Centralized Strategy and Decentralized Execution With Onfolio's Dominic Wells

WEBVTT
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In this episode of the Blue Vignette podcast,
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I am interviewing Dominic Wells. Now, Dominic
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is an entrepreneur and he wrote a blog post.
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That blog post was seen by a friend of mine who
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shared it with me. And when I read it, my first
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thought is this is something we in the Adventist
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ecosystem need to hear because we value autonomy.
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We value this decentralized way of doing business,
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so to speak. We have a decentralized ecosystem
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and that comes with a lot of benefits. It also
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comes with a number of trade -offs. What I found
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very interesting is the fact that Dominic has
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gone to both extremes in his business. He has
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gone to the decentralized approach where each
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of his business units are operating individually
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with their own CEOs effectively. when now he
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has swung back the other way, not in an extreme
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way, but now he has center in his own description.
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He has centralized strategy and decentralized
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execution. And I think this is a lesson that
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we can learn from as a church. So when I finished
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reading his article, I reached out to him directly
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and asked if he would be willing to be on the
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show. And he said, yes. And so what you're about
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to hear is that context. So I hope you enjoy
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it. And thank you for joining us for this episode.
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Hi, everyone. Welcome back to the Blue Vineyard
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podcast. My name is Luke, and today we have a
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special guest on the show. We have Dominic Wells.
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Welcome to the show, Dominic. Hey, thank you.
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Yeah, happy to be here. All right. Dominic, in
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preparation for this call, I was having a poke
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around and doing the cyber stalking thing, looking
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at your LinkedIn profile. And I'll just read
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the opening paragraph that you got there. It
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says, CEO and founder of Onfolio Holdings Incorporated.
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We buy, grow, and operate profitable internet
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businesses primarily in the content space. Through
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our expertise, we can optimize businesses across
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any vertical. Now, as I read that, the first
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thing that came to mind, and I'm going to go
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back and I want to get a little bit of your backstory,
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but as an initial starting point, when you first
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started, the idea that you're working with businesses
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in many verticals, Was that something that was
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scary to start with considering everyone says,
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you know, no, just do one thing and do it well,
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or was that what did you know that that was the
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right path? It's funny because I think it's more
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of an evolution over time. And in terms of what's
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the right path, I think it's more about like
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what works well for you. So I definitely know
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intuitively that, yeah, focusing on one thing
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makes a lot more sense and you probably get better
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results. But I think also you have to play to
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your own strengths or play to your own weaknesses.
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And my weakness is I'm not really able to just
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focus on one thing. The business model that worked
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for me was running multiple businesses at the
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same time that were primarily content in the
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beginning. And as you were reading that, I thought,
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okay, I need to update my LinkedIn a little bit
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because we're not really in the content space
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anymore. When I very first started, I built one
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website. and I was writing all the content myself
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and doing the SEO and conversion rate optimization,
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all the things that you do when you own a website.
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And then I would think of another idea for another
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website and another idea for another one and
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another idea for another one. So I was often
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starting multiple. And part of that is I think
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until you've seen a little bit of success, you
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always come out with new ideas, maybe because
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you're impatient or I think just the kind of
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beginner mind is a bit of a butterfly. So you're
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thinking about all these different things. And
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so people would say to me, like, just focus on
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that website you've got. It's making a grand
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a month or like whatever. You could probably
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get it to 10 grand if you just focused on that.
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Stop starting new websites. Yeah, that was a
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good advice, but I also felt like sometimes...
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I got a little bit of success if I could maybe
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get one website to 2K a month or three and then
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sell another one to get that one to two or three.
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I didn't know how to go from say three to 10.
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And so I think it's just about what is your core
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strength. If I can jump on one thing you said
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there, the skill set that it takes to get you
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to two or three thousand a month is different
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to the skill set that it takes to get you to
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$10 ,000 a month. What is the primary difference
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would you say? Probably the ability to focus.
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I think, yeah, I think the kind of analogy people
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usually use is like going from zero to one or
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from one to 10 or something. And there's definitely
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a skill set going from zero to one. I think you
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need to have a lot of early enthusiasm and a
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lot of early kind of like massive action doing
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a lot of different things, being excited. And
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then that builds you the kind of inertia to get
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to like whatever that one is. But then going
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from that stage to another stage, it almost requires
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a completely different personality or entrepreneurial
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style. I think it's more data -driven. It's more
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disciplined. Like zero to one, maybe you need
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to throw a lot of spaghetti and see what sticks.
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And then one to 10 is like, okay, that spaghetti's
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stuck. So what do we do now? Maybe we need to
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create some sauce and brown the mints and stuff.
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Some people can do both. Some people learn to
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do both. And some people just kind of stay in
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their lane. For me, it was about, even when it
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became buying businesses, moving from starting
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businesses to buying businesses, I was good at
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finding a business, seeing some opportunities
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to grow it. Like maybe they hadn't fully optimized
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something and I knew if I bought the business,
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I could then optimize it. I didn't really know
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what to do beyond that. So I would just go out
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and buy another one and optimize that and get
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the same kind of... So it was like I was scaling
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horizontally rather than vertically. So I'm not
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even sure if there's an answer, just other than
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like figure out what you can do and then like
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do more of that. One thing that you mentioned
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before, it's hard for you to focus on one thing.
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You like doing multiple things. I can very much
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relate to that. In my entrepreneurship journey,
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I've had a number of people say to me, Oh, look,
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you should just stick to this thing. And I have
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a, you know, fair inability to do that. So some
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of my questions here are going to be selfish
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in nature because you're a lot further along
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this journey than I am. But maybe just to focus
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on your unique toolbox that that makes up who
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you are and what your value you bring. What would
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you say? I like maybe the two or three main skills
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or viewpoints that you hold that have allowed
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you to find success in the channel that you have.
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I think one actually is probably tenacity. This
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probably applies to people who focus on one business
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as well, maybe even more so. But it can be very
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easy to get overwhelmed by doing 17 different
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things at the same time, whether that's within
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a single business or within multiple different
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businesses or just in everyday life. And I think
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it's almost like brute force that allowed me
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to keep going where maybe other people would
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have failed or not giving up. And so it's kind
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of like just being able to cope with it is one
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element of it. And the other I think is, I think
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I'm pretty good at delegating and kind of identifying
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who or what to delegate or who to delegate to.
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I don't think I'm necessarily a good manager,
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like in the kind of day -to -day management sense.
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But one thing all good managers have is they
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have that ability to delegate. I'll constantly
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find myself in an area where I think, okay, I'm
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doing too much. And too much is obviously subjective,
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but I might think, okay, I'm doing too much.
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I need to either cut something out or I need
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to bring someone on to... delegate this to and
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you kind of delegate the responsibility rather
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than the task. So you're like, this is what I
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want to achieve. This is how you do it or this
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is how I've done it so far. Feel free to improve
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it and then kind of let them get on with it.
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I think that's been a big part of it. Like whenever
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I try and take something on by myself, again,
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I can get that little bit of initial momentum
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and then unless I bring someone else in to take
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over. it doesn't go anywhere. So yeah, I think
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those two things are probably the key drivers
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of how I've got to where I am now. Let's focus
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for a second on the founding of Onfolio. You
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mentioned some of the things that you did beforehand,
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but If we're to look at that, what was the catalyst
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for getting started? Because I mean, I think
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I could see some through lines from what you
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were doing before. But what was it that made
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you say, yeah, I'm actually going to get into
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buying businesses? There was a number of different
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things, I think. helping people get started in
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affiliate marketing, like starting their own
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business. We did done for you website creation
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and we helped people pick a niche and then gave
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them the tools that they needed to go beyond
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that. I had people in my audience who had more
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money to deploy and they didn't want to start
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a business from scratch. They wanted to buy an
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established business. A few things started happening
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at the same time, actually. So I had bought a
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few businesses myself and I realized, oh, this
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is actually a way faster way to scale. And I'd
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started learning about investing. And I'd also,
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I'd been to a conference where I was, at least
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in my mind, everyone was miles better than I
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was in terms of success in life. And I think
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I'd been an entrepreneur for Only five years
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at the time, but it felt like I've been working.
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Those first five years feel like 20. I get it.
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Yeah. And I think my business did a million in
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revenue that year. So I felt like I've been working
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really hard, spinning my wheels and I've objectively
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had a lot of success and I've got way further
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than most people get. But at the same time, I
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also felt... I was frustrated with my progress.
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And I went to this conference, which was kind
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of private invite only conference. And everybody
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I met there was kind of two things. One, they
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were way more successful than I was, which was
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super inspiring. And two, they were really encouraging
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and optimistic. And they would be like, what
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do you do? And I would tell them what I did.
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And they just said, wow, that's amazing. That's
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so cool. I think everyone kind of assumes if
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I was there, I was a lot more successful. It
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kind of made me realize, one, I should be thinking
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bigger, and two, I probably can be bigger or
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I can achieve those things I'm thinking about.
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It helps that a lot of the people at the conference
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were American, and you know, Americans have that
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very gung -ho, like, yeah, you can do attitudes,
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whereas like in the UK, it's a bit more like,
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why do you want to be an entrepreneur? All of
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these things kind of happened where I was thinking,
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okay, how can I be bigger? Or how can I spend
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the next five, ten years of my life working on
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something with a much bigger payoff? I think
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at the same time, it was around about this time
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that I read What It Takes, I think it's called
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by Stephen Schwartzman, who founded Blackstone.
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He had a quote that basically said, if you want
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to succeed, I'm paraphrasing, but it was basically
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if you want to succeed in business, you have
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to dedicate yourself to business. You can't kind
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of do it part time. So therefore, if you're going
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to dedicate yourself to something, you should
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do something that has a huge payoff. And it's
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no harder to do something huge than is to do
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something small. And I definitely agreed because
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I felt my business was small when I was working
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like 60 hours a week or something. So I thought,
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yeah, that actually rings true. So all these
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things kind of happened and I was thinking, okay,
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what do I like? I like buying businesses. Could
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I do that at scale? Yeah, maybe I can raise some
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money and start a fund or something. I had no
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idea how you did that, but I was thinking, okay,
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maybe that's possible. And then I had people
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in my audience saying, we want to go out and
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buy businesses. Can you help us? And so all of
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these things happened maybe within the space
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of... three to six months. And so I thought,
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okay, I'm going to start a new business on the
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side. Call it Onfolio because I was trying to
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think, you know, online portfolio. Webfolio .com
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was already taken. So funny story actually, Onfolio
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.co was available and .com wasn't. And I Googled
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it to check like nobody else had the .com and
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it was, it was not available. So I was like,
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okay, great. I'm not like, it was like a dead
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website. So I thought, okay, I'm not going to.
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muscling on someone's copyright or trademark.
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But it turns out Microsoft actually owned Onfolio
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.com and they had bought a kind of asset management
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asset, as in web assets, like JPEGs and stuff.
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They bought this company called Onfolio, I think
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15 years before, and they just merged it into
00:13:34.840 --> 00:13:38.049
the Microsoft suite. and then they hadn't renewed
00:13:38.049 --> 00:13:41.149
the trademark. So I was like, okay, good. I'm
00:13:41.149 --> 00:13:43.450
not going to get in trouble, but eventually I
00:13:43.450 --> 00:13:45.850
was able to buy the domain off them. So Onfolio
00:13:45.850 --> 00:13:48.929
started and in the beginning it was, okay, I'm
00:13:48.929 --> 00:13:51.049
kind of building a portfolio. I'm building a
00:13:51.049 --> 00:13:55.110
team to help me run that portfolio. If someone
00:13:55.110 --> 00:13:57.549
else wants to buy a business, I'll help them
00:13:57.549 --> 00:14:02.789
buy it and then they'll own it and my team can
00:14:02.789 --> 00:14:06.549
run it for them. and we'll get profit share and
00:14:06.549 --> 00:14:08.990
fees and everything. So I did that for about
00:14:08.990 --> 00:14:13.190
a year and it grew really quickly because basically
00:14:13.190 --> 00:14:15.289
everyone was saying to me, I've been looking
00:14:15.289 --> 00:14:18.350
for someone like you for a long time. So it was
00:14:18.350 --> 00:14:22.710
like, okay, great. Perfect. So the business grew
00:14:22.710 --> 00:14:25.250
really well. But after about a year, I realized
00:14:25.250 --> 00:14:29.470
we're essentially a glorified agency here. I'm
00:14:29.470 --> 00:14:33.039
reading books about Blackstone and Berkshire
00:14:33.039 --> 00:14:35.779
Hathaway and holding companies. And really, we
00:14:35.779 --> 00:14:39.559
are just like a kind of glorified content creation
00:14:39.559 --> 00:14:42.360
agency or SEO agency for these people. And so
00:14:42.360 --> 00:14:45.000
that's when we pivoted into being our own holding
00:14:45.000 --> 00:14:47.019
company, said to people, we're not going to work
00:14:47.019 --> 00:14:49.100
with individual investors. We're all going to
00:14:49.100 --> 00:14:51.919
pool our money and make a holding company. And
00:14:51.919 --> 00:14:53.860
that's actually better for individual investors
00:14:53.860 --> 00:14:57.220
anyway, because diversification and so on. Yeah,
00:14:57.220 --> 00:15:00.399
so that's kind of how Unfolio evolved into the
00:15:00.409 --> 00:15:04.370
the kind of model it's at today. Excellent. If
00:15:04.370 --> 00:15:07.090
you had to break up the history of Onfolio into
00:15:07.090 --> 00:15:11.289
chapters, what would those chapters be? Yeah,
00:15:11.450 --> 00:15:13.429
I kind of touched upon it a bit. So chapter one
00:15:13.429 --> 00:15:15.450
was just kind of like the inception. We're working
00:15:15.450 --> 00:15:18.110
for individuals. I think we were managing 30
00:15:18.110 --> 00:15:20.570
websites, but it was all 30 different individuals
00:15:20.570 --> 00:15:25.750
or a couple of them had a few properties. So
00:15:25.750 --> 00:15:31.519
that was... Late 2018 through to probably April
00:15:31.519 --> 00:15:35.399
2020. Yeah, in hindsight, it was like I pivoted
00:15:35.399 --> 00:15:39.480
to a holding company pretty much in when COVID
00:15:39.480 --> 00:15:42.340
was in its early throes, but it was pure coincidence.
00:15:42.440 --> 00:15:44.620
I'd been thinking about this model and making
00:15:44.620 --> 00:15:47.620
the switch for two or three months. I think I
00:15:47.620 --> 00:15:50.139
sat down and I wrote six or seven pages in a
00:15:50.139 --> 00:15:52.500
notebook about, here's the problems we're doing
00:15:52.500 --> 00:15:55.730
individually. Here's the pros and cons. Here's
00:15:55.730 --> 00:15:57.750
the different holding company models we could
00:15:57.750 --> 00:16:00.610
have. The holding company model I liked the most
00:16:00.610 --> 00:16:02.990
was actually the public holding company model.
00:16:03.750 --> 00:16:07.070
And it was really simple. It was like, I kept
00:16:07.070 --> 00:16:11.909
saying to people who had holding companies, you
00:16:11.909 --> 00:16:13.970
raise money into a holding company, you buy some
00:16:13.970 --> 00:16:15.509
businesses, what happens when you want to raise
00:16:15.509 --> 00:16:17.230
more money? And they would say, well, you either
00:16:17.230 --> 00:16:19.730
make a new holding company. And I thought, well,
00:16:19.730 --> 00:16:21.549
that sounds like a mess because then you've got
00:16:21.549 --> 00:16:24.090
people own 10 % of this one, 15 % of that one.
00:16:24.279 --> 00:16:28.480
And they say, oh, you calculate the value of
00:16:28.480 --> 00:16:32.379
the holding company and then issue more shares.
00:16:32.419 --> 00:16:34.559
And I thought that sounds really complicated.
00:16:35.200 --> 00:16:37.200
I get why maybe public companies, it makes more
00:16:37.200 --> 00:16:39.460
sense because you can just see the value. You
00:16:39.460 --> 00:16:42.700
don't have to calculate the NAV plus the public
00:16:42.700 --> 00:16:45.519
holding companies you in theory, because we are
00:16:45.519 --> 00:16:47.360
a public holding company and we are not experiencing
00:16:47.360 --> 00:16:51.460
this, but we will one day. You get some arbitrage
00:16:51.460 --> 00:16:54.059
where you're in you're buying businesses. It's
00:16:54.059 --> 00:16:58.000
a three to four X profit Public companies usually
00:16:58.000 --> 00:17:01.840
trade for say 20 X you instantly get this at
00:17:01.840 --> 00:17:03.899
was not instant But yeah, you get this arbitrage
00:17:03.899 --> 00:17:06.140
and so I thought oh, yeah Maybe I'll build a
00:17:06.140 --> 00:17:08.059
private holding company grow it really big and
00:17:08.059 --> 00:17:11.920
go public later and do this So there's kind of
00:17:11.920 --> 00:17:15.839
chapter Chapter 1 .5. I guess was me starting
00:17:15.839 --> 00:17:19.059
to pivot this way. But then I connected with
00:17:19.059 --> 00:17:21.859
someone who actually said you can go public very
00:17:21.859 --> 00:17:25.099
early and use it as an accelerant to all of the
00:17:25.099 --> 00:17:27.200
things you're trying to do. Now, again, this
00:17:27.200 --> 00:17:31.960
was in 2020. Everyone was very high on Trump's
00:17:31.960 --> 00:17:35.599
economy, which was kind of like Biden's economy,
00:17:35.799 --> 00:17:39.140
Trump's, and really Obama's economy. But it was
00:17:39.140 --> 00:17:40.619
a very different economy to what we have today.
00:17:41.480 --> 00:17:43.259
Yes, absolutely. It was like, yeah, you can grow
00:17:43.259 --> 00:17:45.700
really fast. You can raise money at high valuation.
00:17:46.119 --> 00:17:48.339
You can leverage the fact you're a public company
00:17:48.339 --> 00:17:52.400
to do better deals, better structures. You can
00:17:52.400 --> 00:17:55.720
recruit talent. You can attract more deal flow.
00:17:56.220 --> 00:17:59.660
You can get a more significant valuation. You
00:17:59.660 --> 00:18:03.880
can leverage the stock. A lot of that actually
00:18:03.880 --> 00:18:07.579
has come true. Some of it is work in progress.
00:18:08.259 --> 00:18:10.940
So chapter two is, okay, we went public in...
00:18:11.469 --> 00:18:14.789
2022 in the end. So it took us, was it 2022?
00:18:15.029 --> 00:18:17.549
Yeah, August 2022, we went public. So basically,
00:18:17.809 --> 00:18:21.309
late 2020, we raised some more money from basically
00:18:21.309 --> 00:18:23.210
those same investors we were working with. We
00:18:23.210 --> 00:18:25.049
said to them all, hey, we're going to do this
00:18:25.049 --> 00:18:28.150
now. Are you in? And most of them said no, but
00:18:28.150 --> 00:18:31.089
enough of them said yes. And then 2021 was just
00:18:31.089 --> 00:18:35.529
growing and preparing for going public. But then
00:18:35.529 --> 00:18:38.890
late 2021, we connected with some investment
00:18:38.890 --> 00:18:40.890
bankers who said, you don't need to go public
00:18:40.890 --> 00:18:43.269
on a smaller exchange. We can take you public
00:18:43.269 --> 00:18:46.309
on NASDAQ and you can raise some money in the
00:18:46.309 --> 00:18:49.750
process, which will help you grow. And then Russia
00:18:49.750 --> 00:18:53.690
and Ukraine had a fight and inflation happened.
00:18:54.190 --> 00:18:55.869
And so it took us about another seven or eight
00:18:55.869 --> 00:18:59.750
months to finally IPO. So then I guess chapter
00:18:59.750 --> 00:19:03.329
three is, or chapter two, kind of the chapter
00:19:03.329 --> 00:19:05.250
we're in now is like, okay, we're a public company.
00:19:05.710 --> 00:19:07.750
and hopefully chapter three and chapter four
00:19:07.750 --> 00:19:11.349
are coming soon. Yeah, they're all on their way.
00:19:11.569 --> 00:19:13.950
Yeah. So just to sort of like shift and talk
00:19:13.950 --> 00:19:18.210
about the decentralization and like that sort
00:19:18.210 --> 00:19:21.470
of phase that you went through and the article
00:19:21.470 --> 00:19:24.670
that you wrote that was the trigger for us connecting,
00:19:25.210 --> 00:19:28.630
you were talking about the decentralization and
00:19:28.630 --> 00:19:31.329
like how you organized leadership. How was the
00:19:31.329 --> 00:19:34.529
leadership team structured before you originally
00:19:34.529 --> 00:19:36.769
decentralized how you were leading the companies
00:19:36.769 --> 00:19:40.069
in the portfolio. Yeah. So again, if you think
00:19:40.069 --> 00:19:42.210
about, I touched upon this a little bit, but
00:19:42.210 --> 00:19:44.569
when we very first started, we were buying content
00:19:44.569 --> 00:19:47.930
websites. And for listeners who might not be
00:19:47.930 --> 00:19:49.869
familiar, content website is essentially like
00:19:49.869 --> 00:19:52.890
a blog. Maybe you get a lot of your traffic from
00:19:52.890 --> 00:19:58.309
Google by free organic SEO traffic. And then
00:19:58.519 --> 00:20:01.160
You either make money through advertising. So
00:20:01.160 --> 00:20:03.819
we own some recipe websites and those things
00:20:03.819 --> 00:20:05.500
where you have to read for 20 minutes to get
00:20:05.500 --> 00:20:08.579
to the actual recipe. We own some of them. We
00:20:08.579 --> 00:20:13.000
also had affiliate articles where, so once upon
00:20:13.000 --> 00:20:16.440
a time, if you Googled what is the best safety
00:20:16.440 --> 00:20:19.299
razor or what is the best straight razor or cutthroat
00:20:19.299 --> 00:20:23.099
razor, number one was a website I owned. And
00:20:23.099 --> 00:20:25.079
it just recommended different razors from Amazon
00:20:25.079 --> 00:20:27.380
and people would go to Amazon. And if they bought
00:20:27.380 --> 00:20:29.940
something, we would get a commission. That model
00:20:29.940 --> 00:20:32.740
really suited centralization because we could
00:20:32.740 --> 00:20:36.599
have one SEO team, one content team. And sure,
00:20:36.720 --> 00:20:40.539
there would be writers who were better at recipes
00:20:40.539 --> 00:20:42.920
or who were better at like men's grooming and
00:20:42.920 --> 00:20:44.819
stuff. But generally you could have one central
00:20:44.819 --> 00:20:48.460
team. We had a bunch of virtual assistants who
00:20:48.460 --> 00:20:50.940
were logging into WordPress and uploading everything.
00:20:51.720 --> 00:20:56.009
So very centralized. And the part of the theory
00:20:56.009 --> 00:20:59.109
there is that you get operating leverage where
00:20:59.109 --> 00:21:02.950
maybe you have these fixed costs, but then every
00:21:02.950 --> 00:21:05.069
time you buy a new business, you're not necessarily
00:21:05.069 --> 00:21:08.190
having to build a new team. So you get the leverage
00:21:08.190 --> 00:21:11.609
and maybe your team costs 50 K a month and you're
00:21:11.609 --> 00:21:13.869
earning a hundred. And then you buy another business,
00:21:14.289 --> 00:21:16.569
you're earning 120, but you're still at 50 K
00:21:16.569 --> 00:21:20.980
and so on. And what we found was Not everyone
00:21:20.980 --> 00:21:23.420
can cope with doing 17 different things at once
00:21:23.420 --> 00:21:26.380
and so our teams were basically spread too thin
00:21:26.380 --> 00:21:29.319
They would they wouldn't necessarily complain
00:21:29.319 --> 00:21:32.259
because I think it was I Think they were telling
00:21:32.259 --> 00:21:34.200
the truth, but they would basically say we need
00:21:34.200 --> 00:21:38.420
more people We could get way better results if
00:21:38.420 --> 00:21:40.539
we just focused on one website, but obviously
00:21:40.539 --> 00:21:42.059
that website there wasn't a website that was
00:21:42.059 --> 00:21:47.079
making enough money to justify the team expenses.
00:21:47.420 --> 00:21:49.380
And so then we thought, well, how large was your
00:21:49.380 --> 00:21:52.480
team at this point? Let's say probably 30 or
00:21:52.480 --> 00:21:56.480
40 people. But like our SEO team, for example,
00:21:56.500 --> 00:21:59.460
was costing us about 30 grand a month and they
00:21:59.460 --> 00:22:02.059
were managing about 10 websites and those websites
00:22:02.059 --> 00:22:04.960
were generating let's say 40 grand a month. So
00:22:04.960 --> 00:22:07.359
there wasn't a lot of wiggle room. And I thought,
00:22:07.380 --> 00:22:11.200
well, maybe I could just go out and buy one big
00:22:11.200 --> 00:22:15.619
content website that is generating a hundred
00:22:15.619 --> 00:22:19.599
K a month and then have one team running it and
00:22:19.599 --> 00:22:21.980
then another big content website and have another
00:22:21.980 --> 00:22:24.380
team running it. And that made me nervous because
00:22:24.380 --> 00:22:27.319
you don't get diversification when you do that.
00:22:28.039 --> 00:22:30.440
But it's where I started thinking about having
00:22:30.440 --> 00:22:34.119
dedicated teams running dedicated businesses.
00:22:34.740 --> 00:22:37.500
And I think in late 2020, we realized the writing
00:22:37.500 --> 00:22:39.759
was on the wall for content websites. Well, we
00:22:39.759 --> 00:22:41.980
didn't even think of AI at the time. So we got,
00:22:42.160 --> 00:22:44.630
we made the right decision, but maybe the reason
00:22:44.630 --> 00:22:46.269
the writing was on the wall was wrong. We just
00:22:46.269 --> 00:22:50.210
felt like Google was rewarding kind of niche
00:22:50.210 --> 00:22:53.150
websites a lot less. And so every time we saw
00:22:53.150 --> 00:22:56.089
one, we thought we can't buy this website because
00:22:56.089 --> 00:22:59.029
one Google update wipes out 50 % of its income.
00:22:59.670 --> 00:23:01.990
So that's not a very good investment strategy.
00:23:02.109 --> 00:23:05.549
And so we started pivoting towards like agencies
00:23:05.549 --> 00:23:07.829
because we were essentially an agency. So we
00:23:07.829 --> 00:23:12.619
understood the agency model. Also, I tend to
00:23:12.619 --> 00:23:14.720
read up on a lot of other holding companies and
00:23:14.720 --> 00:23:20.220
seeing there's a lot of literature out there
00:23:20.220 --> 00:23:22.799
about decentralized holding companies and the
00:23:22.799 --> 00:23:24.980
ones that get the best results tend to be decentralized.
00:23:25.339 --> 00:23:28.819
Again, it's kind of like the decision to become
00:23:28.819 --> 00:23:31.240
a holding company in the first place. or the
00:23:31.240 --> 00:23:32.700
decision to start Onfolio in the whole place.
00:23:32.779 --> 00:23:35.039
I've been holding these thoughts in my head and
00:23:35.039 --> 00:23:37.339
gathering information and sort of building confidence
00:23:37.339 --> 00:23:39.759
in my belief, I guess, that this was the right
00:23:39.759 --> 00:23:42.420
decision. And so after we IPO'd, we bought some
00:23:42.420 --> 00:23:45.960
quite different businesses. We bought like a
00:23:45.960 --> 00:23:49.599
digital course. We bought some more agencies.
00:23:49.759 --> 00:23:51.440
We bought two agencies. We bought one digital
00:23:51.440 --> 00:23:53.599
course and we bought some WordPress software.
00:23:54.359 --> 00:23:56.880
And so at that point, we thought, yeah, like
00:23:56.880 --> 00:23:59.200
this makes way more sense to be decentralized
00:23:59.200 --> 00:24:01.960
now. So we kind of spend the next two or three
00:24:01.960 --> 00:24:05.579
months going all in on decentralization. So what
00:24:05.579 --> 00:24:08.880
that meant in practice was instead of having
00:24:08.880 --> 00:24:12.019
one Slack channel for everybody. And so for example,
00:24:12.160 --> 00:24:14.119
maybe you've got six different websites and you
00:24:14.119 --> 00:24:19.369
hire someone and they join Slack. And the team
00:24:19.369 --> 00:24:21.089
who's hired them is like, Hey everyone, this
00:24:21.089 --> 00:24:24.049
is Sally, please welcome her. And all the other
00:24:24.049 --> 00:24:25.769
teams are like, Hey, welcome, welcome. And it
00:24:25.769 --> 00:24:29.529
felt really disingenuous because a lot of people
00:24:29.529 --> 00:24:30.849
were like, I'm never going to speak to you. We're
00:24:30.849 --> 00:24:32.269
never going to be on a call. We're working on
00:24:32.269 --> 00:24:33.609
complete different businesses, but I have to
00:24:33.609 --> 00:24:35.589
say happy birthday to you like twice a year,
00:24:36.089 --> 00:24:38.789
once a year. I just felt like it wasn't the right
00:24:38.789 --> 00:24:41.509
way to do it. So every company got its own Slack
00:24:41.509 --> 00:24:44.819
channel and the culture's actually... became
00:24:44.819 --> 00:24:48.079
stronger because each company was able to go
00:24:48.079 --> 00:24:52.619
all in on its own culture. Dedicated business
00:24:52.619 --> 00:24:57.000
manager or CEO for each business, dedicated teams
00:24:57.000 --> 00:24:59.819
and so on. That costs more in theory because
00:24:59.819 --> 00:25:02.559
now you have to pay for five Slack subscriptions
00:25:02.559 --> 00:25:06.519
instead of one and five HREF subscriptions and
00:25:06.519 --> 00:25:11.500
five managers instead of one. it more generally
00:25:11.500 --> 00:25:13.579
if you have the right people in the right seats
00:25:13.579 --> 00:25:16.339
generally it more than makes up for it because
00:25:16.339 --> 00:25:19.440
the performance of those businesses benefits
00:25:19.440 --> 00:25:21.859
we started out centralized and then we went oh
00:25:21.859 --> 00:25:24.980
actually we should become decentralized and we
00:25:24.980 --> 00:25:28.559
did that for about 18 months before we move back
00:25:28.559 --> 00:25:31.019
to where we are now which is what i wrote an
00:25:31.019 --> 00:25:33.619
article about and what prompted you Yeah, so
00:25:33.619 --> 00:25:36.099
I want to hear more about that. Just curious,
00:25:36.460 --> 00:25:39.299
in that phase where you were, or where you moved
00:25:39.299 --> 00:25:42.619
to a decentralized model, it sounds like you
00:25:42.619 --> 00:25:45.019
had, like it did have a positive effect. Like,
00:25:45.700 --> 00:25:47.380
would that sound like the net effect of it was
00:25:47.380 --> 00:25:49.359
positive, at least for where the business was
00:25:49.359 --> 00:25:53.640
at at the time? I think so. Yeah. I don't think
00:25:53.640 --> 00:25:58.660
it necessarily reflected in the performance of
00:25:58.660 --> 00:26:02.509
the businesses. And I don't know if that's necessarily
00:26:02.509 --> 00:26:05.670
a centralization, decentralization issue, or
00:26:05.670 --> 00:26:07.269
if it's just that we had the wrong people running
00:26:07.269 --> 00:26:10.150
those businesses. It's tough to know because
00:26:10.150 --> 00:26:12.670
they were good people. Yeah, there's definitely
00:26:12.670 --> 00:26:14.670
positives though. So for example, all of the
00:26:14.670 --> 00:26:19.390
individual teams have better culture and that
00:26:19.390 --> 00:26:22.630
is a big, that is important. To some extent,
00:26:23.069 --> 00:26:26.049
being decentralized actually allows for more
00:26:26.049 --> 00:26:30.049
knowledge generation because If you're centralized,
00:26:30.170 --> 00:26:32.730
you can share information a lot more easily,
00:26:32.809 --> 00:26:35.150
but if you're decentralized, typically you've
00:26:35.150 --> 00:26:43.089
got more people. Different ways of thinking are
00:26:43.089 --> 00:26:47.009
filtering among the companies. Someone might
00:26:47.009 --> 00:26:49.609
hire someone who they wouldn't hire if they were
00:26:49.609 --> 00:26:51.690
centralized, but in a decentralized way, that
00:26:51.690 --> 00:26:54.049
person may bring in a bunch of knowledge. As
00:26:54.049 --> 00:26:57.450
long as you as a company are able to help. pass
00:26:57.450 --> 00:27:00.130
that knowledge around the companies by having
00:27:00.130 --> 00:27:03.390
regular meetings with individual leaders and
00:27:03.390 --> 00:27:06.309
having them disseminate that knowledge. So it
00:27:06.309 --> 00:27:07.950
might be, for example, someone discovered something
00:27:07.950 --> 00:27:10.210
about email deliverability or what have you.
00:27:10.470 --> 00:27:12.329
And so you've just got, it's kind of increasing
00:27:12.329 --> 00:27:15.930
your surface area for innovation or like insight
00:27:15.930 --> 00:27:18.450
discovery, and then you're able to spread it
00:27:18.450 --> 00:27:20.910
among the teams. So it did have a net positive
00:27:20.910 --> 00:27:23.250
in many ways. One of the things that led to us
00:27:23.250 --> 00:27:27.779
changing to now where we kind of have what we
00:27:27.779 --> 00:27:31.420
call centralized strategy and decentralized execution
00:27:31.420 --> 00:27:34.720
is ultimately the businesses weren't performing
00:27:34.720 --> 00:27:38.720
great and we needed to make some cuts. And we
00:27:38.720 --> 00:27:41.900
felt like we could probably make significant
00:27:41.900 --> 00:27:44.400
savings if we let go of all the business managers.
00:27:44.539 --> 00:27:47.700
And then we thought, do they deserve to stay?
00:27:48.480 --> 00:27:52.099
Well, according to the P &L, no. According to
00:27:52.099 --> 00:27:54.480
the fact we like them, yes. So it was a tough
00:27:54.480 --> 00:27:58.109
decision. Once we let them go, we realized actually
00:27:58.109 --> 00:28:00.470
the reason the businesses were struggling were
00:28:00.470 --> 00:28:03.809
because a lot of the CEOs didn't necessarily
00:28:03.809 --> 00:28:05.549
know everything that they should be doing. So
00:28:05.549 --> 00:28:07.529
they worked hard. This is that altitude view
00:28:07.529 --> 00:28:09.029
that you were talking about in your article,
00:28:09.170 --> 00:28:12.630
right? Yeah. It was really hard thing to kind
00:28:12.630 --> 00:28:15.630
of articulate. Sometimes it was things we thought
00:28:15.630 --> 00:28:18.390
they were doing and they said they were doing,
00:28:18.490 --> 00:28:21.809
but then we've kind of found when, so my CLO,
00:28:22.879 --> 00:28:26.579
When we replaced the CEOs, he stepped in to be
00:28:26.579 --> 00:28:29.359
basically CEO of three businesses. And he would
00:28:29.359 --> 00:28:31.500
be like, why is this data not really being tracked
00:28:31.500 --> 00:28:33.279
properly? And they would say, well, we are tracking
00:28:33.279 --> 00:28:36.140
the data, but then we'd look at what they were
00:28:36.140 --> 00:28:39.960
doing. And it was kind of, oh, okay, that's like,
00:28:40.059 --> 00:28:42.019
yeah, you have a dashboard, but you're not really
00:28:42.019 --> 00:28:44.339
paying attention to it. Or you're not understanding
00:28:44.339 --> 00:28:49.069
how to interpret that data. For example, one
00:28:49.069 --> 00:28:51.009
business, I mentioned this in the article, one
00:28:51.009 --> 00:28:53.730
business manager was saying, yeah, I generated
00:28:53.730 --> 00:28:56.170
some new sales from emails. So we were like,
00:28:56.170 --> 00:28:58.029
okay, great, he's doing email marketing. But
00:28:58.029 --> 00:29:00.950
then we found out he was just going through his
00:29:00.950 --> 00:29:03.549
inbox for previous leads and just emailing them
00:29:03.549 --> 00:29:06.069
like, hey, are you interested in buying more
00:29:06.069 --> 00:29:10.109
content? And so it was kind of like, I think
00:29:10.109 --> 00:29:13.750
when you're not sure what you should do, you
00:29:13.750 --> 00:29:17.740
tend to optimize. for what you are familiar with
00:29:17.740 --> 00:29:22.039
or what you know how to do. And so they were
00:29:22.039 --> 00:29:25.119
all working hard and keeping themselves busy.
00:29:25.180 --> 00:29:27.779
They were not lazy or anything. Potentially they
00:29:27.779 --> 00:29:31.400
felt underpaid maybe and we felt, what are we
00:29:31.400 --> 00:29:34.039
paying you for? Which is kind of the dynamics
00:29:34.039 --> 00:29:40.240
existed forever. But kind of realized we're always
00:29:40.240 --> 00:29:44.200
going to get better results than they are because
00:29:44.200 --> 00:29:47.500
we We see everything across all the businesses.
00:29:47.819 --> 00:29:53.180
We therefore learn faster and we have more knowledge
00:29:53.180 --> 00:29:55.240
to apply. So it's maybe not necessarily that
00:29:55.240 --> 00:29:57.480
they were bad, but it was that we could kind
00:29:57.480 --> 00:30:00.180
of see the woods for the trees and they were
00:30:00.180 --> 00:30:03.660
kind of stuck. So we kind of said, well, my CIO
00:30:03.660 --> 00:30:07.119
taking over was always temporary. And so we started
00:30:07.119 --> 00:30:10.720
to think, what are we going to do when it's time
00:30:10.720 --> 00:30:13.039
for you to step out? Are we going to just hire
00:30:13.039 --> 00:30:15.440
new CEOs and hope for the best this time? Maybe
00:30:15.440 --> 00:30:18.680
hope we pick them better? Are we going to incubate
00:30:18.680 --> 00:30:21.059
new leaders in the businesses who kind of shadow
00:30:21.059 --> 00:30:24.059
you for six months or a year or whatever? Or
00:30:24.059 --> 00:30:25.559
are we going to try something different? And
00:30:25.559 --> 00:30:30.259
we've kind of realized, well, yes, we can create
00:30:30.259 --> 00:30:33.480
to -do lists and have the teams execute on that
00:30:33.480 --> 00:30:36.859
to -do list and we guide them. But it's not a
00:30:36.859 --> 00:30:41.230
ton of work for us to actually help create those
00:30:41.230 --> 00:30:44.289
to -do lists. And then the teams generally are
00:30:44.289 --> 00:30:46.289
in touch with their audience a lot better than
00:30:46.289 --> 00:30:49.130
we are. Their customers, they're answering customer
00:30:49.130 --> 00:30:53.289
support tickets or reading feedback on Facebook
00:30:53.289 --> 00:30:55.569
ads and things like that. So it's almost like
00:30:55.569 --> 00:30:57.250
a two -way thing where they're telling, they're
00:30:57.250 --> 00:31:00.390
helping us understand the problems of the business,
00:31:00.490 --> 00:31:02.690
but maybe it's almost like they're just data
00:31:02.690 --> 00:31:04.789
dumping on us. And then we're kind of like, oh,
00:31:04.809 --> 00:31:06.490
okay, I see what's happening here. We should
00:31:06.490 --> 00:31:09.700
do more of this. So then we say to them, here's
00:31:09.700 --> 00:31:12.240
what you should do. Again, when we were kind
00:31:12.240 --> 00:31:15.039
of more fully decentralized, we'd be like, here's
00:31:15.039 --> 00:31:17.359
what you should do or you tell us what you should
00:31:17.359 --> 00:31:19.579
do and we'll just let you get on with it. Whereas
00:31:19.579 --> 00:31:23.140
now it's more like we're not going to micromanage
00:31:23.140 --> 00:31:25.019
you or anything, but we're going to kind of watch
00:31:25.019 --> 00:31:28.000
you do it or we're going to check in. And it's
00:31:28.000 --> 00:31:32.460
almost like we were becoming loathe to get involved
00:31:32.460 --> 00:31:34.019
because we were like, no, we're decentralized.
00:31:34.180 --> 00:31:36.619
We shouldn't get involved. Whereas the reality
00:31:36.619 --> 00:31:39.119
is, just do what it takes. So if this business
00:31:39.119 --> 00:31:42.299
needs you to get involved and help, just get
00:31:42.299 --> 00:31:45.220
involved and help. Don't do it in a negative
00:31:45.220 --> 00:31:49.900
way. Just be there. I actually think the CEOs
00:31:49.900 --> 00:31:52.440
that we let go probably would have benefited
00:31:52.440 --> 00:31:54.400
from that as well. We're kind of like, well,
00:31:54.440 --> 00:31:56.779
we hired you to tell us what you should do. And
00:31:56.779 --> 00:31:58.700
they're kind of like, yeah, no, I get that. But
00:31:58.700 --> 00:32:01.400
it's like you're sitting in the back seat and
00:32:01.400 --> 00:32:02.839
you're just watching the person drive off the
00:32:02.839 --> 00:32:04.720
cliff because you're like, well, You're the one
00:32:04.720 --> 00:32:09.980
having the driving lesson. When I learned to
00:32:09.980 --> 00:32:12.660
drive, my driving instructor had pedals as well.
00:32:13.200 --> 00:32:15.480
I think that's probably standard. I guess to
00:32:15.480 --> 00:32:17.599
some extent, it's a little bit like that. Unfortunately,
00:32:18.079 --> 00:32:21.500
we weren't able to discover that until we let
00:32:21.500 --> 00:32:23.779
them go and we got back in the seat and we realized,
00:32:23.980 --> 00:32:27.910
okay, here's what all the problems were. How
00:32:27.910 --> 00:32:30.890
did you navigate that process of letting them
00:32:30.890 --> 00:32:32.589
go? Because I imagine that would have been a
00:32:32.589 --> 00:32:34.470
pretty difficult thing to do because you don't
00:32:34.470 --> 00:32:39.089
hire a CEO lightly, right? So like, how did you
00:32:39.089 --> 00:32:41.450
navigate that and like mitigate whatever risks
00:32:41.450 --> 00:32:42.630
there might have been? Because I imagine that
00:32:42.630 --> 00:32:45.170
would have had ripple effects like within those
00:32:45.170 --> 00:32:50.630
organizations. Yeah, well, there's a few different
00:32:50.630 --> 00:32:52.950
things. First of all, there was the decision
00:32:52.950 --> 00:32:55.730
that we made as a, I think that was three of
00:32:55.730 --> 00:32:59.240
us that made the decision. It started out as
00:32:59.240 --> 00:33:01.819
a financial decision. It turned out to be the
00:33:01.819 --> 00:33:03.759
best decision we've made because the business
00:33:03.759 --> 00:33:06.420
is a, you know, we were thinking we just need
00:33:06.420 --> 00:33:08.299
to save some money. If we let go of these people,
00:33:08.299 --> 00:33:10.960
we can save 20K a month. And it turns out not
00:33:10.960 --> 00:33:13.859
only have we saved 20K a month, but we've like
00:33:13.859 --> 00:33:17.079
one business has this time last year it did,
00:33:17.220 --> 00:33:20.079
which was maybe three months before we let go
00:33:20.079 --> 00:33:23.279
of the person running it. It did a hundred and
00:33:23.980 --> 00:33:28.539
I think about 150K revenue in April last year.
00:33:29.180 --> 00:33:32.839
And this year it's flirting with 400K in April.
00:33:33.119 --> 00:33:35.099
It's done. Wow. That's huge difference. Yeah.
00:33:35.339 --> 00:33:39.599
I think, so what is it? It's April 30th. So I
00:33:39.599 --> 00:33:43.759
think it's done 350K so far this month. So it's
00:33:43.759 --> 00:33:48.200
a huge difference. It's more than 2X. So significantly
00:33:48.200 --> 00:33:52.039
better than saving 20K a month. When we made
00:33:52.039 --> 00:33:53.539
the decision, we were like, okay, we can save
00:33:53.539 --> 00:33:57.359
20K a month. But the fear was, will the businesses
00:33:57.359 --> 00:34:01.660
die without them? What happens if we let go of
00:34:01.660 --> 00:34:04.539
these people? We save 20K a month, but then two
00:34:04.539 --> 00:34:06.579
months later, the businesses have declined. And
00:34:06.579 --> 00:34:11.400
so we had to figure out, can we at least keep
00:34:11.400 --> 00:34:14.360
them afloat? And we felt comfortable like we
00:34:14.360 --> 00:34:16.539
could. There's also an argument, if we don't
00:34:16.539 --> 00:34:18.500
fire them, the businesses will decline as well.
00:34:19.219 --> 00:34:21.460
We made that decision in the course of about
00:34:21.460 --> 00:34:23.699
two weeks where we felt like, okay, yeah, we're
00:34:23.699 --> 00:34:25.059
definitely going to do this. And then we thought,
00:34:25.119 --> 00:34:28.380
okay, how are we going to navigate it? The people
00:34:28.380 --> 00:34:32.760
we let go, we gave them a little bit of notice
00:34:32.760 --> 00:34:36.780
and we gave them severance. I think it was two
00:34:36.780 --> 00:34:38.619
months, which again, you always want it to be
00:34:38.619 --> 00:34:41.380
longer, but at the same time, you kind of do
00:34:41.380 --> 00:34:44.039
what is standard. And also if you pay them too
00:34:44.039 --> 00:34:48.050
much, you might as well have kept them. There
00:34:48.050 --> 00:34:51.230
was like a three or four week period Handover
00:34:51.230 --> 00:34:53.489
period and so the thing we were concerned with
00:34:53.489 --> 00:34:58.369
I guess we were most concerned with was are we
00:34:58.369 --> 00:35:02.590
what happens if the teams rebel or Yeah, like
00:35:02.590 --> 00:35:04.449
we're seen as the big cut -through people that
00:35:04.449 --> 00:35:06.929
just fired the leader that you liked and so on
00:35:06.929 --> 00:35:09.190
and yeah That's right. There's where's the loyalty
00:35:09.190 --> 00:35:12.510
going right? Yeah, and I'm not entirely sure
00:35:12.510 --> 00:35:15.829
how it went because it was my COO who had those
00:35:15.829 --> 00:35:20.750
calls with the team I think, like in hindsight,
00:35:20.829 --> 00:35:23.110
it went quite smoothly and we did actually let
00:35:23.110 --> 00:35:26.849
go of some contractors as well. The ones who
00:35:26.849 --> 00:35:29.190
were most likely to kick up a fuss, we kind of
00:35:29.190 --> 00:35:31.329
wanted them to leave anyway. So the fear was
00:35:31.329 --> 00:35:34.250
what about the good people? And in hindsight,
00:35:34.309 --> 00:35:39.130
I would probably say the good people are happier
00:35:39.130 --> 00:35:41.170
now because they see the businesses are growing.
00:35:41.329 --> 00:35:45.750
They see that we're, or my COO is a good manager.
00:35:46.280 --> 00:35:50.440
I think everyone feels like, yeah, it was the
00:35:50.440 --> 00:35:52.800
right decision. At the time, it was very much
00:35:52.800 --> 00:35:54.920
about just having calls with them and just reassuring
00:35:54.920 --> 00:35:59.360
them, this had to be done. We want you to stay.
00:36:00.280 --> 00:36:02.199
It's a tough decision, but it had to be done.
00:36:02.280 --> 00:36:05.500
And I think there was probably trepidation, but
00:36:05.500 --> 00:36:09.199
over time, trust builds and people realize, okay,
00:36:09.400 --> 00:36:12.239
yeah, your heart was in the right place with
00:36:12.239 --> 00:36:16.000
these decisions. Yeah, it's never easy, but you
00:36:16.000 --> 00:36:21.019
just kind of have to do it as kind of truthfully
00:36:21.019 --> 00:36:24.880
and openly as you can. We didn't say we fired
00:36:24.880 --> 00:36:28.260
this person because they were bad. We just said
00:36:28.260 --> 00:36:30.179
we had to, you know, unfortunately it had to
00:36:30.179 --> 00:36:33.519
be done and we're going to try and make things
00:36:33.519 --> 00:36:37.900
better. You mentioned that we're talking about
00:36:37.900 --> 00:36:40.719
these three CEOs that you mentioned who were
00:36:40.719 --> 00:36:43.699
transitioned out. But obviously, there are a
00:36:43.699 --> 00:36:47.239
lot more companies where their managers or their
00:36:47.239 --> 00:36:52.739
CEOs stayed. What was it about those scenarios
00:36:52.739 --> 00:36:55.320
that made you say, no, we're going to leave this
00:36:55.320 --> 00:36:57.980
person in, or these ones were going to leave,
00:36:58.019 --> 00:37:01.300
take out? What was the decision criteria? They
00:37:01.300 --> 00:37:05.260
were harder to replace. I think it was that their
00:37:05.260 --> 00:37:09.690
businesses were... probably in better shape and
00:37:09.690 --> 00:37:12.090
yeah, they were more embedded in the business.
00:37:13.170 --> 00:37:15.690
They came with the businesses that we acquired.
00:37:17.489 --> 00:37:19.670
Also, to some extent, it was that we also felt
00:37:19.670 --> 00:37:22.829
they could help out running some of the businesses
00:37:22.829 --> 00:37:26.769
that are now leaderless. So one person we let
00:37:26.769 --> 00:37:29.510
go of was running a content business, like a
00:37:29.510 --> 00:37:32.630
content agency. And one of the people who stayed
00:37:32.630 --> 00:37:36.010
was running two SEO agencies. And we felt, well,
00:37:36.090 --> 00:37:40.110
okay, he can probably take over the content agency
00:37:40.110 --> 00:37:43.150
as well. And that's what he did. So it was a
00:37:43.150 --> 00:37:47.190
little bit like, we feel like his business is
00:37:47.190 --> 00:37:49.610
going in the right direction. He knows what he's
00:37:49.610 --> 00:37:52.409
doing more. He can probably help take on some
00:37:52.409 --> 00:37:56.130
of the burden. like picking up the reins. So
00:37:56.130 --> 00:37:58.449
it's kind of interesting because I said we didn't
00:37:58.449 --> 00:38:00.630
make this decision purely based on performance.
00:38:00.670 --> 00:38:03.829
It was based on we need to save some money. But
00:38:03.829 --> 00:38:05.489
at the same time that I guess there was some
00:38:05.489 --> 00:38:06.949
performance element to it because otherwise we
00:38:06.949 --> 00:38:10.590
would have fired everyone. So yeah. Yeah, no,
00:38:10.630 --> 00:38:13.230
that's just it's just interesting. So another
00:38:13.230 --> 00:38:15.610
another thing I'm thinking as far as the day
00:38:15.610 --> 00:38:17.530
to day of how this operates. So there's this
00:38:17.530 --> 00:38:20.269
shift that you've taken to bring the strategy
00:38:20.269 --> 00:38:24.550
component into a centralized place. So with the
00:38:24.550 --> 00:38:27.469
other portfolio companies whose leadership remained
00:38:27.469 --> 00:38:30.610
intact, from what I'm understanding, it's not
00:38:30.610 --> 00:38:33.389
just it was business as usual for them. You're
00:38:33.389 --> 00:38:36.070
still taking on the strategic work internally
00:38:36.070 --> 00:38:38.210
and they're just handling execution now. Is that
00:38:38.210 --> 00:38:41.570
how that operates? Yes. Or is it on a case by
00:38:41.570 --> 00:38:47.170
case basis? Kind of both. I would say it's more
00:38:47.170 --> 00:38:48.610
it's going to be more of a gradual thing with
00:38:48.610 --> 00:38:51.300
them because obviously They're still there. So
00:38:51.300 --> 00:38:54.340
we need to, we need them to buy in. We can't
00:38:54.340 --> 00:38:55.619
just say, this is what you're going to do now
00:38:55.619 --> 00:38:57.219
execute. They'll be like, well, I was doing,
00:38:57.260 --> 00:39:00.179
you know, I was CEO last week. So it's case by
00:39:00.179 --> 00:39:04.760
case, but I think basically everybody's realizing,
00:39:04.760 --> 00:39:06.960
and this is why I said, if we had known this
00:39:06.960 --> 00:39:09.980
back when the other CEOs were in, uh, still in
00:39:09.980 --> 00:39:13.380
the jobs, they might still be hard to say everybody's
00:39:13.380 --> 00:39:15.400
realizing this is a better way of doing it. So
00:39:15.400 --> 00:39:20.659
the people who did survive are still like, Yeah,
00:39:20.659 --> 00:39:24.079
actually, this is a good strategy. We appreciate
00:39:24.079 --> 00:39:31.780
your insights. It's almost like an advisory board
00:39:31.780 --> 00:39:35.699
helping us come up with a strategy. And even
00:39:35.699 --> 00:39:38.519
though we centralize strategy, that doesn't necessarily
00:39:38.519 --> 00:39:44.179
mean strategy is dictated from the central part
00:39:44.179 --> 00:39:46.519
of the company. and then they just have to follow
00:39:46.519 --> 00:39:50.079
it blindly. But it's like, we're taking control
00:39:50.079 --> 00:39:52.800
of the process of creating the strategy. We're
00:39:52.800 --> 00:39:55.880
rolling up our sleeves as well, and working with
00:39:55.880 --> 00:39:58.980
them to do it. It needs to go both ways because
00:39:58.980 --> 00:40:00.960
we might say, hey, have you thought about this?
00:40:01.079 --> 00:40:04.110
And they might say, That's not going to work
00:40:04.110 --> 00:40:07.269
because ABC reason, whereas the alternative is
00:40:07.269 --> 00:40:09.050
us kind of blindly be like, hey, what are you
00:40:09.050 --> 00:40:11.789
going to do this month? Okay, cool. Get on with
00:40:11.789 --> 00:40:14.769
it. Like decentralization for the sake of decentralization,
00:40:14.929 --> 00:40:18.730
basically. Obviously, this means that your as
00:40:18.730 --> 00:40:21.630
in your responsibility and especially your CEO's
00:40:21.630 --> 00:40:24.309
responsibilities changed as a result of this
00:40:24.309 --> 00:40:27.469
shift. How much extra effort or extra time would
00:40:27.469 --> 00:40:31.400
you say it's taken? you and your COO compared
00:40:31.400 --> 00:40:33.619
to what you were doing before the centralization
00:40:33.619 --> 00:40:39.519
of strategy? For me, less. For me, I just get
00:40:39.519 --> 00:40:41.340
to write the blog posts and take all the credit
00:40:41.340 --> 00:40:48.239
for it. But for the COO, yeah, more. But we're
00:40:48.239 --> 00:40:50.039
kind of in a place where we just have to do whatever
00:40:50.039 --> 00:40:53.099
it takes to grow the company and get out the
00:40:53.099 --> 00:40:55.820
other side. For him more, yeah. For me, a little
00:40:55.820 --> 00:41:01.960
bit more, but not like Not a ton more. Yeah.
00:41:02.480 --> 00:41:05.179
How scalable is it? Like, how do you think about,
00:41:05.340 --> 00:41:07.639
OK, when we, you know, double the size of the
00:41:07.639 --> 00:41:11.840
portfolio, you know, is it a case of hiring more
00:41:11.840 --> 00:41:14.960
people like your COO who can function as that,
00:41:15.440 --> 00:41:18.280
like, you know, nexus point for multiple companies?
00:41:18.300 --> 00:41:20.059
Or like, how do you think about scaling beyond
00:41:20.059 --> 00:41:23.519
where you are now? That's how we're thinking
00:41:23.519 --> 00:41:27.170
about it. Yeah, it's. Again, wait for me to write
00:41:27.170 --> 00:41:29.750
a blog post 18 months from now saying, hey, we
00:41:29.750 --> 00:41:33.449
changed again. I think all good companies do
00:41:33.449 --> 00:41:38.329
that. That's how we're thinking about it. I think
00:41:38.329 --> 00:41:44.929
my COO is very unique and he is a rare breed,
00:41:45.090 --> 00:41:47.309
I guess, but I don't think he's entirely unique.
00:41:48.110 --> 00:41:52.750
There are others out there like him. We can't
00:41:52.750 --> 00:41:56.150
exactly take on many more businesses in our current
00:41:56.150 --> 00:41:59.590
structure without needing to hire someone else.
00:41:59.949 --> 00:42:02.289
But I think it is repeatable. And we've actually
00:42:02.289 --> 00:42:04.889
seen that. So my COO actually took most of March
00:42:04.889 --> 00:42:09.349
off because he had surgery and said he was off
00:42:09.349 --> 00:42:14.110
for maybe three weeks. And before he went off,
00:42:14.690 --> 00:42:17.650
it was very much like, okay, let's get a couple
00:42:17.650 --> 00:42:21.719
of the people under him. learning this process.
00:42:22.079 --> 00:42:24.739
And so it would be these are the calls that you
00:42:24.739 --> 00:42:28.340
need to have with either the CEOs or with the
00:42:28.340 --> 00:42:30.639
teams. It was very much like, let's hope nothing
00:42:30.639 --> 00:42:34.440
breaks while he's gone. But actually, I think
00:42:34.440 --> 00:42:39.380
the businesses thrived without him. Credit has
00:42:39.380 --> 00:42:41.659
to go to him for putting the foundations in place,
00:42:41.659 --> 00:42:47.440
of course. But that demonstrates to us we can
00:42:49.449 --> 00:42:52.889
train and hire other people who can follow the
00:42:52.889 --> 00:42:57.050
process. Because now we have two or three people
00:42:57.050 --> 00:43:00.250
in the team who are able to do this. So if you
00:43:00.250 --> 00:43:01.929
can do two or three, you can probably do 20.
00:43:02.230 --> 00:43:05.250
So I think how it would probably exist is it'll
00:43:05.250 --> 00:43:09.070
be a little bit of incubation. So bringing people
00:43:09.070 --> 00:43:12.889
up from the company, taking on more responsibility,
00:43:13.050 --> 00:43:16.619
but that takes years, maybe even decades. that's
00:43:16.619 --> 00:43:19.099
okay because we're thinking in years and decades.
00:43:19.800 --> 00:43:25.139
But also, it'll be about hiring the right people
00:43:25.139 --> 00:43:30.760
and just working closely with them to see rather
00:43:30.760 --> 00:43:32.380
than be like, hey, you're a talented person,
00:43:32.460 --> 00:43:34.860
go figure it out. It'll be like, you're a talented
00:43:34.860 --> 00:43:36.739
person, but here's the structure, here's what
00:43:36.739 --> 00:43:38.539
we're building, here's how it works, we're going
00:43:38.539 --> 00:43:42.539
to make sure you get it. I think that's the way
00:43:42.539 --> 00:43:47.880
to do it. As it stands right now, how many companies
00:43:47.880 --> 00:43:52.320
are in the portfolio? Well, the ones that drive
00:43:52.320 --> 00:43:54.860
meaningful revenue, by which I mean pretty much
00:43:54.860 --> 00:44:01.199
all of the revenue, I'd say six companies. So
00:44:01.199 --> 00:44:04.420
we did 7 million revenue, just under 8 million
00:44:04.420 --> 00:44:06.219
revenue last year, but we're probably on about
00:44:06.219 --> 00:44:08.840
a million a month now, so call it 12 million
00:44:08.840 --> 00:44:11.880
run rate. That million a month revenue is driven
00:44:11.880 --> 00:44:15.619
by... Maybe five companies. Yeah, so there's
00:44:15.619 --> 00:44:18.559
a lot of smaller ones some like legacy ones like
00:44:18.559 --> 00:44:21.739
some content sites that are just We don't even
00:44:21.739 --> 00:44:23.679
think about them and they pay us five grand a
00:44:23.679 --> 00:44:27.420
month Yeah, just some other ones basically. There's
00:44:27.420 --> 00:44:31.099
like a collection of sites that probably Won't
00:44:31.099 --> 00:44:35.960
be in our portfolio in a couple years time Okay,
00:44:36.460 --> 00:44:38.280
one one more question before I start before I
00:44:38.280 --> 00:44:40.460
wrap up obviously if you've got those companies
00:44:40.460 --> 00:44:43.639
and you're looking after those At the, at the
00:44:43.639 --> 00:44:45.440
administrative side of the organization, obviously
00:44:45.440 --> 00:44:47.579
there's yourself, there's just your COO. Are
00:44:47.579 --> 00:44:49.840
there any, is there anybody else at that top
00:44:49.840 --> 00:44:52.659
level or is, or are you both directly leading
00:44:52.659 --> 00:44:57.039
everything below that? No. So my COO has two
00:44:57.039 --> 00:45:00.860
people under him who have the title, uh, director
00:45:00.860 --> 00:45:04.000
of growth, uh, director of strategy and director
00:45:04.000 --> 00:45:11.630
of, uh, operations. Um, and they. They're involved
00:45:11.630 --> 00:45:15.130
with every company as well. They're a lot more
00:45:15.130 --> 00:45:18.829
like, well, director of strategy, less so, but
00:45:18.829 --> 00:45:22.269
the director of ops is a lot more like action
00:45:22.269 --> 00:45:24.869
task focused. Like, okay, this team, can you
00:45:24.869 --> 00:45:29.230
fill out this document? She started contacting
00:45:29.230 --> 00:45:33.230
everybody for this month saying, hey, new month's
00:45:33.230 --> 00:45:35.449
about to start. Can you record me a video? Like,
00:45:35.449 --> 00:45:37.090
what went well in April? What are you planning
00:45:37.090 --> 00:45:41.429
for May? That kind of thing. So it means there's
00:45:41.429 --> 00:45:44.190
more like, there's more bandwidth and there's
00:45:44.190 --> 00:45:47.829
more ability to cope with everything, but also
00:45:47.829 --> 00:45:50.230
four brains are greater than one. So there's
00:45:50.230 --> 00:45:53.730
like a lot more, you're able to do the centralized
00:45:53.730 --> 00:45:55.889
strategy a lot better because there's more people
00:45:55.889 --> 00:45:58.690
collaborating on it. At the same time, you don't
00:45:58.690 --> 00:46:01.150
want too many cooks in the kitchen. So at the
00:46:01.150 --> 00:46:03.010
moment you got, this is a pretty good sweet spot.
00:46:03.849 --> 00:46:08.389
Yeah. All right, so my last question for anybody
00:46:08.389 --> 00:46:11.969
that is leading a decentralized organization,
00:46:12.190 --> 00:46:14.969
of which I know there's a number in our audience,
00:46:15.650 --> 00:46:17.570
anyone who's leading a decentralized organization
00:46:17.570 --> 00:46:19.969
and is seeing what you have said and thinking
00:46:19.969 --> 00:46:22.969
to themselves, yes, that is the problem that
00:46:22.969 --> 00:46:26.090
I have. What would you recommend as any specific
00:46:26.090 --> 00:46:28.849
advice that you would give to them as to how
00:46:28.849 --> 00:46:30.769
to take steps in this direction? What would be
00:46:30.769 --> 00:46:33.639
the most helpful advice? I mean, hopefully you
00:46:33.639 --> 00:46:35.659
don't have to go out and fire a bunch of people.
00:46:36.559 --> 00:46:41.099
I think you don't because I think we only discovered
00:46:41.099 --> 00:46:44.579
that there was this alternative model after we
00:46:44.579 --> 00:46:46.599
did that, but I think you could make it work
00:46:46.599 --> 00:46:49.239
without that. One thing that we were guilty of
00:46:49.239 --> 00:46:53.179
was, I touched upon it a few times as being decentralized
00:46:53.179 --> 00:46:56.179
for the sake of it and almost like we don't want
00:46:56.179 --> 00:47:00.920
to kind of insist on some things or... suggest
00:47:00.920 --> 00:47:03.820
certain things because we're decentralized and
00:47:03.820 --> 00:47:07.179
that's not what we do. And it's more like just
00:47:07.179 --> 00:47:09.739
figure out what model works. And so knowing,
00:47:09.840 --> 00:47:13.260
well, we can become more involved and we probably
00:47:13.260 --> 00:47:18.260
are better equipped to help than the individual
00:47:18.260 --> 00:47:23.019
CEO is because we have access to more data, we
00:47:23.019 --> 00:47:28.280
can see more businesses. We have that kind of
00:47:28.280 --> 00:47:31.429
strategic altitude. I think for the most part,
00:47:32.170 --> 00:47:36.710
the leaders of those organizations or the individual
00:47:36.710 --> 00:47:39.630
business units or however, like whatever the
00:47:39.630 --> 00:47:42.030
terminology is, they generally would welcome
00:47:42.030 --> 00:47:44.409
it. They're kind of like, yeah, like tell me,
00:47:44.670 --> 00:47:48.309
help me, tell me what you know. And then that
00:47:48.309 --> 00:47:52.250
actually for us as an acquirer is a huge superpower
00:47:52.250 --> 00:47:54.730
because when we go out and we want to acquire
00:47:54.730 --> 00:47:58.210
a business and we can tell them. you stay if
00:47:58.210 --> 00:48:01.570
you want to come in and join us. The advantage
00:48:01.570 --> 00:48:03.590
that someone gets when they join our portfolio
00:48:03.590 --> 00:48:07.309
is they benefit from all of that insight and
00:48:07.309 --> 00:48:11.769
the kind of playbook above them that when they're
00:48:11.769 --> 00:48:13.250
just running their own thing, they don't have
00:48:13.250 --> 00:48:16.409
access to. I think even if someone is just running
00:48:16.409 --> 00:48:18.530
an organization and isn't necessarily going out
00:48:18.530 --> 00:48:22.210
and acquiring new ones, it still remains true
00:48:22.210 --> 00:48:26.250
that you have this layer above your individual
00:48:26.869 --> 00:48:30.630
operators or managers or whatever that should
00:48:30.630 --> 00:48:35.050
be used. And so where the system breaks is if
00:48:35.050 --> 00:48:37.210
you're all trying to do everything or you're
00:48:37.210 --> 00:48:40.650
all trying to know everything about everything,
00:48:40.690 --> 00:48:43.090
which is why you don't want to go fully centralized.
00:48:43.369 --> 00:48:47.389
I would say just try it and see how it goes and
00:48:47.389 --> 00:48:50.969
just be flexible. I think don't adopt a certain
00:48:50.969 --> 00:48:54.539
philosophy and stick to it. I love that. Dom,
00:48:54.739 --> 00:48:57.239
thank you so much for sharing your experience.
00:48:57.519 --> 00:48:59.500
We really appreciate that. We'll definitely be
00:48:59.500 --> 00:49:02.659
adding links to find you and Onfolio in the show
00:49:02.659 --> 00:49:04.460
notes. So if anyone wants to learn more that
00:49:04.460 --> 00:49:06.500
they can. Thank you. Really appreciate you being
00:49:06.500 --> 00:49:08.820
on the show. Yeah, thank you. Thanks for having
00:49:08.820 --> 00:49:09.179
me.