🏗️ $100M CEO Dan Pollard

Welcome to another founder Wisdom Pod with Dan Pollard. He's founder at Fergus Software, apparently. Yeah, we're going to talk about hundreds of millions of dollars, which is the valuation of the business, I guess. And Dan had a very colorful background. Bunch of failures in his 20s, which we're going to talk about too. Success in his 30s and now he's enjoying his 40s. Love that. Dan is from New Zealand, has been living there for a while and is a gym, gym bug like myself. Just finished a leg day this morning. We're going to talk about his routine, his businesses and everything Dan's about. Lots of wisdom to be articulated today. This podcast is brought to you by my podcasting company. It's called podpar.com it's a podcasting agency. We don't have much space right now, but we do unconventional podcasting. So we monetize your pods scalable way. If you want help with your pod and make some money out of it, you can go to podware.com Dan, welcome to the pod. Tell me a bit more about yourself and your businesses.

Good morning, Charles. Thanks for inviting me in and making this happen. The audience. Hello. So, as Charles said, I'm Dan. My background is I. My dad's in construction. He's a builder. And he told me at 17, you'll be a plumber because they make lots of money. And that was my career path. And I'm one of those people that don't like working for anyone. So by 22, I started working for myself. I was in a building boom. So within a year I had two vans in a road, four people bought my first house by time I was 23. And on paper it looked great, but the reality was I had no idea what I was doing. I had. I got these massive tax bills. I was working all day, trying to do paperwork all night, and I got wiped out. I had to close that business. I had this huge tax bill back then and I just managed to keep my house, like, just. And I had to go contracting for two years because I was emotionally burnt out. And if you want to, if you want to. Demoralizing. I was living in a boarding hostel for two years and my wages for two years went to pay that tax bill. So imagine working for two years just scraping by to pay the tax bill. That was very demoralizing. 27 had another crack once again, had a couple of guys very quickly this time. I had bookkeepers involved from day one to make sure I paid my taxes. So I never got into that trouble again. But just cash flow Invoicing, quoting, working on a day, it just burnt me out again. So I quit, closed that business, sold it, went overseas, tried to enroll for university, actually to become a lawyer or M and A, but then realized that was 10 more years of work to try and get back to the money I could earn. I was like, oh man, I'm stuck on that year off. I read a lot of books about life and business and found out, found out business was a science, which I'd never realized it was before. And then so I came back to Auckland when I was 30, started again, but this time with, you know, a business plan and all that sort of drama. And then within eight years I went from just me to 25 staff and my plumbing company, had two kids and had done two software startups and that was quite the end of the, that was quite the journey. And then when I was just before I was 40, that was my mission. I sold my plumbing company for a million dollars, got rid of that and then did the software company full time. And that's about five years ago now. And so now that's got 95 staff in three countries and that's worth over 100 million. And so as I say, my 20s was marked with just huge amounts of work and no financial success. The 30s was huge work, like more than anyone can ever imagine, but actually lots of financial success. And now my 40s, so I'm working nowhere near as hard and enjoying my life a lot now. Wow.

So I think we all have some pent up energy in us like mine, I don't know, like maybe not from being the popular kid in high school, you know, had ugal in your case you had success as a business owner, as a plumber, and for two years you had to work for someone else. So I think you derived like humongous pent up energy from that time. And it's like, oh, when I'm going to be back, I'm going to be hella back.

And now just poverty, man, just po.

And that must have created like a lot of motivation to not ever go back in that state again, right?

Absolutely it might. Failing is fine, but trying to fail again and come back from that is very difficult. It's better, it's better not to fail actually. It's fine. But my gosh, yeah, it's hard to come back from when you're, from when you're underwater.

Right. And I'm guessing it must have been near a million in unpaid taxes or hundreds of thousands, which is pretty heavy now. I mean, I don't want to cut to the chase, but how do you get the valuation of 100 million? That's pretty significant. Starts to come near the billion. I have billion dollar goals, if not trillions in the future. That's big money right there. How do you get there?

You basically it's revenue and for SaaS companies, software as a service company, it's your revenue times your rate is, you know, there's pretty, pretty standardized metrics for how you value a CS company. So it's pretty straightforward.

And what do you guys do at Fergus? It's, it's just crazy. Like 100 million. That's. And plus you're like almost sole proprietor. Like there's not a lot of people on the cap table, right?

There's a few, you know, we've raised, there's not many, but we've raised 30 million now. So we've raised a lot of money from big investors. We do job management for other construction software. Sorry, other construction companies. How to run your business to make money. So because I, that's how I was able to make my plumbing company work was I had to make my own software so I could grow my company. And then I. There was no grand plan. Anyone listening? No grand plan. It was like, I don't want to fail a third time. The software doesn't exist to control my paperwork, I'm going to build some software. And it just spiraled out of control, if that makes any sense.

I mean, yeah, I love luck, but I. From doing this podcast, I've observed that most CEOs are quite humble about what they did. So what did you control? What did you make happen to create that sort of grow with growth, which is pretty exponential. Did you just fill a market need? There was nothing. What market do you target and what were your growth hacks that you put into play to get to that level?

Now these are the great questions I love, right? So the first thing, there's so many things I want to talk about here. I don't know if we'll have enough time in the half hour. So the first thing is you have to understand first, first principles of what the heck it is you need to solve. And so the, the biggest thing I want to talk like all that matters for a business. I don't care what anyone says. In my opinion, all that matters is cash flow. That's the first pillar. If you look at cash flow values, brand marketing product, you get worthless nothing. Without cash flow, you can't do nothing. So therefore the first principle you have to build your business on is how the hell do I get cash flow? Now the second one is there's no point having cash flow if it's not actually profitable. Like you still need to be making profit to cover all your expenses. So therefore the first foundation of your business is I need to get cash flow. So therefore you need to do invoicing and I need to make sure the jobs are profitable. So every business has that foundation. And so then I went for tools, looking for software that could help me do my invoicing every day and let me know my margins. All right? So if I was making money and it didn't exist, and so that's what, that's what led me into this. Like, well, I don't want to do this a third time. So, okay, time to make some software. Now I was militant on achieving this goal of, I call it the ability to invoice every day, right? So you don't have to invoice every day, but I want the ability to invoice every day at the right margin. And I was militant at achieving that goal, right, which mean I have to go to the suppliers and get the change the way they send us invoices at the change industry, right, to get all this stuff, stuff to come in. However, the other thing that was, motivated me to do this was I'd read a motivation book about a famous New Zealand book called Edmund Hillary. He was the first to climb Mount Everest. Don't know if you've heard of him. And it's right. And he's on our $5 note. And I was reading the book about why he's on the five dollar note. And it wasn't for climbing Mount Everest. It was because he was. No one else had climbed Mount Everest, no one else had come back alive. And so on that morning, he was prepared to die, to do something extraordinary because the chances of him dying was actually super high. But he still did it anyway. And that's why he's on the five dollar note for what he was prepared to do. And so that book talked about if you want to do something off note, something worthy, you actually have to go all in. All in. And so then I developed, I have this thing called SAP and it's called Shut up and pay. And so to build that software, I just had to pay people money. Had to go all in and over, over, over those sort of two or three, four years I was doing, I spent a million dollars of my own money building software

all in. Burn the boats. Yeah, Ernest Shackleton is my favorite explorer. So that one was Also like an extreme son of a bitch. And he also saved his whole team. Right. Because you're also about leadership, creating culture. How do you lead a team in the right direction and make sure that their incentives are aligned with yours and the company's?

That's a great question. It's a really complicated balance between culture and leadership and management. It's used to juggle all of it. I certainly am not a touchy feely sort of person at all. I have found the best way to lead people is to have an unrelentingly clear goal of where you're going and you're going in that direction. And so the things that make that successful is that you yourself are an absolute. When I say subject matter expertise, you know what, experience your customers need to experience, so they're delighted, but you need to own that. If you don't own that, you've got no you really the chance of you being successful are extremely limited. So you need to own that experienced outcome and then it's your job to make sure. So I like it that your team have to be match fit, right. Like, do you know rugby?

Yeah. Beautiful sport.

Beautiful sport, right. Your team has to be match fit with you, right. So you have to have your team members have to be match fit. They also need all the right gear and they need to be trained. Right. So. So you need to know where you're going and then you need to make sure that your, your team are actually kind of like, like, or they've got the same mindset of going after it with you. And if, if those things come together, then your people will put up with a lot of you because people love having a strong leader who are going after something. And do you really want people who don't like your management style? No.

Keep them out of the bucket, select them carefully, vet them. And yeah, it's like a sports team, right. You ask for performance. It's not this type of pity game or, you know, oh, he's a friend, he's a family member, I'm gonna help him out. No, it's like they need to be a value. It's like a nickel system. And I never succeeded at that on my side. And, yeah, chip on my shoulder, I guess. Pent up energy for my next venture. But I think I can learn from folks like you now in terms of products and your client's obsession. And we've seen the biggest business in the world, Amazon, they have just an unhealthy obsession with their customers. I'm looking at the features here. Your Plans they start at 60 bucks a month. There's GPS tracking files and photos tasks, tiered pricing, purchase offer. What feature is the most used here and what feature do you have on the roadmap?

The most feat with the. Yeah, I don't want to. Do you want to talk about product features? It's more about the. How the system. I don't want to talk about that. It's more about how the whole system delivers cash flow and gross profit. Right. That's, that's how the thing works. That's what, that's why it's great because somehow people put the system into the business and it delivers cash flow, gross profit. Now what went into deliver that, that's what's interesting is because. So from first principle thinking. So what I have is this, I have this. So I Learned from my 20s, so I had the wrong attitude, had many wrong attitudes. One of the wrong attitudes I had was I saw people and staff as customers. I wanted a way to get their money from their wallet to my wallet and my staff were numbers in a way to deliver that for me. Guess what? That doesn't work because why never. So I was like oh shucks. What. So the concept I have now was willingness. How can I get my staff willingly wanting to work for me so that the customer receives an experience so they willingly want to pay me. And so now this concept of willingness sort of dictates everything that I do, the way I think and the way I approach solving problems and solutions.

Right. So how do you align your staff to your clients needs and because you were there, you were a man of the craft. So you know what is needed when you have a client in front of you. And yeah, I, I guess aligning your objective with theirs, how to make more profits, how to close more quotes, how to bring clarity, how to make value obvious to the client, how to look more professional. And you started in New Zealand, that one. So you conquered the market. Is it fair to say you have? Initially you had around 20 market share when it caught fire and nowadays it's probably like 40 market share.

Very good. Yeah, we're very. In New Zealand. We're unbelievable. It's unbelievable. So there's. So the first principle. How do you, how do you get alignment? So the first core concept is you probably heard the saying is the right information to the right person in the right format at the right time. Right. That, that, that is a core information management principle that needs to be in your, in your business. So it's part of what's inbuilt in the software is so the mobile phone, what the tradesperson gets is directly what that person needs. On, on the desktop there's a different set of information sets that the office person gets so they see the right information. Now how do you get willingness? So the obviously the first thing you as the business owner have to set up is hey Charles, what outcome do you want after I finish working for you? So the first thing is asking Charles, what would make you happy? To pay my bill when I finished. And that's the first place to uncover is, Charles, what do you want? And then you've got to write that down explicitly in the information system. So the people who are always ready go, oh, Charles wants this outcome at this price in this time frame. That's the first part to establish. And then the other, the other thing is so, right, so that's the first underlying thing that you have to do. The second thing is so, so now Charles, pretend you're working for me, Charles, right. And I'll say to you, Charles, I will pay you what you want if you do what I want. Right, so let's talk about that. And so then that's how you start building culture. So these are the outcomes I need to achieve for the client. What will make you willingly want to do that? And so there's all sorts of ways you can bring culture around to make that, that happen. So for I'll give you one practical example that transformed, that was one of the things that transformed my plumbing company in my 30s, right. And it was this concept of tradespeople hate putting in their time, they hate doing the admin, they're always behind. And I was always badgering my staff to do this. It was a constant pain point pressure. And then one day I was like, why don't you just get one of the office persons to call stuff and just do it for them on their behalf. So Leanne, every morning would take her less than an hour to call all the guys, finish the time entries, descriptions, paperwork. It was all done like an hour of staff took 30 bucks a day on staff members wages. It was all done. All the pressure went out of the business. All this pressure came off my staff and meant that the staff could now focus on achieving property owner outcomes more than trying to keep me happy.

Because how much indications do you actually give them? How much leeway do you give them? How much creativity and entrepreneurship do you give them? Does it depend on their capabilities and their skills? Because that's something I always struggle with. I was like, hey, here are my objectives now you have carte blanche to do whatever you want to achieve these goals.

Yeah, great. So if you're a tradesman, you have the full autonomy, right. So however, so there was another massive, massive principle. I bought into the business. So I was, I've now try and model my businesses as much as possible on lean manufacturing principles. And so one of the massive principles in lean manufacturing is quality control reports to the executive, not to production. And that was a game changer when I found out you need to put in a system to bring in quality control and production can't be in charge of that. And so what I did every single charge up job the guys were doing. The next day one of the office people would call the property owner and say, hey, was Dan, was it, was he on time, was he friendly, was he professional? You know, are you happy? And so what that did, culturally it meant the staff knew that someone in the office was going to call the customer and see what that experience was like. And so that's how you start bringing quality control. You have to bring in quality control into your business. Someone from the exec. So she will report to me directly, no filter. I'd hear directly how my staff are or interacting with, with the customer, no filters. And so then the staff know, oh shucks, the boss is going to hear exactly what I, what I'm like and what I'm, what I'm outputting. Right. And so this is a big, a lot of people are motivated by shame and this is a very big thing you have to understand about people is shame and embarrassment is one of the biggest motivators to making them behave correctly.

Wow, that's funny, sad and interesting at the same time. The business this year, hundred million dollar valuation. When do you want to exit?

I think I've got a few challenges left. I've got some goals I want to achieve in that it's pretty fun, like it's pretty amazing to see because remember, there's no grand plan. I want everyone to realize there was no grand plan. I was doing software for my own plumbing company. So I wouldn't fail a third time. Right. It's now grown to this big thing and it's very, it's very deeply satisfying seeing something you've created deeply impact thousands of other businesses and have that and literally help transform their lives. Right. That's deeply rewarding. And there's a few more things I think the software can do to continue to really improve the lives of more people. And I want to see if that's possible. I hate using the Term AI, I hate that it's a catchword. But those who don't think it's real are also if you're in software and you're not taking it seriously like you do need to. And so I think if we can do some things right, we can really start to really automate more and more of people's businesses processes to really bring about more improvements to their lives with minimal data input. And that's pretty interesting to me.

10,000 customers monthly active users or more than that. Man, that's beautiful. That's fascinating. How many markets are you in now?

We're in three. So we've got staff in three countries. We've been all the English speaking countries around the world. So yeah, I don't know.

Is competition fierce in the us?

The US is a weird, weird anomaly. We don't do much in there because they just got. It's, it's such an interesting market. They work so differently than most of the world. So we kind of stay away.

Mexican, tell me how come. I've got customers all over the world, mostly US but also UK and Australia.

A lot of, I don't know how to put this. A lot of Americans want to what we call the want to work gray. So kind of not illegally but kind of actually legally. And the system does not help you avoid tax and lose jobs. And the Mexican legal underpaid labor, it's just not designed to work that way. And so this.

Yeah it's interesting right like. And yeah the Mexicans workers, a lot of workers. That's a big part and that's who is constructing us right now. It's just fascinating to think about. Just like in Europe there's market of immigrants just like in Dubai and Qatar there's yet immigrants that are also building. That's just interesting to think about. If you think of that exit one day, what would you do with these tens of millions by a rugby team like a guy go getter like you. What would you actually do at your time?

Well, I'm doing another starter right now because I find that interesting and my dream dream would be to buy some land sort of near the coast and actually do a little coastal retreat for people because I enjoy landscaping and water and providing. I would build it and get something else to run it but I enjoy landscaping and nature and water. So I'd go back to my roots of being doing that sort of thing. But I can't ever see me ever never doing business and industries. So I'm not, I'm not, I'm not Motivated by holidays, unfortunately. I like, I like working and building businesses.

Same here. What are your goals this year? What do you want to focus your time on?

So the goal this year is to launch my new product and get that into the market, continue to grow the Fergus and obviously really start. Start understanding how we can bring in these new sort of AI LLMs into, into our business and how they can, you know, nothing will release this here but understanding how we can really use that to help our customers. Because, I mean, that will grow our market share, right? I mean, imagine the software kind of just starts doing it all for you in the next couple of years.

I can certainly imagine that. I mean, it's, it's a magic trick that has gone old since GPT gave you these magical answers in 2020. And I think that was such a pivotal moment. You know, like technology is indistinguishable from real magic.

It is magic. It's absolutely black.

Black magic on your side. Dan, where can we find out more about you?

I kind of, for some reason I just, I still, I don't have a profile. I just kind of do my own thing. But, you know, I'm just at Fergus, but if you need to email me, just dan@fergus.com I talk to everyone. You want advice, man, just, just email me, yeah.

Or Google Dan Pollard. Fergus, you should pop first there. Dan Pollard on LinkedIn. Dan, thank you so much for today. That was really helpful.