartest clients in the world in personalized insurance companies that I still, to this day, think have some of the most sophisticated approaches to how they deal with analytics and data. But that aside, we built out the business. We never took external funding. We built it through profits. It was a mixture of software and services. We started to partner up with ChoicePoint, which was an information services business that later got acquired by LexisNexis and had very deep, entrenched footing in the insurance base. It made sense for them to acquire the business because we were building validated solutions into their very established client base. I inherited a few new teams and a few new products and helped with the integration of the company, helped with the product marketing of the border group that I was part of and was doing all of this concurrently with doing an MBA, as well, which was great to put into practice what I was learning. As they say in driving race cars, “Race it on a Sunday; sell it on a Monday.” It was a little bit the same when I was doing an MBA, learning on a Sunday and then learning about how I would actually get it applied and practice on a Monday. My team grew from 30-40 and up to a much larger team. We got to build some great products in the market and make the acquisition work. I did learn, through that, as much as I still to this day think LexisNexis is one of the greatest companies on the planet. But I’m generally not a big company guy. All of my time shifted from working out in the field with customers and solving problems to dealing with all of the necessary components of being in a large company dealing with budgets, IT, HR, and dealing with adding a little bit of value to very large problems as opposed to a lot of value to small problems. I can do that big-company thing, but I’m not sure I have any personal, unique advantage in doing the big-company thing. I get much more fired up by building something from scratch. So I went through the journey and spent a couple of years doing that. Then, I started to, through the MBA and through my work at Lexis, learn more about information services more generally and how data flows from Company A to Company B and what that means in both developed and emerging markets. I started to get interested in alternative data and how that could help organizations such as banks in emerging markets issue credit and open accounts in a more streamlined way. I started to get interested in this conundrum of—my whole career, I’ve been spending time working with data. Why is it that when there is supposedly an abundance of data that even my own team, even inside LexisNexis, couldn’t easily get our hands on clean data? I still think this is a big problem in the world and a big opportunity in the world, but getting clean data is just a fundamental bottleneck of almost every analytical exercise. So that was my time at LexisNexis.

Alejandro: One thing there that I think will be interesting to the listeners is how was the process of the acquisition? When you go through the full cycle as an entrepreneur, it gives you full visibility, so how was that process for you guys?

Mark Hookey: It was an interesting integration of cultures. We had a very different way of working to LexisNexis. We had a fast-growing, dynamic culture, and LexisNexis was fast-growing and dynamic in some areas but also much more established and stable in others. So we had to integrate our teams with the teams of people that were on a ten-year time horizon instead of a ten-month time horizon. That wasn’t always easy. There was nothing magical about it. It was just about getting everybody in the same room, breaking bread together, having a few drinks, getting to know each other, and understanding each other’s perspectives. There was definitely quite a big disconnect at first between the acquirer and the company. That disconnect extended to almost everything: planning processes and rigor, HR, compensation, disconnected payroll structures, go-to-market strategy, agility, database decision-making. We had thought pre-acquisition that we were making decisions on the basis of rigorous data but actually, relative to more established companies, we were a little bit more based on a few data points. So everybody had to meet in the middle for that work.

Alejandro: In this case, you were mentioning that LexisNexis has been one of the most magical big corporations that you’ve had the pleasure to work with. What do you think made them so magical?

Mark Hookey: They are solving big, established problems with technology and data that weren’t pie-in-the-sky ideas. They were proven-known problems. Like Pride to ChoicePoint being around insurance companies that used to fax documents to each other. Then somebody said, “Instead of faxing these to each other, why don’t we put them in a database and it would be more efficient?” “Okay, that makes sense. That saves a lot of money.” These are very big problems in the market that are often neglected. I think maybe it was a knee-jerk reaction after spending so long in what was the advanced analytics domain that I was excited about spending time on boring but impactful problems that actually changed people’s lives. I still, to this day, am far more interested in the picks and shovels and in the boring, impactful problems. Lexis was a master at doing that, at letting the clients be experts in their own domain, letting the clients run their own businesses but solving the infrastructure elements of what they do. They also did a lot of great stuff and very inspiring stuff. They still do a lot of great stuff, helping governments and government agencies with tracking down bad guys. That’s part of their business and part of the use of data in this world, which is in the event of crime or money-laundering or other activities like that where systems like this can be a critical part of helping to track down the bad guys and helping the good guys.

Alejandro: Tell us at what point did you realize that maybe it was time to go at it again? When did DemystData come into the picture? What was that incubation process?

Mark Hookey: There were two things. First of all, my wife did a job in Spain, and she was very excited about it. So we were going to move to Spain. I could have stayed with LexisNexis, but that triggered us to think about what I wanted to do next. The other thing that was happening, as much as I loved LexisNexis, it is a big company, so I was missing that innovation strength. I was getting interested in the domain of data access and how to move data from Point A to Point B. But I found that I didn’t have the bandwidth to do anything about it because everything was incremental. Everything was about executing on what was already decided. I did try to bring a few ideas internally, but I had budgets to meet, obligations, and all sorts of appropriate things, given what I was doing in the company. It made sense to have another go, to do a startup, do it from ground zero, and try to actually move the needle on a few big problems in the world.

Alejandro: Got it. Then tell us what happened next.

Mark Hookey: Apart from moving to Spain, having a great time, putting on some weight, and meeting some interesting people, I think the main thing that happened next is I took a step back and realized I had gotten a bit soft on technology, which had evolved a lot since I had been in technology. It was no longer desktop software and deep tech. It was cloud-enable; it was Ruby, Python, and a whole set of technologies that I had never spent time with before. So I had to teach myself to be technical again. That was fun, and I had to teach myself to build a startup, which back then, I incorrectly thought was all about building an app, building something that faced consumers. So I built some consumer-facing websites to do things that get individuals to do things like credit cards. Later on, we evolved into an enterprise B2B technology company, and that has always been in my personal wheelhouse as part of what I’ve been building. I spent some time chasing the consumer route, perhaps in hindsight, incorrectly. So I started teaching myself to be technical and launch a few versions of this. I didn’t focus on fundraising or anything like that. I just focused on building product, testing it into the market, and seeing what stuck.

Alejandro: In this case, you did spend quite a bit of time in coffee shops figuring out what to do and what this would look like. That sounds more like nowadays of how the life of an entrepreneur is and how you go about what product/market fit would look like and how that would work out. So, in this case, for you, how did you go about building the team around you, and how did you get to product/market fit?

Mark Hookey: You know, I was spending a lot of time in coffee shops, and I was spending a lot of time in building tech, but I was also spending a lot of time just talking to people in the market, flying around the world, going to see banks and staying in China and the U.S., lenders, insurers, and getting to know their problems and using some of my personal history and experiences as a consultant to get to know what people really cared about, not because I wanted to build a professional services consulting business at all, but just because I wanted to understand the problems that we were solving. So I’d be sitting in a coffee shop for a big chunk of the day just learning how to build software and build cloud infrastructure and make it work. But then, other days, I’d be getting on planes and networking my way to go see smart people at interesting companies and learn about what they were doing. Usually, we could do something with our earlier platforms, something marginal and tactical for them, so they might be trying to launch some new wealth management service or some new digital lending app or some peer-to-peer lender or something. They would always be trying to do something. Usually, some aspect of that would involve a data integration problem, so we would help them with that. That was a way to let the market steer the establishment of product/market fit. Later on, as we got more established and hired some people and started real product, it became much more about surveying the market and finding out what we were doing and were not doing.

Alejandro: Now, for the people that are listening to really get it, what ended up being the business model of DemystData? 

Mark Hookey: Our business model is about external data operationalization. Enterprises have incredibly high friction and high-cross processes associated with testing and deploying third-party external data. That could include doing things like verifying a consumer or business, conducting a credit check, doing an insurance underwriting application, or something else. Enterprises need to use external data for part of their engagement with their own customers. There are thousands and thousands of really interesting pockets of external data sitting inside organizations such as Lexis, Experian, and Equifax but not just the big players. There’s a whole longtail of external data sources that have exciting, compliant, accurate data. Enterprises can’t tap into it, so we provide a bit of a one-stop-shop model. They’re like the Disney and web trying to be like Netflix, where it’s all about solving the distribution problem and getting it out into production in a transparent way and not trying to build a company that owns the data but trying to build a company that helps people harness it. That’s going really well. 

Alejandro: How did you guys go about capitalizing on the business?

Mark Hookey: In the early days, as I mentioned, we weren’t focused on fundraising; we were focused on building things that worked. It was very lean. Sometimes, in hindsight, maybe even too lean. It wasn’t until much later on that I started to hire paid employees. It was myself building lots of different iterations of technology. Then we brought in a co-founder, and I brought in a couple of team members to help accelerate some of the customer stuff we were building. Then we did a small seed round and a Series A. I was based in Hong Kong at the time because we had moved there. There was a very nascent venture capital ecosystem in Hong Kong at the time. It’s become a lot more established since then. But back then, there was a lot of private equity and almost none of what people traditionally call venture capital Series A seed funding with one or two exceptions. So I managed to meet a couple of the key people and raised a Series A and that helped fund the next phase of development, discovery, and product/market fit. Then I moved back to the states. I did an extension to the A. Then did a B and did an extension to the B. There was never one big fundraise. It was more incremental than that for us. We were growing all throughout, and we were growing more healthily sometimes than others, but we were growing all throughout, and we were funding to continue operations and accelerate just a little bit—just a little bit because more recently, there was not one moment where we said, “Okay. We’ve discovered product/market fit. It’s time to put the foot on the gas pedal. Let’s go and raise x-dollars. Stop everything else. We’re just going to do this one thing.” We sort of evolved there throughout time. I do think that’s something when they read TechCrunch and read about these companies that take off, find product/market fit, and raise huge amounts of money. I think it is far more common for people to iterate their way there in a more step-by-step way.

Alejandro: For example, in this case, when we’re thinking about the pitching and going out to investors, as you were saying, what has been the main difference that you have seen from raising money in the U.S. versus raising money in Australia?

Mark Hookey: We’ve actually never raised money in Australia until just last year, and that’s been very interesting. But I did raise some money in Asia and also later on in the States and in the UK. There are some things that are common. Everybody everywhere wants growth and product/market fit, and they want a great team. That’s common. Like every entrepreneur, we had a lot more people say no to us than yes. We had hundreds of pitches that people didn’t understand the model. They didn’t see us having enough traction. They had concerns about how it was going to evolve. But what was interesting was in the States, you have to tell your pitch to the person that you are speaking to, and the U.S. VCs definitely expect a very ambitious plan. They expect the big pitch, “This is going to be a multibillion-dollar enterprise. This is why—this is how I’m going to take on the world.” In most situations, most VCs, if you ask them, haircut those numbers so much. They see it as a big, bold, ambitious plan—very, very hard. Most companies don’t hit their numbers, but they want to hear the big pitch anyway. They don’t want to hear equivocating companies that come in and say, “This doesn’t work, and that doesn’t work.” That was one of the things that I learned in the early days. When I engaged VCs in other parts of the world outside the U.S., there was a lot more conversation about what doesn’t work. When I had those conversations in the U.S., again, not to overly generalize because every VC is different, but in the U.S., when I had too much of a conversation about what doesn’t work versus what is working, you would talk yourself out of a deal, and the more you talk, the more you explore, and the more you discuss, they would get concerned. That doesn’t mean that, for a second, we hid anything. You don’t hide things. Everything gets disclosed during diligence, but it’s more about the narrative, the pitch, and synthesizing what you’re going to do in crisp soundbites. That was one difference that I observed personally.

Alejandro: How much capital have you guys raised to date for the business, Mark?

Mark Hookey: We raised about $60 million. That’s been through Series A and Series B transactions. Then, more recently, in the middle of last year, we raised a $25 million pre-IPO round on a pathway to doing a public listing in Australia.

Alejandro: Got it. What have you seen in terms of expectations? How have you seen those transform or change from one financing cycle to another?

Mark Hookey: This is one area that I think what entrepreneurs do read about is fairly accurate. There is an evolution of what investors, quite rightly, expect to see at different gear changes in the company. In the early seed, Series A stage, they want to see successful customers, product/market fit, and proof that, as one of my board members always used to say, “The dogs will eat the dog food.” Like, this product actually works, and people care about it. They care less about revenue and costs. Then in Series A and Series B, they care about the extension of that, the ability to predict, believe, and deliver growth. And the dogs won’t just eat the dog food, but they will continue to eat the dog food. So they care a lot about retention and growth within customer accounts. As you get into later stages, then they start to care not only about that but also about fore-castability, predictability, operational processes, and metrics, so becoming a company that is more than just any one group of people and is more than any just one group of customers that is a predictable machine. The goal for any scaling company, and I believe this is no matter how it’s financed, whether it’s VC, PE-backed, or not is that it has to be able to build a predictable machine. You pour investment capital in the top, and you get predictable outcomes out the bottom. That’s how it’s evolved through the cycle.

Alejandro: Imagine you go to sleep tonight, and you wake up in a world where the vision of DemystData is fully realized. What does that world look like?

Mark Hookey: Data is accessible with zero marginal costs with very high compliance as ubiquitous and is used for good purposes all around the world. There are a few key large incumbent platforms out there in the case of the bureaus. But data is so far away from being at people’s fingertips, and it’s this great undelivered promise that we all hear about that data is going to be everywhere and is going to change the world. But if you ask almost anyone in almost any enterprise and not just the regulated ones and not just the sensitive data but almost any enterprise in the world, they all, in unison, complain that “I can’t get any data around here. I don’t know what’s actually happening in my own business, let alone in the outside world.” If I could wake up tomorrow, whether it’s DemystData or not and enterprises could have a rich understanding of what’s happening around them with their customers, and then, in turn, they build on top of that, and they deliver innovative products, economic growth, and great outcomes for the world, then that would be what I would want to see. The components are very much available now, the technology, maturity around data, and the frameworks for governance are there, but it hasn’t been pulled together in a way that is what anyone is called—what is it? Circuit Cities, the easy button. Where’s the easy button for data? If anything, it’s drifting in the other direction as the data gets more and more complicated. It’s getting more and more complicated to tap into data. The basis of competition is shifting toward data because of the maturity of the tools that use data. That’s actually now coming up, so everybody has great AI technology and great cloud of the structure and great data warehouse infrastructure, but nobody has plain data. Nobody has solved that problem.

Alejandro: Got it. Now, imagine I put you into a time machine, and I take you back in time to that moment where you are coming out of Columbia, you are thinking about what’s next, and perhaps building a business. If you had the opportunity of having a chat with your younger self and giving that younger Mark one piece of advice before launching a business, what would that be and why, given what you know now?

Mark Hookey: More narrow niche focus. Amazon sold books before they sold everything. I think in hindsight, had we just done one thing for one type of customer in one country for not much money and just done that, it would have probably been faster. It might have been less fun, but it would have been faster to build real impact in the world. Maybe that would have been not having lofty pitch conversations with venture capitalists and doing even more through a bootstrapped mechanism. I look at some of the stuff we’ve done with clients successfully today, reducing fraud and automating verification for people originating credit cards in India and other countries in Southeast Asia. They are really great solutions. Each one of those specific problems is just one business entirely by itself before you generalize into a platform. My younger self, I think, could have been more focused on a narrower set of business problems. Again, it’s at odds with what the VCs want to hear. The VCs want to hear how you’re building this platform, but it isn’t restricted to any one vertical. We don’t just serve banks; we serve insurers; we serve healthcare; we service this and that. Now DemystData has matured, we do still have lots of different verticals, but I think I was naïve to think that we could serve those from day one.

Alejandro: For the folks that are listening, what is the best way for them, Mark, to reach out and say hi?

Mark Hookey: They can reach out and say hi to our company via our website. There’s a contact-us form. If they want to reach out and say hi to me and ping me on LinkedIn and say hi. I’ve got a lot of things going on, but if there’s any way I can be helpful and point people in the right direction and give back, I’m a big fan that being an entrepreneur is an incredibly rewarding journey, an incredibly challenging journey, and allows you to have a real impact in the world and have fun along the way.

Alejandro: Amazing. Mark, thank you so much for being on the DealMakers show today.

Mark Hookey: Thanks, Alejandro. Great to connect.

 

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Neil Patel

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