Ep 36: Michael Wood: From $0 to selling for hundreds of millions

When Michael Wood, the entrepreneurial force behind Translucent and ReceiptBank (Dext), sits down to chat, you're guaranteed a treasure trove of insights that go beyond the usual startup success story.

As we navigate Michael's voyage from the uncharted waters of early B2B SaaS business terrain to the heights of a multi-hundred million dollar sale, his candour is as refreshing as it is enlightening.

His reflections on the motivations fuelling his drive shed light on the personal challenges that often accompany the entrepreneurial journey. Michael's backstory, influenced by his mother's conservative take on job security, makes his leap into entrepreneurship all the more compelling.

But this conversation isn't confined to past victories; Michael leads us through the emotional labyrinth of founding a company, from the adrenaline rush of overcoming the brink of bankruptcy to the nuanced struggle of expanding across international borders.

The story of ReceiptBank's metamorphosis from a postal-based service to a digital lifesaver for accountants is a masterclass in adaptation and innovation. And with Translucent's inception sparked by the need for seamless multi-entity management, Michael proves that the entrepreneurial itch doesn't simply fade with success—it evolves.

Away from spreadsheets and investor meetings, Michaels shares how he recharges with adventures that rival his business conquests. From sailing the Atlantic to cycling the rugged terrains from Melbourne to Sydney, his pursuits speak to the resilience and relentless spirit that define a true founder.

You can connect with Michael here and be sure to check out both ReceiptBank and Translucent.

Transcript

Speaker 1: 0:02

Building a B2B SaaS business in out of Wellington or out of London anywhere outside of the Valley before 2013 is a bit like inventing the television in a Stone Age society. You didn't have the tools, you didn't have anything. And it's true, there were so many problems we had and problems we had to solve and things we didn't know because there wasn't a playbook.

Speaker 2: 0:22

So it was much, much scrappier know, because there wasn't a playbook, so it was much, much scrappier. Michael is the founder and CEO of Translucent and formerly was the co-founder of Receipt Bank, which sold successfully for a multi hundred million dollar figure.

Speaker 1: 0:37

It wasn't about getting rich. It was literally just about that. I would like to go on holiday or, if I'm sick, not know that. Oh, frankly, I'm not earning, and that puts pressure on paying rent at the end of the month.

Speaker 2: 0:49

Hey everybody, it's Greg Sheehan. Welcome to my podcast, where you will hear from a range of guests, including those from the startup world and those that have had incredibly interesting lives and some stories to tell. I would really appreciate it if you could hit the follow button and share this amongst your friends, but, as you know, time is limited, so let's get on with it and hear from our next guest. I want to tell you a little bit about desk work. Desk work is your offshoring option. If you want to save around 50% of your total headcount cost for equivalent talent across accounting, marketing, sales, your operations or your admin, then check out Deskwork. Honestly, if I was looking to start an accounting firm again, it would be a no-brainer for me to use Deskwork. I've used offshoring teams before in the past. I got past my skepticism on being able to do it and it was so phenomenally successful. Go have a look at desk-workco backslash, greg, and book yourself a free discovery call to learn more about it. Better still, mention my name and get yourself some discounts. Check it out.

Speaker 2: 2:02

Now back to the show. My guest today is Michael Wood. Michael is the founder and CEO of Translucent and formerly was the co-founder of Receipt Bank, which sold successfully about three years ago now, I think for a multi-hundred million dollar figure. Michael is a seasoned. He might not like that because it makes him seem old, but he's not that old, I am old.

Speaker 2: 2:26

He's a seasoned founder, michael, welcome to the podcast, thank you. Thank you, very lovely to be here. It's super cool, super super cool to have you. You and I have known each other for a number of years around the Xero ecosystem and I can't remember when that was. That was probably a good decade ago, when Xero was starting to rise up.

Speaker 1: 2:45

I think it would be about 2013, maybe 14, something like that. We probably first knew each other.

Speaker 2: 2:51

Yeah, in early days If I was to bet on it, I'd say 13. I'd say 13 as well, and you and Sophie from Receipt Bank were down in New Zealand and Australia, kind of touting the Receipt Bank product, kind of touting the Receipt Bank product. But I'd love to sort of start where I often do when I'm talking to founders and just start really with your personal origin story before we get on to the companies that you founded. So were you always one of these like inquisitive kids that was ultimately destined to be an entrepreneur?

Speaker 1: 3:18

It's a great question. Probably yes, probably yes, but it wasn't obvious for a long time. I grew up with a single mother and my mother's outlook was definitely a very conservative one, so the idea of entrepreneurship or working for anything other than a very established company was something that was very scary for her, and so the upbringing that was definitely I was exposed to through her was definitely one of job security and stability and things like that. But to your question, yes, I think, actually my natural character. I can talk about how it came through and when it came through, but it probably always would have come through eventually and it was probably that more curious based and maybe a bit more of an independent streak. So you just thrilled your mum and said I want to be an entrepreneur.

Speaker 1: 4:27

That must have freaked her out. She was incredibly unhappy about it and you know, receipt bank was my third company and I was doing sort of receipt bank effectively sort of through my 30s and even then, with every stepping stone we went through with that where this other valuation of the company increased, her initial response response was always can you sell it? Can you just bank that money? Can you get out? You know, because she just saw it inherently as this very risky thing and was like you know well, if it's worth anything, please just sell it today so that you can buy a house and be financially secure. So it's probably worth saying so.

Speaker 1: 5:01

I'm going through that journey of receiving bank Bank. Although it was a very financially successful journey in the end, it was quite stressful to go through because I didn't own a house, I didn't own a car, I had plenty of debt. You know, you often see that technology entrepreneurs on one hand they have this paper wealth, but actually their real wealth, if we can call it that, is negligible. And that was definitely my journey and that stressed her a lot and you had some companies.

Speaker 2: 5:28

As you said, your receipt bank was your third company and I saw, doing some research for this, that there was one company where it almost made you bankrupt, yes and so. So what was the motivation to start those original businesses then? If you came from a mum that was so conservative, what was the driver?

Speaker 1: 5:45

so I think there was two key things that happened. One I was. I moved to London after university. I moved in with a friend and I consider myself incredibly lucky to have spent time with this friend because he came from a very so, whereas my parents were all about, you know, join a graduate scheme, get training with a big company, he came from a very different place. He came from a very sort of iconoclastic have no respect for these big companies, you know. So he was very focused on he wanted to do his own thing, he wanted to his own business and he was like Michael, why do you talk about, you know, whether it's Tesco or British Airways or whatever other sort of august British name we could mention. He was like Michael, you know, why do you possibly want to work for any of these big companies? There's nothing, there's nothing interesting.

Speaker 1: 6:38

And it was definitely a sort of a year or so of living with him and sort of hearing that very different messaging. That then the messaging I've been brought up with and it was very challenging but I think very good for me, you know, to get that other exposure. And then, of course, one simultaneously was I graduated in 98, so I was coming to London, basically as the dot-com boom came to the boil. So the other thing that was happening was, of course, my parents messaging looked incorrect and his messaging looked more in keeping with the times, as you know.

Speaker 1: 7:17

Obviously, we can talk about the likes of Amazon, but then there was, you know, this multitude of companies, and every major company looked like it was being threatened by someone else. And that doesn't just mean dot coms, because of course, in the UK we had EasyJet taking on BA, maybe a little before Virgin Blue taking on Qantas, but you know, sort of you know there was, there was a huge amount of disruption going on that hadn't been seen in the previous 10, 20 years, maybe even longer, and so I'd say those two things were the really key thing of just that friend's influence, of being in my ear, of no, no, michael, there's another way. And then seeing the internet boom and, frankly, jumping on it and saying that's, I want my career over there in that more disruptive, innovative, exciting world so it was that for something like, it was that almost in the genesis.

Speaker 2: 8:13

For something like uh, was it Coco Jambo? Exactly.

Speaker 1: 8:16

So I worked a strategy consultant and it became really obvious to me that at the time computer games were still very much seen as a toy. But it was really obvious that computer games were also a media. And of course that's just totally understood now that games are a form of media like books, film etc. That's normal to say that. But at the time. And of course you see in magazines and newspapers you get reviews etc. But back in 98, 99, 2000 that was not the you had. Computer games were reviewed in computer game magazines that were sold to teenage boys. But what I recognized then that games were a medium and if they're a medium they could hold advertising. And so my first business was around being an innovator in bringing advertising into video games.

Speaker 2: 9:00

And that wasn't ultimately a success. But no doubt taught you a few things video games, and that wasn't ultimately a success, but no doubt taught you a few things.

Speaker 1: 9:12

Yeah, we learned a few things. It actually wasn't a success because a very major client went bankrupt so we were stuck with a very large bill. So maybe the key lesson about it is a very expensive but a very normal business lesson that unfortunately many, many people learn and it has nothing to do with the Internet or technology or anything and it is just about exposure creditor or debtor exposure. But I think there were other lessons in there. I think we were too early to the technology lessons in there. I think we were too early to the technology. I think I didn't know enough then about how solutions technology solutions and internet solutions have to be scalable. The approach we were doing was far too bespoke, reflecting my consulting background and things like that. So I think there were a multitude of lessons.

Speaker 1: 10:00

But the thing that took us down and, as you say, almost bankrupted me and left scars for years and years and years what was not being paid, and it took me 10 years plus before I could open my post like a normal person, because you go through those months where every phone call is someone shouting at you, every letter is a demand and so, yeah, for years later, people would come to my house and there'd be a pile of letters there Michael, why aren't you opening your post? And it was just something that required psychological space, emotional space, to sort of deal with the pile of letters. So, of course, by then the letters were just a standard, you know, utility bill or a flyer, you know, as it's past, any letter being related to Coco Jambo. But again, many, many people, I'm no way alone, I've only gone through it.

Speaker 2: 10:51

When you go through something like this, it is very difficult and yet, with that and with that backdrop, you ultimately then go and co-found Receipt Bank. Was that part of the motivation in starting Receipt Bank? I'm going to do this again and I'm going to make it work this time and I'm going to have money. Was any part of the motivation that?

Speaker 1: 11:15

Yeah, it wasn't quite that. So what I meant is Coco Jumbo went down. What was really unexpected and really lovely was the phone started ringing. So at the time it might have been something like I don't know 28, something like that. And the phone started ringing because what people that knew me sort of through business were, oh well, you've now run a business at 28. Where, oh well, you've now run a business at 28. You know, you've got a whole really interesting set of experiences and a really interesting set of energy and a really interesting set of skills and we'd love you to help us with our businesses. And that was completely unexpected.

Speaker 1: 11:57

And I often say to people now, you know, if they ever talk about starting their own business, I say always do it, because you will get rewarded in some way, even if the business isn't successful, you'll earn, you'll create a new skill set or something. It's funny how you get the R and the ROI from investing in a business, because it isn't always the business is successful, but I do believe by channeling your energies that way, value is created. And the phone started ringing. So I became basically a freelance marketing director for a number of clients and I did that for several years and that sort of got me back on my feet. You know, sort of the personal balance sheet went from negative to positive.

Speaker 1: 12:38

But after doing that for two or three years I was very, very conscious that I was helping build other people's businesses and the key motivation doing Receipt Bank was I want to do a product business. I want to do a business that would. The way I talk about is I want to make money wisely. I don't want to be just selling my time and, of course, the key thing for everyone who's listening to this sells their time. They know that every time you go on holiday for a week, you don't earn for a week. It wasn't about getting rich, it was literally just about that. I would like to be able to go on holiday or, if I'm sick, not know that, oh, frankly, I'm not earning and that puts pressure on paying rent at the end of the month.

Speaker 1: 13:13

So the thinking was I want to do a product business so I make money wisely. That was it, and I'd helped to build a accountancy practice. That is one of the things I've been virtual marketing director for. So I got to know I'd helped to build accountancy practice. That is one of the things I'd been virtual marketing director for. So I got to know the accounting world fairly well. And the other thing was I'd become a very, very, very early user of cloud accounting. So I was one of the very few people in the world in 2007, total serendipitously not out of of my curiosity, just that, my accountant having to put me on it but I'd become one of the first people in the world to use cloud accounting. So, you know, when it came to 2010, which is when we started Receipt Bank, I had two things there was pure serendipity. One was I got to know how accountancy practices worked and and I was a veteran client, a three-year experienced client of cloud accounting and that was exactly it, because often the question is asked of founders.

Speaker 2: 14:12

you know how much of a role does timing play in the success of a venture and what you're essentially saying? There is a lot. You were somewhat in the right place at the right time not to take away any of the work that was involved, but you timed your entry onto that wave well, timing is everything and so is luck.

Speaker 1: 14:32

So a question I like to ask is what was your luck? Because everyone gets luck and timing is everything, and you can actually trace back the combination of luck and timing to businesses. If we take Facebook, for example, obviously an unbelievable success, but they weren't the first social network. They know that. But what do you need for a social network to break out? You need broadband and you need digital cameras, because before that, a social network is people typing it's never going to break out. You need broadband and you need digital cameras, because before that, a social network is people typing it's never going to break out, whereas when you share photos, where did facebook start?

Speaker 1: 15:12

It started in harvard university in I can't remember, 2005, whatever. Why is that interesting? People always talk about the dot, edu and the status, definitely a key part of it. But what else did universities have? They had broadband. Households did not universally have broadband then. So universities were the natural place to start because you had broadband and digital cameras had got to high penetration by then. So you couldn't launch a social network successfully to break out in 2000 because broadband and digital cameras weren't in the place.

Speaker 1: 15:49

And if you tried to launch it in 2012,. Well, you're going to be too late because Facebook's already the dominant social network and, frankly, for every single business every business you can look around and trace what are the precedents that had to be in place for your business to be successful? So many people, of course listening to this will be very, very familiar with Xero and I've spent quite a lot of time thinking about cloud accounting and its place around the world, and I don't want to take anything again away from Rod and the team. In the same way, I wouldn't take away from the incredible achievements of Mark Zuckerberg and the team. But what's really interesting about New Zealand is New Zealand had BankLink, so New Zealand accountants were already familiar and were already accepting of the bank feed being part of their offering and part of their product and, frankly, part of their processes, which was unique around the world, didn't happen anywhere else in the world.

Speaker 2: 16:48

And a big shout out to Malcolm McDonald from BankLink, who was the guy who was the CEO and founder of BankLink, you know was really an early pioneer in the space.

Speaker 1: 16:58

Absolutely. So you know that didn't mean it was inevitable that a cloud accounting behemoth would come out of New Zealand. You know we've got to give credit to Craig, to Amish and to Rod and the team, because you know they did so many phenomenal things but they had, let's call it fertile ground with BankLink being there and so, yes, so I think timing's important and sometimes luck's important, and for me it was being put on cloud accounting, and the other thing that happened that was phenomenal for a seat bank was the iPhone. You know that was not on the app store. The business we set out in 2010 was not predicated on everyone having a camera in their pocket and the ability to capture receipts, so that completely supercharged the business that we set out to build. So that would be another key piece of luck I believe we had.

Speaker 2: 17:55

And so, when you started Receipt Bank, what was the original sort of problem that you were looking to solve? You know, this is 2010,. Early on, what were you looking to try and do?

Speaker 1: 18:04

It started as a postal-based service.

Speaker 1: 18:07

It was, you know we were saying to accountants look, you cannot make cloud accounting a success if you are only going to get the accounts payable and expenses at the end of the year or the end of the quarter when VAT or BAS is due.

Speaker 1: 18:24

You need to get a more steady flow, a more steady let's call it feed, of those expenses and documents. So we will create a process whereby an envelope is sent out to a client once a month. They can stuff everything in and send it in and you're now in a place where you can do management accounts and other advisory services on a more frequent basis because you have all the data, whereas if you wait for the clients to do the shoebox, the carrier bag, at the end of the quarter, at the end of the year, frankly cloud accounting is going to be a bit of a damp squib because you can't do anything. The advice you can give, the services you can sell are going to be limited, and so we started out with a monthly postal service. And then obviously, we thought email in was interesting, we thought mobile in you know we were launching these other things, but the core submission method, as we called it to begin with was post.

Speaker 2: 19:22

And so you then build this business, you and your co-founder, alexis, and you build this out over what? 10, 11 years, no doubt going through multiple rounds. I know you did a series C, I think in 2020, which was pretty sizable, sort of you know, 55 odd million pounds, I think it was. Did you sort of follow the traditional SaaS B2B playbook? You know, you do, we get a few, a couple of co-founders, and then we, you know, do a little angel round and then we do a seed, and then we do an A and a B and a C. Is that how you built the business out, or was it a bit more scrappier than that?

Speaker 1: 19:58

Yeah, the thing I would say that's quite funny and I've talked to quite a few people in Silicon Valley about this and they're very complimentary about what Xero achieved and what we achieved and others outside of Silicon Valley achieved, because what you refer to now as the B2B playbook completely exists, but it only really came into existence probably around 2013, 2014. Some key articles were written around 2011, 2012, but it absolutely did not exist in 2010, 2011, 2012 in any meaningful way. And, as one very prominent investor said, building a B2B SaaS business in out of Wellington or out of London anywhere outside of the valley before 2013, is a bit like inventing the television in a stone age society. You didn't have the tools, you didn't have anything and it's true, there were so many problems we had and problems we had to solve and things we didn't know because there wasn't a playbook. So it was much, much scrappier.

Speaker 1: 20:58

And one of the things that was really notable, at least for the London ecosystem, was that we had to build the businesses and it wasn't just Receipt Bounce everyone building B2B SaaS businesses in London. Then we had to build the businesses and it wasn't just receipt bags everyone building b2b SaaS businesses in London. Then you had to hire grads. You had to build the business on graduates because, unlike in Silicon Valley, it wasn't like, oh, we can pluck our UX designer from Facebook or a product owner from Expedia or all these different job roles that had veterans in them. They just didn't exist in London and they wouldn't exist in Auckland or Wellay or in Sydney and Melbourne. So instead you had to hire graduates and sort of shape them into the roles you required, and that would be a sort of major way. That was very different. But no, no, it's much, much scrappier, and even scrappier doesn't quite tell the real story. It was much more groping around in the dark of how do you do this?

Speaker 2: 21:54

And so over that decade, if it was indeed groping around in the dark and it was pretty scrappy, what was the toughest part of the whole journey? No doubt there were lots of moments where it was really, really tough Looking back. What was the hardest part?

Speaker 1: 22:11

The toughest part was definitely the first two years. So, the first two years, although we were in hindsight, I don't think we could have got the timing any better, starting in August 2010. It did not feel like that in 2010, 2011, 2012. So, if we think I might get the numbers slightly wrong, xero had something like 10,000 subscribers in 2010.

Speaker 2: 22:44

That sounds about right. Yeah, I mean, it kicked off in 2007 with a listing, and so three years later and they were tripling every year, I would say that's about right, let's call it that.

Speaker 1: 22:54

Yeah, it might be 20,000 or something, but still relatively small. Yeah, uk, one called free agent, one called cash flow, let's say between then they had another 10,000. We are talking a market that is tiny. I think Gary Turner, who built the Xero business in EMEA, he recently remembered to me that in 2011, there were less than 30 apps connected to the Xero API. So that's useful just to talk how small the market was. So, though we were growing in 2011, we were growing in 2012. Growing meant growing a tiny business, and I remember it was a conversation with wayne schmidt that made me realize no way, schmidt was the country country head for australia at that point?

Speaker 1: 23:49

yeah but this stage he'd moved to be head of bookkeeping in australia because chris ridd was in situ. But he mentioned to me there were these things called zero roadshows in australia and it made me realize how much more developed the australian market was than UK. And I remember going to our board, which was just three or four of us at the time, but saying we need to open an Australian office. And to point out how weird I sounded. We are a UK company, I think at the time our monthly revenue was £3,000. And I'm going and saying we now need to become an international business and open an office on the other side of the world. And I was right. We did it. It was the right thing to do.

Speaker 1: 24:45

But those kind of conversations were not easy. It was what are you talking about, Michael? So of course you can think about international expansion once you've got a dominant business in the UK. There was a lot of things like that that at the time you look and sound pretty odd, but actually you're doing things now that make sense. An international B2B SaaS business is quite obvious. Oh, you position your business wherever the global market is most mature and the greatest demand is, and things like that.

Speaker 1: 25:20

But you know, we were much more in our national silos back then than we are now. So there was definitely that couple of years where, in some ways, by many measures, the business looked like it was failing. It looked like it was failing, we had very little revenue, the market size was tiny and you had to be very concentrated on the fact is, we were growing every week. So our weekly growth rate was good, albeit from a small base, and cloud accounting was going to be huge. So if you focused on those two things, you took a set of actions and decisions, it would lead one way. But, of course, if you had your mindset in a previous mindset, which is well, you expand off your own balance sheet when you have the profits to invest in the business, you think about international expansion when you're in a dominant position in your current markets, et cetera, et cetera, you know you needed to learn a very different playbook or invent, as it was, a very different playbook than had. So those first two years were really tough.

Speaker 2: 26:30

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Speaker 1: 27:32

a really, really lovely moment was I'm going to struggle to get the right year, but that year that we went to those australia roadshows they were in feb and we won add-on of the year at zero con australia that year.

Speaker 2: 27:49

I think I partied with you after that. From memory, I think I might have.

Speaker 1: 27:53

Yeah, it was in Sydney. It was at the Crown, I think, in Sydney, and I think it would have been 14.

Speaker 2: 27:59

Yeah, something like that.

Speaker 1: 28:01

And that just felt an incredible achievement to come to Australia and open this Australian office. We felt very much like the newcomers. We felt very much like the outsiders and to have succeeded and helped so many businesses and got that, that was a very, very emotionally sort of resonant moment for all of us to have achieved that, because that was the work that went into that. You know, trying to bridge two hemispheres you know, sophie, alexis and I for a year or a year plus, you know it really was you're doing whichever hemisphere you're in, you're doing your day job and, of course, you're then working past midnight or up at 5am to do client calls, to do management calls, whatever it is for the other hemisphere. That was hugely rewarding. And then the other bit was before I sold the business in 2017, we did the Series B and that was the first time that I was able to take sort of real money out of the business and was able to buy a house, and that would have been the other bit. That would have been the bit where it was.

Speaker 1: 29:19

Frankly, building the business was very, very, very stressful and scary because you're putting all your energy in something. It feels very big. But my personal circumstance, as I say, was I had nothing, and to be able to take enough money out and be able to buy a house and suddenly be able to feel, oh god, you know, by that time you know I'm 40 and it's like I was terrified will I have the energy to go again? You know, if this blows up, will I have the energy to do this again? Or am I going to be in my 40s with no assets to my name and not have the energy to do all this again, or maybe not the confidence of a blow up to do it all again? So I think it would. Would be that it would be buying the house and translating that hard work and that success into something tangible that is, oh my God. I feel, of course, sorry as well. This isn't Australia, you know no super, no pension, no, nothing to be. Oh, in some way I'm in a safer place.

Speaker 2: 30:24

Yeah, thank you for sharing that story, because I think there will be a bunch of founders that can really resonate with that, so I think that's fantastic. So then, rolling forward, you ultimately exit out of Receipt Bank or Dext, and you then take some time, presumably, and then you start Translucent. Tell me about why and the origin story there.

Speaker 1: 30:47

So the why is a great question. People do say to me Michael, are you an idiot? You don't need to do it all again. Why do it all again? And I guess some days I do feel like an idiot and then other days I'm incredibly excited, but most of the time I'm incredibly excited. It actually came from the issue we saw at Receipt Bank. So let's call 2015, 2016. By that stage, we are eight entities around the world. We have a business in New Zealand, we have a business in Australia, south Africa, america, bulgaria, france, uk. So we have these offices around the world. We have these entities around the world.

Speaker 1: 31:21

Mainly, we're on zero and we're managing multiple entities around the and obviously Xero is not designed for that. You know Xero great software. We love it. I still love it, but it's not designed to be multi-entity software, and so we spent I spoke to quite a lot of other founders that were tackling the same problem at the time. It's like, well, what are you doing? What are you doing were buying a sort of set of different add-ons, as they were called at the time, but now apps? You know you're.

Speaker 1: 31:55

We are hitting issues with the number of invoices that Xero could do. Of course, you're hitting issues with group reporting, consolidation. You're hitting all sorts of different issues intercompany transfers, all these kind of different things and so everyone is sort of buying different apps. You're doing your own sort of software. You're doing a whole lot of Excel and manual process. Frankly, you're sort of hacking everything you can to try and make it work. We sort of kept the show on the road for about two years of running all this sort of multi-entity setup, but frankly, it's a huge amount of work and it is a hack. You know the best will in the world. Xero is not designed to do that, nor is any other SMB accounting software. They're designed to be fantastic single-entity softwares.

Speaker 1: 32:36

And so in the end the new CFO came in and said you know, guys, you're going to have to move to NetSuite. And I wasn't intimately involved in the migration to NetSuite, but it was a fascinating project to watch, both as an internal manager and as a board member, because of course the proposal comes to board that is oh yeah, it's going to take this many months, it's going to cost this much more and oh yeah, you as a business get no benefits whatsoever. Now of course, I'm being slightly flippant. The benefit is we can't continue running the existing system. The finance team is creaking, they're going to break. We need to make this move to NetSuite. But is creaking, they're going to break. You know we need to make this move to NetSuite but there were no other benefits. No, by the way, there's an awful lot of extra cost because with SMB software like Xero, the data, the finance data, is easily available to anyone else in the business, and when we move to NetSuite it's available to no one. So we're going to have to spin up a data warehouse and our data team as well to make that data available. Oh, the apps and add-ons that work with Xero are not the same ecosystem that work in NetSuite. So we're going to rip out whole other workflows and processes. We're going to do all these migrations as well.

Speaker 1: 33:44

So I was like, oh wow, this is a really sort of interesting project. So for many years I said to people there's a really interesting business there in what I call the zero net suite gap of people don't want to leave zero. There's nothing wrong with zero or each of the per entity or intra-entity workflows, but there is the need for a piece of software that orchestrates or links or sits as a platform on top of Xero for multi-entity businesses, and so for many years I'd say to founders oh, if you want a really big business, that opportunity exists. And then, after we sold Receipt Bank, dext and I'd been out for a year or two, I thought you know, that opportunity is so big, I'm going to do it myself. And that's what translucent is.

Speaker 1: 34:34

Translucent is there are many, many businesses out there that are trying to run multi-entity zero. They have no interest or desire to leave zero, but they do not need something like NetSuite. You know, some businesses do, but a fraction of these businesses do. We're often talking things like property companies, where each property is a zero entity. Or we might be talking a chain of three restaurants or something. They don't need NetSuite and, frankly, if you tried to sell NetSuite to them, they'd understandably take fright. So we think there's a very large number of businesses that need something that sits on top of zero.

Speaker 1: 35:11

But the old thing, what we did at Receipt Bank doesn't make sense either. The old sort of 2015 solution of oh, you need an app stack, you need 10 different apps just to make zero multi-entity work. Well, that makes no sense either. Why should your team have to learn a different ux and pay a different amount, an extra amount, for every single workflow and, of course, your data and your security and your permissions and everything are all over the place. It's like, yeah, that made sense to hack in 2015, but it doesn't now. So what we're doing at Translucent is we're saying, if you're a multi-entity business in one piece of software, we will make sure we cater to every workflow. You need group reporting, consolidation, intercompany bank consolidation, linking the data with excel or google sheets, search, etc. Etc. So there's a large number of apps we need to build. We're building them one by one, but that's what we're doing.

Speaker 2: 36:10

A translation and for those that are listening who are from the accounting world and, given my background, a lot of people that listen to these podcasts are you need to check out Translucent and I will make sure that there's ways to link to you and to Translucent in the show notes for the episode. So, when it comes to building a business like this, you've done the startup thing a few times. Now this is a little bit different. You're doing this on your own as the founder and CEO, and you've got all the experience of the last 20-odd years of doing startups. How do you approach things differently with Translucent? That may be when you started this. You're like you know what. I'm just going to do this a little bit differently.

Speaker 1: 36:49

Yeah. So there's no question, when you've had a successful exit, like Receipt Bank was, you are in a very fortunate position. And you're in a very fortunate position, I think, in three ways. One is you've got a set of experiences that help you. Second is you have a sort of personal balance sheet. That means you know you have a bit more control of the company's financial destiny. And thirdly, you've got a track record that other investors are keen to invest in. So you are in a very fortunate position. That sometimes means the advice you give isn't that useful because you are in that slightly different position. What it's meant for me is I have built a very different company this time. I'm a big believer in a person's energy is really, really key, and I'm not quite going to go mystical on this but I do you can.

Speaker 2: 37:39

You can if you want.

Speaker 1: 37:39

That works for me it's not really my character guy, but I do believe we've all got a certain amount of energy and one of the big decisions in life is where you choose to put it. And you know some people want to put it 100 into their kids and having, you know, a big family. Other people choose to put into a business. Other people choose to put it into, you know, becoming a olympian or things like that. But the one thing I do believe is that sort of energy is finite and you've got to be a little careful about where you put it. And I also think and this might get certain people's backs up I think when you're you have more of it than when you're older, and so one of the things I've.

Speaker 2: 38:17

definitely it's harder to get those batteries recharged, isn't it? When you're older it is.

Speaker 1: 38:21

And there's no question. At Receipt Bank, you know I was doing absolutely everything. You know setting up our sales force writing the emails for marketing. You know being on the phone for sales and I sales force writing the emails for marketing. You know being on the phone for sales and I'd love to have that energy, but I don't know. So there is more. We are a bigger organization at this stage of our revenue than we were at receipt bank because I have more people around me sort of acknowledging that. I think I need that because I have I don't have the energy.

Speaker 2: 38:50

Hopefully I've got a wiser head, hopefully I've got more experience, but I don't have quite as much energy and I was having a conversation with somebody on the podcast here the other day about sometimes actually having the time to reflect and therefore make a better decision, and the old sort of principle of measure twice cut once that by actually having more people around you to take some of the grind away and the urgent stuff away, for you to have space to go for a walk, to go for a run, to get out into a park and to think, then you're actually possibly going to make a much better decision that creates a lever for the future success of the business. Do you think that's true? So actually, it's not inputs based, it's outputs based.

Speaker 1: 39:38

I think there comes a time. That's definitely true. I'm not there yet. I'm still very sort of running on the treadmill. There's no question, though, my role at Receipt Bank got to there, and I became very, very effective due to that. So, again, I might slightly butcher the anecdote, but I know sort of Warren Buffett sort of says he spends sort of 80% of his time reading, and I was very fortunate and I got a time at Receive Upquake where the most of my time could be spent speaking to people and reading. So, whether it was speaking with competitors, speaking with customers, speaking with partners like Xero, speaking to VCs and reading and there is no question that can become a superpower. If you can get a business large enough where you can afford that to be your role, I think it is an unbelievable superpower. I've experienced it in the past. I can't wait to get back there Because, as you say, you can make a small number of very, very powerful decisions, as opposed to running around and, frankly, making a very high number of very small decisions.

Speaker 2: 40:51

And what is your superpower? I mean, obviously, you can talk about getting to the state in the business where you've got more time to be able to make better decisions, which is in itself, a superpower. What about for you personally? Just the personality that you bring, the skill set that you have? What is that? Where are you in your and I hate using this phrase your zone of genius?

Speaker 1: 41:10

and I hate using this phrase you're a zoner genius, so I think I'm very good at let's call that sort of medium timeframe of seeing where an industry will go. So am I the guy who knows what tech will look like in 20 years? No, I don't know enough about chip architecture and things like that. Do I get distracted by what an industry will look like in six months or 12 months? No, but I'm very good at that sort of three to five year. This is where the puck is going, this is how things are going to look and this is where my business needs to get to, and I can advise other people where their businesses need to get to, and that I think I'm very, very good at and speaking of advising other businesses on where they can go, because that is quite a superpower to have that sort of three to five year mid-term clarity.

Speaker 2: 42:08

Do you get involved with other founders and, whether it's through angel investing or just advising people over coffee, do you do much of that? Have you got time and space?

Speaker 1: 42:16

for that. I've done a little bit. I do less now that sort of translucent is so full time. But yeah, I sit on a couple of boards. I've made angel investments in the past. Again, I do less of it. I don't think I'm very good at it. We'll see in five years time if my cohort does well. You know, I think I've got a couple of winners in there, but definitely quite a few that didn't work out. But no, for some of them I definitely sort of spend the time and yeah, I definitely sort of have coffees. You know I'm proud. There's quite a few people in the zero ecosystem over the last sort of 10 years that I've been able to help and assist and give advice to. So yeah, I tried to do that, but definitely with Translucent being so full on. The time is not, is a bit more limited now.

Speaker 2: 43:00

And a common trait in well, not just founders but in humanity, is this imposter syndrome, and you've had a really successful exit. You've done you know what what three or four startups now but do you still ever have doubts or feel the imposter syndrome element or are you kind of past that now?

Speaker 1: 43:21

so the answer I'd give to that, greg, is I'm a big believer in only the paranoid survive I love that phrase. So I'm constantly checking our plans, rechecking them. What are we doing? Have we got this right? You know, and even in you know, translucent's been going now for, let's say, meaningfully, 18 months. We're still very young, very new. Already. In that time we've made a couple of pretty big mistakes that we've had to correct and things like that. We've got some fantastic things right as well, but you've always got to be looking and re-looking. Only the paranoid survive. I love that.

Speaker 2: 44:00

And how do you recharge and refill the, as you say, the finite resource, that is, your own energy? How do you go about doing that? Do you read and get inspired, do you run or walk, or do you spend time with family? What's your way of kind of getting away so that you can?

Speaker 1: 44:18

recharge. I think I'm really bad at it.

Speaker 1: 44:21

I think thanks for being honest, that's good. I think they would say I'm pretty bad at it as well. I would love to find ways to get better at it. The one thing that I've found I found it last summer that's really worked for me is spending time in and on the water, and basically I've always spent time in and on the water, but I suddenly realized last summer that that does work for me, and whether it's because of course, you can't be checking your phone, whether you're kayaking or I've got really into flight boarding, which is when you've got one of these e-foils, that sort of on the water or swimming or anything, I find that helps.

Speaker 1: 44:58

But I slightly worry that that's almost a false one, in that it works because I can't check my phone or I can't. You know you have to be. You know if you're a kayak or if you're doing something so active you can't think about the business, and I wish I had an ability to be a bit more mindful and just be able to sit on the sofa and not let myself get distracted. So I was actually at a dinner party on Saturday night and I was chatting to one friend about translucent and another friend. She literally sort of shouted at me from across the table of Michael.

Speaker 1: 45:29

Stop it, it's Saturday night just no, yeah, yeah, yeah, and you know she was probably right and then what did you say? Only the paranoid survive that wouldn't have gone down well with her, to be fair to her. She said you've got 15 minutes and then you've got to stop. So I was like, okay, fine, we'll finish our conversation.

Speaker 2: 45:48

I love that. I love that your friends look out for you and and I'll talk to you offline about the e-foil, because I'm kind of intrigued by that. One final question for you before we let you get on with your day, because you're in a completely different hemisphere to me. What is something that very few people would know about you? Your family know about it and those close to you know maybe it was the e-foiling, but what's something that very few people know about?

Speaker 1: 46:12

Michael Wood, I don't think of myself as a particularly private person, but I do know that self-awareness isn't maybe that correct. I remember some people in receipt banks sort of saying that you know they knew certain things but sort of not other things. There's sort of things I've done that are sort of I maybe don't talk like I've sailed the Atlantic and things like that. There's's certain things I've done that I don't always talk about in a work content and there's two or three things I've done like that that are quite interesting. I've cycled from Melbourne to Sydney and stuff like that.

Speaker 2: 46:44

Those are big things, michael. Those are big things. I've just casually dropped that in that I've sailed across the Atlantic and I've ridden a bike from Melbourne to Sydney, which for anybody who doesn't know that is a long way.

Speaker 1: 46:56

Is it 2000k or 2000?

Speaker 2: 46:57

miles.

Speaker 1: 46:58

Yeah, it'd be something I quite like things that have an A to B. So if you said to me oh Michael, do you want to go and cycle 2000k? I'd be like oh my God. No, that sounds awful. But if you give a narrative to it, like going from A to B or the sailing was from Portugal to America, so it felt very sort of Columbus. Like you know, if you give something as a narrative to it, my mind really attaches to it. So I quite like things like that.

Speaker 2: 47:23

Michael, it is. It's always a real pleasure seeing you and I always prefer when we're doing that over a wine or a meal. In this case we're doing it with some podcast microphones but honestly, talking to you, I feel personally, I feel really, really inspired, and I know there'll be people listening who also feel like that. I want to thank you for being open and candid about the journey and that you've been on, because lots of people again will resonate with that. As I said, I'll put ways for people to connect with both yourself and Translucent on the show notes, your LinkedIn profile, etc. Just want to thank you for the time you've given today. It's been a real honour to chat to you.

Speaker 1: 48:04

Not at all, thank you. Thank you very much for taking the time to speak with me.

Speaker 2: 48:14

Hey, don't forget to check out Deskwork, the team behind you, being able to build high-performing offshore teams for your startups and SMEs. It's deskworkco. Backslash, greg, and go and save yourself some hard-earned money.