Paul Taylor is the founder and CEO of Thought Machine which is a fintech company that builds cloud-native technology to revolutionize core banking. The company has raised over $100 million from top tier investors like Draper Espirit, IQ Capital, Playfair Capital,and Backed VC to name a few. Prior to this he founded Phonetic Arts which was acquired by Google.
In this episode you will learn:
- How to get creative with funding
- The importance of the market
- How to get acquired by Google
- The key to being a good negotiator
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.
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 Paul Taylor:
Paul Taylor founded Thought Machine in 2014 because he wanted to bring modern software technology to banking.
Paul Taylor strongly felt something needed to be done about the way most banking systems were so cumbersome and awkward, not to mention deeply frustrating and practically useless for millions of end users.
They discovered this after originally setting out to make intuitive banking apps based on advanced machine learning and then hitting a brick wall time after time when attempting to integrate or get proper data feeds.
Their conclusion was that we should build our own core banking platform from scratch and encourage our customers to scrap their archaic technology.
Hence Vault was born in the spring of 2015. Will Montgomery wrote the code while Paul Taylor acted as product manager – setting and guiding the overall direction of the system – a role he still plays today.
Before founding Thought Machine, Paul Taylor founded two other successful technology companies – Rhetorical Systems, which was acquired by Nuance in 2004 and Phonetic Arts, which was acquired by Google in 2010.
Paul Taylor was CTO for the former and CEO for the latter, until they became part of Google, after which point Paul Taylor served as a research scientist and manager of the speech team in London.
They launched the Google text-to-speech system in 2012, which still provides the basis for all of Google’s speech output, from driving directions, voice search and accessibility to machine translation. The system has been installed on more than a billion phones since 2012.
In addition to his practical work in technology, Paul Taylor takes pleasure in sharing his passion through academia; Paul Taylor has been a lecturer in Linguistics as well as director of the Centre for Speech Research at Edinburgh University.
He also spent two years within Cambridge University’s Engineering Department, writing the book, Text-To-Speech Synthesis. At Thought Machine, Paul Taylor takes pride in having helped to build an extremely strong team of talented people and a fantastic company culture. Team work and fun are very important to him; it’s crucial that we continue to create incredible products and have a great time in doing so.
Connect with Paul Taylor:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today it’s going to be another day where we’re battling the accents. You’re going to have here the Spanglish and also the Irish, with our guest. It’s someone that has built several companies, done the full cycle, and the exits. He has even sold companies to big companies, giants like Google. We’re really going to find today’s guest fascinating. So without further ado, Paul Taylor, welcome to the show today.
Paul Taylor: Thank you for having me. It’s a pleasure to be here.
Alejandro: So born and raised in Belfast. Apparently, there was a tremendous quality of life. How was life there?
Paul Taylor: I was born in Belfast. Obviously, I don’t remember the early years too well. I was growing up in the 1970s, and Belfast in the 1970s was known for the terrorism that was there. But as a child, you adapt to every circumstance you’re in. It all felt very normal to me. It had the effect of depressing the economy, but it also depressed house prices. My parents were able to afford a really beautiful house. It was something that would be completely unimaginable in London, where I currently live. We had a front garden. We had a back garden. The back garden was big enough to play football. It was a tremendous quality of life. It was very, very happy. People find that fine. They associate Belfast and the troubles with such negative experiences. But for me, it was a very happy time and certainly my school years there were a great time too—great schools in Northern Ireland. That’s not particularly well-known, but that served as the basis for a future academic career.
Alejandro: Talking about schools, I know that a Nobel Prize had a big impact on you. What was that story?
Paul Taylor: Yeah. It took me a long time to realize that I was good at school. I was always good, but I wasn’t great when I was young because I was always a bit of a dreamer and always thinking of things, and I always wanted to do stuff. But I love math. I love physics. I love history. I remember, in particular, one time in our fifth year at school, which I would have been about 16. Our physics teacher said, “We’ve got a special guest visiting the school today.” We snuck into the back of the hall. That was actually filled, so I got a seat in the front. Our guest speaker was Ernest Walton. He gave a talk, and it was so profound and so interesting that I was completely blown away by the talk. Ernest Walton had gone to my school, Methodist College Belfast, and I think he left there in something like 1920. He did a Ph.D., and that ended up at Cambridge University. While at Cambridge University, in the early ‘30s, he was assigned the task of trying to split the atom. At that stage, no one had split an atom. Ernest Walton and his teammate, John Cockcroft, and their boss was Ernest Rutherford, who is very well known. He told the story of J.J. Thomson and Enrico Fermi and all these people who were on the lab. It was absolutely incredible that he was sharing a cup of tea with the person who first discovered the electron. The great part of the story was, he said one day they were trying to split a lithium atom into two helium atoms. Rutherford was away one day, and they put up the experimental apparatus in a way that Rutherford thought wasn’t going to work. They gave it a go, and sure enough, the helium atoms are detected as alpha radiation, and they detected that on a screen. They were pretty sure they had done it. Rutherford came back the next day and confirmed it, and off they went. For that, they became the first people in the history of the world to ever split an atom. It wasn’t a fissionary reaction because it stopped splitting as soon as you stopped the energy going in, but it was still a first. Then in 1950, he won the Nobel Prize for physics. I just remember I was blown away and going right after that, “I’m going to be a scientist.” Previously, I had been very focused on being in a band. At that stage, the guitar was put to one side, and I thought, “All right. Let’s go do some science.”
Alejandro: That’s awesome, and talking about science, you went to University, and then you did your Ph.D. in Linguistics. Is that right?
Paul Taylor: Yes, and no. On the certificate, it certainly says Ph.D. in Linguistics. I was in the Department of Linguistics, but let me just say I’m one of the world’s worst linguists. When I was at University, they had an institution called the Centre for Speech Technology Research. It’s still there. It’s a highly regarded center for research in machine learning, artificial intelligence, with the focus on speech technology. Speech recognition, which is computers listening to you and speech output, tech speech synthesis, which is the computer speaking back. I started my Ph.D. in this, and it was a wonderful mixture of AI, algorithms, linguistics, and coding. I learned to be a pretty good software engineer when I was there. I started bit by bit doing the thing. The first thing I became famous for, which is building tech and speech systems. I had a similar moment of euphoria while I was an undergraduate. I was doing engineering, and we had one lecture on speech. I just remember going, “Ah! This is so incredible.” Then when I figured out you could do speech and engineering; I was just blown away. It was a second eureka moment after the first with Ernest Walton. So, I did my Ph.D. there and graduated in ’92. Then I spent six years of post-doc experience at Edinburg University, which were wonderful years doing AI and stuff. What was really remarkable about artificial intelligence in that stage was, it was very interesting, but no one cared. These days, you have presidents and prime ministers and the Financial Times, and everybody writing about AI. Back then, nobody wrote about it. Nobody cared. Certainly, no one wanted to buy it. But that was good because everyone left us alone, and we could sit there and do our research. Sometimes, in the early part of your career, it’s good to have space so you can develop, and you train yourself, and have thoughts yourself, and not have to have too much pressure on you.
Alejandro: What do you think has happened? Why in the ‘90s nobody cared about AI, and now, every single entrepreneur that I hear pitching is talking about AI in their business.
Paul Taylor: That’s very simple. It did not work then. The algorithms, to a certain extent, weren’t that different. We have neural nets today or deep-belief nets, which have got multiple layers in nodes, but the essence of it isn’t too different. The things that are different are 1) CPU power. Using Cloud computing, you can trend thousands of cores onto our problem. 2) Availability of data. We were training on hundreds of pieces of data, and now, today, you train on hundreds of millions of pieces of data. It didn’t matter how clever we were. We just didn’t have the capability to do it.
Alejandro: Of course, and obviously, the more data, the better trained the artificial intelligence, the algorithms. After those years, you finally make the leap, your first company, with Vertical Systems. Tell us about this.
Paul Taylor: As the ‘90s progressed, and the dot-com boom was on, it felt very distant to me. I was in Edinburgh University. I didn’t know any entrepreneurs. There was not a local tech company scene there. I had an itch, but I couldn’t scratch it. I remember one time in early February 2000, I went to an event, and I spoke at the event. At lunchtime, I met Professor Peter [DeNure 9:22], who had previously worked at Edinburg University. We got to talking. He had spun out his own company. He did digital cameras, or the chips in digital cameras way before anybody had really caught onto that. He said, “Why don’t I come and visit you, and we’ll talk about it.” A couple of days later, he came to my office, and we sat down. I remember quite clearly it was about 4 pm, and he started to talk. I knew nothing about companies. I mean nothing. I didn’t know what shares were. I didn’t know what the letter IPO meant. I didn’t know what stock options were. I didn’t know what intellectual property was. I didn’t know anything. But he wasn’t put off. I think this is a great lesson for entrepreneurs or anybody looking at somebody who’s early on in the stages. Do not focus on what they know. Either you can learn all that stuff. Now, I deal with options, contracts, and I’m funding documents all the time. I can do it in my sleep, but that’s not the point. The essence is, do you have the capability to do something else that other people can’t do? Of course, being good at AI meant that I had a leg up. Peter knew he could get people to figure out all the legal side. So, Peter talked me through it, and then he talked me through the war stories of his company vision. I thought, “This is just incredible. I was so excited about the whole thing. I went home that night, just buzzing. I remember thinking, “I have to try this.” Once you’ve seen it, you can’t unsee it. I thought, “If I don’t try now,”—the other thing, I was 32 years old by that stage. I already had nervous ideas that I was too old to be an entrepreneur. And that’s something that’s completely ridiculous. Now, I’m 52, and I am not too old. You’re never too old. It’s all the point what you can uniquely contribute to the market that’s the key thing. Sure enough, off we went, and we got an order in pretty quick. The company went crazy. We got an order from Toshiba, and we had to hire 25 people. Some of the work was fairly easy to do, database work, but we had to get people to understand the linguistics. I remember hiring a waitress at a party.
Paul Taylor: I remember interviewing software engineers all day. I went to the pub, and I was depressed because we hadn’t found anybody, and I was basically sulking at the bar. The guy beside me said, “Why are you sulking?” I said, “I can’t find any good software engineers. He said, “Why don’t you hire me.” And he was a software engineer. So I interviewed him, and we hired him.
Alejandro: That’s amazing.
Paul Taylor: At one time, I was in an off-license in a queue, and I hired the guy in front of me in the queue. It was a fantastic time. Completely naïve. Didn’t know what we were doing, but we had an order; we had a bit of cash. Then at the end of the year, we did our first fundraise. This is how completely insane those doc-com boom years were. The company was nine months old. We raised 2 million pounds at a pre-money valuation of 12 million.
Paul Taylor: On the day we were closing, the word had gotten out, and the phones were ringing in lawyers’ offices with people try to preempt the bid and put their money in. I don’t know any companies today that can risk 2 million pounds on a 12 million pre-money valuation after 12 months. I’ll say, to be honest, that was the high point in terms of share prices. The dot-com bust happened after that.
Alejandro: What was the business model here for Rhetorical so that people get it that are listening.
Paul Taylor: To be honest, we never had much of a business model. What we did was we built tech speech systems. It was software installing. It was often bought by Telco’s and other companies, but it was a speech-synthesis system. We tried various business models. We tried doing [13:23]. We tried so many things, but we had sporadic sales in sporadic markets. It might have looked okay back then, but it wouldn’t be impressive today. It was just one-off pieces and good luck in a commercial sense.
Alejandro: So, what is one lesson that you took away with you from this experience with Rhetorical?
Paul Taylor: On the positive side, do not be afraid to jump in. Get people to complement your skill set, and off you go. But on the lessons learned on the sobering thoughts, I think it was a classic sense of us being too early with the technology because that same technology, basically it was the same algorithms, in eight years nine years, then they were powering Siri. It wasn’t like we were fantasists, but it just wasn’t there. However, do I regret any of it? No, I don’t. I’d do it all again.
Alejandro: Absolutely. That’s really what makes us is the journey as entrepreneurs. Here, you guys did an exit, and then you went to Cambridge University. You did a couple of years there until another opportunity came knocking. What was that?
Paul Taylor: Because of the bio, I had a guarding-me period for two years, which is quite a long time, but they paid me. They said in the original contract, “You can’t work.” I said, “What about an academic job?” They said, “That doesn’t count as working. Yeah, you can do that.” So, I was a visitor at Cambridge University for two years. I wrote a book on tech speech. I think it’s #300,000 of them on the best seller’s list. So, there wasn’t too much profit out of that, but it was good fun. Everything I knew about tech speech, I wanted to put in the book just so I could keep it there. I want to do it again. We hadn’t had that great an exit. You just got the feeling that it could have been better. We had the talent. We had many things going for us, a great team, but we just didn’t execute. In 2006, I took two of my colleagues from Rhetorical and Tomlinson in Hudson, and the three of us founded Phonetic Arts in 2006, which was primarily to do the same thing, but a computer games industry. What we were really going to do is, imagine a football game like FIFA, or Madden, or something like that. It has a lot of commentary on it, but that’s just cleverly-stitched samples of speech. What we were going to do was to build a tech speech system that could that so you could have live commentary in a football game, really reacting to what players are doing. Very ambitious, but off we went. Again, we did pretty good, but we had a similar problem. Just when we wanted to raise money, the great financial crash happened. I’m going, “Oh gosh, here we go again.” It was another good company. We did better commercially and had a great market. The first half of the company was really good. The second half was much tougher. We were also very lucky because we hit the time when—if you remember Zynga, hit the Facebook market with games, and browser-based games started to move to mobile and online. That meant that the traditional revenue streams for EA and all those interactive visions and all those sorts of companies were drying up a bit. The huge R&D budgets that they were prepared to spend on things was a lesson. Again, the timing wasn’t really great.
Alejandro: Got it. And, Google came knocking.
Paul Taylor: Yes. I do remember this. This was a key moment. In the summer of 2010, I got an email from my friend at Google saying, “This guy wants to speak to you.” The guy was David Parker [17:33]. David called me a few days later. Confidentiality forbids me going into it, but he spoke in a very cryptic manner. Eventually, I found out that he was from Google. I said, “So what do you do at Google?” And he goes, “I work in Mergers and Acquisitions.” He didn’t say anything else, and I said, “Oh. Are you planning on talking about acquiring my company?” He goes, “Well, I might be.” I looked at the phone and thought, “Wow.” He said, “Look. Why don’t you have a think and come and meet me in London and let’s talk about this? So, I put the phone down, and I stared at it for about 20 minutes. I went for a walk in the park, going, “Did Google just offer to buy my company?” I phoned one of the investors and talked to him, and he goes, “Right. Stop thinking about it immediately.” I said, “So, phone him back with the price?” He goes, “No. No. Don’t do anything like that, you idiot. Don’t do anything.” A few days later, I made an appointment in London, and he said, “Keep your trap shut. Answer factual questions about the business, but don’t try and get into any negotiation. It’s up to them to make the first offer.” It went pretty well with Google. They were very gentlemanly with the transaction. There was no funny business, but it did drag on an awfully long time. They said, “It should be over in eight weeks.” It actually took 20 weeks.
Paul Taylor: Yeah. As things went on, of course, our pipeline had dried up because I was focusing on the company. Things got pretty tight, so the offer was made in early August. We ran out of money about the end of September. We stopped paying people’s salaries in October and November. We had a bank loan and an overdraft. We had borrowed all the money we possibly could. We were absolutely out of it. It was just another week. We were just about to close, and then it was Thanksgiving in America. I nearly collapsed at that time. But the week after Thanksgiving, they said, “We’re nearly there.” I remember the final days of the deal when you do know that it’s basically there all the time and everything else. The negotiation was very tense. It was firm but fair. So, David was a very good negotiator. I’m not sure I won many points, but we got there. I do remember the final day, we went into the Taylor Wessing office in London, representing Google, and I signed all the documents. I think it was 2,000 pieces of paper to sign, and it took me about seven hours. At the end, I said, “I finished the final one.” Google leaned over, and there was a Google M&A guy there, and he said, “Welcome to Google.” Then the whole company became Google employees.
Alejandro: Wow! And I understand that literally at the time of the signature, you had no more money for a return ticket. It was only a one-way ticket.
Paul Taylor: Yes. Google is very nice, but they’re very rich. Rich people don’t often understand what poor people have to go over. It was agreed a couple of weeks before the deal was meant to close that we were going to go to New York to the New York office, and onboard there because the speech team was there. They said, “Yeah, come over. We’ll put in the hotel on 31st street.” Google is down around Chelsea in the meatpacking district. I had a look at the hotel. I said, “Who’s going to pay?” “Google will pay. Of course Google will pay. Don’t worry about that.” A couple of days later, I hadn’t seen anything. So I pinged one of them and said, “When you said Google will pay, are you going to book tickets and then send them to us.” He says, “Oh, no. You book it, and we’ll reimburse you when you get here.” I was like, “Oh, no.” I think there were six of us who were scheduled to go. We just scrabbled enough money. We basically go one-way tickets out there. But when we got to the hotel, we had to check-in at the hotel. Google had made reservations for us, but you know the way you swipe a credit card at the hotel, all those credit cards got rejected. There was no money in the credit cards, but finally, one of our collects, [Alan Dinken 22:10], who’s Russian, but he had some kind of dodgy Russian credit card. Thankfully, that one got through. Of course, once we’re in the hotel, all expenses are paid, so I went straight to the bar and ordered T-bone steaks for everybody, wine, and the whole works. We lived like kings, and we were panicky that we would realize any day our credit wouldn’t be good. But, of course, that was on a Sunday. The transaction closed on a Friday. That was on a Sunday. Then we started working with Google, but the money from the acquisition landed on Tuesday. Let me just say there’s a famous picture of us, all lining up at Citibank ATM in Manhattan. You know the way in Manhattan, you have an indoor little room for the ATMs? There’s a picture of us in a line checking our balances and then holding our fists in the air going, “Yeah, the money has landed.”
Paul Taylor: And off, we went. Let’s say after that, there were no worries about being kicked out of the hotels. It was all pretty good.
Alejandro: Wow, and I understand that also, it was a nice outcome. It was a 5x for the investors, so pretty good! Good stuff. I know that now, being in Google, I know that for you, it was pretty shocking, the culture. Why?
Paul Taylor: When I arrived at Google, I was completely blown away by how good the culture was. Let me just say, over the decades, corporate company culture has consistently gotten better, at least for those who are lucky enough to have the high-end jobs. Google took our staff in an incredible way. It had a good atmosphere of people not being political and people being good to one another. But most of all, it just had this incredible engineering depth of excellence. When I saw how Google wrote code—I’ll put it this way. When I went to Google, I thought I was good at writing code. After the first week, I thought, “They’re going to fire me. I’ve got to be the worst here.” Every line of code was written perfectly. Everything was documented. Everything was tested. Everything was continually deployed. Lots of things that we take for granted today have been developed at Google or invented at Google or further progressed at Google. It was a joy to work. Another thing I noticed at Google was they hire a good person for everything job. That means that with the consequence, in most teams, the top people carry the rest of the team to a certain extent. But google had excellent people everywhere. Because of that, it meant that all you had to do was do your own job, and you could completely rely on other people doing theirs. That was a really great feeling. But, of course, I learned about how the Cloud worked. I learned about internal development infrastructures, so all the great things that make Google technology good. There are business lessons, as well, but just the core engineering culture was really something.
Alejandro: And you lasted there for quite a bit for a little over three years. But then, again, opportunity comes knocking, and this is your recent baby, Thought Machine. Tell us about Thought Machine.
Paul Taylor: Yeah, I stayed at Google for three years. I had a lock-in for three years. I really enjoyed it, but I thought, “Why am I sitting here, making Larry Page even richer. He’s a very nice guy, but he doesn’t need the money. So, I decided to leave Google, and I took a little time out. Then I thought, “I think I’ve got one more startup in me. So, we founded Thought Machine in June 2014, and I learned a lot from Google. To be honest, I learned more from Google than I did from doing my own two companies because once you’ve seen what good looks like, you’ve seen it done, and you go, “I can be done, and it can be done at this tremendous level of scale. So, while I enjoyed my time at Google, and I enjoyed my time in Silicon Valley, I wanted to remain in London. Fintech there was bubbling up and coming along, so I said, “Okay. Let’s do Fintech.” It was only going to be Fintech. I wanted to build the company culture that had excellence baked in, so it was a lot from the Google company culture that we borrowed. We founded Thought Machine. I did the obvious thing. I hired some of my mates from Goggle. I hired the core team. Of the 2014 people that joined Thought Machine, the seven of us, the backbone of the engineering part of the company, and off we went. We got some feels in fairly early, but the penny dropped for us, or the key point was about the middle of 2015 when we came across this opportunity in core banking. We became aware that traditional banks were on this terrible legacy IT stakes. They had all sorts of problems, and we thought, “It’s like one of the science-fiction films.” They’ve been lost on an island, cut off from civilization. They stopped doing this stuff decades ago, and it really cost them. We thought, “If we bring our Google technology to this, we can make a big impact in this market. So, we built the vault, which is cloud-native core banking engine, and we thought, “We will help retail banks modernize their tank stack and be able to offer the same quality of experience that all the other pieces of technology we use day-to-day.
Alejandro: Interesting. How do you guys make money? How does that work?
Paul Taylor: We are a B2B company, so we sell our core banking engine to banks. You’ve got to be a licensed bank. It’s a subscription model, very much like a SaaS model, and banks pay a fee every year, and they get all the upgrades for free. It’s got a very good ARR kind of characteristics. We do professional services as well, but the backbone of the company is the license revenue.
Alejandro: Got it. Was it like a beast for you to get up to speed on all the regulatory hurdles around operating as a Fintech business?
Paul Taylor: It’s not too bad. The actual direct hurdles aren’t too bad. The regulation hasn’t been too bad, but the complexity of banking—in essence, banking is very easy. Either I’m borrowing money from the bank, or the bank’s borrowing money from me, and it’s done at different interest rates and different durations. You just need ways to move money. There’s nothing conceptual about a bank. It was done in Roman times. It was done in the Middle Ages. It was done in Victorian times. It’s nothing that’s actually hard. What is hard is all the different payment schemes. We’ve got Visa, Mastercard, and in the UK we’ve got GUESS, and in the States, you’ve got ACH. There are different ways of moving money and different ways of writing reports and different ways of validating things and different ways of doing money laundering checks. You add all that stuff, and it’s a huge amount of stuff. That was the hurdle. Learning all the bits that aren’t in the conceptual part of the bank, which is just about products and loans and deposits. It’s MVP in this stage, this business because you can’t go live on half a bank, so you need to be able to find some way of getting live, and some proof points without having to build a Tier 1 bank.
Alejandro: How much capital have you guys raised to date?
Paul Taylor: I think it’s 82 million pounds. So, somebody, a quick conversion in dollars.
Alejandro: 105 million, something like that.
Paul Taylor: 105 million dollars. Yeah. It sounds like a lot when you say it in one lump.
Alejandro: Absolutely, and obviously, this is your third business. Now, you’ve seen all types of partners and people that can bring that strategic lens to get things forward. Why did you choose the investors that you chose for this?
Paul Taylor: In a way, we chose ourselves. IQ Capital is one of the UK’s, probably the leading seed fund and their Deep-Tech fund from Cambridge, but they had it best in phenetics arts. Max, my ex-partner there and I met in 2007; we started doing that. He was new in his career, and I was new in my career. It has to be said we built a strong relationship through that as well. He got his 5x return in a few years. The relationship went dormant as I was at Google, but we always kept in touch. Then I invested some money in his fund. In 2016, he said, “We really want to invest in you.” We weren’t even thinking about raising money, but we took some money and off it went. That has proven to be a fantastic relationship. Max and I get on great. We really feel like team members rather than any kind of investor funder story. That’s been great, and likewise with the other funds, Backed and Playfair. I had personal relationships with the founders of those funds before the investors. When you’re a repeat entrepreneur, especially at the C stage, it is straightforward to get the money. Lloyds Banking Group was a customer, and then they decided they wanted to make an investment too. That’s been tremendous, as well. The whole thing just escalated from there.
Alejandro: Talking about timing, March is when you closed your last round. March, before the craziness of the coronavirus, Paul.
Paul Taylor: We actually signed everything in mid-January. We were just waiting a moment to drop the press release, but indeed, we were pretty fortunate with that. To be honest, I don’t think the coronavirus impacted the business hugely, but as we know, a lot of companies out there—there’s a lot of doubt in the market. I definitely feel for many, many companies raising money because I was there twice before. I was there in the dot-com crash. I was there in the great financial crisis, so I know what it’s like. I know how tough for people it is. I’d say at this stage, very few are worried about the money. It’s just terrible as you see a business that you worked so hard on that gets into trouble.
Alejandro: Of course. How big is Thought Machine? You guys have how many employees?
Paul Taylor: That’s a good question. It’s growing every day, but we passed 300 a few weeks ago. I don’t think it will get to 400 this year, but not far off.
Alejandro: Wow. That’s amazing. Paul, one of the questions I typically ask the guests that come on the show—it’s amazing the journey that you’ve had as an entrepreneur. If you had that possibility to go back in time and have a chat with your younger self, with that younger Paul that was coming out of academia and thinking about launching a business, knowing what you know now, what would be that piece of business advice that you would give to your younger self and why if you were to launch a business?
Paul Taylor: I’ll make one observation first, which is when I think back on the first two companies, and when I think back on Thought Machine, the thing that I always remember is the people. And, Rhetorical Systems, in particular. It was just tremendous fun. If you’re not having fun in a tech startup, you shouldn’t be doing it. It is filled with passion, filled with good times, and there are so many funny stories. So, whatever you do, make sure you can enjoy it. But I think the more serious lesson is, when you’re young, you think about products. But when you’re older, you think about markets. Today, I think about market. The essence of it is, and I’m not the first one to say this is product/market fit. Just keep on dwelling on these issues, and you want to pick the biggest market possible. That’s something I learned at Google. If you do all that back-breaking work, and you put it through, and you’re successful, what’s the point if the company can only make a couple of million dollars in revenue. If you are successful, that tremendous team and that tremendous work, you want to make sure your billions of dollars so you can keep the company going and keep the whole thing going, and you don’t keep having to go back to investors. So, big markets and the critical thing is, what has everyone else missed? You’d think with the number of tech companies out there that everything that could be done would be done. We’ve heard all sorts of crazy ideas from startups. But believe me, all the time—I mean, all the time there were huge opportunities that no one’s thought of. I think we effectively did that. When we said we’re going to build entire Tier 1 banks in the Cloud, people thought we were crazy. “You’ll never do it. Banks won’t be interested.” And now, we’ve got customers. We’ve got masses of industry as well because we were at the right place at the right time with the right product. Think about markets. Think about real points of pain. And instead of jumping on the next train or anything else, think, “What has everybody else missed?” and don’t be afraid to back yourself until you find it.
Alejandro: Wow. I love it. So, for the folks that are listening, Paul, what is the best way for them to reach out and say hi?
Paul Taylor: The best way to do it is through the Thought Machine website, or if you want to, through LinkedIn. We’ll be happy to connect.
Alejandro: Fantastic. Well, Paul, thank you so much for being on the DealMakers show today.
Paul Taylor: Thank you very much. It was a pleasure talking to you.
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